For Immediate Release - September 27, 2013

Patrick Administration Announces New Protocol for Former American Career Institute Students with Outstanding Student Loans

BOSTON - A recent order issued by a federal district court judge is providing additional guidance and resources to former students of American Career Institute (ACI), the Division of Professional Licensure (DPL) announced today. These new guidelines will give students the ability to address any financial obligations they may have to the defunct school. 

The order mandates a court-appointed receiver to work with DPL to ensure that students only pay for the education that they actually received while attending ACI, and to make sure students can discharge any financial obligations related to education or training that they did not receive because of the school’s closure.

"Unfortunately, these students had the floor fall out from beneath them when ACI shut its doors and this court order is an important step to help them stabilize their finances," said Consumer Affairs and Business Regulation Undersecretary Barbara Anthony. "The burden of tuition costs will not rest on those whose education was not fulfilled."

Citing financial difficulties, ACI, a for-profit occupational school that provided training in various fields, abruptly closed its five Massachusetts campuses in January 2013. Approximately 1,400 students attending the school’s Massachusetts locations – Braintree, Cambridge, Framingham, Springfield and Woburn – were affected by the school’s closure.

"This court order will help students as they seek to resolve any remaining financial obligations to the school," said Director of the Division of Professional Licensure Mark R. Kmetz. "In conjunction with to the other efforts the state is providing, this protocol will give these impacted students an additional source of relief."

The court order divides affected students into five categories, and authorizes the receiver to take certain actions relative to the needs and obligations of students in each group. These categories include:

  • Completers: Students who have completed their programs and have received, or are entitled to receive, certificates of completion. These students have completed the training they paid for from ACI, and must satisfy any financial obligations prior to receiving a certificate of completion.
  • Fresh Starts: Students who had paid or incurred a portion of their tuition costs prior to ACI’s closure, but had not yet begun their program or had not yet completed a single course. Students in this category will have their financial obligations to the school discharged.
  • Discharges: Students who were at various points in their programs and either opted to discontinue their training by not participating in a teach-out or transfer opportunity, or who did not have such an opportunity, and are seeking full discharges of their federal and ACI-related debts. These students may have their financial obligations discharged; however, they will not receive a certificate of completion from ACI and cannot use the training that they received from ACI toward future education programs at other institutions.
  • Teach-Outs: Students who participated in courses or externships arranged by state regulators through other schools in order to complete their program; teach-out students receive a certificate of completion from ACI or their teach-out school upon completion of their studies. These students will only be required to satisfy obligations related to coursework completed with ACI, while balances related to attendance at approved teach-out institutions will be discharged.
  • Transfers: Students who did not participate in a teach-out opportunity but opted to transfer to another institution, at which they will complete their program and receive a certificate of completion. Students in this category will have their obligation discharged to the extent that the training ACI provided was non-transferable, or to the extent that the coursework necessary to complete the program was not provided by ACI.

Separate from the court order, DPL has taken a number of steps to assist former ACI students affected by the school’s closure. Last month, DPL announced a claims process through which eligible ACI students may submit a claim for refund of tuition paid to the school, or for other expenses related to their enrollment.  Eligible students may file a claim by downloading, completing and mailing a claim form to DPL.  All claims must be received by DPL before5:00 p.m. on Friday, October 4, 2013. For more information about the claims process, students are encouraged to consult the most recent school closure bulletin available on DPL’s website.

In addition to the claims process, DPL has held several information sessions for students at each of the school’s former locations, and has obtained and distributed student records.  The agency has also arranged "teach-out" opportunities to enable students to complete their studies at other approved schools or institutions, and continues to investigate the school’s closure. DPL is working closely with various federal and state agencies to arrange for loan discharges and other relief options.

DPL is a regulatory agency within the Office of Consumer Affairs and Business Regulation responsible for ensuring regulatory compliance and the integrity of the licensing process for more than 370,000 licensees in trades and professions under the jurisdiction of 31 boards of registration. 

DPL also licenses private occupational schools operating in Massachusetts. Oversight responsibilities for private occupational schools were transferred to the agency from the Department of Elementary and Secondary Education in 2012.  Currently, there are 165 occupational schools licensed to operate at 245 locations in Massachusetts.  For more information, visit Follow DPL on Twitter @MassDPL.