Attorney General Bill McCollum News Release
October 27, 2009
Media Contact: Jenn Meale
Phone: (850) 245-0150
en EspañolPrint Icon Print Version

Florida Leads Multistate Settlement with Student Loan Provider

~ Settlement resolves issues related to now-defunct helicopter training school ~


TALLAHASSEE, FL –Attorney General Bill McCollum today announced that Florida and 11 other states have obtained a settlement with a private student loan provider, resolving an 18-month multistate investigation. Student Loan Xpress, a subsidiary of CIT Group, total of $112.7 million in debt for students who obtained non-government guaranteed educational loans to attend a now-bankrupt helicopter training school, Silver State Helicopters, LLC. Florida was the lead state in the investigation and settlement negotiations; Florida victims will be entitled to over $17 million in student loan forgiveness.

“This is an excellent resolution for those students whose dreams of flying were grounded, but who were still stuck with student loans to pay back,” said Attorney General Bill McCollum.

Silver State Helicopters began operating in 2002 as a small helicopter pilot training school and ultimately operated 34 flight schools throughout the country. For at least two years, Student Loan Xpress served as the preferred student lender for Silver State Helicopters, providing approximately $172 million to over 2,800 students nationwide. Records showed that only a small percentage of students graduated and drop-out rates were exceptionally high.

By 2008, Silver State Helicopters had discontinued operations entirely and had filed for bankruptcy. Most students were left owing Student Loan Xpress a substantial amount of debt for training and certifications they never received. The Florida Attorney General’s Office received over 300 complaints about the school’s bankruptcy and the student loans still owed. Silver State had school locations in Jacksonville, Ft. Lauderdale, Lakeland, and Melbourne with at least 375 Florida students.

The settlement requires Student Loan Xpress forgive up to 75 percent of the total amount borrowed by the majority of Silver State Helicopters students as part of its resolution of a pending class action. The percentage of loan forgiveness will vary based upon the number of flight certifications each student obtained.

In addition to the loan forgiveness, the agreement includes several terms of injunctive relief which will preclude Student Loan Xpress from providing negative information to any credit reporting agencies about settling students who failed to make payments on their loans prior to the settlement.. Further, in the future, where Student Loan Xpress acts as the exclusive private loan provider to students of a private post-secondary, trade or vocational institution not certified or accredited by state or federal authorities, the company must provide written disclosures to each prospective student-borrower stating the loans do not constitute an endorsement of the school, its principals, or the quality of education or training offered.

The related national private class action settlement was also today filed in Federal court in Florida. The settlement and benefits provided are available generally to students who were attending Silver State as of the date of its closure, February 4, 2008.

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