CONCORD, NH [Press Release] – Attorney General Gordon J. MacDonald on Thursday announced that 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. New Hampshire joins 47 States and the District of Columbia in the settlement.
CEC agrees to forgo any and all efforts to collect amounts owed by former students living in the states participating in the agreement. In New Hampshire, 1,572 students will get relief totaling $4,635,685.31. CEC has also agreed to pay $5 million to the states and New Hampshire will receive $50,000.
CEC is based in Schaumburg, Ill., and currently offers primarily online courses through American InterContinental University and Colorado Technical University. 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. CEC has closed or phased out many of its schools over the past 10 years.
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. Complaints centered on unfair and deceptive practices by 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. That investigation revealed evidence demonstrating that:
- 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 denied the allegations of the attorneys general but agreed to resolve the claims through this multistate settlement.
Under the agreement, CEC must:
- Make no misrepresentations concerning accreditation, selectivity, graduation rates, placement rates, transferability of credit, financial aid, veterans’ benefits, or licensure requirements.
- Not enroll students in programs that do not lead to state licensure when required for employment, or that due to their lack of accreditation, will not prepare graduates for jobs in their field. For certain programs that will prepare graduates for some but not all jobs, CEC will be required to disclose such to incoming students.
- Provide a single-page disclosure to each student that includes: a) anticipated total direct cost; b) median debt for completers; c) programmatic cohort default rate; d) program completion rate; c) notice concerning transferability of credits; d) median earnings for completers; and e) the job placement rate.
- Establish a risk-free trial period. All undergraduates who enter an online CEC program with fewer than 24 online credits shall be permitted to withdraw within 21 days of the beginning of the term without incurring any cost. All undergraduates who enter an on-ground CEC program shall be permitted to withdraw within seven days of the first day of class without incurring any cost.
CEC has agreed to forgo collection of debts owed 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: http://www.careered.com/About-Career-Education/Contact-Us