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SALT LAKE CITY (AP) -- KeyBank has announced it is prepared to forgive all or part of some the loans it made to students at the Academy of Nursing.
The state has cited the academy for charging students upfront for its tutoring program -- a violation of state law. Most of the students borrowed the $17,000-plus in tuition through KeyBank and have yet to receive refunds from the academy.
The students paid in advance for classes they expected would lead to nursing degrees from New York's Excelsior College. Students said that when Excelsior increased entrance requirements they sought refunds, but the academy stalled.
KeyBank issued more than $5 million in loans to 292 students.
Beth D. Rosenberg, president of Key Education Resources, said if academy students' loans were fully disbursed but no education provided, "they should not have to repay that loan." Rosenberg made the comment to the Deseret Morning News from her office in Cleveland.
Students who completed the academy's program are expected to repay the full loan.
Rosenberg said KeyBank is not sending out notices of repayment to students, and nothing will be going to credit bureaus at this time.
KeyBank has been tightening"its policy on disbursements and full disbursements for a one-year loan program will no longer be made without the borrower's prior consent, she said.
Two-year disbursements were reportedly made to the academy for some students.
State Consumer Protection Division Director Francine Giani is expected to close the academy for good on Friday. Already, the classrooms at the Salt Lake business are empty and its online services have been taken down.
Academy founders and brothers Mark and Aaron Hansen have no plans to file an appeal on two state citations issued last month against the academy.
Attorney Brian Barnhill did file a request with Giani on Wednesday for a hearing on a citation against the Elite Nurses "boot camp," a side business run by Mark Hansen. Students also paid up front for that program, which Giani said was cited for not being registered with the state.
Barnhill said Hansen started Elite Nurses with the understanding that the state did not require that business to be registered.
A state criminal investigation continues into the Hansens' use of student tuition checks.
Barnhill said the academy began spending more and more money as Excelsior College raised the bar on getting into its nursing program.
Giani estimates students are owed upward of $2.5 million. The state has only the Hansens' $187,000 bond to divide up among those who lost money.
(Copyright 2005 by The Associated Press. All Rights Reserved.)