Friday, June 27, 2008

Citibank Deferment Request Letter

Many of our SSH clients with loans from Citibank have received a letter regarding a deferment request. The first paragraph of the letter states, "At this time we are in the process of updating our records to ensure that we have current enrollment information for our customers. We would appreciate it if you would assist us with this process. Please read this information in Section 1 and have your school's Registrar complete Section 2. Be sure to sign, date and return this request in the envelope provided. Failure to complete and return this form may result in your CitiAssist Loan being placed in immediate repayment." The letter only allows for a deferment if the borrower is currently enrolled in school. Any deferment request made pursuant to this letter requires a certification from an authorized schoold official. If you are not in school, you do not qualify for a deferment under the terms of this letter. Here is how I suggest that our Citibank clients respond to this letter. Write the following on the letter: " I was a student at Silver State Helicpoters. The school closed and filed bankruptcy on February February 4, 2008. I request that this loan be placed on a no interest, no payment status while the facts regarding this bankruptcy are reviewed. I am represented by attorney Michael Jay Berger with regards to both the Silver State Helicopters bankruptcy and my loan from Citibank. Please have your legal counsel call Mr. Berger at his office, 310-271-6223 to discuss my loan and the loans of Mr. Berger's other clients who borrowed money from Citibank to receive training from Silver State Helicopters."

Thursday, June 19, 2008

AES/Student Loan Xpress Suspends Interest Accrual and Payments on SSH Student Loans

Many of our SSH clients with loans from Student Loan Xpress that are serviced by AES have received letters from AES regarding the suspension of interest accrual and payments on their SSH Student Loans. The letters are dated or or about May 27, 2008 and state in pertinent part, "Dear Customer: As you may know, Silver State Helicopters filed for bankruptcy and ceased operations on February 4, 2008. We continue to assess the situation created by the closure of the school. Although you may have received a prior letter from us regarding your account, this is to advise that, as a courtesy to you, we have elected to treat your account as being "in grace" status and to suspend interest accrual, from the date the school filed for bankruptcy. Accordingly, until you receive further written notice from us, your loan will remain in grace status, interest will not accrue, and you will not be required to make any payments. We are not waiving any of our rights under the terms of your loan, including our rights to restart accrual of interest or to begin the repayment period, however, we will provide you with written notice of any decision to restart the accrual of interest or to being the repayment period. No action on your part is required at this time and we will update your loan status with the loan servicer, Amercian Education Services. " This letter is a good thing for all of our AES/Student Loan Xpress clients, and a good example for KeyBank and Citibank to follow. It may ultimately prove to be the first step towards a mutually agreeable settlement with the lenders.

Sunday, June 15, 2008

More Publicity For Our Cause

The following is a transcript of a story that aired on the local ABC television station on Friday, June 13, 2008 on the 5:00 pm news. It appears on the website under the Title "Consumer NewsSchools close, but students still pay."
By Ric Romero
LOS ANGELES (KABC) -- Trade schools and vocational schools provide a wonderful service for students who find traditional colleges are not for them. But what happens when the school you attend goes bankrupt and has to close? You may be left with a huge bill that still has to be paid off.
Many of these schools require you to pay up front, and often the money comes from a loan from a private finance company who expects you to pay them back no matter what happens to the school.
When they're in the air, professional helicopter pilots can feel like they're on top of the world. It's a rewarding job that requires months of training to master. Christian Shaffer of Oro Grande thought he had the right stuff. Shaffer signed up for instruction with Silver State Helicopters Flight Academy and thought he was on his way to becoming a chopper pilot.
"They promised me a long-term career with Silver State themselves, promised me good pay, and a lot of credentials that would help me to further my career," said Shaffer.

A North Las Vegas company, Silver State thought there were no limits and had operations in 28 locations across the country, including Long Beach and Chino. In handout video, Silver State makes the 18-month-long training program look very exciting.
But as with all students, it was going to cost Shaffer plenty. Silver State got the aspiring pilot a loan through an outside private lender to pay the tuition.
"The first $24,000 was taken out before I even started class," said Shaffer.
Six months later, Christian was even deeper in debt and far from living his dream.
"I was already $48,000 in debt, owed $48,000, with only four hours of flight time logged," said Shaffer.
Helistream in Orange County is a helicopter school that's been around for over 20 years. According to Helistream's Director of Operations, Rod Anderson, Silver State's requirement of students to pay so much up front was unusual for the industry.
At Anderson's chopper school there is a three-to-one teacher/student ratio, with plenty of hands-on training. Silver State emphasized more classroom instruction and a large student class-to-teacher ratio. But remember, Shaffer was told he would have a job once he graduated from Silver State.
The only thing is, Silver State declared bankruptcy well before Shaffer finished his training, and after he had paid nearly $70,000 to attend the school.
"It was pretty devastating to the family -- very. I can't explain it enough, how it really put a damper to our life and our future," said Shaffer.
With the school closed and Silver State with his money, Christian's only choice now is to hire an attorney and attempt to get Silver State's president and CEO, Jerry Airola, to give him his money back.
"We're certainly going to investigate all the avenues of recourse against the lenders. If there's been fraud or collusion by the lenders, we hope to use this to wipe out these student loans," said attorney Michael Berger.
"They will have lost time, they will have lost their hopes, but at least maybe they won't have a huge burden on them," said attorney Gail Higgins.
At this point, Christian's only hope is with a lawsuit. But before you enter into a contract with a trade school or vocational school, make sure you know your rights and know how to protect yourself

Saturday, June 14, 2008

Proofs of Claim

The deadline to file a proof of claim in the Silver State Helicopters Bankruptcy Case is July 7, 2008. If you are one of our SSH clients, we handle this for you. We have already filed hundreds of proofs of claim for our clients, and we anticipate having all remaining proofs of claim for our clients filed by July 1, 2008. I have 2 employees working full time on this 5 days a week, with an additional 2 employees helping out. We already have all of the information that we need to file these claims for most of our SSH clients. If we need further information from any individual client, we will contact him or her by telephone and by e-mail. The most important piece of information that we need for each SSH client is the amount that he or she paid to attend SSH. This can be paid paid in cash, or by obtaining a loan, or in some combination. The typical SSH student years borrowed $69,900.00 to attend SSH, and obtained his loan from Key Bank (earlier students), Student Loan Xpress (most of the students), or Citibank (later students). Liberty Bank acted as an originator for some loans, and then sold the loans to Student Loan Xpress. AES is the loan servicing agent for Student Loan Xpress. It is helpful for us to know the name of the bank in preparing the proof of claim and to have a copy of the loan agreement and a recent statement from the lender. When the documents are available, we attach a copy of the loan agreement and the SSH Training Services Agreement to the Proof of Claim.