Shuttered for-profit college firm to pay $28M settlement over closures
Laura Spitalniak
March 13, 023
Dive Brief:
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A shuttered for-profit college corporation will pay $28 million to settle allegations it left students in the lurch following its sudden closure.
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A lawsuit against the Education Corporation of America and its subsidiaries claimed the coalition didn’t provide students a way to complete their education when its colleges closed. ECA’s closure also resulted in over $100 million in student loan discharges, the suit said.
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The settlement agreement was filed in December and finalized Monday, according to the plaintiff legal team. The money will be distributed among almost 2,000 creditors and former students by John Kennedy, the head of the ECA’s receivership estate.
Dive Insight:
Prior to its closure, ECA operated several for-profit institutions nationwide, including Brightwood College, Brightwood Career Institute and Virginia College. The already-struggling company shut down in 2018 after the Accrediting Council for Independent Colleges and Schools suspended its colleges’ accreditation. ACICS has been much-beleaguered in its own right and is on track to shut down by early 2024.
