TUCSON, AZ (Tucson News Now) - Arizona residents with student debt may have those debts forgiven after the state reached a huge settlement with a company that runs for-profit schools.
Attorney General Mark Brnovich said the state agreed to a $22 million settlement with Career Education Corp, which operated several schools across the country including some in Arizona.
As part of the deal, CEC will stop all efforts to collect money from former students in either one of the following categories:
- Students who attended American InterContinental University or Colorado Technical University and completed their classes before Dec. 31, 2013.
- Students who attended any CEC school that was closed prior to Jan. 1, 2019, including Briarcliffe College, Brooks Institute, Collins College, Harrington College of Design, Katharine Gibbs School - Philadelphia, Le Cordon Bleu, Missouri College and Sanford-Brown Colleges and Institutes.
CEC will notify students of the debt relief by mail and those with eligibility questions should contact CEC.
Brnovich said the settlement will impact more than 6,000 Arizona residents.
“Decisions about higher education are already stressful enough without having to worry about the high cost of obtaining a college education or questioning the value of your degree,” Brnovich said. “We’ve secured $22 million in debt relief for Arizonans that will help thousands of students who were saddled with large debts and degrees that were less useful than CEC led its students to believe.”
Brnovich said the investigation revealed that CEC:
- Deceived students about the total costs of enrollment by instructing its admissions representatives to inform prospective students only about the cost per credit hour without disclosing the total number of required credit hours;
- Misled students about the transferability of credits into CEC from other institutions and out of CEC to other institutions by promising on some occasions that credits would transfer;
- Misrepresented the potential for students to obtain employment in their field by failing to adequately disclose the fact that certain programs lacked the necessary programmatic accreditation; and,
- Deceived prospective students about the rate that graduates of CEC programs got a job in their field of study, thereby giving prospective students a distorted and inaccurate impression of CEC graduates’ employment outcomes. For instance, CEC inaccurately claimed that its graduates were “placed” who actually worked only temporarily or who were working in unrelated jobs.
The settlement requires CEC to reform its recruiting and educating practices and to be monitored by an independent administrator for the next three years.
Brnovich said 46 other states were part of the lawsuit. The total amount of debt that will be forgiven is $493 million for more than 179,000 former students.
CEC will pay $5 million to the states to assist in funding current and future investigations into fraudulent practices of for-profit educators.
CEC based in Schaumburg, Ill., currently offers primarily online courses through American InterContinental University and Colorado Technical University.