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Attorney General Conway Files Agreement That Helps Thousands of Decker College Students

Attorney General Jack Conway today announced that he and the bankruptcy trustee for Decker College, Inc. have reached a settlement and tendered an agreed order for approval by the U.S. Bankruptcy Court that will provide relief for thousands of students in the college’s Associate of Applied Science Degree programs. Those programs include carpentry, plumbing, electrical, and heating, ventilation and air conditioning (HVAC) trades. The settlement benefits trade program students who enrolled in Decker after April 1, 2004.

“It is my hope that these students will continue to pursue their dreams of a better life through education, and I believe the agreement filed today will help them in their pursuit,” Conway said.

An involuntary petition for bankruptcy was filed against Decker College in October 2005, shortly after accreditation for certain programs was revoked and the U.S. Department of Education terminated federal funding and federal student loans for the school. As a result of Decker’s closing, most of the students in these programs were unable to secure their degrees or transfer credits to other schools. The Attorney General’s Office of Consumer Protection filed a claim in the bankruptcy proceedings in April 2006, alleging violations of the Kentucky Consumer Protection Act and sought restitution for students and civil penalties. The alleged violations related to Decker’s fraud and failure to deliver the education expected and promised.

In August 2007, the trustee sought court approval to employ a collection agency to recover payment for more than 2,200 student loans owed to Decker that totaled more than $4.5 million. The Attorney General objected. This settlement releases the 2,200 students from liability on the loans. In addition, the trustee has withdrawn its objection to the Attorney General’s claim for restitution for the remaining students. The settlement also provides potential relief for Decker students currently liable to other lending institutions for loans obtained to attend the trades programs at Decker. These students could receive monetary relief to offset their loan debt to the extent assets are recovered by the trustee and available after creditors with priority claims are paid. The settlement also helps 350 students who filed individual proofs of claim, formal documents to recover tuition costs.

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