Deal will partially erase debt tied to Silver State Helicopters

By Mary Manning (contact)

Tuesday, Oct. 27, 2009 | 2:02 p.m.

Papers filed in a federal court in Tampa, Fla., today will help forgive more than $100 million in student loans that left student pilots from bankrupt Silver State Helicopters in a sea of debt.

Silver State Helicopters declared bankruptcy a year ago, but the student loans worth $112.8 million left the student pilots in debt. Under an agreement with 12 states, including Nevada, Student Loan Express is expected to forgive those student debts, Nevada Attorney General Catherine Cortez Masto said today.

The Nevada Attorney General's Office served on an executive committee that helped negotiate the agreement. Nevada is expected to file its version of the agreement in Clark County District Court.

Silver State Helicopters began its operation in 2002 as a small helicopter pilot training school based in North Las Vegas and at Boulder City under former Clark County sheriff candidate Jerry Airola.

At its peak, the school operated 34 flight schools nationwide with a total of 2,700 students enrolled. Student Loan Express served as the preferred student lender for those attending Silver State Helicopters, offering $174 million to more than 2,300 students nationwide. When the school closed in February 2008, most students were left owing Student Loan Express substantial debts for training and certification they never received.

The states' settlement includes a provision that Student Loan Express forgive debt for students who are eligible for relief and participate in a private, nationwide class action settlement, Holman et al v. Student Loan Express, that was filed in the federal court in Florida.

More than half of the students who enrolled in the flight school never earned a certificate. Under the agreement, Student Loan Express will forgive 75 percent of the total amount borrowed by those students. Students who received one or more certificates will also receive some relief. Students will be required to make payments on the remaining loan balance under the agreement.

Students who are eligible for the settlement will receive documents from the class counsel once the court accepts the settlement, Masto said.

In addition to Nevada and Florida, state involved in the settlement include California, Georgia, Idaho, Illinois, Missouri, Montana, Oklahoma, Oregon, Utah and Washington.