DoE and state AG take action in investigating CEHE and their attached schools

DoE and state AG take action in investigating CEHE and their attached schools

271 have signed. Let’s get to 500!
Petition to
DoE Secretary Miguel Cardona and

Why this petition matters

Started by Matt Atkinson

On 8/1/2021 Independence University, an exclusively online accredited college closed their doors with next to 0 warning to students. Letters sent out by Execs blamed DoE for not paying Federal Aid funds resulting in a bankruptcy by the school, its ground campus Steven-Henagar's College and it's parent company Center of Excellence in Higher Education (CEHE).

In 2014 the CO AG filed suit for unfair practices (CO Case 2014CV34530). That case was refiled and adjudicated in 2020 (CO Case 14CV34530). The 2020 case resulted in a $3M award to the plaintiff. Per CEHE founder Carl Barney's personal blog, that verdict was overturned on appeal by a CO Appeals court shortly after the verdict.

This verdict was unknown to students as it was not required to be disclosed. The main point of contention in the suit was the use of an internal private loan program called EduPlan. Essentially CEHE Schools (they owned 4 main ground campuses, some satellite campuses and IU) charged a tuition that was knowingly higher than the max a student could be awarded for federal aid (not illegal) and then to cover the balance, deceptively entered students into an EduPlan loan, which in some cases was many thousands of dollars.

Even after the suit, CEHE continued to use these practices. They were dropped by their accreditor in April of 2021 but under appeal remained accredited until the appeal was adjudicated. That never happened as the school closed before a decision was made. In the past, the Dept of Education (DoE) had investigated CEHE and their schools and put them on a monitoring program for their receiving federal funds. DoE eventually cut them off due to no improvement of practices.

IU tried to do a teach out to 2 other schools that were questionable as well. Normally when there is a teach out DoE isn't involved as it is between each school's accreditor to make the transition. IU accreditor asked DoE to review the teach out as they didn't feel it was going to be adequate. DoE did review it and did not approve the teach out.

Due to this, students were left with a dilemma. They could completely drop out of school all together and get their loans forgiven under the Closed School Forgiveness program, continue under the "teach out" and apply for borrower defense forgiveness based on fraud/misrepresentation by the school or transfer to a completely new school, hope the credits transfer and apply for borrower defense forgiveness.

Students who dropped completely have had success in getting their loans dropped. Those who transferred could still be on the hook for the IU portion of their loans. Due to this, some students have little to no funding left and could be forced to try and pay out of pocket class by class.

We have also received collection letters and calls, some with amounts that don't match records and some that don't even list an amount, asking us to repay the EduPlan balances.

We also show that DoE has received our unused portion of our Pell Grants back based on our student portals. Per our dashboards, that is not reflected. We have also been shown in our student portals (which are still active) that between Aug 2021 and current, our unused loans proceeds were mailed to us as a stipend. This includes an amount as well as a check number. To date we have not received these checks. When confronted about it (ie speaking with the collections callers or numbers in letter) we are told those checks will be sent after DoE pays them as they don't have the funds. These checks total thousands of dollars for some students.

We the undersigned, ask the DOE, the US AG and the AG from each state in the US as well as DC, to investigate this matter and take appropriate actions. As students, we are bound by an arbitration agreement that was embedded to our enrollment agreement. It is impossible to do arbitration with a company or school that is closed. It is our understanding that this agreement prevents us from suing either as a class or as individuals.

271 have signed. Let’s get to 500!