In lawsuit filed against Betsy DeVos, Education Corporation of America argues that it needs major financial restructuring but that campuses will have to close without federal student aid.
The problems at for-profit college operator Education Corporation of America have piled up in recent years.
Its enrollment has plummeted. It has stopped making on-time payments on its debt. And it’s fighting eviction from multiple locations as creditors pursue judgments against the company.
This week, ECA told a federal judge that it could not complete a teach-out — a process by which students finish their degrees or transfer credits elsewhere — at two dozen campuses slated for closure unless an unusual restructuring plan is approved. In a lawsuit naming Education Secretary Betsy DeVos and her department as defendants, the company hinted that the government could face numerous loan-forgiveness claims from students attending those campuses without the plan in place.