On July 3, 2019, Career Education Corporation (CEC) agreed to resolve almost $500 million of student loan debt. It was part of a settlement deal with 48 states, including the District of Columbia. Nearly 180,00 students who enrolled in courses won’t have to pay back the student loans they took from the CEC.
What happened? Before we delve into what happened, let’s find out who CEC is.
The CEC is an educational service company that provides quality, career-centered learning for individuals. The CEC owns the American InterContinental University (AIU) and Colorado Technical University (CTU). They offer degree programs through doctoral and master’s level, and also provides bachelor’s and associate levels for varied students pursuing different disciplines.
The CEC also provides students both campuses and online courses for degree programs. The AIU has schools in Georgia, Atlanta, Texas, and Houston. Also, for CTU, there are campuses in Colorado Springs and Aurora.
On January 1, 2020, CEC officially changed its name to Perdoceo Education Corporation. According to the company, it reflects their revolution through their academic institutions to provide quality education to its students.
In 2014, the US senate filed a lawsuit against the CEC, with students in these schools instigating more complaints against the corporation.
According to the settlement of the lawsuit, the CEC agreed to forgive almost $500 million remaining student loan debt offered to the following schools:
About 180,000 student borrowers who took loans from the corporation, called institutional loans, are those who got the funds. Borrowers in Florida received a considerable portion of the funds, $68 million in total, and Texas received $51 million.
The CEC faced allegations of allegedly misleading students about their job placement rates and the value of the program they offered in their schools. Concerning the lawsuit, the company stopped collecting unresolved student loan debt, as an order from the government. They were also tasked to let the credit bureaus delete debts from the student’s credit reports.
Also, the CEC had to issue a one-page disclosure to potential students with specific details that entailed their job placements rates. It also included projected total costs of the program, and the average earning for each course for the potential student.
It was a significant step to prevent future student borrowers from incurring huge loan debts. One important thing to remember is that the settlement only covered institutional loans. It did not include federal student loans or private student loans from other loan servicers.
If you have a federal loan from a CEC, then you have to use the Borrower Defense to Repayment Program to clear off your student debt. Luckily, it’s straightforward to get your loan debt paid off under this program. Also, it’s essential to get the BDAR application early, because they base it on a first-come, first-serve basis.
Even though the Secretary of Education, Betsy DeVos, has tried many times to stop students from collecting their BDAR discharges, it still does work. You can get your student loan debt paid if only you adhere to the rules of the program.
About 2,200 filed a lawsuit against Le Cordon Bleu, and they agreed to pay 44 percent of the student loan debt. You must know that it’s not a student loan forgiveness. Instead, it’s a settlement deal due to the students filing a lawsuit against the college.
It’s simple to get rid of your student loans. There’re two ways to achieve loan forgiveness if you’re a formal student of Le Cordon Bleu:
The federal government runs these two programs so you can access the forgiveness program. Also, it’s not a scam like what most people are claiming it to be. It’s entirely legit since the government is running the programs.
Even though there are two ways you can apply to get loan forgiveness, you cannot use both. You have to select one, and it should be able to give you the best opportunity of getting rid of your loans.
The BDAR forgiveness program is for college students who enrolled in schools who, in some way, violated the law. Previous students are having their loans discharged, so it’s possible to pay off your student loan debt.
If you want to get your loans removed, you have to connect Le Cordon Bleu lawsuit to the Borrower Defense claim. You also have to include the discharge settlement they agreed to pay in the application.
The first thing to do is to state how Le Cordon Bleu infringed the law. Also, state how you would not have gone for the student loan if you knew they were a fraud.
In other words, you’re trying to state the fact that the college told you a lie that made you take out the student loan. They used deceitful advertising schemes to convince you to borrow.
Secondly, accurately state what the school specifically did to you. Find out what Le Cordon Bleu confessed in the lawsuit against them and find the case which personally connects to you. Here are some of the charges against Le Cordon Bleu:
You can file your BDAR claim on the official federal government website. Be careful not to bring charges on any other website. There are a lot of scammers out there claiming to help students in the process with a low fee. Only use the official US government site.
Another way to get a Career Education Corporation loan forgiveness is by using the Closed School Discharge Program. You can qualify if you were enrolling in the school before it shut down, or you quit school, not above 120 days before the college was shut down.
However, some criteria will disqualify you from getting your debts paid off. If a student is currently enrolling in another school, and has transferred their credits from the school, the student won’t be eligible for the forgiveness program.
Also, students can’t qualify if they completed all their credits needed to graduate from the school but hadn’t got their diploma before the school closed down. If you are eligible for the requirements, then you can get your CEC loan forgiveness through the Closed School Discharge Program.
The application is relatively easy. Download the application from the official Federal Student Aid website, fill the form, and send the application to your loan lender. The loan servicers have other means of tackling the applications. So you have to provide everything your loan servicers ask you to provide, including any instructions they provide.
If you are a student from the American InterContinental University, you can get your student loan debt paid through the Borrower Defense to Repayment Program. You can submit a BDAR application using the details explained in the Le Cordon Bleu section.
But, if you have a federal loan, then it’ll not be possible for you to get the full Career Education Corporation loan forgiveness. On the other hand, the good news is that you are eligible to get your loan discharged through the BDAR program.
One relevant information to know is that the lawsuit settlement does not cover federal or private student loans. You can only get your debts cleared through the CEC. But, you can get your loans wiped out through the Borrower Defense to Repayment program.
If you have student loan debt that does not fall under the CEC, there are many options available to get your debt cleared. Your best chance is to search for other discharge, loan forgiveness, and available refund programs.
The Career Education Corporation’s fraudulent act caused a huge toll on students who borrowed to get into their schools. Imagine having an ambitious goal to pursue a master’s degree, which would lead you into your giant step in a career, only to find out your school is bankrupt. And now you have to pay back the thousands of dollars you borrowed to pursue your dream.
It was a nightmare for thousands of students. CEC’s act was unfair to the students. But thanks to the lawsuit, you can now pay off your debt and pursue your dream again.
Now, depending on the school you’re enrolled in, you can get Borrower Defense to Repayment Program or Closed School Discharge Program. With a good financial adviser, you should get your student loan debt cleared in no time.
If you still have questions about the Career Education Corporation or any of the information on this page, feel free to contact us for a free consultation.