NYC consumer affairs department sues for-profit Berkeley College
- Berkeley College, one of the largest for-profit institutions in New York, is being sued by the New York City Department of Consumer Affairs for violating consumer and local debt protection laws, NBC New York reported.
- The college denies the allegations, which include using predatory marketing tactics that misrepresented its offerings and job prospects, misleading students about financial and grant aid options and terms, sending invoices under a name other than its own, and seeking payment for debts not owed, according to DCA.
- DCA said the lawsuit came after a roughly two-year investigation that included interviews with past, present and prospective students, document review, undercover operations and a "lengthy battle" over subpoenas issued to the college. Berkeley told NBC it provided more than 52,000 documents at DCA's request and the department denied its ask to review the allegations.
The New York DCA is among several local and state agencies shining a light on for-profit colleges amid widespread claims of predatory marketing and subpar graduation outcomes that spurred the Obama-era Education Department to tighten the regulations governing the sector.
Such instances are expected to increase as the Trump administration seeks to loosen regulatory oversight of the for-profit sector, according to The Hechinger Report, which cites the shutdown of the Charlotte School of Law by North Carolina's attorney general after the Ed Department found it had misrepresented its accreditation and student outcomes.
California is suing the fully online for-profit Ashford University and its parent company Bridgeport Education over allegations of similar misrepresentation. The Los Angeles Times reported Ashford targeted low-income, first-generation and veteran students, and it attributed most of its earnings to federally subsidized student loans and grants.
Last year, 18 Democratic attorneys general sued the Ed Department for not enforcing regulations developed by Obama administration requiring for-profit and vocational colleges to prove their graduates could find work in their field, as well as communicate students' average potential earnings and debt. The for-profit sector has said the rules are too stringent.
The Ed Department plans to repeal the current version of the gainful employment rule and has said it hopes to release a final version by year-end. Another Obama-era rule governing for-profits — borrower defense to repayment — was ordered into effect last week. The Ed Department halted implementation of the rule, which was slated to take effect in July 2017, while it wrote its own version of the regulation, the Associated Press reported. The rule makes some students eligible for discharge of their federal loans.