Career Education Corporation, a major for-profit college operator, has agreed to cancel nearly $500 million of student loans as part of a settlement with 48 states and the District of Columbia.
Here’s what you need to know and how it can affect you.
The Settlement: What Happened
Career Education, which operates the for-profit colleges Colorado Technical University and American InterContinental University and serves approximately 34,000 students, agreed to cancel $493.7 million in student debt for nearly 180,000 former students. The Illinois-based company faced allegations of fraud and deceptive practices, including allegedly misleading students about its job placement rate and actual cost of earning a degree, among other practices.
“[Career Education]’s practices were unfair to students as well as taxpayers who supported federal student loans that were destined to fail,” said Iowa Attorney General Tom Miller, the settlement’s co-lead negotiator, said in a statement. “This agreement not only provides relief to former students but also protects future students and advances our efforts to clean up the for-profit education industry.”