Connecticut students to get debt relief in national settlement with for-profit company
About 1,415 Connecticut residents who attended institutions run by the for-profit education company, Career Education Corp., will receive debt relief as a result of a national settlement with 49 state attorneys general, including Attorney General George Jepsen.
Jepsen announced Thursday that Career Education Corp. has agreed to reform its recruiting and enrollment practices and will forgo approximately $493.7 million in debts owed by 179,529 students nationally. Nationally, the average individual debt relief will be about $2,750.
The five-year multi-state investigation, which was co-led by Connecticut, was launched after numerous complaints from students about “predatory and deceptive practices,” a statement from Jepsen’s office said, and a critical report on for-profit education by the U.S. Senate’s Health, Education, Labor and Pensions Committee.
“For far too long, unscrupulous for-profit colleges have put money before people, engaged in deceptive recruiting practices, and left students with a burden of crushing debt while providing them with useless degrees that wouldn’t lead them to gainful employment,” Jepsen said in a statement. “Today, we are holding Career Education Corp. responsible for the misrepresentations it made to these students. It is my hope that this debt relief will help to ease the burden on students who were trying to better themselves, their careers and their livelihoods but were instead tricked into programs and degrees that were sometimes worthless.”
Keith M. Norton, executive director of the state Office of Higher Education, said CEC no longer has bricks and mortar schools in Connecticut, but state resident could still be enrolled in the company’s on-line classes, which are offered by American Inter-Continental University and Colorado Technical University.
Norton said that CEC had run Sanford-Brown College in Farmington, which he said closed in 2015.
Norton said that in recent years more and more problems have come to light with the for-profit higher education industry, which he said makes it important for students to do their “due diligence” before enrolling in those schools.
“We in Connecticut don’t have many for-profit institutions left on the ground,” he said.
Sen. Richard Blumenthal, D-Conn, said he’s been a longtime critic of for-profit schools “that fail to meet basic standards in quality… And Career Education Corporation is a glaring example of the type of predatory and fraudulent practice we’ve sought to stop.”
Blumenthal said the settlement is “a great result” and “a good template or model for others” by forcing a for-profit education institution to stop collecting “debts that result from unscrupulous practices and holding Career Education Corp. accountable for deceptive and misleading pitches.”
CEC is based in Schaumburg, Ill., and primarily offers online courses through American InterContinental and Colorado Technical universities. The company closed or phased out many of its schools over the past decade, including brands such as Briarcliffe College, Brooks Institute, International Academy of Design & Technology, Brown College and Le Cordon Bleu.
The states’ investigation said that CEC used “emotionally charged language to pressure students into enrolling in CEC schools and deceived students about the total cost of enrollment.”
The states allege that CEC also misled students about the transferability of credits and misrepresented the potential for students to obtain employment by failing to disclose needed accreditation and by distorting graduation and job placement rates.
“The states contended that students who enrolled in CEC would not have otherwise done so,” a statement from Jepsen’s office said, “and were saddled with substantial debt that they could not repay or discharge.”
As part of the settlement, CEC must be accurate in its representations of accreditation, selectivity, graduation rates, placement rates, transferability of credit, financial aid and licensure requirements as well as providing a single-page statement on students’ total costs, completion rates, job placement rates and other factors.
An independent monitor selected by the attorneys general will oversee CEC’s compliance. Connecticut co-led the states’ investigation with the attorneys general of Iowa, Illinois, Kentucky, Maryland, Oregon and Pennsylvania.
Former students with questions about eligibility for debt relief can contact CEC or call the Office of the Attorney General at 860-808-5318.
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