Students Say For-Profit School Kept the Wealth
MINNEAPOLIS (CN) - A for-profit university misleads students about its accreditations, credit transfers, and the jobs and salaries they can expect upon graduation, a class claims.
Four former students and one current student filed the suit against Globe University Inc. and School of Business Inc., in Hennepin County District Court.
The complaint accuses the schools of using deceptive advertising to coerce students into enrolling and creating a "boiler-room culture among their enrollment representatives, who consistently misrepresent to prospective students that course credits earned at its [sic] institutions will transfer to other postsecondary institutions, inflate job placement rates, inflate starting salaries of new graduates, [and] mislead students about defendants' institutions' accreditations."
While the schools profit heavily from the grants and scholarships that their students receive, graduates are left in crippling debt, according to the complaint.
The students claim "Globe's ads, websites and enrollers seek to attract students who are eligible for financial aid and are seeking postsecondary educations that lead to better jobs and brighter futures."
"When they seek information about Globe, all prospective students are put in contact with enrollers who recited and deliver essentially the same memorized, scripted presentation," the complaint continues. "This misleading sales pitch is designed to manipulate students into enrolling at Globe and for the students to take out financial aid in the form of student loans, grants and scholarships."
The U.S. Department of Education allegedly says that, during the 2011-12 school year, Globe "took nearly $140 million in federal, state and private loans, grants and scholarships from its students."
Accreditation issues also plague the schools, according to the complaint, which notes that most students find out after enrollment that their credits will not transfer to other universities, which leads to a "Catch-22" situation.
"Their choice is either to (1) continue at Globe to at least graduate with a degree, albeit expensive and virtually worthless, or (2) start over at a legitimate school (or quit altogether), after wasting months or years at Globe, taking with them at least tens of thousands of dollars' worth of student loan debt, with nothing to show for it," the complaint states.
Students say Globe additionally exaggerates the projected salaries for graduates, as one plaintiff was allegedly told she "would make $30,000 as a paralegal graduate from Globe ... [but] actually started out without a paralegal job, part-time at $10 per hour."
Globe's placement office told her after she graduated that the going rate for new paralegals in her area was $12 to $14 per hour, not $30,000 per year," the complaint. A $30,000 salary works out to just under $14.50 an hour, full-time.
"After attending Globe, most students drop out," the complaint states. "A minority graduate. All of them are burdened with tens of thousands of dollars in student loan debt, having earned essentially worthless, non-transferrable credits, and are left without the credentials needed to obtain a job in their degree field."
This isn't the first string of accusations against Globe, either, as two former deans sued the school in 2012 with allegations that they were fired for blowing the whistle on the university's fraudulent recruiting practices.
The class seeks damages for violations of the Prevention of Consumer Fraud Act and the Unlawful Trade Practices Act, as well as false advertising and unjust enrichment.
The class of former and current students is represented by Clayton Halunen of Minneapolis.