More than 3,000 people in Washington can expect to see student debt relief totaling more than $7.6 million, the state attorney general’s office said Thursday.
The debt relief is due to legal action taken by Washington State Attorney General Bob Ferguson against for-profit education company Career Education Corp., headquartered in Illinois.
CEC owned two physical locations in Washington, both in Tukwila. One was a Sanford-Brown campus, previously known as the International Academy of Design and Technology and the Le Cordon Bleu campus. Both schools stopped taking new students in 2015 and are closed. CEC also has online programs.
Those who attended a CEC school that closed before Jan. 2, 2019, and got a CEC-held and CEC-issued student loan, are expected to receive debt relief.
Washington residents who attended CEC’s remaining two schools, American InterContinental University and Colorado Technical University, before or on Dec. 31, 2013, will also get debt relief from loans issued by CEC, the attorney general's office said.
Ferguson’s office said CEC used deceptive practices to attract potential students and misrepresented the cost of attendance and job placement rates to its students.
In addition, students were misled about total enrollment costs and could not obtain employment or the license needed in their field because the company did not disclose that some programs lacked “necessary” professional accreditation, the attorney general's office said.
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According to the attorney general's office, job placement rates of past graduates was misrepresented by the company and said the placement rates included graduates who had only worked temporarily, some as little as one week, or who were hired in a field unrelated to the field in which they had earned a degree.
Students were also told that credits were transferable to other institutions, but the attorney generals' office said it was either very difficult or impossible to transfer to a non-CEC school.
Officials said the median debt relief amounts students will receive is $1,463, while the most an individual will receive is $59,000.
The office reports that some students incurred debt as high as $50,000.
Students will not need to take any action. Within 60 days, CEC will notify all who are eligible of their debt relief. And those who may have questions about eligibility may contact CEC.
Not only is CEC required to pay more than $7.6 million to Washingtonians, but Ferguson's office said it is also bound to:
- Disclose to prospective students the total direct cost, median debt for those who complete the program, default rates, program completion rates, credit transferability, median earnings for graduates and job placement rates.
- When calculating job placement rates, only include students who get jobs in their field and remain in their field for more than 30 days.
- Notify credit-reporting agencies of the debt relief to remove the debt from students’ credit reports. If a student finds out the debt has not been removed from their credit report, CEC must again notify credit-reporting agencies.
- Prohibit misrepresentations when recruiting students.
- Record online chat transactions and telephone calls with prospective students.
- Provide a risk-free trial period of 21 days for online programs and seven days for on-campus programs, if they have less than 24 college credit hours when starting the program.
Along with Washington, 47 other states investigated CEC’s recruitment practices. All found the company misrepresented the cost of attendance, graduation rates, expected future salaries for graduates and job placement rates, the attorney general's office said.
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