Career Education Society On Thursday, attorneys general from 48 states — including Illinois — and the District of Columbia agreed to end a seven-year investigation into the for-profit school’s recruiting and enrollment practices.
As part of the agreement, the Schaumburg-based company denies any allegations of wrongdoing or liability. It will also pay a total of $5 million in expenses to attorneys general and waive collection of about $493.7 million in debts owed by 179,529 students nationwide, according to the Illinois Attorney General’s Office, Lisa Madigan.
In Illinois, 16,852 students will receive relief totaling more than $48 million, Madigan said, representing an average payment of about $2,850 per student. Additionally, Illinois will receive more than $250,000 of the $5 million in expenditures.
“The resolution of this open investigation is a significant milestone for the company that coincides with the completion last month of a multi-year process of teaching and closing our transition campuses,” said Todd Nelson, CEO of Career. Education. “We have remained true to our belief that we can work with Attorneys General to demonstrate the quality of our institutions and our commitment to students.”
A company spokesperson declined to comment further Thursday afternoon.
Shares of the company rose 2.13% to $11.74.
A set of injunction provisions will also be put in place to protect prospective students, Madigan said. Career Education said these provisions include prospective students receiving additional important policy information, academic program information, and financial aid information during the enrollment process and an enhanced refund policy — processes that should be completed within the next six months.
Robert McKenna, a former Washington state attorney general, was tasked with overseeing the implementation of the terms of the agreement over the next three years at a cost of $2 million.
“Today’s settlement ensures that the company treats students as they should have been (treated) all along – with honesty and respect for their future,” Madigan said.
Madigan said the deal concludes a seven-year investigation by his department that was spurred by student complaints and a critical report on for-profit education by the Committee on Health, Education, of Labor and Pensions of the United States Senate. The other attorneys general joined in January 2014.
Thursday’s settlement affects all states except New York and California. Career Education reached a $10.25 million settlement with New York in 2013, and the company said California is expected to issue a similar judgment at a later date.
Career Education, which currently operates online colleges American InterContinental University and Colorado Technical University, was among many for-profit educational institutions that came under scrutiny from federal and state authorities several years ago. years for recruitment and student loan practices that left students in debt or unable to obtain jobs in their field of study.
At its peak, the company operated up to 10 for-profit institutions nationwide, including Le Cordon Bleu, Sanford-Brown University and the International Academy of Design & Technology, but closed or sold many of them. over the past five years.