Oklahoma Attorney General Mike Hunter today announced for-profit education company Career Education Corporation (CEC) will forgo collecting more than $2.2 million in student loan debt from 1,131 Oklahomans as part of a national settlement.
In total, the company will forgive over $493.6 million to 179,529 students from 48 states and the District of Columbia. The only two states not included in the settlement are California and New York.
The announcement ends an investigation by attorneys general from seven states that was launched in 2014, after complaints from students and a critical report on for-profit education by the U.S. Senate’s Health, Education, Labor and Pensions Committee.
OK Attorney General Mike Hunter
The attorneys general alleged employees of CEC were pressured to enroll students. Employees were also encouraged to engage in unfair and deceptive practices, including making misleading statements or failing to disclose information to prospective students on total costs, transferability of credits, program offerings and job placement rates, among others.
Attorney General Hunter said as part of the agreement and in addition to the debt relief for students, the CEC will reform its recruiting and enrollment practices.
“The victims in this case were students who wanted to earn an education and better their lives,” Attorney General Hunter said. “As a result of the high-pressure enrollment tactics used by employees at the company, some students never obtained the professional license they were seeking and incurred debts they could not repay. I appreciate the team from our office and the others from around the country for their work that led to this positive outcome for victims.”
Former Washington state Attorney General Robert McKenna, who is currently a partner at San Francisco-based law firm of Orrick, Herrington & Sutcliffe, will independently monitor the company’s settlement compliance for three years and issue annual reports.
The CEC has closed or phased out many of its schools over the past 10 years. Its schools 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.
Relief eligibility
The CEC has agreed to forgo collection of debts owed to it by students who either attended a CEC institution that closed before Jan. 1, 2019, or whose final day of attendance at the American InterContinental University or Colorado Technical University occurred on or before Dec. 31, 2013.
Former students with debt relief eligibility questions are encouraged to contact the CEC by calling (844) 783-8629, or (847) 783-8629 or email cecquestions@careered.com.
In part and under the agreement, the 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, the CEC will be required to disclose such to incoming students.
• Provide a single-page disclosure to each student that includes: anticipated total direct cost; median debt for completers; programmatic cohort default rate; program completion rate; notice concerning transferability of credits; median earnings for completers; and the job placement rate.
• Not engage in deceptive or abusive recruiting practices and record online chats and telephone calls with prospective students. CEC shall analyze these recordings to ensure compliance. CEC shall not contact students who indicate that they no longer wish to be contacted.