Career Education Corporation is the business behind Colorado Technical University and American InterContinental University, two for-profit remote learning schools that together enroll approximately 34,000 students. While both schools are still accredited, they recently lost a nationwide lawsuit. Forty-eight states and the District of Columbia sued the corporations for lying to students about job placement rates after graduation. The other two states are either negotiating separate agreements of their own (California) or had previously settled with CEC (New York).
The investigations into the schools’ promises began in 2014 after many students complained about having been misled into enrolling by the for-profit college. The judgment against CEC includes a $5 million charge to repay the cost of those various investigations, and a requirement that every prospective student be given a physical report on accurate job placement rates, anticipated costs beyond graduation, and the actual average earnings of graduates.
On top of all that, the largest part of the settlement is a requirement that CEC erase the student loan debt of more than 179,000 students, to a total just shy of $500 million.
“Today’s settlement ensures the company treats students the way they should have been all along—with honesty and respect for their futures,” said Illinois Attorney General Lisa Madigan, one of the attorneys general who spearheaded the suit. $48 million of the total judgment will go to Illinois students.
Career Education Corporation denies any wrongdoing but has given the settlement no resistance.
“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,” said Todd Nelson, CEO of CEC, in a company statement immediately after the ruling.
The for-profit college industry has been under increased scrutiny for several years now, even while the Trump Administration and Education Secretary Betsy DeVos have been relaxing oversight policies. Many of the giants in the field have collapsed entirely, including a few other schools formerly owned by CEC, such as Sanford-Brown College and Le Cordon Bleu.
Photo: Shutterstock
