Profit college owner agrees to end $500M in student debt

A sample disclosure sheet from a settlement with the Career Education Corp. The company is now required to provide a similar document to prospective students

Profit college owner agrees to end $500M in student debt

The company also agreed to bolster its staff training and hire a third-party administrator to report on its compliance with operational and marketing parts of the agreement.

Career Education Corporation (CEC) says they are going to reform their recruiting and enrollment practices.

As part of the agreement, the company is expected to forgo collecting almost $493.7 million in debts owed by former students, including an estimated $12.2 million for about 4,800 Ohioans. State attorneys general began investigating the company in 2014 following complaints from students and a damning report by the U.S. Senate.

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 January 1, or whose final day of attendance at American InterContinental University or Colorado Technical University occurred on or before December 31, 2013.

CEC was once among the biggest for-profit educational institutions in the country, with brands including International Academy of Design & Technology, Le Cordon Bleu, Missouri College, and Sanford-Brown under its umbrella.

A spokesperson for Stein says numerous students affected here attended CEC schools in other states. Among other things, Wasden said, the investigation found some students could not get licensed in their professions and couldn't repay their debts because of CEC's practices. That forgiven debt for North Carolina students amounts to more than $9 million.

"If someone feels like they're eligible for debt forgiveness, they should contact CEC directly and let them know they are part of this class of people and that they should be getting some debt relief as well", Brnovich said.

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Additionally, the school agreed to stop enrolling students in programs that don't lead to state licenses required for employment, Courthouse News Service reported.

AG Healey's Office has been at the forefront of efforts to secure relief for defrauded students.

"As a result of this settlement, people that have outstanding student debt that was obtained through these specific universities will have that debt removed or relieved".

The company also misrepresented the job placement rates of past graduates. The company counted graduates who worked temporarily or in a field unrelated to their studies as graduates successfully placed in jobs. Some Washingtonians may still be attending CEC schools through online programs.

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.

"CEC's practices were unfair to students as well as taxpayers who supported federal student loans that were destined to fail", Iowa Attorney General Tom Miller said in a statement Thursday.

Assistant Attorney General Craig Rader handled the case for Washington.

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