The for-profit education company Career Education Corp. did not admit it was hustling students, but did agree to forgo collecting approximately $493.7 million in debts owed by 179,529 students nationally.
CEC made the agreement in a settlement with Nebraska Attorney General Doug Peterson and 48 other attorneys general in the United States.
CED also agreed to reform its recruiting and enrollment practices in the settlement, which was signed in January.
A group of attorneys general launched an investigation into CEC in January 2014, Peterson said, after receiving 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 allege that CEC pressured employees to enroll students and engaged in unfair and deceptive practices, including 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, the attorneys said.
CEC denied the allegations of the attorneys general but agreed to resolve the claims through the multi-state settlement. The settlement caps a five-year investigation.
CEC closed or phased out several 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, Peterson said.
Peterson said the settlement will provide more than $660,000 worth of debt relief to more than 300 Nebraska students.
CEC agreed to forgo all efforts to collect amounts owed by students who either attended a CEC institution that closed before Jan. 1 or whose final day of attendance at AIU or CTU occurred on or before Dec. 31, 2013. In Nebraska, 370 students will see relief of approximately $665,400.
Peterson said the settlement is “an effective example of the work that can be done by state attorneys general in protecting American students and their families from institutions that put profits ahead of people.”
CEC has also agreed to pay $5 million to the states. Nebraska’s share will be $75,000.
CEC is based in Schaumburg, Ill. and currently offers primarily online courses through American InterContinental University and Colorado Technical University.
All of the U.S. states participated in the settlement except California and New York.