Agreement will forgive 1,011 South Dakota students' debt
PIERRE—Following a five-year investigation, 1,011 South Dakota students will receive $1,593,219 in debt relief from Career Education Corporation, Attorney General Jason Ravnsborg announced Monday.
Those students are among the 179,529 students nationwide who will be relieved of more than $493.7 million in debt by the Schaumburg, Illinois-based corporation, which must also reform its recruiting and enrollment practices as part of its assurance of voluntary compliance. CEC will also pay $5 million to states, of which South Dakota's share is $50,000, as part of the settlement with state attorneys general.
CEC primarily provides online classes through American InterContinental University and Colorado Technical University and has previously closed or phased out multiple other schools.
An investigation of the corporation was launched in January 2014 after attorneys general received complaints from students and a report from the U.S. Senate's Health, Education, Labor and Pensions Committee.
Allegations against CEC claimed that the corporation pressured its employees to enroll students and participated in deceptive practices, such as misleading students or failing to tell prospective students about total costs, job placement rates and more, resulting in students not being able to get professional licensure and accumulating debt they could not pay back.
According to a press release from Ravnsborg, CEC denied those allegations but agreed to resolve them with the settlement, which requires them not to seek collection of amounts owed by students in participating states who either attended a CEC school that closed before Jan. 1 this year, or whose last day attending one of CEC's remaining schools was on or before Dec. 31, 2013. The average debt relief nationally for each student affected will be approximately $2,852.
The agreement sets out seven requirements for CEC, most of which center around disclosing accurate program and financial information to students, giving students opportunities to withdraw from programs and not using deceptive tactics for recruitment.