For Profit College Hit With $13 Million Jury Verdict For Fraud

June 24, 2013
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A Kansas woman has won a $13 million judgement against a for-profit college after she alleged that she was fraudulently enticed to enroll into one of its nursing programs.

Jennifer Kerr, a single mother, went to  Vatterott College after seeing television ads to find out how she could get off state assistance and earn more money.

“When she went to the local campus and told the admissions representative that her dream was to be a nurse, Kerr contended in a lawsuit, the representative told her that although the school did not offer a nursing degree, it did offer a medical assistant’s degree. That degree, she allegedly was told, would help her earn $15 to $17 an hour and, with the transfer of her credits, put her on the “fast track” to becoming a nurse,” wrote the Kansas City Star.

She received $27,000 in loans and began the 60-week program four years ago.

“Kerr said she was flabbergasted to learn that she wasn’t even enrolled in the medical assistant’s program. Instead, she was enrolled in the preliminary medical office assistant’s program. She said she was told that if she wanted to continue on and get the medical assistant’s degree, it would take a total of 90 weeks and cost her some $10,000 more.”

So she sued. A jury agreed with her and ordered the Missouri-based Vatterott Educational Centers Inc., to pay $27,676 in compensatory damages and $13 million in punitive damages. The college is expected to appeal.

Kerr’s experience is similar to what thousands of other for-profit college students have found: false promises of great jobs for attending the schools.  Studies have shown that some for profit colleges encourage students to lie on their loan applications, that almost have of their income is spent on marketing and that many student who attend these colleges default on their loans.

“In 2010, an undercover investigation of 15 for-profit colleges (not including Vatterott) conducted by the U.S. Government Accountability Office revealed, among other findings, that “four colleges encouraged fraudulent practices and that all 15 made deceptive or otherwise questionable statements to GAO’s undercover applicants.”

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