LOS ANGELES (CN) – The American Career College kept financial aid money for itself, for services it did not provide, instead of giving the money to students, a student claims in a Superior Court class action.
Lashara Leonard sued American Career College on behalf of students who did not receive financial aid for housing and transportation, though they qualified for it.
“ACC is a college campus institutionally accredited by the Accrediting Bureau of Health Education Schools, which has been approved to participate in the Federal Student Aid Program through the United States Department of Education,” Leonard says in the complaint.
ACC offers degrees in healthcare programs such as nursing and dentistry at three campuses in Southern California.
According to the complaint, students are responsible for finding their own housing and transportation: “ACC does not maintain any student housing. Further, ACC assumes no responsibility for student housing. ACC’s online catalog represents that the total cost of the program does not include transportation costs to and from externship or clinical sites. This cost is the student’s responsibility.”
Leonard enrolled in the vocational nursing program at the Los Angeles campus. The college sent her a letter breaking down her tuition costs and awards of financial aid after she was accepted, but Leonard says she never got any of the money.
“Plaintiff has never received any of the funds allotted for room/board, transportation, or personal [expenses],” according to the complaint.
Leonard claims the college kept financial aid money from hundreds of other students: “Plaintiff is informed and believes that, as in her case, ACC has failed to disburse the housing, transportation and/or personal funds to similarly situated enrolled students,” the complaint states.
“Allowing colleges to violate the financial aid laws by failing to appropriately disburse financial aid income to the enrolled students enriches the colleges by paying for services not rendered while at the same time creating a debt for students who will be newly entering the workplace.”
Leonard says the college catalog misled students by asserting that total tuition costs include fees for tuition and services provided on campus, even though there are also built-in fees for housing, transportation, and personal use, which the college does not provide.
As an example, Leonard says, the catalog lists total tuition for vocational nursing as $33,950, though tuition fees are only around $18,600, so students are charged $15,000 for services they do not actually receive.
“Defendant ACC intended to defraud plaintiff and those similarly situat(ed) with plaintiff as evidenced by the fact that defendant ACC provided no breakdown of the $33,950 tuition; failed to advise plaintiff and those similarly situated that aid had been obtained for housing, transportation, and personal funding; failed to disburse the aid obtained for transportation, housing and personal funding to plaintiff and those similarly situated, but instead kept those funds and applied them to services ACC did not and does not provide,” according to the complaint.
Leonard says the college deceived and defrauded its students, who had no reason to believe that their tuition costs included services besides classroom instruction and campus services.
As a result, Leonard says, the students “incur the debts of financial aid, [but] … they do not receive the full benefit of the funding.”
Leonard says the withholding of financial aid was “willful, wanton, malicious, and despicable in that defendants knew that they had obtained the financial aid on behalf of plaintiff and those similarly situated for services defendants did not provide, i.e., housing, transportation and personal costs, and failed to advise the plaintiff and those similarly situated that they were entitled to disbursements based on the aid received or to make such disbursements to plaintiff or those similarly situated of those sums not directly related to services provided by the college.”
She seeks rescission and punitive damages for fraud, conversion, and unfair business practices.
She is represented by Sohaila Sagheb of Woodland Hills, who did not return calls and emails seeking comment.