The FTC has awarded $30 million in compensation to the Career Education Corporation (CEC) for deceptive recruiting practices. The company obtained sales leads by misrepresenting its affiliation with the U.S. military and misleading students about the quality of its programs. The result of this practice was that many students enrolled in affected schools but did not receive the training they were promised. The company has agreed to stop collecting debts and reform its recruitment practices.
While the lawsuit seeks to recover lost profits, it also aims to protect students from future deception.
The case cites two recent cases where Career Education Corp. lied about the costs of tuition, including false advertising, and used emotional language. While the company denies any wrongdoing, it has agreed to provide new disclosures about their programs, phase out programs that do not allow students to take licensing exams, and provide a list of borrowers who attended certain of their New York programs from 2009 to 2012. These borrowers will be able to claim a portion of the settlement fund.
The lawsuit is similar to many other class action suits involving for-profit schools. Janet Blake, a former student of Sanford Brown College, filed a class-action lawsuit against Career Education Corporation and a subsidiary company, which subsequently removed the case to Circuit Court of the County of St. Louis. The plaintiffs allege that the defendants violated the Missouri Merchandising Practices Act by misrepresenting the replacement rate of student loans.
The Career Education Corp.
settlement claims that the organization lied to prospective students and regulators about the costs of their programs. By misleading prospective students, the company could boost enrollments and revenues. Several claims in the lawsuit allege that the company advertised job placement rates of 55 percent to 80 percent. In reality, the rate was closer to twenty-four percent. Despite these allegations, the lawsuit has not yet been resolved. The case continues to be litigated.
The company settled the case for $493 million and has agreed to reform its recruiting and enrollment practices. The company has also agreed to waive the debts of 179,529 students. In addition to the settlement, the CEC has agreed to provide new disclosures and cease collecting debts from these students. In addition, the company has agreed to phase out certain programs in New York that do not allow students to take the required licensing examinations. The suit also stipulates that the CEC must release a list of student graduates of certain New York programs from 2009 to 2012.
In addition to settling the lawsuit, the Career Education Corporation has agreed to cease all illegal recruitment and enrollment practices and to reimburse all students’ debts.
The company has also agreed to provide a list of its students who have graduated from the school since 2009. The companies’ settlement has resulted in almost $500 million in refunds for the victims. In addition, the case has made the Career Education Corporation commit to reforming its recruiting and enrollment practices.
The lawsuit alleges that the company failed to disclose the costs of its programs and the jobs of its graduates. In addition, the Career Education Corporation was unable to disclose the cost of its programs and lied to students about their employment prospects. A federal investigation led by Tom Miller’s office found that the organization was knowingly charging students for courses it did not have accreditation. This practice prevented them from obtaining jobs in fields such as medical ultrasound.
The Career Education Corporation settlement only benefits borrowers who owe money to the company.
In addition, a large portion of the students who borrowed money from the company is not eligible for the settlement. In addition, the Career Education Corporation also lied to the government about the number of jobs they offered to their borrowers. This practice boosted the company’s revenues and increased its enrollments, and it is now paying back those enrolled in its schools.
The Career Education Corporation settlement was a win-win situation for its students and its clients. The company settled in the suit with the state and was forced to provide new disclosures to its students. It has also agreed to phase out certain programs and hire an independent auditing company. This agreement will require the corporation to terminate the employees responsible for misleading practices. It also requires them to disclose their compensation and dismiss those who were behind them.
