Private college agrees to forgive half a billion student loan debt

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Nearly 180,000 alumni of Illinois-based for-profit adult education schools will fail to repay nearly $ 500 million in student loan debt, under a regulation won by 49 state attorneys general, including Illinois AG Lisa Madigan.
The company, Career Education Corporation, is based in Schaumburg and currently operates primarily online schools under the names American InterContinental University and Colorado Technical University.

Madigan spokesperson Eileen Boyce says the company has misled many students about their job prospects after graduation, pushed them to enroll, and misled them about costs and the possibility of transferring credits.

“Many Illinois students have been conned by for-profit entities,” Boyce says. “And the regulations ensure that students not only can forfeit their loan payments, but that they will be treated better.”

Career Education Corporation has denied any wrongdoing under the agreement. In Illinois, the settlement frees nearly 17,000 students from $ 48 million in debt, an average of just under $ 2,900 per student.

Boyce says the new Illinois Student Bill of Rights, passed last year, should prevent many of these problems in the future.

“The Student Loans Bill of Rights addresses these issues by requiring student loan managers to properly process payments, provide and explain to distressed borrowers all of their repayment options – starting with income-oriented plans – and also created a student loans ombudsperson in the Illinois attorney general’s office, ”Boyce said.

The CEC has closed or abolished a number of its schools, including Briarcliffe College, Brooks Institute, Brown College, Harrington College of Design, International Academy of Design and Technology, Le Cordon Bleu, Missouri College and Sanford -Brown.


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