Attorney General Morrisey Reaches Multistate Settlement with For-Profit Education Company

Updated 45 weeks ago From a News Release by WV Attorney General Patrick Morrisey
CHARLESTON — West Virginia Attorney General Patrick Morrisey and 48 attorneys general announced an agreement with for-profit education company Career Education Corporation that will relieve more than $493.7 million in debts owed by 179,529 students nationwide.

“Misleading students cannot be tolerated,” Attorney General Morrisey said. “This settlement will provide debt relief to West Virginia students who were victims of deceptive business practices.”
In West Virginia, the agreement will result in the cancellation of student loan debt totaling $1,451,501.47 for 640 West Virginia residents who attended Career Education Corporation (CEC) schools.
CEC will also pay $50,000 to the State of West Virginia for use in general consumer protection purposes.
The states allege CEC misled students about the total costs of enrollment at its institutions; misled students about the transferability of credits into CEC and the transferability of credits out of CEC into other institutions; misrepresented its program offerings and potential to obtain employment in the student’s desired field, including failure to adequately disclose the fact that certain programs lacked the necessary programmatic accreditation; and engaged in unfair or deceptive practices in calculating job placement rates.
CEC denied the allegations of the attorneys general but agreed to resolve the claims through this multistate agreement.
Under the agreement, CEC must:
  • Make no misrepresentations concerning accreditation, selectivity, graduation rates, placement rates, transferability of credit, financial aid, veterans’ benefits, or licensure requirements.
  • 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.
  • Provide a single-page disclosure to each student that includes: a) anticipated total direct cost; b) median debt for completers; c) programmatic cohort default rate; d) program completion rate; c) notice concerning transferability of credits; d) median earnings for completers; and e) the job placement rate.
  • Require students before enrolling to complete an Electronic Financial Impact Platform Disclosure, which provides specific information about debt burden and expected post-graduation income. CEC is working with the states to develop this platform.
  • Not engage in deceptive or abusive recruiting practices and record online chats and telephone calls with prospective students. CEC shall analyze these recordings to ensure compliance. CEC shall not contact students who indicate that they no longer wish to be contacted.
  • Require incoming undergraduate students with fewer than 24 credits to complete an orientation program before their first class that covers study skills, organization, literacy, financial skills, and computer competency. During the orientation period, students may withdraw at no cost.
  • Establish a risk-free trial period. All undergraduates who enter an online CEC program with fewer than 24 online credits shall be permitted to withdraw within 21 days of the beginning of the term without incurring any cost. All undergraduates who enter an on-ground CEC program shall be permitted to withdraw within seven days of the first day of class without incurring any cost. 
West Virginia joined the settlement with coalition leaders Iowa, Connecticut, Illinois, Kentucky, Maryland, Oregon and Pennsylvania, along with attorneys general from Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming. 
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