Blog Enforcement Watch September 11, 2015

Kentucky AG Secures $11.2 Million Settlement from For-Profit College

​On September 10, Kentucky Attorney General (KY AG) Jack Conway announced a settlement with a for-profit college, resolving claims that the school violated the state Consumer Protection Act.  The state alleged that the college violated the statute by denying students financial aid to purchase textbooks at bookstores other than its own; misrepresenting students’ ability to transfer credits to other institutions; admitting students who failed the college’s own admissions assessment; and hiring unqualified faculty.

Under the consent decree, the college will pay $1.2 million to the Office of the Attorney General to be distributed to affected students.  The college will also cease collection of $11 million in institutional debt owed by affected students.  The college will also correct or remove credit reporting of collection activity associated with student debt.  Further, the consent decree subjects the college to compliance requirements for the next two years.  The school must also implement enhanced disclosures to students regarding student loan debt; strictly follow its admissions criteria; hire qualified faculty members; and conduct free, bi-monthly career services workshops for current and former students.