College aid settlement questioned

ALLENTOWN - Some students at a for-profit Allentown college investigated for allegedly steering students into high-interest loans say the school's $200,000 settlement with the state won't help alleviate their debt.

The settlement money from Lehigh Valley College will go to the state treasury and the Attorney General's Office, not to students battling as much as $100,000 of debt from the 18-month programs.

"It's not going to the people who were affected? Not even a little bit?" asked I-iesha Leon, now a Houston resident whose wages are garnished because she is unable to pay her student loan bills.

The school, once known as Allentown Business College, is owned by Career Education, a Chicago-area company with about 80 for-profit schools nationwide and annual revenue of $1.7 billion. The company announced earlier this month that it would close the one-building campus in Allentown when current students graduate.

Students say they took out loans with interest as high as 17 percent. The school charges about $30,000 to $37,000 for programs in subjects such as massage therapy or computer networking.

The Lehigh Valley students did not have a clear case for restitution because they signed contracts for their loans, according to Nils Frederiksen, a spokesman for Attorney General Thomas Corbett.

Under the settlement, Career Education denies violating the state consumer-protection law. The company later issued a statement pledging its commitment to "information transparency and sound lending practices."

Students complained that school advisers rushed them through the financial-aid process and that they were not warned about the high rates on some loans.