Two For-Profit Schools Must Pay Students $2.3M Over Unfair Practices

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Hundreds of former students at Kaplan Career Institute and Lincoln Technical Institute in Massachusetts will receive redress from the for-profit colleges after the schools settled charges they engaged in unfair practices with the state’s Attorney General’s office.

The Boston Globe reports that Kaplan Higher Education LLC and Lincoln Educational Services Inc. have agreed to pay millions of dollars to students in order to resolve claims the companies used unfair recruiting tactics and inflated job placement numbers to lure students into enrolling at the colleges.

“We allege these for-profit schools lured hopeful students into enrolling in their vocational programs by promising certain careers, but only left them with substantial debt,” Attorney General Maura Healey said. “Students trying to better their lives through education are instead being left financially ruined. These settlements will provide the relief these students deserve and prevent deceptive practices that put taxpayer dollars at risk.”

The settlements are the result of an Attorney General’s Office investigation that looked at dozens of schools operated by the companies and found, among other things, that the schools falsely reported a 70% job placement rates for graduates.

According to the AG’s office, Kaplan Higher Education, which owned the now-shuttered Kaplan Career Institute schools in Massachusetts, used job listings that were publicly available resources and did not offer any independent services or programs for its students’ job searches.

The company will pay eligible graduates of its medical vocational programs a total of $1.375 million. The Globe reports that the office first opened its investigation into the Kenmore Square school four years ago.

A spokesperson for Kaplan tells the Globe that the school “emphatically maintains that its actions were compliant and in the best interests of students, who were well-served by the institution.”

The company says they agreed to the settlement because of litigation costs, and was not found to have engaged in any wrongdoing.

As for Lincoln Technical Institute, the school’s parent company will pay eligible graduates of its criminal justice program at its Somerville and Lowell campuses $850,000 and will forgive $165,00 worth of private student loans the students took out.

The AG’s office reports that its investigation into the program found that students were unable to find work in law enforcement or private security after graduation.

The school was also found to include unrelated jobs, such as general retail positions, in its placement data, the Globe reports.

According to the AG’s investigation, the school allegedly told recruiters to pressure prospective students to attend the school by establishing unhappiness, creating urgency and to “bring out the pain.” They were also allegedly told to contact students at least seven times within the first three days to convince them to enroll.

In a statement to the Globe, Lincoln Educational Services says the investigation into the school started in 2008, at a time when employment opportunities were limited for all students.

The company contends that for-profit schools are held to higher standards than other traditional universities, despite their differing student bodies.

“Full disclosure and transparency require a level playing field,” the statement said. “We look forward to the day that all post-secondary institutions … are held to the same standards.”

Two for-profit colleges settle lawsuit with attorney general for $2.3 million [The Boston Globe]

by Ashlee Kieler via Consumerist