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Thursday, May 15, 2008

Silver State Students Sue Lender

Silver State Helicopters closed and locked its doors and filed for bankruptcy in February, leaving thousands of students owing loans and without their certificates. Now a California law firm, Pinnacle Law Group, has filed a proposed class-action suit against Cleveland, Ohio-based KeyBank, seeking to bar the financial institution from collecting on the loans for California students who attended, but didn't finish, Silver State's 18-month program. The case was filed in Oakland, California’s Superior Court. Other student loan companies, including Citibank and Student Loan Express, also could be targets of upcoming separate actions. Silver State required students to pay the full, almost $70,000, tuition up front. But, the company “helped” students by offering access to preferred private lenders such as KeyBank. Students were told that payment on the loans wouldn't begin until six months after graduation. The lawsuit contends that KeyBank, which sold off the loans to investors, included provisions in the loan documents to avoid California and federal consumer protection laws, including a requirement that any legal action against the bank be brought in Ohio. The loan documents also included some anti-class-action arbitration clauses. For related news
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