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Online School Blamed|for Disappearing Aid

HOUSTON (CN) - Walden University blamed a student for his missing financial aid that was stolen in a data heist that exposed the profit-seeking online school's 800,000 students to identity theft, the student claims in a federal class action.

Amos York sued Walden University and Laureate International Universities, part of an institution that has yearly revenue of $4 billion, carries $3.5 billion in debt and has students in 30 countries, according to the Monday lawsuit.

York says he enrolled in Walden part-time in August 2014 after he began teaching criminal justice at a Houston-area high school, following a career in law enforcement.

Walden offers online doctoral programs in criminal justice, public health, social work, nursing, psychology and 15 other fields. It is accredited by the Higher Learning Commission, giving its students access to federal student aid to cover the $14,000 yearly tuition, according to the school's website, checked Tuesday morning.

York says he depended on that aid, and became anxious in June when the loans he expected had not come. He says he called Walden "to inquire about the status of his financial aid," but "(d)uring this initial conversation, Walden refused to provide plaintiff with any helpful information."

Walden told York the aid was "his responsibility," he says.

So he called Heartland Campus Solutions ECSI, a defendant in the lawsuit, and the administrator of his financial aid.

"Similar to his experience with Walden, plaintiff was initially blamed for any issue concerning the whereabouts of his financial aid," the complaint states.

York says he learned on June 23 that someone sent his financial aid to a bank account in Vermont, from which it was spent on a prepaid bank card. He "realized that something was seriously wrong" because he had never been in Vermont.

He notified the FBI, the Harris County Sheriff's Department and the U.S. Department of Education, leading to news of a data breach at Walden, which would not own up to it, according to the complaint.

"Instead of doing the right thing and addressing or advising individuals of the data breach - defendants did the opposite. On June 24, 2015, Walden emailed plaintiff claiming that it (and its partners) used appropriate security measures for its online student systems. Walden also falsely claimed that these systems 'prevented your banking information from exposure and prevented the funds from reaching an unauthorized party.'" (Parentheses in complaint. Citation to exhibit omitted.)

York did eventually get his aid, he says, but it came so late he couldn't take his business elsewhere. "Plaintiff was effectively forced to continue his education at Walden."

York says the data breach will cost him at least the $150 a month he is paying for a credit-monitoring service, though Walden's tab will be much higher if he has his way.

He seeks certification for a nationwide class he estimates in the thousands, and an "accurate, complete notice of the details of the data breach."

He also wants restitution, disgorgement, and punitive damages for deceptive trade, negligence and breach of contract.

He is represented by Joel Simon with Fernelius Alvarez Simon in Houston.

Walden is incorporated in Virginia and based in Minneapolis. It was founded in 1970, according to its website. It predates the mythical Walden University of the Doonesbury comic strip, which began on Oct. 26, 1970.

Walden spokeswoman Tamara Chumley did not immediately respond to a phone message seeking comment Tuesday morning.

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