Attorney General Stein wins order against student lender, voids predatory loans
RALEIGH, N.C. (WITN) - Attorney General Josh Stein announced today he won a court order against student lender Prehired that requires the company to shut down permanently.
Stein’s office said the order also requires the lender to pay more than $4.2 million in restitution to student borrowers who were harmed, and void nearly $27 million in all outstanding loans.
Stein, a bipartisan group of ten state attorney generals as well as the federal government brought this case to court against Prehired saying that Prehired made false promises about job placements, trapped students with illegal loans, and used abusive debt collection practices on borrowers. In North Carolina, 22 people made payments to Prehired totaling $112,716.638. In all, North Carolinians may receive an estimated $1.1 million in contract cancellations.
“We will not allow predatory lenders to rob North Carolinians of their money and damage their futures,” said Attorney General Josh Stein. “I’m pleased that this order wins relief for students who were harmed and shuts down the company.”
According to Stein, Prehired operated a 12-week online training program that claimed to prepare students to get guaranteed jobs as entry-level software sales development representatives with six-figure salaries.
The lawsuit also says that Prehired offered “income share loans”, which require students to pay back the loans as a percentage of the income they make after graduating.
Stein sued Prehired in June 2023, claiming that the company was violating consumer financial laws by claiming its loans were not really loans, failing to tell borrowers about important parts of the loan agreement, deceptively pushing borrowers into debt, and suing students in jurisdictions that were far away from where they lived to make it harder for them to dispute the cases.
Stein’s office says that Prehired has already filed for bankruptcy and stopped operations, but today’s order requires it to shut down for good.
Students affected by this action can submit a claim at https://cms.www.prehiredclaims.com/.
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