Salter to Pay Students $3.75 Million Over Alleged Inflated Job Placement Rates, Misleading Enrollment
Largest Settlement to Date as Part of AG Coakley’s Investigation of For-Profit School Industry; Salter Must Also Provide Website Disclosures and Employment Assistance to Students
BOSTON – A for-profit school will pay students $3.75 million to resolve allegations of misrepresenting job placement numbers and using deceptive enrollment tactics, Attorney General Martha Coakley announced today. A total of $3.5 million will be used to pay down student federal loans, as well as nearly $250,000 in private loan relief and associated payments. That money will be distributed as relief for certain students who attended health related programs at specific Salter College and The Salter School campuses in Massachusetts. This is the largest settlement to date as part of AG Coakley’s ongoing investigation of the for-profit school industry.
“We allege this for-profit school used misleading recruitment tactics in order to obtain tuition payments and fees from students looking to further their education,” AG Coakley said. “Our ongoing investigation into the for-profit school industry has provided real relief for students who have incurred substantial debt because of these deceptive practices.”
The consent judgment file size 4MB against Salter College: A Private Two-Year College, LLC (Salter), and its owner and operator Premier Education Group, L.P. (Premier), entered in Suffolk Superior Court, also requires the defendants to make appropriate disclosures on their website advertisements, and pre-enrollment materials, and provide services to students seeking jobs in their field of study.
The AG’s investigation involved alleged deceptive practices at Salter College’s West Boylston campus, and The Salter School locations in Fall River and New Bedford. At least 600 students alleged to be harmed by Salter’s deceptive practices are expected to be eligible for loan relief.
The AG’s complaint file size 3MB alleges that in order to induce students to enroll in their Massachusetts campuses, Salter and Premier claimed to have a selective admissions process, and misrepresented the historical success of students in finding jobs in their fields of study, such as the medical assistant, medical billing and coding, and health claims specialist programs.
Since at least 2009, the defendants allegedly deceptively represented their educational programs and services to prospective students, requiring representatives of the school to describe a selective process for the “type of student” accepted. In fact, Salter is an open enrollment school with limited admission standards beyond a high school diploma (or equivalent) and the ability to pay tuition or have access to federal student loans.
Recruiting efforts also allegedly involved statements about Salter’s career-training preparation and assistance in finding jobs for students in their fields of study, and the school’s historical success and influence in placing students in these jobs. The website for Salter at one point touted that “[t]he education you receive at Salter College is designed to prepare you for an exciting career or to enhance the opportunities in your current career.” The complaint alleges that job-related materials provided to students were from publicly available sources, and the school did not provide students with any special services or programs to assist in their job search.
The schools allegedly used high placement rates, in some cases above 80 percent, to persuade consumers and prospective students in Massachusetts to enroll, when in fact the actual placement rates were materially lower. In order to reach these higher rates, the complaint alleges that the defendants improperly counted temporary jobs, part-time jobs, and jobs allegedly not in the students’ field of study, such as home health aides, toward their stated placement statistics.
Prospective students were also allegedly told that externships provided by the schools would lead to full time, in-field employment, when instead many students were forced to find their own externships, delaying the completion of their program and their ability to work. For many of the students, Salter externships do not lead to jobs in their fields of study.
In addition to loan relief for eligible students, the judgment requires Salter and Premier to provide accurate disclosures for all of their Massachusetts locations on their website pertaining to their placement services, job listings, admission standards, and certification, and to provide certain services designed to enhance former and current students’ ability to effectively obtain placement in fields related to their education at Salter.
This matter is part of the for-profit school investigative initiative in the Public Protection and Advocacy Bureau of the Attorney General’s Office.
In June 2014, AG Coakley announced the finalization of new for-profit and occupational school regulations to better protect students from potentially unfair or deceptive practices.
In April 2014, the AG’s Office filed a lawsuit against for-profit school Corinthian Colleges, Inc. and Corinthian Schools, Inc., which operate Everest Institute, over allegations that it misrepresented its training programs and job placement rates in order to increase profits, and pushed students into high-interest subprime loans.
In November 2013, the AG’s Office filed a lawsuit against American Career Institute (ACI) alleging the school falsified student signatures, enrollment records, attendance, and grades to receive government-funded student loan proceeds, and failed to provide students the course material and training for which they incurred tens of thousands of dollars in debt.
AG Coakley reached a $425,000 consent judgment in October 2013 to reimburse former students of Sullivan & Cogliano Training Centers, Inc., a Brockton-based for-profit career school, for allegedly misrepresenting job placement numbers and making other misleading statements about its medical field training programs. The settlement resolved the AG’s lawsuit filed earlier that year.
In April 2013, AG Coakley launched Eliminate Deceptive Education Business Tactics (D.E.B.T.), an extensive consumer protection campaign with free educational trainings across the state and a new website offering resources for consumers related to for-profit schools.
In March 2013, AG Coakley signaled her support for proposed federal legislation which would stop for-profit schools from spending taxpayer money on marketing.
In June 2012, AG Coakley obtained $225,000 for the state in a multistate settlement with QuinStreet which resulted in the deceptive for-profit marketing website GIBill.com being taken down and handed over to the U.S. Department of Veterans Affairs.
The AG’s Office has tips for prospective students to use when evaluating their choices for higher education. Students should learn about their education and career training options to determine the best way to achieve their education and career goals and how much they can afford to borrow in student loans:
- Some schools use high pressure recruiting tactics such as claiming that a prospective student has to sign up immediately. Never sign anything at first encounter.
- No school can guarantee that students will get jobs after completing their programs. When a school offers their job placement statistics, ask what jobs are counted as placements. Useful questions include: “How many students graduated from this medical training program and obtained a job in the medical field? What help did the school provide for these students to get a job?”
- Some schools advertise how easy it is to get a degree. If it seems too good to be true, it probably is. Use certain websites to find a school’s on-time completion rate or graduation rate and loan default rate. Remember that many schools do not allow credits to transfer from a for-profit school.
- Students are responsible for their student loan debts even if they do not graduate or earn enough to pay back their loans. Use a free online loan calculator here.
Consumers with questions can call AG Coakley's Insurance & Financial Services Division hotline at 1-888-830-6277.
No private companies have been authorized to assist Salter students in recovering benefits under the settlement, including through ‘document preparation’ services. Any relief a student is entitled to will be provided directly by the Attorney General and free of charge. Under no circumstances should any student pay any company a fee in connection with obtaining relief under the settlement.
Today’s case was handled by Assistant Attorney General Peter Leight, Division Chief Glenn Kaplan, Legal Analyst Diana Hooley and Mathematician Burt Feinberg, all of the Attorney General’s Insurance & Financial Services Division.