FOR-PROFIT EDUCATION COMPANY FORGOES COLLECTING LOANS AND CHANGES PRACTICES IN MULTI-STATE AGREEMENT

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Monday, January 7, 2019

PIERRE, S.D. – Attorney General Jason Ravnsborg announced today that Career Education Corp. (CEC) has agreed to reform its recruiting and enrollment practices and forgo collecting more than $493.7 million in debts owed by 179,529 students nationally, in a settlement with state attorneys general.

The Assurance of Voluntary Compliance filed today caps a five-year investigation.

CEC agrees to forgo any and all efforts to collect amounts owed by former students living in the states participating in the agreement. In South Dakota, 1,011 students will get relief totaling $1,593,219.

Nationally, the average individual debt relief will be about $2,852.

CEC has also agreed to pay $5 million to the states. South Dakota’s share will be $50,000.

CEC is based in Schaumburg, Ill., and currently offers primarily online courses through American InterContinental University and Colorado Technical University.

CEC has 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.

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 total costs, transferability of credits, program offerings, job placement rates, and other topics.

As a result, some students could not obtain professional licensure and incurred debts that they could not repay nor discharge.

CEC denied the allegations of the attorneys general but agreed to resolve the claims through this multi-state settlement.

Under the agreement, CEC must:

Relief eligibility

CEC has agreed to forgo collection of debts owed to the it by students who either attended a CEC institution that closed before Jan. 1, 2019, or whose final day of attendance at AIU or CTU occurred on or before Dec. 31, 2013.

Former students with debt relief eligibility questions can call CEC at 844-783-8629, or email them at CECquestions@careered.com.