Settlement wipes out $12.6M in Nevadans’ student loan debt
CARSON CITY — Thousands of Nevadans who attended or took classes from for-profit Career Education Corporations’ colleges like Le Cordon Bleu will receive nearly $12.6 million in debt relief after a multistate settlement with the company, the Nevada attorney general’s office announced Thursday.
The debt relief comes as part of an agreement with Nevada and 47 other states, plus the District of Columbia, that followed a five-year investigation into the for-profit college. The company agreed that it would not collect $493.7 million owed by 179,529 students nationally.
In Nevada, the relief means that 3,727 students who enrolled at CEC colleges will not have to pay back their nearly $12.6 million in combined debt. CEC also agreed to pay $5 million to the states, with $50,000 going to Nevada.
Prosecutors alleged that CEC “pressured its employees to enroll students and engaged in unfair and deceptive practices,” according to the Nevada attorney general’s office, and that resulted in students enrolling who would not have and who could not obtain professional licensure and who were stuck with substantial student loan debt.
CEC denied the allegations, it said in a statement on its website, but agreed to forgo collecting the outstanding debt.
“Many Nevadans spend hard-earned money and time to attain higher education degrees and should be able to rely upon the representations of schools about the value of their degrees,” Nevada Attorney General Adam Laxalt said in a statement. “My Bureau of Consumer Protection continues to work with partner law enforcement offices to ensure our students are not mislead by educational institutions.”
The settlement comes amid criticisms of U.S. Education Secretary Betsy Devos and her handling of student debt forgiveness, including an attempt to delay the implementation of an Obama-era rule, called the Borrow Defense to Repayment, aimed at making it easier for students to have certain loans forgiven.
CEC operated campuses in Las Vegas for Le Cordon Bleu and the Sanford-Brown College, which closed in 2016 and 2015, respectively.
Students who attended one of the schools that closed before Jan. 1 are eligible for the debt relief. And students whose final day of attendance to the company’s remaining schools at American InterContinental University and Colorado Technical University, which offer online courses, was before Dec. 31, 2013, will also receive relief, according to the attorney general’s office.
Former students with questions about debt relief eligibility can call 844-783-8629 or email CECquestions@careered.com
Contact Capital Bureau Chief Colton Lochhead at clochhead@reviewjournal.com or 775-461-3820. Follow @ColtonLochhead on Twitter.
