Attorney General Laxalt, 48 AGs Announce Agreement with For-Profit Education Company to Reform Practices and Forgo Collection of Student Loans

January 3, 2019

Carson City, NV – Today, Nevada Attorney General Adam Paul Laxalt and 48 attorneys general announced an agreement with for-profit education company Career Education Corporation (CEC) to reform its recruiting and enrollment practices and forgo collecting about $493.7 million in debts owed by 179,529 students nationally. 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.

    This agreement resolves a five year investigation into allegations against CEC that 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. The coalition of attorneys general alleged that CEC pressured its employees to enroll students and engaged in unfair and deceptive practices. As a result of these practices, students enrolled in CEC who would not have otherwise enrolled, could not obtain professional licensure, and were saddled with substantial debts that they could not repay nor discharge. CEC denied these allegations, but agreed to resolve the claims through this multi-state settlement.

      “Many Nevadans spend hard-earned money and time to attain higher education degrees, and should be able to rely upon the representations of schools about the value of their degrees,” said AG Laxalt. “My Bureau of Consumer Protection continues to work with partner law enforcement offices to ensure our students are not mislead by educational institutions.”

        Under the terms of the agreement, CEC agrees to forgo any and all efforts to collect amounts owed by former students living in the states participating in the agreement. In Nevada, 3,727 students will receive relief totaling approximately $12,599,766. Nationally, the average individual debt relief is projected to be approximately $2,750. CEC has also agreed to pay $5 million to the states, of which Nevada will receive $50,000. Among other requirements, the settlement provides that CEC may make no misrepresentations concerning accreditation, selectivity, graduation rates, placement rates, transferability of credit, financial aid, veterans’ benefits or licensure requirements. Furthermore, CEC may 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. For certain programs that will prepare graduates for some but not all jobs, CEC will be required to disclose such to incoming students.

          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 American Intercontinental University or Colorado Technical University occurred on or before Dec. 31, 2013. Former students with debt relief eligibility questions may call CEC at contact CEC.

            In addition to Nevada, participants in the settlement include: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming and the District of Columbia.

              Chief Deputy Attorney General JoAnn Gibbs and Senior Deputy Attorney General Laura Tucker represented Nevada in this matter.