Attorney General Peterson Announces Settlement with Career Education Corp.
For-profit education company to forgo collecting loans, change practices in agreement with Nebraska Attorney General and 48 Other AGs
Settlement will bring $493.7 million in debt relief for CEC students
LINCOLN – For-profit education company Career Education Corp. (CEC) has agreed to reform its recruiting and enrollment practices and forgo collecting approximately $493.7 million in debts owed by 179,529 students nationally, in a settlement with Nebraska Attorney General Doug Peterson and 48 other attorneys general.
The Assurance of Voluntary Compliance filed Thursday caps a five-year investigation.
According to General Peterson, “This settlement will provide over $660,000 worth of debt relief to more than 300 Nebraska students. It is an effective example of the work that can be done by state attorneys general in protecting American students and their families from institutions that put profits ahead of people.”
CEC agrees to forgo all efforts to collect amounts owed to CEC by students who either attended a CEC institution that closed before January 1, 2019, or whose final day of attendance at AIU or CTU occurred on or before December 31, 2013. Eligible students must reside in one of the participating states. In Nebraska, 370 students will see relief of approximately $665,400.
CEC has also agreed to pay $5 million to the states. Nebraska’s share will be $75,000.
CEC is based in Schaumburg, Illinois, and currently offers primarily online courses through American InterContinental University and Colorado Technical University.
CEC has closed or phased out many of its schools over the past 10 years. Its brands have included Briarcliffe College, Brooks Institute, Brown College, Harrington College of Design, International Academy of Design & Technology, Le Cordon Bleu, Missouri College, and Sanford-Brown.
A group of attorneys general launched an investigation into CEC in January 2014 after receiving several complaints from students and a critical report on for-profit education by the U.S. Senate’s Health, Education, Labor and Pensions Committee.
The attorneys general alleged that CEC pressured its employees to enroll students and engaged in unfair and deceptive practices. These practices included making misleading statements or failing to disclose information to prospective students on total costs, transferability of credits, program offerings, job placement rates, and other topics.
As a result, some students could not obtain professional licensure and incurred debts that they could not repay nor discharge.
CEC denied the allegations of the attorneys general but agreed to resolve the claims through this multi-state settlement. The states participating in the settlement include Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.
Former students with debt relief eligibility questions can contact CEC.
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Please click the link to find court documents: https://bit.ly/2suujDR
