Consumer complaint received 2019-07-10
Product: Student loan — Private student loan
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: AES/PHEAA (MN)

As of XX/XX/XXXX XXXX XXXX who is the 3rd party debt collector to AES ( American Education Services ) sent a letter to me indicating that they are indeed not the owner of these loans, that there is no lender or owner that has come forward to claim these loans. They tell people that they are so people will still pay the predatory loans. 

I also have recorded conversations with management of XXXX XXXX verifying that XXXX XXXX is not the owner nor the lender, but that they have to say that in order to collect the debt. 

AES has since added on 4 identical loans from a company that does not have my loans in their possession. XXXX XXXX. 

AES still has XXXX and XXXX XXXX XXXX XXXX listed as the owner and lender of my loans. these companies no longer exist, and XXXX XXXX has already verified that they are not the owner of my loans as well. they only have my transcripts. 

Until several years ago, XXXX was one of the biggest for-profit school companies, and owned chains including XXXX XXXX XXXX, XXXX University, and XXXX University. It targeted low-income students, promising a quality education and career opportunities, and charged them high tuitions for sub-standard programs. After years of declining profits and trouble maintaining accreditation, XXXX began to sell its schools. 
In XXXX, XXXX sold most of its schools for {$60.00} XXXX XXXX XXXX XXXX XXXX, XXXX, a subsidiary of a XXXX-based religious organization, the XXXX XXXX XXXX. XXXX XXXX is in the process of converting the schoolsfrom for-profit to non-profit status. XXXX XXXXXXXX application to the Department of Education to approve the non-profit conversion is pending. If the conversion is approved, XXXX XXXXoperated schools will be subject to even less federal oversight than they are currently. You can read more about the sale and proposed conversion in an earlier post here. 
On Friday, XX/XX/XXXX, XXXX XXXX XXXX ( XXXX ) and 58 related companies filed for bankruptcy.The bankruptcy filings include some of the campuses that XXXX sold and also some that it didnt sell. 
The bankruptcy filings say that XXXX does not expect to have any funds to distribute to unsecured creditors. In other words, it wont have any money left at the end of the bankruptcy. In fact, XXXX says that it has between {$0.00} and {$50000.00} in assets, but owes between {$500.00} million and {$1.00} billion. Its list of people and companies it owes money to is 1,500 pages long, and includes political campaigns, copy companies, and financial institutions. It will file more financial information in the coming weeks. 
One of XXXXs lawyers for the bankruptcy is XXXX XXXX, from the firm XXXX XXXX XXXX XXXX. Mr. XXXX and XXXX XXXX XXXX are also representing the estate of XXXX XXXX XXXX , XXXX ( XXXX XXXX ), in its bankruptcy, which was filed in XX/XX/XXXX. You can read more about the XXXX bankruptcy and the XXXX representation of former XXXX students here. 
At the same time that XXXX filed for bankruptcy, XXXX XXXX announcedin an internal memo that it will close 30 of the campuses that it bought from XXXX just last year, including several XXXX XXXX campuses.XXXX XXXX has since confirmed these plans, and blames declining enrollment and an increased demand for online education for the closures. 
Although were not yet sure what, if any, connection exists between XXXX filings and the XXXX XXXX closures, it is clear that both corporations are acting to protect their own interest while further harming their former and current students. 
XXXX XXXX has provided limited information about the closures, but it has shared its plan for affected students. We have summarized its plan below. At the bottom of this post is a list of campuses that XXXX XXXX has said it will close. 

INFORMATION ABOUT SCHOOL CLOSURES HOW THE CLOSURES WILL AFFECT STUDENTS WHO ARE CURRENTLY ENROLLED Through leaked XXXX XXXX memos and accountsandformsshared by current students, the XXXX on Predatory Student Lending has learned that XXXX XXXX is giving students at closing campuses 5 options. Here is what weve learned, some information about loan cancellation, and important things to keep in mind until we learn more. A full list of affected schools is at the end of this post. 
Options For Students at Closing Schools XXXX XXXX announced that students may choose from the following 5 options for how to continue their education : -Complete your degree at your current campus by the end of XXXX, when the campus will close -Complete your degree via the XXXX XXXX XXXX -Complete your degree at another XXXX XXXX campus -Complete your degree at another XXXX XXXX school, either XXXX University or XXXX University -Transfer to another , unspecified university outside the XXXX XXXX network of schools XXXX XXXX is trying to convince students to accept these options by offering a 50 % tuition reduction to students who remain at a XXXX XXXX   school and a {$5000.00} tuition grant to students who transfer to one the unspecified other schools. 
We have not been able to determine what will happen to students who choose not to accept these options, but it is likely that they will be automatically withdrawn from their program. 
Students should notlet XXXX XXXX trick them into accepting these offers before they have all the information they need to make an informed decision! Only accept an offer once you have all the information and if its the best option for you. 
As part of these offers, XXXX XXXX will make students sign acknowledge forms and waivers that will relieve it of any responsibility it owes to students and may prevent students from receiving relief from their federal loans in the future. 
Students should notsign anything until they have read it carefully, had all of their questions answered, and decided that what the best decision is for them! 
XXXX XXXX is Trying to Deprive Students of Their Right to Loan Cancellation The federal government has a program called the Closed School Discharge program that will cancel federal student loans when students schools close. It is only available to students who are enrolled when the school closes or who had withdrawn within 120 days of the school closure. Students who accept an offer to continue their education somewhere else when their school closes do not qualify for Closed School Discharges. 
In a public disclosure, the XXXX XXXX XXXX, an accrediting agency that oversees two XXXX XXXX campuses in Illinois and Colorado, recognizes that these schools are at risk of closing and urges students to be aware of Closed School Discharges. XXXX XXXX does not want its students to get Closed School Discharges! Thats because they will have to pay back the government for each loan that is cancelled from its schools. 
XXXX XXXX timed its closings so that anyone who withdraws will do so more than 120 from the closing, and is using tuition discounts to convince students to stay enrolled. These are both ways to prevent students from qualifying for a Closed School Discharge. This is not right! 
Important Information for Students Theres still a lot that we dont know about XXXX XXXX plan to close its school, and how that will affect students rights. While we wait to learn more, it is important for affected students to ask questions, share information, and protect themselves. Here are a few specific things you can do : -Ask your school for to be placed on a formal leave of absence. XXXX XXXX   schools may not agree to give leaves of absence, but if they do it may help buy some time and maintain students eligibility for Closed School Discharges -Do not sign anything without reading it completely, getting all of your questions answered, and understanding how it affects your right to a Closed School Discharge or to enforce your rights against your school. XXXX XXXX might try to have you waive your rights. Do not do that without understanding the full impact of that decision, which will vary student by student. 
-Share your experience and information!! There are 1000s of students across the country that are affected by this. Join XXXX groups. If you receive information from your school, share it! 
-Visit the Debt Collective website and learn how borrowers across the country are fighting back against bad schools and unfair and illegal debt. 
-Continue to visit this blog for updates. 
-Contact your U.S. representative or senator and let them know whats happening! Demand that they pressure the Department of Education to declare that all students affected by these closures are eligible for Closed School Discharges unless they WANT to accept XXXX XXXX offers. 
XXXXs Bankruptcy May Limit Students Ability To Recover From Their Schools For former students of XXXX-operated schools, XXXXs bankruptcy may limit their ability to seek recovery directly from their school, even in arbitration. Former students may wish to file claims in one or more of the bankruptcy cases ; more information will follow in the coming days. 
Please visit the Federal Student Aid website, the Debt Collective, or contactthe XXXX   on Predatory Student Lending ( thats us! ) to learn more. 
The XXXX on Predatory Student Lending is fighting for and with students who have been cheated by the predatory federally-funded colleges. We are monitoring the XXXX   filings and XXXX XXXX closures and will provide updates for affected students as soon as possible. 

List of Affected Schools XXXX XXXX CAMPUSES SOLD TO THE XXXX XXXX The XXXX XXXX will cease enrollment at the following 18 XXXX XXXX campuses : Arizona : XXXX California : XXXX XXXX/XXXX XXXX, XXXX XXXX/XXXX XXXX, XXXX, XXXX XXXX Colorado : XXXX Florida : XXXX XXXX Illinois : XXXX, XXXX Indiana : XXXX Michigan : XXXX North Carolina : XXXX, XXXX Oregon : XXXX Pennsylvania : XXXX South Carolina : XXXX Tennessee : XXXX Virginia : XXXX The XXXX XXXX will continue to operate the following 12 XXXX XXXX campuses : California : XXXX, XXXX XXXX Florida : XXXX Georgia : XXXX Nevada : XXXX XXXX Pennsylvania : XXXX Texas : XXXX, XXXX, XXXX, XXXX XXXX Virginia : Virginia XXXX Washington : XXXX All other XXXX XXXX were not sold to XXXX XXXX and have closed. 

XXXX THE XXXX XXXX WILL CEASE ENROLLMENT AT THE FOLLOWING 10 XXXX CAMPUSES : California : XXXX XXXX, XXXX XXXX, XXXX XXXX Colorado : XXXX Florida : XXXX Illinois : XXXX Tennessee : XXXX Texas : XXXX Utah : XXXX XXXX XXXX Washington : XXXX XXXX THE XXXX XXXX   WILL CEASE ENROLLMENT AT THE FOLLOWING 3 SOUTH CAMPUSES : Michigan : XXXX North Carolina : XXXX XXXX Ohio : XXXX Read more XXXX on Predatory Student Lending Statement on Proposed Sale of XXXX to XXXX XXXX XXXX XXXX, News, XXXX on Predatory Student Lending - XX/XX/XXXX Last Friday, for-profit college giant XXXX XXXX XXXX ( XXXX ) announced the sale of many of its campuses to the XXXX XXXX XXXX. The acquisition would convert three of the corporations chainsthe XXXX XXXX, XXXX University, and XXXX Universityinto nonprofits. XXXX will retain ownership of the XXXX XXXX chain, which is shutting down most of its campuses, and the 19 XXXX XXXX campuses the corporation is in the process of shutting down. 
XXXXs conversion to nonprofit status raises critical questions, including how the corporation intends to ensure positive student outcomes once it is no longer subject to gainful employment regulations. XXXX has more than 130 programs that the federal government has found to burden graduates with unmanageable student loan debtprograms that will be subject to even less federal oversight once they have been sold to a nonprofit. XXXXs compliance with federal requirements attached to the receipt of federal Title IV funds will be even more critical once the corporation is no longer subject to the 90-10 rule, which prevents for-profit colleges from receiving more than 90 percent of their revenues from such funds.

Like the last-ditch sale of many XXXX campuses as that company failed, this sale leaves failing schools with XXXX, while selling off assets that may still have value to a new entity that may disclaim liability for the acts of its predecessors. This type of transaction leaves former students struggling with unmanageable debt even more completely without recourse. 
Less than a year ago, XXXX tried to sell the XXXX XXXX XXXX XXXX XXXX, an XXXX XXXX campus in XXXX, Massachusetts, to a university based in XXXX. The deal was scuttled after the corporations failed to obtain state approval. As XXXXs equity holders continue to try to divest themselves of these assets, regulators should demand assurances that whoever owns the schools will operate them in the interests of students. 
XXXX The XXXX  on Predatory Student Lending represents a group of former students who attended the XXXX-owned XXXX XXXX XXXX XXXX XXXX. In XXXX, these former students demanded that the companies remedy the harms they had caused to students and their families. The XXXX  and Public Justice are currently challenging the federal governments refusal to provide documents shedding light on XXXXs recruiting practices. 
Read more XXXX on Predatory Student Lending Sues Federal Government For Withholding For-Profit College Corporations Recruitment Records XXXX, News, XXXX on Predatory Student Lending - XX/XX/XXXX On XX/XX/XXXX, theXXXX on Predatory Student Lendingof the Legal Services Center of XXXX XXXX XXXX filed a Freedom of Information Act ( FOIA ) lawsuit, challenging the governments refusal to provide documents shedding light on for-profit college giant XXXX XXXX XXXX ( XXXX ) s recruitment practices. 
Months ago, the XXXX filed a FOIA request with the Department of Justice ( DOJ ), seeking access to these documents. DOJ claimed that it couldnt release the documents ( in part ) because it said there was a court order preventing it from doing so. The XXXX disagreed. So, together with XXXX XXXX, we asked the court that issued the order to clarify that the order does not, in fact, prevent DOJ from releasing the documents. 
Soon after we asked the court for clarification, however, DOJ changed its tune entirely. It now claims that the public has no right to access these documents, even though they were produced to the government by a corporation the government alleged defrauded it of billions of dollars, and would enable the public to evaluate the governments decision to settle its claims for less than one percent of what it had originally said they were worth. 
The lawsuit challenges the governments assertion that the public has no right to these important documents. 
Two Federal Lawsuits, Still No Documents Federal regulations allow student loan borrowers to seek cancellation of their federal student loans by showing that their school violated state law. Former students of the XXXX XXXX and other XXXX-owned chains thus want the documents to help prove that they were defrauded, and are entitled to relief on their student loans. Because these documents have been kept secretand because XXXX usesforced arbitration clausestodrive students out of the public court systemborrowers seeking debt relief often have little but their own personal experiences to support their claims of misconduct. 
The Attorney General of Minnesotaone of the states that participated in the caseexpressed support for the XXXX efforts, stating that the information requested by the XXXX could aid students in their efforts to obtain loan forgiveness from the United States Department of Education, which would unburden them from thousands of dollars of debt. 
The XXXX  has made a significant effort to obtain these documentsfiling a freedom of information request, litigating the governments denial of that request, and moving to intervene to challenge the government and XXXXs efforts to keep the documents secretbecause the documents are critical to the XXXX advocacy on behalf of low-income student loan borrowers. The documents will help the XXXX seek relief for former students of XXXX-owned schools ; inform the public about the practices of for-profit education companies and the governments oversight of those companies ; and advocate for policies that will protect low-income student loan borrowers. 
Background : Government Lawsuit Against XXXX XXXX, a corporation that has been closely associated with XXXX XXXX for years, runs four large chains of for-profit schools, including the beleaguered XXXX XXXX. In XXXX, the federal government, along with several states, sued XXXX, alleging that it violated state and federal law and then lied about it to get government funding. The government claimed that, to maximize enrollments, XXXX illegally paid its admissions employees based on the number of students they could enroll ; created a boiler room style sales culture, the relentless and exclusive focus of which was the number of new students each recruiter could sign up ; taught its recruiters to exploit prospective students vulnerabilities ; and rewarded those who recruited the most students with bonuses, extra time off, vacations, and gifts. 
The lawsuit eventually settled in XXXX for {$95.00} million, less than one percent of the more than {$11.00} billion in taxpayer-funded federal student grants and loans that the government alleged XXXX received between XX/XX/XXXX and the suits filing. The settlement did not relieve students of any of the federal student loan debt they took on to attend XXXX-owned schools. 
Documents Related to This Case Freedom of Information Act Requests, Appeal, and Complaint : XXXX on Predatory Student Lendings FOIA Requests to DOJ and Intervening States ( PDF ) XXXX on Predatory Student Lendings FOIA Appeal ( PDF ) Project on Predatory Student Lendings FOIA Complaint ( PDF ) Intervention ( XXXX XXXX ) : XXXX on Predatory Student Lendings Brief in Support of Motion to Intervene ( PDF ) XXXX on Predatory Student Lendings Brief in Support of Motion for Clarification of Protective Order ( PDF ) XXXX on Predatory Student Lendings Reply in Support of Motion to Intervene ( PDF ) XXXX on Predatory Student Lendings Reply in Support of Motion for Clarification of Protective Order ( PDF ) About the XXXX on Predatory Student Lending The XXXX on Predatory Student Lending fights for low-income borrowers, representing students and families who have experienced unfair, deceptive, and illegal conduct at the hands of for-profit colleges. In addition to litigating on behalf of its clients, the XXXX   has advocated for policy reforms to increase accountability in the for-profit industry. 
About Public Justice Public Justice pursues high impact lawsuits to combat social and economic injustice, protect the Earths sustainability, and challenge predatory corporate conduct and government abuses. For two decades, Public Justice has been exposing and preventing excessive secrecy in our nations courts. Public Justice has unsealed evidence of dangers to public health and safety, helped injury victims oppose over-broad protective orders, and educated the public about the dangers of litigation conducted behind closed doors. 
Read more Challenge to Secrecy of Recruitment Records from For-Profit Education Company XXXX, News, Predatory Lending/Consumer Protection Clinic, XXXX on Predatory Student Lending - XX/XX/XXXX TheXXXX on Predatory Student Lendingof the Legal Services Center of XXXX XXXX XXXX andPublic Justiceasked a federal judge on Friday, XX/XX/XXXX, for access to documents that are likely to reveal for-profit college giant XXXX XXXX XXXX ( XXXX ) s recruitment practices. 
A few years ago, the federal government, along with several states, sued XXXX, whose four large chains of for-profit schools include the beleaguered XXXX XXXX, alleging that it violated state and federal law and then lied about it to get government funding.The government claimedthat XXXX illegally paid its recruiters based on the number of students they could enroll, a practice prohibited by federal law. XXXX, the government alleged, created a boiler room style sales culture, the relentless and exclusive focus of which was the number of new students each recruiter could sign up. To maximize enrollments, the lawsuit alleged, XXXX taught its recruiters to exploit prospective students vulnerabilities, and rewarded those who recruited the most students with bonuses, extra time off, vacations, and gifts. 
The lawsuit eventually settled in XXXX for {$95.00} million, much less thanthe {$1.00} billion the company received in taxpayer-funded federal student grants and loans in the XXXXyear alone. But as part of discovery in the suit, XXXX produced a lot of documents that we believe will shed light on their recruitment practices. The documents from this lawsuit are likely to strengthen claims for relief of hundreds, if not thousands, of former XXXXC students, saidXXXX XXXX, one of the attorneys representing the debtors. 
Former students of the XXXX XXXX and other XXXX-owned chains want these documents to help prove that they were defrauded, and are entitled to relief on their student loans. Because these documents have so far been kept secretand because XXXX usesforced arbitration clausestodrive students out of the public court systemborrowers seeking debt relief often have little but their own personal experiences to corroborate their claims of misconduct. 
While taxpayers spent hundreds of millions of dollars funding what the Department of Justice has called XXXX recruitment mill, the borrowers who attended these schools have yet to obtain federal debt relief, said Public Justice attorney XXXX XXXX. 
Before filing this lawsuit, the XXXX  tried to get these documents showing XXXXs predatory recruitment practices through federal and state freedom of information requests, but its request was denied in part because of a protective order in the case. The XXXX  asked a federal judge to rule that the protective order does not shield the documents. 
Documents Related to This Case XXXX on Predatory Student Lendings FOIA Requests to DOJ and Intervening States ( PDF ) XXXX  on Predatory Student Lendings Brief in Support of Motion to Intervene ( PDF ) XXXX on Predatory Student Lendings Brief in Support of Motion for Clarification of Protective Order ( PDF ) About the XXXX  on Predatory Student Lending The XXXX  on Predatory Student Lending fights for low-income borrowers, representing students and families who have experienced unfair, deceptive, and illegal conduct at the hands of for-profit colleges. In addition to litigating on behalf of its clients, the XXXX  has advocated for policy reforms to increase accountability in the for-profit industry. 
About Public Justice Public Justice pursues high impact lawsuits to combat social and economic injustice, protect the Earths sustainability, and challenge predatory corporate conduct and government abuses. For two decades, Public Justice has been exposing and preventing excessive secrecy in our nations courts. Public Justice has unsealed evidence of dangers to public health and safety, helped injury victims oppose over-broad protective orders, and educated the public about the dangers of litigation conducted behind closed doors.