For-profit education company to forego collecting loans
For-profit education company Career Education Corp. (CEC) has agreed to reform its recruiting and enrollment practices and forego collecting more than $493.7 million in debts owed by 179,529 students nationally.
In Tennessee, 2,866 students will get relief totaling approximately $5,512,189.
Nationally, the average individual debt relief will be about $2,750.
CEC has also agreed to pay $5 million to the states. Tennessee’s share will be $75,000.
CEC is based in Schaumburg, Ill., and 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.
An investigation was launched in January 2014 after several complaints from students and a critical report on for-profit education by the U.S. Senate’s Health, Education, Labor and Pensions Committee.
That investigation revealed evidence demonstrating that:
- CEC used emotionally charged language to pressure them into enrolling in CEC’s schools
- CEC deceived students about the total costs of enrollment by instructing its admissions representatives to inform prospective students only about the cost per credit hour without disclosing the total number of required credit hours
- CEC misled students about the transferability of credits into CEC from other institutions and out of CEC to other institutions by promising on some occasions that credits would transfer
- CEC misrepresented the potential for students to obtain employment in the field by failing to adequately disclose the fact that certain programs lacked the necessary programmatic accreditation
- CEC deceived prospective students about the rate that graduates of CEC programs got a job in their field of study, thereby giving prospective students a distorted and inaccurate impression of CEC graduates’ employment outcomes.
For instance, CEC inaccurately claimed that its graduates were “placed” who worked only temporarily or who were working in unrelated jobs.
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 call 844-783-8629 or 847-783-8629.
They can also email CECquestions@careered.com
This settlement includes students in Alabama, Georgia, and North Carolina as well as other states.