With so many people today seeking higher education, the need to be aware of career college scams and technical school scams is essential. There are a number of fraudulent activities that take place both online and offline, so it’s important for potential students to keep their eyes open and conduct research before choosing any career college or technical school.
Lawsuits and Recent Scams
In February of this year the Consumer Financial Protection Bureau filed a lawsuit against one of the most popular technical schools, ITT Educational Services. It accused ITT Tech of abusive practices that included predatory lending. This lawsuit is the first time the bureau has taken a hard line in an enforcement action related to illegal or unethical practices in which some for-profit colleges engage. Some observers believe this shows just how serious and aggressive the agency will be in its plans to work diligently and use its enforcement powers to the best of its ability to better control this particular sector of higher education.
According to the complaint, ITT pressured students into taking on predator loans and misled potential students about the success rates of their job placement program, credit transferability, and accreditation. The CFPB claims the company developed a substantial private loan program that conned borrowers into taking on high-interest loans they knew would fall into default. In fact, records showed the default rates were as high as sixty-four percent!
Just the Beginning
The action the bureau took against ITT was intended as a warning to other for-profit institutions of its plans to take a harder line in enforcement of regulations. Consumer advocates are in favor of this action while others are equally encouraged by the vigilance the agency has taken in regard to lending practices that exploit students who are working hard to obtain a higher education. The advocates have stated in the past they are of the opinion the CFPB needs to fill in some significant gaps in the ability of the federal government to regulate both for-profit colleges and private student loans. They believe there are significant gaps in both of these areas at the present time.
While the federal government has increased its scrutiny of for-profit colleges since President Obama took office, their attention has been focused predominantly on how the various career colleges and technical schools handle the federal funds they receive each year. The Federal Trade Commission requires the financial products and services for-profit colleges offer to adhere to the same standards as any other consumer financial product or service.
While these financial issues are big problems in the for-profit educational sector, they are certainly not the only ones students may face. Many times there are issues of misrepresented accreditation, overstating job placement success rates, misrepresentation about their curriculum as it relates to similar programs at other colleges, and even what salaries a student can expect in the field once he or she graduates.
If you believe you have been taken advantage of by your career college or technical school, our office can help you form a case against the institution. For more information or to contact one of our lawyers, shoot us an email. While we may not be able to help with every case, we’re happy to evaluate the facts of your case for no charge.