Settlement Brings Debt Relief To Students Of For-Profit Chain

Jan 3, 2019

A five-year investigation of the Illinois-based, for-profit Career Education Corp. (CEC) chain has resulted in a nearly $500 million multi-state settlement that includes North Carolina.

The settlement will provide debt relief to students who were enrolled in classes on the chain’s campuses and in on-line courses. North Carolina Attorney General Josh Stein announced the settlement in a press release issued Thursday.

CEC has been under investigation stemming from charges that its officials engaged in unfair and deceptive practices in recruiting students for schools in the chain that included Sanford-Brown, Le Cordon Bleu, the American InterContinental University (AICU) and Colorado Technical University (CTU).

The investigation of CEC — launched by the state attorneys general — uncovered evidence that officials deceived prospective students about total enrollment costs, the quality of the schools’ mainly online courses, the transferability of courses between CEC and other schools, employment prospects in their chosen fields and the employment outcomes of CEC graduates.

CEC officials have denied misleading students in recruitment efforts but agreed to the settlement.

Stein says if students had been given accurate information by recruiters, they may have enrolled elsewhere and not been saddled with high debts and degrees that were not highly respected in their fields of study.

“Students who borrow for higher education are investing in their future,” Stein said. “I will not allow for-profit schools to prey on those hopes and dreams. This settlement gives North Carolina students who attended a CEC school the debt relief they need for a second chance to get a valuable education.”

In the settlement, CEC officials have agreed to forgo debt collection on almost 5,000 North Carolina students who attended the chain's schools that closed before Jan. 1, 2019, or last day of class at AICU or CTU was on or before Dec. 31, 2013.

Nationally, about 180,000 students will benefit from the settlement.

A spokesperson for Stein says many of the students affected here attended CEC schools in other states. That forgiven debt for North Carolina students amounts to more than $9 million. The settlement also calls for CEC to pay $5 million to each of the 49 states and the District of Columbia whose attorneys general were part of the investigation.

An administrator has been appointed to ensure that CEC complies with the terms of the settlement, which calls for the chain's officials to train recruiters, revamp recruiting practices and provide accurate information on courses and graduates' employment placements.