Delaware, federal agency gain judgment against student lender that promised IT sales job placements


Work from the Delaware Attorney General’s office and the federal Consumer Protection Financial Bureau and 11 other states, a Delaware bankruptcy court approved a judgment that will require bankrupt student lender Prehired to provide more than $30 million in relief to student borrowers nationwide.

The order approved by a federal bankruptcy court requires Prehired to cease all operations, permits the potential payment of $4.2 million in redress to consumers affected by its practices, and voids all of its outstanding income share loans, valued by Prehired at nearly $27 million.

“When Prehired decided to use the Delaware courts to perpetrate an illegal nationwide debt collection scheme, my office quickly took action to stop them in their tracks.  Today, through an effort that grew to include 11 other states and the Consumer Financial Protection Bureau, we are pleased to announce this resolution that will provide real relief to borrowers around the country,” said Attorney General Kathy Jennings.  “My office will continue to do the work to ensure that Delaware’s courts and judicial system are not used to perpetrate frauds, either here in Delaware or across the nation.”

Prehired operated a 12-week online training program claiming to prepare students for entry-level positions as software sales development representatives with “six figure salaries” and a “job guarantee.” Prehired offered students “income share” loans to help finance their costs of the program.

The AG’s Consumer Protection Unit went to work in early 2022. That investigation began after Prehired filed nearly 300 debt-collection lawsuits in the Delaware Justice of the Peace Court seeking to enforce its income share agreements. Prehired started filing the lawsuits one month after forming two Delaware limited liability companies.


Prehired voluntarily dismissed those cases after the state expressed its concerns in a March 8 letter that virtually all of the defendants resided outside of Delaware and had no practical way to defend themselves in the lawsuits.Days later, Prehired began refiling those same cases on the Ejudicate online arbitration platform, even though students never agreed. Once again, the Consumer Protection Unit acted to stop the arbitrations.

More information about the order can be found in a companion release issued by the CFPB. A copy of the federal bankruptcy court’s order is available here.

Jennings praised the efforts of the Delaware Justice of the Peace Courts for acting promptly to stay the lawsuits filed by Prehired against hundreds of consumers.

Delaware DOJ’s efforts on this matter were handled by the staff of AG Jennings’ Consumer Protection Unit, as well as former Deputy Attorney General Katie Devanney, whose efforts viewed by Jennings as critical to bringing Prehired practices to light.

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