Education Firm to Forgo Collecting Loans in Agreement with SC Attorney General Wilson

Monday, January 7th, 2019

For-profit education company Career Education Corp. (CEC) has agreed to reform its recruiting and enrollment practices and forgo collecting about $493.7million in debts owed by 179,529 students nationally, in a settlement with South Carolina Attorney General Alan Wilson and 48 other attorneys general.

The Assurance of Voluntary Compliance filed Thursday caps a five-year investigation.

“This company misled South Carolina students who were trying to better themselves and left them with debts they couldn’t pay because they were deceived about their chances of getting jobs,” Attorney General Wilson said. “The company violated our laws against unfair and deceptive trade practices and is now paying the price.”

CEC agrees to forgo any and all efforts to collect amounts owed by former students living in the states participating in the agreement. In South Carolina, 2,510 students will get relief totaling $4,943,823.

Nationally, the average individual debt relief will be about $2,750.

CEC has also agreed to pay $5 million to the states. South Carolina’s share will be $50,000.

CEC is based in Schaumburg, Ill., 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. 

As a result of the unfair and deceptive practices described above, students enrolled in CEC who would not have otherwise enrolled, could not obtain professional licensure, and were saddled with substantial debts that they could not repay nor discharge. CEC denied the allegations of the attorneys general but agreed to resolve the claims through this multistate settlement.

Robert McKenna, former Washington state attorney general and current partner at the San Francisco-based law firm of Orrick, Herrington & Sutcliffe, will independently monitor the company’s settlement compliance for three years and issue annual reports.

Relief eligibility

CEC has agreed to forgo collection of debts owed to the it by students who either attended a CEC institution that closed before Jan. 1, 2019, or whose final day of attendance at AIU or CTU occurred on or before Dec. 31, 2013.

Former students with debt relief eligibility questions can contact CEC.

The CEC investigation was led by Iowa, Connecticut, Illinois, Kentucky, Maryland, Oregon, and Pennsylvania.  The agreement also covers the District of Columbia and the following states:  Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

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