For Immediate Release - July 30, 2015

AG Healey Secures Additional $2.3 Million for Students Misled By For-Profit Schools

Hundreds of Students Affected by Alleged Deceptive Practices of Kaplan Career Institute and Lincoln Tech; Settlements Part of AG’s Ongoing Review of For-Profit School Industry

BOSTON – For-profit schools Lincoln Technical Institute and Kaplan Career Institute will pay hundreds of their former students more than $2.3 million to resolve allegations that they inflated job placement numbers and employed unfair recruiting tactics to persuade prospective students to enroll in their programs, Attorney General Maura Healey announced today.

“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,” AG Healey said. “Many of these students paid their tuition using federal loans, so not only have these schools taken advantage of students, they’ve taken money from taxpayers. 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.”

Today’s announcement is part of AG Healey’s ongoing and comprehensive review of the for-profit education industry, which includes urging the federal government to cancel student loans tied to predatory for-profit schools as well as an outreach program and resources for students seeking educational opportunities. The AG’s Office is currently in litigation with for-profit schools Corinthian Colleges and American Career Institute for alleged unfair and deceptive practices. The AG’s Office reached settlements worth more than $4 million with two additional for-profit schools in Massachusetts – Sullivan & Cogliano and Salter College.

The settlements with Kaplan pdf format of Kaplan Settlement
file size 2MB and Lincoln pdf format of Lincoln Tech Settlement
, both filed in Suffolk Superior Court, stem from the AG’s allegations of misleading job placement rates for its vocational programs, both reporting above 70 percent when in fact the actual rates were materially lower, along with high-pressure sales tactics.

 

Kaplan Career Institute

Under the settlement with Kaplan Higher Education, LLC pdf format of Kaplan Settlement
file size 2MB – which owned Kaplan Career Institute schools in Massachusetts – a total of $1.375 million will be distributed to eligible graduates of the school’s medical vocational programs, through paying off a portion or all of the students’ federal student loan debt. Kaplan has closed the school and no longer operates any Kaplan Career Institute schools in Massachusetts.

Students who attended these programs largely entered them in hopes of obtaining employment in the medical field. According to the AG’s investigation, Kaplan induced enrollment of students at the school with harassing sales tactics and misleading representations in its recruitment materials concerning its educational program and employment.

Students reported to the Attorney General’s Office that the job listings provided by Kaplan were from publicly available resources and that Kaplan did not provide any special services or programs to assist students and graduates in their job search.

As part of the settlement, Kaplan is also required to give notice to the AG’s Office before attempting to open or re-open any for-profit school campuses in Massachusetts. 

 

Lincoln Technical Institute

Under the settlement with Lincoln Technical Institute pdf format of Lincoln Tech Settlement
and its owner Lincoln Education Services, Inc., $850,000 will be used to pay down federal student loans for eligible graduates of the school’s criminal justice program at its Somerville and Lowell campuses. The school will also forgive an additional $165,000 in private student loans.

Despite the school’s website stating that students would “[b]uild the foundation for a career in law enforcement and private security with Criminal Justice training at Lincoln,” the AG’s Office alleges that many students could not find work in these fields. Lincoln improperly counted temporary jobs, part-time jobs, and jobs outside the students’ field of study – such as general retail positions – toward its placement statistics.

Lincoln also allegedly used an admissions manual that instructed recruiters to “bring out the pain” in potential students so that they would feel pressure enroll. Lincoln’s recruiters used scripted questions to “establish unhappiness, create urgency.” The AG’s complaint alleges that the school’s recruiters steered students away from other ways to further their education and training, including the military and community college.  Recruiters were required to make at least seven attempts to contact the student within the first three days in order to persuade them to enroll. 

The settlement with Lincoln requires the school to accurately calculate placement statistics going forward. Lincoln must also make disclosures to prospective students regarding job placements and refrain from making misleading representations regarding the transferability of credits. 

These cases were handled by Assistant Attorneys General Peter Leight and Tim Hoitink, Division Chief Glenn Kaplan, Legal Analyst Diana Hooley and Paralegal Erica Harmon, all of the Attorney General’s Insurance and Financial Services Division.

The AG’s Office has an extensive consumer protection campaign along with tips online for prospective students to use when determining the best way to achieve their education and career goals and how much they can afford to borrow in student loans.

Students with questions can call AG Healey’s Insurance & Financial Services Division hotline at (888) 830-6277. 

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