Berkeley College to Cancel $20M in Unpaid Loans, Revamp Collection Procedures in Settlement with NYC

The City of New York has reached a settlement with a for-profit university that will force the school to stop collecting on $20 million of unpaid student loans while also paying a fine of $350,000 for, among other allegations, collecting debts that were not owed, concealing its identity from former students when collecting debts, and lying on court documents about when debts were accrued.

The city’s Department of Consumer and Worker Protection filed the lawsuit against Berkeley College back in 2018, making a series of allegations. In addition to the ones mentioned above, the school was also accused of lying about federal student loans, tricking students into taking out loans directly from Berkeley, and concealing the costs from students until it was too late for them to withdraw. A copy of the settlement can be accessed by clicking here.

Under the agreement, Berkeley will stop collecting on any outstanding student loan that was incurred before January 1, 2019, which the school estimates is valued at $20 million. The school will also pay a fine of $350,000, which will be used to pay restitution to individuals who were victimized. The school must also institute polices related to communicating with students about debt owed to Berkeley and making sure that the statutes of limitation on debt collection are observed.

“DCWP is leading the fight to curb for-profit school abuses in New York City,” said Mike Pierce, executive director, Student Borrower Protection Center, in a statement

. “Predatory schools have long held out the promise of higher education but often leave students trapped in debt and with limited opportunities for economic mobility. Today’s settlement holds Berkeley College accountable for its exploitative enrollment schemes and will cancel tens of millions of dollars in student debt, providing relief to many of the most economically vulnerable New Yorkers.”