Oregon Leads Settlement with For-Profit Education Company

Oregon Attorney General Ellen Rosenblum and 48 state attorneys general yesterday announced a settlement with for-profit education company Career Education Corp. (CEC) that will provide $493.7 million in relief to 179,529 students in the United States. Under the settlement, which was led by Oregon, 2,185 Oregon students will get student loan relief totaling almost $6.1 million.

In Oregon, CEC operated Le Cordon Bleu, American InterContinental University, and Sanford-Brown College, all of which have closed.

“Oregon students who signed up for these schools did so because they wanted to get ahead, but the company’s profit motive did not look out for them. Instead, it resulted in mounds of student debt and often not much to show for it. Our multi-state investigation found that students were deceived by CEC about the actual cost of these programs, misled to think that certain credits could transfer, and were overpromised that they could land jobs when the program ended,” said Attorney General Rosenblum. 

Nationally, the average individual debt relief under the settlement will be about $2,852 per student.

CEC currently offers primarily online courses through American InterContinental University and Colorado Technical University. CEC has closed or phased out many of its schools over the past 10 years. 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. 

Under the agreement, CEC must: 

Make no misrepresentations concerning accreditation, selectivity, graduation rates, placement rates, transferability of credit, financial aid, veterans’ benefits, or licensure requirements. Not enroll students in programs that do not lead to state licensure when required for employment, or that due to their lack of accreditation, will not prepare graduates for jobs in their field.  Provide a single-page disclosure to each student that includes: a) anticipated total direct cost; b) median debt for completers; c) programmatic cohort default rate; d) program completion rate; c) notice concerning transferability of credits; d) median earnings for completers; and e) the job placement rate.

Not engage in deceptive or abusive recruiting practices and record online chats and telephone calls with prospective students. CEC shall analyze these recordings to ensure compliance. CEC shall not contact students who indicate that they no longer wish to be contacted.

Require incoming undergraduate students with fewer than 24 credits to complete an orientation program before their first class that covers study skills, organization, literacy, financial skills, and computer competency. During the orientation period, students may withdraw at no cost.

Establish a risk-free trial period. All undergraduates who enter an online CEC program with fewer than 24 online credits shall be permitted to withdraw within 21 days of the beginning of the term without incurring any cost. All undergraduates who enter an on-ground CEC program shall be permitted to withdraw within seven days of the first day of class without incurring any cost.

Relief eligibility

CEC has agreed to forgo collection of debts owed to it by students who either attended a CEC institution that closed before Jan. 1, 2019, or whose final day of attendance at AIU or CTU occurred on or before Dec. 31, 2013. 

Former students with debt relief eligibility questions can contact CEC. 

The CEC investigation was led by Iowa, Connecticut, Illinois, Kentucky, Maryland, Oregon, and Pennsylvania. The agreement also covers the District of Columbia and the following states:  Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming

The Oregon Department of Justice (DOJ) is led by Attorney General Ellen Rosenblum, and serves as the state’s law firm. The Oregon DOJ advocates for and protects all Oregonians, especially the most vulnerable, such as children and seniors