WHITE PLAINS, N.Y. -- Career Education Corporation, a White Plains for-profit education company, has been ordered to pay $10.25 million in restitution and penalties after it was revealed the company significantly inflated its graduates’ job placement rates, according to a release from the office of New York State Attorney General Eric Schneiderman.
Career Education Corporation will pay $9.25 million in restitution to students, a $1 million penalty and has agreed to substantial changes in how the company calculates and verifies placement rates.
Career Education Corporation employees used several improper methods to inflate its placement rates, including counting graduates’ employment at one-day health fairs, some of which were at the request of the company and mischaracterizing graduates’ job duties in order to improperly count such students as employed in the field in which the student trained or a related field, according to the attorney general's investigation.
For the school years 2008-2009 and 2009-2010, the company disclosed annual placement rates for its New York campuses ranging from 54.9 percent to 80.2 percent, when the correct placement rates ranged from 24.1 percent to 64.1 percent, the release read.
"Students pay thousands of dollars to for-profit colleges because they rightly believe education is the ticket to success in their careers. That’s why it’s so unfortunate that this company exploited students’ aspirations and published misleading information,” Schneiderman said in the statement. “Students deserve – and the law requires – accurate data when schools publish it for prospective students.”
The investigation showed Career Education Corporation was failing to meet the minimum requirement of 65 percent job placement to maintain its accreditation.
The investigation also uncovered the company failed to adequately disclose to prospective students that certain of its programs lacked programmatic accreditation and that, as a result, graduates of such programs were unable to immediately sit for qualifying exams upon graduation, and thus were highly unlikely to obtain employment. The company also failed to adequately disclose to prospective students that credits earned at certain of its schools are not, in most cases, transferable to public or nonprofit degree granting colleges.