Education company to stop collecting loans for eligible students after investigation
Three hundred and seventy students in Nebraska will see relief of approximately $665,400 after Career Education Corp. (CEC) has agreed to forgo collecting debts of some students.
Nationally, CEC will collecting approximately $493.7 million in debts owed by 179,529 students nationally. The company has also agreed to reform its recruiting and enrollment practices. This all comes after a settlement with Nebraska Attorney General Doug Peterson and 48 other attorneys general. The investigation was ongoing for five years.
“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,” Peterson said.
The agreement stated that CEC will 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. Students who meet this criteria must reside in one of the participating states. Kansas is one of the participating states.
As part of the agreement, CEC will also pay $5 million to the states. Nebraska will receive $75,000.
CEC 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, including 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.
Former students with debt relief eligibility questions can contact CEC.