Colorado Technical University Class Action Lawsuit

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colorado technical university class action lawsuit

Colorado Technical University is a for-profit college operated by the Perdoceo Education Corporation -formerly known as Career Education Corporation. Allegedly, its operator has been involved in multiple lawsuits due to unlawful or misleading practices against students. The Federal Trade Commission conducted a multi-year investigation about false marketing strategies or the operating organization’s pressuring sales generation techniques. As a result, the Perdoceo Education Corporation settled a few times with the FTC for millions of dollars. While they never admit the wrongdoing, these settlements created excellent opportunities for the students who were victims of fake promises. In this guide, we will discuss the causes and results of two lawsuits that ended in 2019, which also concern the Colorado Technical University class action lawsuit. 

Both of these lawsuits brought monetary damages and demanded changes in the advertising and student management practices of the Perdoceo Education Corporation. If you have not benefited from any of these lawsuits, we will also guide you to another solution, Borrowers Defense to Repayment plan. 

Perdoceo/Career Education Corporation

One can be confused about why the lawsuits against the Career Education Corporation matters for the Colorado Technical University class action lawsuit. Career Education Corporation (CEC) is the Schaumburg-based for-profit college operator. Recently, at the beginning of 2020, the corporation changed its name to Perdoceo Education Corporation. This organization provides education services through its schools, such as Colorado Technical University, American InterContinental University, and Trident University International. Its previous schools, such as Briarcliffe, Missouri, and Gibbs, are closed. The corporation’s primary source of income is the tuition fees of the students, which mainly the U.S. Department of Defense and Veterans Administration covers. 

But Before…

Before we start discussing the Colorado Technical University class action lawsuit, we have good news for you. As the name of this school was involved in disputes, mismanagement, and fraudulent activities toward students, students of this organization can benefit from some opportunities for student loan forgiveness or reduction. 

If the settlements previously made with the CEC did not bring any changes, students could apply for the Borrower’s Defense against Payment program. This program helps graduates to reduce, if not eliminate, their loan debt obligation. The main factor that matters in the application is proving that the student was the victim of unlawful or unethical practices of the university. As there exists a class action lawsuit against Colorado Technical University, it can be relatively easy to convince the Department of Education officials. If you have any questions regarding this program, you can check our Borrower’s Defense against Repayment page. Alternatively, you can call us to get expert help and advice. 

$493 Million Worth Settlement

This Colorado Technical University class action lawsuit brought massive benefits and changes to the Career Education Corporation. The operator agreed to remove $500 million worth of student debt after settling with 48 states and the District of Columbia. The for-profit college operator manages the Colorado Technical University and American InterContinental University. It serves around 34k students. The settlement, which is about $493.7 million benefits to 180k previous students of the colleges. The Schaumburg-based operator agreed to this settlement after it faced claims such as false advertising, misleading promises about the job opportunities, and misinformation about the education’s cost. The case was based on the multi-year investigation. 

Detailed Causes

It is hard to generalize the causes for almost $500 million worth settlement under a few headings because this Colorado Technical University class action lawsuit has a diverse base of drivers. Allegedly, the college operator employed some unlawful and unethical strategies to attract students. Its recruiters used a pressuring language to make students decide faster about their enrollment. They misled the students by stating that the credits were transferable, when they were not. Also, they used fake facts about employment rates after graduation. 

Even some of the programs did not have the necessary accreditation, which is essential when people start looking for a job after getting a degree. Another problem was that the recruiters did not inform the students about the real cost of the education. They used tricky words and provided incomplete information, which made the program seem more affordable. All those fraudulent strategies to attract students resulted in the class action lawsuit against Colorado Technical University. 

The Settlement

colorado technical university class action lawsuit

As a result of the lawsuit, the Career Education Corporation, or its new name, Perdoceo, agreed to $493 million worth of student loan cancellation. Besides, they agreed that they would not misrepresent the schools through false accreditation, employment rates, credit transfer, and financial aid promises. Also, the programs that did not have the necessary licensure for employment should be closed. 

As students made decisions without being aware of the real cost, the court ordered that the school provide full disclosure about the costs. This single-page document should include the total cost, average debt, percentage of people completing the program, the average salary of the graduates after graduation, etc. Additionally, students were required to fill the disclosure online, which provided information about the debt burden and expected income. Sure, the Perdoceo Education Corporation denied all the allegations, although they agreed to settle. 

The attorney general, who was also a co-lead negotiator, believed that the settlement would set an example for other colleges in the industry and make it fair for the students. 

Eligibility to Student Loan Forgiveness

Students who studied in one of the closed schools of the Perdoceo Education Corporation on or before January 1, 2019, had the right to get loan forgiveness. For graduate students, this time range included the period before or on December 31, 2013. Some of the Perdoceo Education Corporation’s schools, such as Le Cordon Bleu, Missouri College, or Sanford-Brown, were closed. 

While this Colorado Technical University lawsuit settlement is a big step toward creating a transparent environment in the education industry, it does not benefit many students. The settlement only covers the loans that students owe directly to the Perdoceo Education Corporation. They took other federal or private loans for educational purposes after they were influenced by misleading actions of the college, which were not canceled as a result of the settlement. Also, the other two states- New York and California- did not participate in this settlement. They have their agreements. Therefore, students in these states do not benefit from the $493 million loan forgiveness. 

How to Avoid Such Cases?

Sure, receiving a loan cancellation is an excellent idea. However, it is better to avoid such cases beforehand, so that you do not wait for lawsuits and solutions. When entering the university, do not fully trust the claims of the recruiters. Potential students must do in-depth research and get some feedback about the quality of the programs from graduates. They can ask previous students whether they were able to find a job quickly and how the program prepared them for future employment opportunities. 

Another issue is being unaware of the debt management and finances. Prospective students should use loan calculators and read all the material they sign beforehand. The terms of the student loans can be quite hard, so they need to be well-aware of what those terms mean. Getting external help to calculate the burden of the debt is also the right solution. If there is no guarantee that a student can meet the loan debt obligation, it is better to give up and find an alternative program with lower tuition fees. Lastly, read all the material you get and ask many questions without letting the pressuring sales tactics make a decision instead of you. 

$30 Million Worth Settlement

The lawsuits against the Career Education Corporation, and subsequently a class action lawsuit against Colorado Technical University, did not end at the beginning of 2019 when they settled for half a billion. 

In the midst of 2019, another Career Education Corporation reached another settlement with the Federal Trade Commission for $30 million. The main reason behind this Colorado Technical University class action lawsuit was the lead generating processes of the operator. The CEC utilized this process to generate sales leads through deceptive practices. The lead generators misinformed the clients that the schools were affiliates of the U.S. military and made other unlawful claims. 

As Colorado Technical University is one of the CEC’s subsidiaries, it was involved in the allegations of the FTC, together with other entities like American InterContinental, Marlin Acquisition Corporation, etc. The FTC claimed that the CEC utilized the lead generation process for advertising its schools, and attracted clients with false promises or facts. 

Detailed Causes

This Colorado Technical University class action lawsuit had many causes behind. In addition to claiming that the U.S. military recommends the schools, the CEC collected potential clients’ information by stating that they will get opportunities like job offers or other benefits. Lead generators acted like job finding service or military recruiters to get the personal details. They noted that they keep all client information private and do not share it with other parties. Then, they contacted these people for post-secondary education.

The lead generators of the CEC called numbers that were in the list of National Do Not Call Registry. Most of those people did not have any interest in entering a college or any CEC school. Some others showed interest because they were misled by false claims, such as being a U.S. military affiliate or getting fantastic employment opportunities after graduation. As lead generators had specific enrollment quotas for the month, they pressed the potential clients and disturbed them by calling several times a day. All those unlawful and unethical actions led to a class action lawsuit against Colorado Technical University. 

The Settlement

As a result of those causes, the Colorado Technical University class action lawsuit ended with a $30 million settlement. Besides this payment, the court ordered that the CEC should check all the promotional materials its lead generators use. If there are complaints against these recruiters, the operator should deal with them on a case-by-case basis. In general, the CEC should not utilize any lead generation techniques that deceive people and provide false benefit promises. In return, the CEC mentioned that they do not admit any wrongdoing. The only reason behind their agreement to this Colorado Technical University class action lawsuit settlement was their huge expenses for legal services. It has already been four years since the Federal Trade Commission investigation for the case, and they decided to settle to avoid any further legal costs. 

How to Avoid Such Scams?

CTU lawsuit

This Colorado Technical University class action lawsuit is not the first one and would not be the last. Every year, news breaks that the schools face charges, or settle with another party for mismanagement of fraudulent actions. It is better not to wait for a loan debt problem to happen and then demand justice. The Federal Trade Commission advises a few ways to avoid the cause of those problems in the first place. 

People should not fill out any form on the websites without getting much information. They should first find out who is requesting this information and why. If there are not many details about the purpose of the form, it is advisable to go online and search for the site operator. By adding keywords like “complaints” or “review,” it can be possible to find other people’s comments who provided personal information to such platforms. 

If someone calls you, and you understand that they are imposing a different person, you should immediately report it to the Federal Trade Commission. They have a complaint page on their official websites. In no case, one should be pressured to share Social Security or bank card number on the phone or other mediums. In this post, we have discussed two major Colorado Technical University lawsuits. However, there is no guarantee that the settlement will ensure there is no wrongdoing in the future. Hence, be aware of the fraudulent activities of schools and operators to stay away from them. 

I have a CTU Federal Student Loan. What should I Do?

It can be disappointing, but a settlement for the Colorado Technical University lawsuit usually benefits only a few students. Sure, there exist hundreds of students who receive loan forgiveness. However, compared to the total number of debtors, there are not many students with benefits. The main reason for this difference is that the largest settlement, which was $493.7 million worth, was only for the loans owed to the Perdoceo Education Corporation. In general, students take loans from federal and private resources, which were not eligible for the cancellation. 

If you have a federal student loan for Colorado Technical University, there exists an excellent opportunity. The Borrower’s Defense to payment Plan aims to aid students who were victims of the mismanaged universities. It provides a full or partial discharge to federal loans. Borrowers with Federal Family Education or Perkins loans can be required to get loan consolidation before applying for the discharge. If debtors can prove that their universities misled them, then they can get rid of the debt. 

They should also keep in mind that the Borrower’s Defense to Payment program only benefits when the universities engage in unlawful and unethical practices, such as false advertising, misinformation, etc. Personal matters with the university are not eligible for the program as it aims to provide a transparent, honest environment in education. 

Eligibility Criteria

Understanding the eligibility criteria for this program is relatively easy. Convincing the officials that the university misled, misinformed, and deceived the student is the most significant factor in determining whether the debtor deserves cancellation. If the application is approved, the borrowers can get a full or partial discharge and a refund for their previous payments. 

When filling the application, they need to ensure that the form is convincing. All the related documents, such as promotional materials and emails with university officials, can be added to the school’s application to prove the school’s misconduct. After the Colorado Technical University class action lawsuit, it is not difficult to convince the officials about the mismanagement. 

Get Our Help by Your Side

The loan terms are complicated. The lawsuits, cases, settlements are even harder to understand. In this guide, we helped readers understand the recent Colorado Technical University class action lawsuit and its results. We recognize that the benefits that settlement brings do not apply to every student. Most of them are not even eligible for the cancellation worth of $493.7 million. However, we can help you get rid of your debts or at least reduce it if you studied at Colorado Technical University. These students can apply to Borrower’s Defense to Payment program for full or partial discharge. Call us to get more information about the solutions.