TALLAHASSEE, Fla.—Attorney General Pam Bondi and 48 other attorneys general today announced a multistate settlement agreement with a for-profit education company, Career Education Corporation, to reform its recruiting and enrollment practices. The organization allegedly deceived more than 20,000 Florida students, the most of any state. CEC will forgo $493.7 million in debts owed by 179,529 students nationally, including approximately $67.8 million in debts owed by Florida students. The Assurance of Voluntary Compliance caps a five-year investigation.
CEC agrees to forgo all efforts to collect amounts owed by former students living in the states participating in the agreement that either attended a CEC institution that closed before Jan. 1, or whose final day of attendance at American InterContinental University or Colorado Technical University occurred on or before Dec. 31, 2013. Nationally, the average individual debt relief will be approximately $2,750. CEC also agrees to pay $5 million to the states.
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 job placement rates, program offerings, total costs, transferability of credits and other topics.
As a result, some students could not obtain professional licensure and incurred debts that could not be repaid or discharged. CEC denied the allegations of the attorneys general but agreed to resolve the claims through this multistate settlement.
CEC is based in Schaumburg, Ill. and offers primarily online courses through AIU and CTU. CEC 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.
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.
Any former students with debt relief eligibility questions can contact CEC by calling (844) 783-8629 toll free, or by sending an email to CECquestions@careered.com.
The agreement covers the District of Columbia and the following states: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.