10 IMPORTANT, IMPENDING LAWSUITS OVER STUDENT DEBT

10 IMPORTANT, IMPENDING LAWSUITS OVER STUDENT DEBT
by staff writers

February 27, 2012

Student loan debt is a hot topic at the moment, as many predict that it could spur on another economic crisis. The fears may be well-founded as student debt is having far-reaching effects already, not only making it hard for an entire generation of young people to make ends meet but also potentially harming the financial futures of their parents and slowing the economic recovery as a whole. The average college student emerges from school over $25,000 in debt, and some who attended high profile schools or professional programs may carry as much as $100,000 in debt. With the job market tight, many students are unable to find work that pays enough to manage these debts, or they may have trouble finding work at all, leaving many understandably angry.



Some students have decided to push back and are taking their alma maters to task in court. Read on to learn about a few of these cases involving students who feel shortchanged and schools that may have been less than honest about students’ post-graduation prospects.

Brooklyn Law School

Former students of this New York area law school decided to file a class action suit after many students found it difficult, if not impossible to find employment after graduation, despite claims by the school that 90 to 95% of students would find work. Even top students like Adam Bevelacqua, who is suing the school, haven’t had an easy road. Despite good grades, internships throughout his law school education, and passing the bar on his first try, Bevelacqua hasn’t been able to find work. He, and other students like him, now carry over $100,000 worth of debt and have no means to pay it off. They believe that they school purposely misled them about job prospects, inflating numbers so that students would feel more comfortable taking on the large amount of debt attending the school requires.

New York Law School

New York Law School is another law school that is facing the wrath of students who feel they were misled about employment prospects, one of many schools facing increased scrutiny for these kinds of statistics. In August of 2011, a class action lawsuit was filed against New York Law School and Thomas Cooley Law School accusing the schools of providing job placement information to students that was inaccurate enough to be considered fraudulent. The lawyers for the case allege that students were unable to make sound decisions about whether to attend the school based on the information provided, and many took on debt that they would have little ability to pay back without steady employment.

Thomas Jefferson School of Law

Thomas Jefferson, a lawyer himself, probably wouldn’t want his name associated with this law school if allegations against it are true. A 2008 honors graduate of the school, Anna Alaburda has filed a lawsuit against the school, alleging that the school commits fraud by misleading students about post-graduation employment and salary data. Alaburda believes these numbers are inflated to bring in more students but falsely advertise success levels that the current economy simply can’t support. The proof that their claims are exaggerated may lie in Alaburda herself, who despite graduating with honors and applying to 150 law firms hasn’t been able to find long-term employment in the field. With over $150,000 in student loan debt, a settlement from the school may be the only way this young student will stay afloat.

Westwood College

Westwood College isn’t seeing the wrath of former students, but instead the State of Illinois, who claims the school misled students in its criminal justice program and saddled them with debt for a degree that, in many cases, would be no help in getting a job. The state’s lawsuit is the result of more than 100 student complaints about the school’s program, including claims of poor job placement rates, high-pressure sales tactics, low graduation rates, excessive profit margins, and, of course, high student debt. The state may have a pretty good case, as the school’s criminal justice program isn’t accredited, so degrees through the school aren’t recognized by any local or state police departments. Add to that the high cost of the program, which is a staggering $71,610, which is ridiculously high for any school but especially so because students could get a degree from a nearby accredited school for a mere $12,612.

Daymar College

The State of Kentucky is also closing in on colleges that might be using deceptive marketing techniques to lure students into taking on debt they likely won’t be able to repay. Kentucky Attorney General Jack Conway filed a suit against Daymar College in July of 2011, alleging the school uses deceptive tactics to recruit students and cheats students on textbook sales, financial aid, and the quality of their educations. Heavy allegations, but ones that might be true. Daymar College enrolls students who don’t meet their own admission standards, which causes high dropout rates and many students left with high levels of debt, some as much as $34,000 a year. Students also can’t transfer credits out of the school, a fact that the college doesn’t mention to students. It also forces students to buy excessively expensive textbooks from its bookstores and directs how students can spend financial aid dollars. The state is seeking damages of $10 million or more, which hopefully will prompt this college to engage in better practices in the future.



Monroe College

Graduate of Morena College Trina Thompson has $70,000 worth of debt after graduating from the school in 2009, debt which she hasn’t been able to pay for because she can’t find gainful employment. This prompted Thompson to file a class action suit against her alma mater, alleging that the school and the degree it provided haven’t done anything to help her find a job. She believes that the school hasn’t lived up to its end of the bargain and that the school’s career services department has done little to provide job leads and guidance to her and other graduates as it promised. The school says that the lawsuit is without merit and that they do what they can to help students, but that may not be much consolation to Thompson who may soon be homeless.

Villanova University

Villanova is one of 12 schools being sued by class action lawyers for fraudulent employment statistics. The school may be more at risk of having to pay up than other schools, however, as they were recently in hot water with the ABA over inaccurate reporting of admissions data. The school’s falsification of data was serious enough to merit censure and could be used to show that the school has a history of misleading students with false information.

John Marshall Law School

Law schools in the U.S. are getting hit hard with lawsuits over their employment data, largely because many charge such high tuition that students who cannot find work after employment often fall into financial insolvency. John Marshall, located in Chicago, is no exception. The school is at the center of a recent lawsuit that claims the school inflated its post-graduate employment information in an attempt to attract more students. Lawyers on the case allege that the school knowingly published false and misleading data that convinced students to take on substantial debt to finance their educations. Students like Joseph Reyes, one of the plaintiffs, believe this false information led them to make poor decisions regarding their legal educations and to take on more debt than they would be able to pay back, without employment of course.

University of Phoenix

The state of Oregon is also getting in on the game when it comes to suing colleges over student debt. The largest for-profit school in the U.S., University of Phoenix, could be facing major legal trouble over allegations that it engages in misleading marketing practices and mishandles student loans. Karen Johnson, a student of the school, planned to pay for her education without any loans but found out a few weeks into the school year that the school had taken out a loan in her name and mailed her a check. She isn’t the only student with complaints, however, prompting the state to launch an investigation into how the school conducts business.

The Art Institutes

The U.S. Department of Justice filed a major lawsuit against this for-profit school run by Education Management Corporation for fraudulently collecting over $11 billion in government aid. The government claims the schools actively recruit low-income students who cannot pay back student loan debt they incur by paying recruiters for every student they bring in. The school then uses federal dollars to pay these loans. Whether the fraud is legitimate or not is still to be decided, but the schools are pumping out grads into a job market where there is little chance they’ll find employment. At the school’s Philadelphia campus, there are over 600 photography undergrads, a field in which there are few job openings already.