The lawsuits involving Independence University ended with the school shut down, its parent organization found by a Colorado court to have directed fraud, and the U.S. Department of Education discharging roughly $1.15 billion in federal student loans for about 73,600 borrowers who attended any school run by the Center for Excellence in Higher Education (CEHE) between January 1, 2006, and August 1, 2021.1 Independence University was one of four CEHE schools, along with CollegeAmerica, Stevens-Henager College, and California College San Diego. All four closed on August 1, 2021.
Who Qualifies for the Automatic Loan Discharge
On January 13, 2025, the Department of Education announced a group discharge covering every borrower who enrolled at any CEHE school between January 1, 2006, and August 1, 2021. That includes Independence University, CollegeAmerica, Stevens-Henager College, and California College San Diego. The total relief is roughly $1.15 billion across approximately 73,600 borrowers.
The discharge is automatic. You do not need to file a borrower defense application or take any action to receive it. While the department processes the discharges, affected borrowers were placed in forbearance or had collections stopped. The department described the action as a “final agency determination.”
Two limits are worth naming plainly. The discharge covers federal student loans held by the Department of Education. It does not, on its own, wipe out EduPlan loans, the private in-house loan program CEHE ran, or any other private debt. And the window is enrollment-based: attendance at a CEHE school between the two dates is what qualifies, not graduation or completion of a specific program.
What the Department of Education Found
The department ran its own review drawing on the Colorado trial record, evidence supplied by the Arizona Attorney General, and internal CEHE documents. It concluded that CEHE had engaged in “widespread and pervasive” misrepresentations across every campus and online program. Three areas mattered.
Graduate earnings. CEHE’s “Education Pays Off” marketing campaign told prospective students that graduates could earn salaries in line with national averages, or “a million dollars more” over a lifetime. Internal records showed something different. The CEO himself testified that actual graduate earnings were often around $10,000 less than the figures used in advertisements. For associate degree holders in 2009–2010, ads cited a $36,645 average while real earnings ranged from $26,000 to $29,000.
Job placement rates. Published placement rates counted students working outside their field of study, students who already held the same job before enrolling, and students in short-term positions. Graduates were excluded from the calculation by classifying them as “unavailable for employment” on thin pretexts. When the numbers were recalculated using the accreditor’s own standards, some programs’ reported placement rates dropped by 30% or more.
EduPlan loans. CEHE marketed its proprietary loan program, which carried a 7% interest rate, as an “affordable” and “convenient budget plan.” Monthly payments on EduPlan loans were consistently higher than comparable private student loans. Between 2003 and 2006, 70% of EduPlan borrowers defaulted. Between 2010 and 2016, over 80% of accounts incurred late fees. By 2013, CEHE’s own projections estimated that 40% of borrowers would make zero payments the following year.
The Colorado Fraud Case
In 2014, the Colorado Department of Law sued CEHE under the Colorado Consumer Protection Act, alleging deceptive statements to prospective students about job placement rates, graduate earning potential, and the affordability of EduPlan loans. The case, State of Colorado v. Center for Excellence in Higher Education (Denver District Court, No. 2014CV34530), produced testimony from more than 40 witnesses and over 300 exhibits.
In August 2020, the trial court ruled against CEHE and CollegeAmerica. The judge found the schools had knowingly engaged in deceptive practices, issued a $3 million judgment, and held Carl Barney (founder and board chairman) and Eric Juhlin (then-CEO) personally liable for directing the fraud. The court concluded the executives had instructed recruiters to use misleading national salary data to create a false impression of what graduates earned, while withholding internal data showing graduates made significantly less. The court also found the schools had knowingly provided inflated employment placement statistics to accreditors and students.
The case has not closed on appeal. In August 2021, a three-judge panel of the Colorado Court of Appeals reversed the judgment and ordered a new trial, finding an error in how the trial court had handled the “significant public impact” requirement under the consumer protection statute. In May 2023, the Colorado Supreme Court directed the Court of Appeals to reconsider whether a new trial was actually necessary, noting that CollegeAmerica had acknowledged both sides already submitted ample evidence on the public-impact question. The $3 million penalty remains subject to that appellate review.
The Colorado trial record is what the Department of Education leaned on when it announced the loan discharge, so the appellate wrangling over the $3 million judgment does not undo the federal relief.
Why the Schools Closed
CEHE’s accreditor, the Accrediting Commission of Career Schools and Colleges (ACCSC), had flagged problems with the schools’ job placement calculations repeatedly, sending compliance notices in 2012, 2016, 2017, 2018, and 2020. In April 2021, ACCSC voted to withdraw Independence University’s accreditation, citing “significant” failures in student graduation and employment rates.
The same month, the Department of Education notified CEO Eric Juhlin that he was being suspended from participating in any federal program, based on the August 2020 Colorado fraud findings. CEHE was given ten days to remove him from any management role involving Title IV financial aid. Juhlin stepped down on May 4, 2021, and CFO Paul Gardner became acting CEO.
The department then placed CEHE’s colleges under “heightened cash monitoring 2” status, restricting access to federal funding. On July 28, 2021, students received an email telling them the school would close in days. Independence University and every other CEHE campus shut down on August 1, 2021. Richard Cordray, who oversaw federal financial aid at the time, said the schools closed to avoid the findings of an ongoing federal inquiry.
Other Cases Still in Motion
Several related cases run alongside the fraud findings and loan discharge, though none change what borrowers receive.
CEHE v. the federal government. In December 2022, CEHE sued the U.S. government in the Court of Federal Claims, seeking $500 million. The organization alleged breach of contract and an illegal taking, arguing the Department of Education forced the schools to close by improperly denying $43 million in federal aid reimbursement requests. The department’s position is that reimbursement requests were denied because of errors in student file documentation, that CEHE could have resubmitted corrected claims, and that the decision to close “rested solely with CEHE.” In December 2023, the department separately sent CEHE a formal demand for $23 million to cover closed-school loan discharges, giving 45 days to pay or appeal.
Federal False Claims Act case. Two former Stevens-Henager admissions consultants, Katie Brooks and Nannette Wride, filed a whistleblower suit in 2013 alleging the schools violated the Department of Education’s incentive compensation ban by paying recruiters bonuses tied to enrollment, and had falsely certified compliance to keep receiving Title IV funds. The complaint alleged the schools received over $660 million in federal funds while ineligible. After years of narrowing before Judge Jill Parrish in the U.S. District Court for the District of Utah, the case went to trial in April 2025. The jury ruled in favor of the schools, and judgment was entered for CEHE and Stevens-Henager College on May 2, 2025.
WARN Act class action. On August 2, 2021, the day after the schools finished shutting down, a former employee filed a class action in the U.S. District Court for the District of Delaware, Romero v. Center for Excellence in Higher Education, Inc. (Case No. 1:21-cv-01124). The suit alleges CEHE terminated over 300 employees at facilities in Salt Lake City and Phoenix without the 60 days of advance notice required by the federal Worker Adjustment and Retraining Notification Act. In March 2023, the court compelled arbitration of the named plaintiff’s individual claim and stayed the litigation.