Three chains of career colleges with disturbing track records have become the first institutions to oppose a landmark legal settlement that would offer some $6 billion in debt relief to around 264,000 former students who claim they were deceived by their schools.
Keizer University (through its parent organization Everglades College) and, jointly, Lincoln Educational Services and American National College, filed motions Wednesday in federal court in San Francisco seeking to intervene in the lawsuit and s oppose the settlement between the students and the US Department of Education.
Higher education watchers had predicted that for-profit and vocational colleges would oppose the settlement of the lawsuit, which was brought by students opposing mass rejections by Trump’s education secretary , Betsy DeVos, of their requests for debt relief under a federal law providing for the cancellation of the federal loan. obligations when schools have deceived their students.
The settlement, announced two weeks ago, would cancel loans given to students who attended 153 institutions, many of which have faced lawsuits or accreditors for misconduct. The schools on the list are some of the industry’s worst offenders, including abandoned operations like Corinthian Colleges, Globe University, ITT Tech, Independence University, Kaplan College, and Art Institute campuses.
In a court filing supporting the proposed settlement, which requires the approval of Federal District Judge William Alsup, government and student attorneys explain that the schools on the list have “strong indicia of gross misconduct…that it be credible or, in some cases, proven”. , and [a] high rate of group members with ‘requests’ to the department for loan relief.
The for-profit college industry is concerned about the stigmatization of its members on the new list, as well as the potential for the Department to take an action that the law contemplates but has never used: ask a school to recover tuition payments that taxpayers have purchased with the now canceled loans.
Jason Altmire, the former Democratic congressman who heads career college lobby group CECU, previously claimed the Department agreed to the settlement “in its haste to respond to outside political pressure,” which resulted in to the approval of “large swathes of claims without regard to the individual”. deserves.” Arthur Keiser, the self-styled “Chancellor and CEO” of Keizer University, is a board member and a longtime leading figure in CECU.
In its brief filed Wednesday, Keizer University, which offers a wide range of academic programs from nursing to criminal justice to business, calls the settlement “a farce — the Star Chamber thing.” He says Keizer’s inclusion on the list of schools whose alumni are entitled to have their applications granted “already damages the reputation…”
The brief filed by Lincoln and American National similarly asserts that their schools face “both the potential and the reality of adverse consequences following the resolution of borrower defense claims under the iteration.” of the proposed regulation”. Lincoln offers career programs including automotive, cooking, and cosmetology, while American National offers a range of health and business programs.
Keiser, Lincoln and American National may not want to be on a government-approved list of schools involved in bad behavior, but all three have been implicated in bad behavior.
Keizer University has settled investigations into alleged deceptive and predatory practices pursued by both the US Department of Justice and the Florida Attorney General. He also engaged in a controversial conversion from for-profit to non-profit status that ultimately resulted in the Internal Revenue Service finding that the lease agreements Arthur Keizer had with the school that he directs were above fair market value; the IRS imposed additional taxes accordingly. Republic Report uncovered whistleblower accounts of ongoing deceptive and predatory practices and abuse of nonprofit status at Arthur Keiser schools, and this year many top congressional leaders have asked the Ministry of Education to investigate these institutions.
The conduct of Keizer Schools and that of the school’s accreditor, SACS, will also be discussed next week at the semi-annual meeting of NACIQI, the Department of Education’s external advisory committee on accreditation; in a demonstration of how the oversight of higher education has been rigged against students, the chairman of this committee, appointed to the panel by the Republicans of the United States House of Representatives, is none other than Arthur Keizer.
Lincoln Technical Institute in 2015 agreed to a million-dollar settlement with the Massachusetts attorney general over state-bred charges that the school rigged its placement rate and engaged in coercive recruiting and misleading; according to a statement from the AG’s office, “Lincoln … reportedly used an admissions manual that instructed recruiters to ‘bring out the pain’ in prospective students so that they felt compelled to enroll.” Lincoln recruiters used scripted questions to “establish discontent, create urgency”.
American National University, meanwhile, faced a lawsuit from the Kentucky attorney general alleging the school provided misleading information on its website regarding graduate placement statistics. The trial court’s finding that the school had committed violations of the law was upheld by the appellate court’s review.
While the schools on the list may not like being held accountable for predatory abuse, the Biden administration’s decision to agree to this settlement makes sense. At a time of a pandemic where people have faced severe hardship and where the government has suspended all federal student loan obligations for more than two years and is considering significant debt cancellation for all borrowers, it is appropriate to target additional relief for people – many of them veterans, single parents, immigrants and others struggling to build a better future – who attended a constellation of schools that have been revealed by enforcement actions law, student complaints, and other documents as likely to have engaged in predatory practices.
The Department of Education does not have the resources to comb through every debt forgiveness request to find and reject claims from students who attended a misbehaving school but cannot provide proof that they were personally scammed. There is far more justice in this approach than in the DeVos approach, condemned as “disturbingly Kafkaesque” by Judge Alsup, of outrightly rejecting or refusing to act on claims without giving legitimate reasons. It is time for the department, which has long prioritized the due process rights of schools over the interests of students and taxpayers, to take a step towards accountability.
Eileen Connor, student advocate and director of the Harvard Project on Predatory Student Loans, said: “It is disappointing but not surprising that these companies are, as always, looking after their bottom line at the expense of students who have suffered so much. wrong and waited years for justice to be done.
Keizer University is represented in the new case by Jesse Panuccio of the powerful law firm Boies Schiller. Panuccio, a former senior Trump Justice Department official, in that same lawsuit represented Trump Education Secretary Betsy DeVos in her long and ultimately successful effort, backed by the Biden administration, to dodge a deposition by the students’ attorneys.
The Lincoln Tech and American National University legal team includes attorneys from major law firms McGuire Woods and Gibson Dunn, both of which have represented ugly predatory colleges in the past.