Owe CEC money? Settlement means you may not have to repay student loan

via Owe CEC money? Settlement means you may not have to repay student loan, clarionledger.com

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More than 1,800 Mississippians who took out student loans to pay for college through a for-profit education company won’t have to pay back the money, thanks to a settlement with 48 states announced over allegations of deceptive recruitment and enrollment practices.

Attorney General Jim Hood and his counterparts announced a settlement Friday with Career Education Corporation, resulting in forgiveness of more than $493 million in loan debt nationwide, including more than $3 million in Mississippi.

The joint announcement was the result of years of investigations into the Illinois-based company’s recruiting practices. Students had enrolled at dozens of CEC campuses and online courses across the nation over the past 30 years, including brands such as Briarcliffe College, Brooks Institute, Brown College, Harrington College of Design, International Academy of Design & Technology, Le Cordon Bleu, Missouri College, Sanford-Brown and others.

The attorneys general began investigating after getting numerous complaints and a critical report on for-profit education by the U.S. Senate’s Health, Education, Labor and Pensions Committee.

 “Furthering one’s education is a noble effort, and it’s a shame that those doing so are being taken advantage of financially by these companies that are in it to make money rather than educate our citizens,” Hood said in a news release Friday. “I’m proud of our office’s Consumer Protection Division for making sure Mississippians who unfortunately fell victim to this school receive the proper debt relief.”

Specifically, the company is charged with a number of illegal and deceptive tactics, including using “emotionally charged language” to pressure students into enrolling; instructing its admissions representatives to inform prospective students only about the cost per credit hour without disclosing the total number of required credit hours; misleading students about the transferability of credits earned at CEC schools; misrepresenting the potential for students to obtain employment, when the school lacked the “necessary programmatic accreditation”; and misstating the percentage of CEC graduates who were placed in jobs by using numbers based on graduates who worked in temporary or unrelated jobs.

“As a result of the unfair and deceptive practices described above,” Hood noted, “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.”

As a result of the settlement, CEC will forgo collection of debts owed to it by students residing in the participating states who either attended a CEC institution that closed before Jan. 1, or whose final day of attendance at American Intercontinental University (AIU) or Colorado Technical University (CTU) occurred on or before Dec. 31, 2013. In addition, Mississippi will receive $50,000 as part of a $5 million payment to the states, and the company will have to make significant changes to its recruitment and enrollment practices.

In a statement Thursday, the company denied any wrongdoing, but pledged to work with attorneys general to address their concerns. “The resolution of this open inquiry is an important milestone for the Company that coincides with the completion last month of a multi-year process of teaching out and closing our transitional campuses.” said Todd Nelson, chief executive officer. “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.”

The only states not party to the settlement were New York (which settled with CEC in 2013) and California, which is expected to announce a separate settlement soon.

To view Hood’s entire statement, visit http://bit.ly/2s61OMu. Former students with debt relief eligibility questions can contact the CEC at 847-783-8629 or by calling toll free at 844-783-8629. The CEC email is CECquestions@careered.com.