(COLUMBUS, Ohio)—Ohio Attorney General Mike DeWine today announced a multistate settlement with Career Education Corporation, a for-profit college provider that operated several schools, including Sanford-Brown, Le Cordon Bleu, and International Academy of Design & Technology.
As part of the agreement, the company is expected to forgo collecting nearly $493.7 million in debts owed by former students, including an estimated $12.2 million for about 4,800 Ohioans.
“This settlement will provide debt relief for thousands of former students, and it will require Career Education Corporation to take specific steps to help prospective students make informed decisions about their education,” Attorney General DeWine said.
The settlement, which includes Ohio, 47 other states, and the District of Columbia, resolves allegations that Career Education Corporation pressured employees to enroll students and misled students or withheld information about the costs of enrollment, job placement rates, ability to transfer credits, and lack of accreditation of some of its programs.
Under the settlement, the company has agreed to stop collection efforts on private loans it issued to students who attended a Career Education Corporation school that is now closed or who had a final day of attendance at American InterContinental University or Colorado Technical University in 2013 or earlier.
Career Education Corporation will send letters to qualifying former students at their last known address with information about the relief within 60 days. (The debt relief does not include federal student loans or private student loans issued by an entity other than Career Education Corporation.)
The settlement also outlines recruiting and enrollment practices the company must adopt, including, generally:
- Providing a single-sheet disclosure with information about a program’s expected costs, job placement rate, and median earnings of graduates.
- Requiring students to complete an interactive disclosure process about expected post-graduation costs.
- Not enrolling students in programs that lack accreditation required for jobs in their field.
- Requiring an orientation program for incoming students with fewer than 24 credits.
- Allowing undergraduate students with fewer than 24 credits to withdraw within the first 21 days of the program.
Career Education Corporation currently offers primarily online courses through American InterContinental University and Colorado Technical University. It has closed or phased out many of its schools, but 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.
Participating in the settlement are Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.