A for-profit college company has agreed to clear almost $500 million in debt incurred by former students as part of a settlement with 48 states and Washington, D.C.
Other terms of the deal require the company to pay $5 million to states to cover the cost of their investigations, and the company will now be required to give all prospective students a single-page disclosure with information including job placement rates, anticipated costs and the average earnings of graduates.
NY reached an earlier agreement.
CEC officials have denied misleading students in recruitment efforts but agreed to the settlement.
Addressing fraud and abuse in student lending has been a top priority for AG Healey since taking office, whether taking predatory schools to court, changing the practices of student loan servicers, going after unlawful student loan "debt relief" companies, or helping student borrowers find more affordable repayment solutions through her first-in-the-nation Student Loan Assistance Unit.
The settlement, which includes OH, 47 other states, and the District of Columbia, resolves allegations that Career Education Corporation pressured employees to enroll students and misled students or withheld information about the costs of enrollment, job placement rates, ability to transfer credits, and lack of accreditation of some of its programs.
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"We have remained steadfast in our belief that we can work with the attorneys general to demonstrate the quality of our institutions and our commitment to students", CEO Todd Nelson said in a statement. The company also previously operated other schools outside of Idaho including Briarcliffe College, Brooks Institute, Brown College, Harrington College of Design, International Academy of Design & Technology, Le Cordon Bleu, Missouri College and Sanford-Brown.
The debt relief applies to students who either attended a CEC institution that closed before January 1, or whose final day at American InterContinental University or Colorado Technical University happened on or before December 31, 2013, the release said. Both were in Tukwila.
More than 6,000 Arizonans who attended certain for-profit schools and were deceived about the cost of their education are now eligible for $22 million in debt relief. "This agreement addresses concerns about the company's business practices and relieves many Kansas students of debt". When calculating job placement rates, CEC included graduates who only worked temporarily - even as little as one or two weeks - or were employed in a field unrelated to their degree.
Provide a risk-free trial period of 21 days for online programs and 7 days for on-campus programs, if they have less than 24 college credit hours when starting the program.
The deal was signed by every state except California, which is negotiating a separate agreement of its own, and NY, which previously settled with the company.