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AG Derek Schmidt: More than 1,000 Kansas students to receive loan forgiveness

Release Date: Jan 03, 2019

TOPEKA – (January 3, 2019) – More than 1,000 Kansas students will receive $2.1 million in student loan forgiveness under the terms of a settlement reached today with Career Education Corporation (CEC), Kansas Attorney General Derek Schmidt said.

CEC, a for-profit education company based in Illinois, 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.

A total of 1,077 Kansans are eligible for student loan debt relief for a total amount of $2,142,116.

CEC agrees to forgo any and all efforts to collect amounts owed by former students living in the states participating in the agreement.

After receiving numerous complaints from students and a critical report on for-profit education by the U.S. Senate’s Health, Education, Labor and Pensions Committee, a group of attorneys general, including AG Schmidt, launched an investigation into CEC in January 2014. The attorneys general alleged that CEC pressured its employees to enroll students and engaged in unfair and deceptive practices. These practices included making misleading statements or failing to disclose information to prospective students on total costs, transferability of credits, program offerings, job placement rates, and other topics.

As a result, some students could not obtain professional licensure and incurred debts that they could not repay nor discharge.

The agreement with attorneys general in 48 states plus the District of Columbia mandates added disclosures to students, including a new interactive online financial disclosure tool; bars misrepresentations to prospective students; prohibits enrollment in unaccredited programs; and institutes an extended period when new students can withdraw with no financial obligation.

Nationwide, the agreement requires the for-profit college company to forgive $493,687,220 in outstanding loan debt held by more than 66,000 former students.

“Our investigation revealed that CEC lured prospective students into its programs and that many students left the program with unfulfilled promises and sometimes tremendous debt,” Schmidt said. “This agreement addresses concerns about the company’s business practices and relieves many Kansas students of debt.”

As part of the agreement, CEC does not admit to the conduct alleged by attorneys general.

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. 

Eligible students will receive a letter from CEC within 60 days advising them that CEC will no longer attempt to collect student debt forgiven under the terms of this settlement.

A copy of the agreement is available at http://bit.ly/2CMrXWP.

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