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A for-profit higher education company will no longer collect nearly a half-billion dollars in student debt, now that the firm has reached settlements with 48 states and the District of Columbia. 


Nearly 180,000 students who took classes offered at Career Education Corp.'s dozens of campuses over the past 30 years won't have to repay loans they took out with the company. 

 of the debt is $493 million, while the average amount per student nationally is $2,750.


The settlements, announced Thursday, describe a pattern of deception that misled prospective students about the potential cost of enrolling in CEC's programs and their job prospects after graduation, among other issues.

The company denies any allegations of wrongdoing or liability.


"Career Education institutions are committed to providing a quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce," it said 

But the investigation launched by the state attorneys general in 2014 centered not on the quality of the education, but instead on how it was promoted. The states say CEC used "emotionally charged language emphasizing the pain in prospective students' lives to pressure them into enrolling," misrepresented how school credits could be transferred to other schools and told admissions counselors to withhold important information about tuition costs.


"Today's settlement ensures the company treats students the way they should have been all along – with honesty and respect for their futures," read a statement from 

, who helped lead the inquiries into CEC.
CEC currently 

 American InterContinental University and Colorado Technical University. It has closed many of its other schools over the past decade, including 

. Students might still be responsible for any federal loans to pay for their education through CEC.


"This agreement not only provides relief to former students, but also protects future students and advances our efforts to clean up the for-profit education industry," said Iowa Attorney General Tom Miller in his own statement.



The settlement comes as the U.S. Department of Education under Secretary Betsy DeVos has 

 regulations protecting students, including those at for-profit schools. Those items include two significant rules — known as "borrower defense" and "gainful employment" — that remain in place despite those efforts, as NPR 

 have shuttered in recent years. Last month, the Education Corporation of America 

 while 20,000 students were still enrolled.
In addition to the debt relief, which will be 

 by mail, the terms of the settlement require increased transparency from CEC and a one-page disclosure sheet about costs, potential debt, earnings for relevant professions and job placement rates.


It also mandates the establishment of a "risk-free trial period," mandatory orientation in study skills, and financial and computer literacy for some new students.


In 2013, New York's attorney general reached a 

 with CEC because of similar complaints. CEC says California will be the final state to enter into an agreement with the company in a separate, forthcoming deal.  Copyright 2019 NPR. To see more, visit https://www.npr.org.

Business and Economic News

Education News

Ian Stewart

Author

Under a settlement with state attorneys general, Career Education Corp. won't collect some $493 million. It also will be more transparent about the costs and benefits of its programs.

Nearly 180,000 students won't have to repay loans from for-profit higher ed company

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