A for-profit education company with a health care careers school in White Plains will pay $10.25 million to settle claims it misleadingly inflated its graduates’ job placement rates.
New York State Attorney General Eric T. Schneiderman announced the settlement with Career Education Corporation, a company headquartered in suburban Chicago that offers career-oriented training programs on campuses nationwide. Schneiderman said an investigation by his office found CEC “significantly” raised job placement rates in its disclosures to students, accrediting agencies and New York state.
CEC will pay $9.25 million in restitution to students and a $1 million penalty, and has agreed to substantially change how the company calculates and verifies placement rates, Schneiderman said.
“Students pay thousands of dollars to for-profit colleges because they rightly believe education is the ticket to success in their careers,” the attorney general said in a press release. “That’s why it’s so unfortunate that this company exploited students’ aspirations and published misleading information. Students deserve – and the law requires – accurate data when schools publish it for prospective students.”
In White Plains, CEC operates Sanford-Brown Institute, a school offering career programs in the health care industry at 333 Westchester Ave. It operates six other campuses in New York City and on Long Island. CEC also operates several online schools, including American InterContinental University, and currently enrolls 75,000 students worldwide.
The attorney general’s investigators found that CEC inflated its job placement rates from at least 2009 through spring 2011 and used the false data to lure prospective students to its schools.
For the school years 2008-2009 and 2009-2010, the company in school catalogs and on its website reported annual placement rates for its New York campuses that ranged from 54.9 to 80.2 percent, when the correct placement rates ranged from 24.1 to 64.1 percent, according to Schneiderman.
If the correct data had been used, Schneiderman said the company’s Sanford-Brown Institute potentially risked losing its private accreditation for failing to meet minimum placement rate thresholds.
The state investigation also fund that CEC failed to adequately inform students that certain programs were not accredited and thus not likely to lead to employment and that course credits from certain CEC schools most often cannot be transferred to public or nonprofit private colleges.
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