For Profit College to Forgive $493 Million in Loans

Wooden gavel lying on table by judge's chair in courtroom
Photo credit Dreamstime.com

ST. LOUIS (KMOX/AP) -- A Chicago-area for-profit college -- that used to run a St. Louis area institution -- has agreed to reform its recruiting and enrollment practices and forego collecting about $493 million in student debt. Career Education Corp., of Schaumburg, Ill., agreed to a settlement with attorneys general from 48 states and the District of Columbia. New York reached an earlier agreement. Illinois Attorney General Lisa Madigan says the agreement will end what she terms deceptive practices.It oversaw Missouri College in Brentwood until 2015 -- it transfered ownership to Weston Educational, Inc., which closed the school in late 2016 citing financial difficulties. Any debt incurred at Missouri College while CEC owned it is forgiveable. Debt incurred under Weston is not. Moving forward, the company has agreed to explain, clearly, what school will cost, establish a three week trial period for some students, and forgo deceptive recruiting practices among other measures. CEC is downsizing and will eventually operate only American Intercontinental University and Colorado Technical University.