AG: For-Profit Schools Lied, Left Students in Debt Trouble

Published

August 22, 2011

Contributing writer for Credit.com, Chris graduated with honors from the Columbia University Graduate School of Journalism, and has reported for a number of publications including The New York Times, TIME magazine and Popular Mechanics.

A for-profit chain of universities lied about the quality of its education and forced students to buy textbooks and supplies from its schools at inflated prices, according to a lawsuit filed Wednesday by Kentucky Attorney General Jack Conway.

The company, Daymar Learning Inc., allegedly told prospective students that course credits earned at Daymar schools would transfer to other universities. What Daymar neglected to mention is that since some of its programs failed to meet the standards set by its own accrediting organization, courses taken in those programs wouldn’t transfer to other schools, according to the suit.

Daymar also enrolled students who failed to meet the school’s admission standards, increasing the chances that those students will drop out, fail to get a job, and default on their school loans, according to the AG’s complaint. Daymar’s school in Kentucky reportedly has the second-highest default rate of any university in the state.

As attorney general it is “my duty to ensure that consumers are not being taken advantage of as a result of unfair or false business practices,” Conway said in a press release.

A spokesman for Daymar did not return a call for comment.

Conway also alleges that the company forced students to buy textbooks and supplies from Daymar at inflated prices. His office is leading an effort by regulators in 19 states to investigate problems in the for-profit university industry.

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