Career Education Corporation Reaches Significant Agreements to Resolve Multi-State Inquiry
January 03, 2019 at 11:25 pm IST
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Career Education Corporation announced that it has reached agreements with attorneys general from 48 states and the District of Columbia to bring closure to the multi-state attorneys general inquiry on-going since January 2014. As part of the agreements the company expressly denied any allegations of wrongdoing or liability. In addition, the attorneys general have provided a release of potential claims that they may have brought. In connection with these agreements, the Company expects to record a total pre-tax charge of $6.3 million, consisting of (i) a $5.0 million payment to the attorneys general to cover expenses incurred during the course of their inquiry over the last five years (which the attorneys general will distribute as they elect), and (ii) the write-off of approximately $1.3 million of accounts receivable. Although the company agreed to forgo efforts to collect on approximately $556 million of old accounts receivable that were incurred during the last 30 years by students at more than 100 campuses who reside in participating states, all but approximately $1.3 million of these old accounts receivable were written-off in prior reporting periods in the ordinary course of the Company’s operations. The agreement to forgo efforts to collect on previously written-off receivables does not require additional write-off expense to the company’s financial statements. The agreements build upon the significant compliance monitoring processes the Company has adopted over the past several years with commitments to a number of additional operational initiatives that will benefit its students. Its future students will receive additional informational resources on important policies, academic program information and financial aid information during the enrollment process and an enhanced refund policy all of which to the extent not already implemented the Company plans to implement over the next six months. The company will work with a third-party administrator over the next three years who will provide ongoing oversight and review of the company’s implementation of the terms of the agreements. The company will reimburse the administrator a total of $2.0 million for fees and expenses to be paid over the next three years.
Perdoceo Education Corporation, through its academic institutions, offers quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. The Company's academic institutions include Colorado Technical University (CTU) and the American InterContinental University System (AIUS), which provides degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs. Its academic institutions offer students industry-relevant and career-focused academic programs. CTU offers academic programs in the career-oriented disciplines of business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity and criminal justice. AIUS offers academic programs in the career-oriented disciplines of business studies, information technologies, education, health sciences and criminal justice.