Loan company paying back millions to Kansas students

Gladys Abbott
January 6, 2019

More than 6000 Arizona students who attended a chain of for-profit colleges will get their private student loans forgiven thanks to a state attorney's general settlement that was announced today.

Career Education Corp., a for-profit college based in Schaumburg, Ill., has vowed to fix its recruiting and enrollment practices and dismiss almost $13.9 million in student debt owed by 5,584 MI students.

In 2013, New York's attorney general reached a $10 million settlement with CEC because of similar complaints.

Additionally, the school agreed to stop enrolling students in programs that don't lead to state licenses required for employment, Courthouse News Service reported.

David Carl, spokesman for the Office of the Attorney General, said that because of the unfair and deceptive practices, students enrolled in CEC schools who "would not have otherwise enrolled, could not obtain professional licensure, and were saddled with substantial debts that they could not repay nor discharge".

"For years, this company was less than honest with students and prospective students about the costs and other important aspects of their higher education", Idaho Attorney General Lawrence Wasden said in a news release Thursday.

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The Illinois-based corporation agreed to pay $493.6 million to almost 175,000 students nationwide, after an investigation by the Washington State Attorney General and 47 other states found it used deceptive and misleading practices to attract students. On October 16, a federal judge rejected a challenge to the Borrower Defense Rule, ordering its immediate implementation for students nationwide.

Notify credit-reporting agencies of the debt relief to remove the debt from students' credit reports. Both were in Tukwila.

More than 1,000 Kansas students will receive more than $2 million in student loan forgiveness.

CEC has agreed to forgo collection of debts owed by students who either attended a CEC institution that closed before January 1 or whose final day of attendance at American InterContinental University or Colorado Technical University occurred on or before December 31, 2013. More than 90 percent of its students are enrolled through online courses, according to the company. When calculating job placement rates, CEC included graduates who only worked temporarily - even as little as one or two weeks - or were employed in a field unrelated to their degree. Washington and 47 other states investigated the company's recruitment practices and found that CEC misrepresented the cost of attendance, graduation rates, expected future salaries for graduates and job placement rates.

Establish a risk-free trial period for undergraduate students.

The company denied allegations of wrongdoing as part of the agreement, it said in a statement on its website. "We have remained steadfast in our belief that we can work with the attorneys general to demonstrate the quality of our institutions and our commitment to students". CEC says California will be the final state to enter into an agreement with the company in a separate, forthcoming deal.

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