More than 2,500 South Carolina students will no longer have to pay off their student loans at a for-profit college.
The conditions were included in an agreement between 49 states and Career Education Corporation. The state Attorney General’s office said the company, which operated American InterContinental University and Colorado Technical University, among others, misled students about tuition prices and which classes were accredited or could transfer to other schools.
“This company misled South Carolina students who were trying to better themselves and left them with debts they couldn’t pay because they were deceived about their chances of getting jobs,” Attorney General Alan Wilson said in a release. “The company violated our laws against unfair and deceptive trade practices and is now paying the price.”
South Carolina’s 2,510 students who were enrolled in Career Education’s various programs will receive more than $4.9 million in relief, part of nearly $500 million the company accepted nationwide. The state will also receive $50,000 under the settlement.
CEC has closed or phased out many of its schools over the past 10 years, including Briarcliffe College, Brooks Institute, Brown College, Harrington College of Design, International Academy of Design & Technology, Le Cordon Bleu, Missouri College, and Sanford-Brown.
Several state attorneys general launched an investigation in 2014 after a critical report by the U.S. Senate Health, Education, Labor and Pensions Committee.
Investigators said the company trapped students informing prospective students of the cost per credit hour without disclosing how many hours they would need, wrongly promising some credits would transfer, and failing to disclose that certain programs were not accredited, making any diploma essentially worthless in that field.
Among the conditions for the settlement, CEC cannot enroll students in professional programs unless those programs are accredited or lead to an eventual license in the relevant field upon completion. It also requires the company disclose to students in a single page the program’s costs and future debt they would face by enrolling.