Settlement waives more than $850,000 in Idaho student debts

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BOISE, Idaho (KIVI/KSAW) — Idaho Attorney General Lawrence Wadsen has announced a settlement with an Illinois-based education company that will result in the waiving of more than $850,000 in debts owed by nearly 400 Idahoans.

The settlement with Career Education Corp. (CEC) will result in the waiving of $493.7 million in debts owed by more than 179,000 students nationally and ends an investigation that began in 2014. In Idaho, about 388 students will get relief totaling $862,562. Nationally, the average individual debt relief will be about $2,750, according to the news release from Idaho Attorney General’s office.

“I’m pleased to announce that CEC has agreed to change its recruiting and enrollment practices and forego debt collection for students in Idaho and other participating states,” Wasden said. “For years, this company was less than honest with students and prospective students about the costs and other important aspects of their higher education. Doing away with these debts is the right thing to do.”

A group of attorneys general 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, and job placement rates.

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

CEC has also agreed to pay $5 million to the states. Idaho’s share of the settlement is $75,000, which will be deposited into the Consumer Protection Fund, said officials.

CEC is based in Schaumburg, Ill., and currently offers primarily online courses through American InterContinental University and Colorado Technical University. The company has closed or phased out many of its schools over the past ten 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.

CEC had 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.

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