Kaplan University, a prominent for-profit educational institution, has faced numerous lawsuits in recent years, prompting discussion and concern among students, educators, and policymakers. These legal actions primarily revolve around allegations of deceptive marketing practices, financial aid issues, and failure to adequately serve students. As Kaplan University operates nationwide, their lawsuits have raised questions about the overall for-profit education sector in the United States.
One notable case involved former Kaplan students suing the Education Department for debt relief, alleging that they were victims of fraud by the institution. The plaintiffs in this class-action lawsuit argued that the university had misrepresented its job placement rates and educational offerings, leaving them with significant student loan debt and no tangible benefits in terms of improved job prospects or income. Meanwhile, Kaplan has also been the subject of a settlement with the United States Department of Justice, in which they agreed to pay around $1.3 million in the form of tuition refunds for 289 students.
These lawsuits have not only shone a spotlight on Kaplan University’s practices but also called into question the ethics and accountability of the broader for-profit education sector. As legal battles continue, the outcomes and implications of these cases could have lasting implications for the industry as a whole, as well as for students and their families who put their trust and investments into these institutions.
Background of Kaplan University
History and Overview
Kaplan University was a for-profit institution offering a range of higher education programs to students. The university was known for its online courses and its commitment to flexible learning options for working professionals. Kaplan University emerged as a leading provider of higher education, with campuses located throughout the United States.
In 2018, Kaplan University was acquired by Purdue University and rebranded as Purdue University Global. This change marked a significant shift as the institution transitioned from a for-profit model to a public university. This acquisition aimed to expand access to affordable, high-quality education for adult learners.
Accreditation and Educational Programs
Kaplan University was accredited by the Higher Learning Commission, ensuring that its academic programs met certain quality standards. This accreditation is crucial for students seeking federal financial aid and transferring credits to other educational institutions.
Kaplan University offered various academic programs, including associate’s, bachelor’s, and master’s degrees, as well as professional certifications. Programs at Kaplan University covered a diverse range of subjects such as business, healthcare, criminal justice, education, and information technology. Online and campus-based options were available for many of the programs, making it convenient for a wide range of students.
However, Kaplan University faced several lawsuits accusing it of defrauding the U.S. Government and performing other negative practices. As a result, its reputation within the higher education landscape is not without controversy.
Major Lawsuits and Allegations
Recruitment of Unqualified Students
Kaplan University has faced lawsuits concerning the recruitment of unqualified students. In one federal lawsuit, three former academic officers accused the institution of defrauding the U.S. government by admitting and retaining unqualified students to increase enrollment numbers and receive more federal financial aid.
Another case similar to this is Carlos Urquilla-Diaz v. Kaplan University, which involves factual allegations such as grade inflation and pressure to admit unqualified students.
Misrepresentation of Job Placement Rates
Misrepresentation of job placement rates is another area where Kaplan University has faced legal challenges. There have been claims that the institution inflated graduate employment rates to lure students and increase enrollment. However, specific lawsuits and settlements related to this issue are not available in the provided search results.
False Advertising and Transferability of Credits
Kaplan University has also faced allegations of false advertising, particularly regarding the transferability of credits. Some students have claimed that they were misled about the ease with which they could transfer their Kaplan credits to other educational institutions, only to discover that many schools did not accept Kaplan credits.
Though not an exhaustive list of all lawsuits and allegations involving Kaplan University, these examples provide an overview of the key issues that have been raised in major cases. The university has faced legal challenges concerning the recruitment of unqualified students, misrepresentation of job placement rates, and false advertising related to the transferability of credits.
Class Action Lawsuits and Borrower Defense Claims
Corinthian Colleges and Other For-Profit Institutions
Several for-profit institutions, including Corinthian Colleges, Kaplan University, University of Phoenix, DeVry University, ITT Technical Institute, and American Career Institute, have faced numerous legal challenges over the years. Many of these institutions have been accused of fraudulent and deceptive practices, leading to financial losses for students and taxpayers alike.
One of the most significant cases involving for-profit schools was the class-action lawsuit by former Kaplan University students who sued the U.S. Department of Education for debt relief. This lawsuit sought compensation for students who were misled by the school’s recruitment tactics, resulting in substantial student loan debt.
Borrower’s Defense to Repayment Program
The Borrower’s Defense to Repayment program was established to provide relief to students who took out federal loans to attend schools that engaged in fraudulent or deceptive practices. Under this program, eligible students can apply to have their federal student loan debt forgiven.
Under a recent settlement, over 200,000 student borrowers who claimed borrower defense were granted loan forgiveness. These students attended one of 153 institutions identified by the Department of Education, which included several well-known for-profit schools. As a result of the settlement, approximately $6 billion in federal student loans were discharged.
In conclusion, the legal actions and settlements related to for-profit schools like Kaplan University and Corinthian Colleges continue to highlight the challenges faced by students pursuing higher education at these institutions. With the help of the Borrower’s Defense to Repayment program, thousands of students affected by fraudulent and deceptive practices have found some financial relief.
Loan Forgiveness and Discharge Programs
Federal Student Loan Forgiveness
Students who attended Kaplan University, Kaplan Career Institute, or Kaplan College may be eligible for federal student loan forgiveness through the Borrower’s Defense Against Repayment program. This program allows students who have been defrauded by their schools to seek loan forgiveness by proving that the school engaged in fraudulent activities. Kaplan University has been involved in defrauding the US Government to a significant amount, which has led to federal student loans being eligible for discharge.
To qualify for this loan forgiveness program, borrowers must submit a Borrower Defense to Repayment application. Eligibility requires attendance at one of the schools covered by the agreement, such as Kaplan University, and having submitted the application before June 22, 2022.
Closed School Loan Discharge Program
In addition to the Federal Student Loan Forgiveness program, former Kaplan University students may also qualify for the Closed School Loan Discharge program. This program offers loan forgiveness to students who were unable to complete their degree or credential due to the closure of their school without receiving value from the education.
To be eligible for this program, students must meet specific criteria, such as having been enrolled at the closed school within a certain time frame prior to its closure or having withdrawn not more than 120 days before the school’s closure. The application process typically involves submitting relevant documentation to the loan servicer to demonstrate eligibility.
Role of the Department of Education
Betsy DeVos Era
During the Betsy DeVos era as the Education Secretary under the Trump administration, several fraud allegations were made against for-profit colleges, including Kaplan University. The Department of Education under her tenure was criticized for being slow and unresponsive in addressing the claims of students seeking debt relief. A class-action lawsuit was filed by former Kaplan students, accusing the Education Department of taking too long to assess their claims.
With the onset of the Biden administration, the Department of Education has shifted its priorities in addressing borrower defense claims. Education Secretary Miguel Cardona has taken steps to provide relief to students who had been defrauded by for-profit institutions. In February 2022, the Education Department approved $415 million in borrower defense claims for students, including those who attended DeVry University, another for-profit institution. This signaled a change in approach from the previous administration and demonstrated the commitment of the new administration to supporting defrauded students.
The Biden administration and Education Secretary Miguel Cardona are actively working on addressing the concerns of former students of for-profit institutions like Kaplan University. Under the current administration, borrower defense claims are being processed and relief is being granted at a faster pace. They are also focusing on ensuring that defrauded students have access to proper channels to submit their claims and seek assistance.
In summary, the Department of Education has played a crucial role in addressing the cases against for-profit colleges such as Kaplan University. The change of administration, from Betsy DeVos to the Biden administration, has resulted in a shift in priorities and a more proactive approach towards supporting defrauded students. The current focus is on providing relief and assistance to those affected by the alleged fraudulent practices of Kaplan and other institutions.
Notable Cases and Resolutions
Kaplan Career Institute Settlement
In a settlement with the United States Department of Justice, Kaplan Higher Education, a for-profit education company with campuses throughout the country, agreed to pay around $1.3 million as a civil settlement. This payment was in the form of tuition refunds for 289 students who were enrolled at Kaplan campuses. This settlement aimed to resolve allegations related to Kaplan’s handling of federal financial aid for its students.
One notable lawsuit involved former Kaplan University employee, Carlos Urquilla-Diaz, who brought a case against Kaplan University (Case No. 8:07-CV-669-T-33TGW). The presiding judge, United States District Judge Patricia A. Seitz, mentioned that this case had factual allegations similar to another employment discrimination case, particularly involving grade inflation and pressure to admit unqualified students.
False Claims Act
In 2008, three former academic officers at Kaplan University filed a federal lawsuit accusing the institution of defrauding the US Government of billions of dollars. The lawsuit stated that Kaplan University violated the False Claims Act, which imposes liability on companies and individuals who defraud governmental programs by knowingly presenting a false claim for payment or approval.
The former employees alleged that Kaplan manipulated student records, including grades, attendance, and financial aid eligibility. The university allegedly fostered a culture that prioritized profits over education, pressuring employees to inflate grades and admit unqualified students to receive federal financial aid.
As a result of these allegations and legal proceedings, Kaplan faced severe repercussions, incurring significant financial penalties and the requirement to alter its practices to maintain compliance with federal regulations.
Impact on Students and the US Government
The lawsuits involving Kaplan University have had significant consequences for both students and the US Government. Students who attended Kaplan University have found themselves burdened with student loans and questioning the value of their education. In some cases, students have accused the institution of defrauding them by providing misleading information about their academic programs and job prospects upon graduation.
The lawsuit filed by three former Kaplan employees alleged that the university participated in fraudulent practices, which led to an increased burden on student loans and the US Government. As a result of these allegations, students who believed they were misled by Kaplan sought relief from their student loans through the Department of Education’s borrower defense program.
The Borrower Defense claims filed by defrauded students place a financial strain on the US Government, as the Department of Education must review and potentially provide relief for these loans. The number of claims filed highlights the widespread impact of the fraudulent practices allegedly conducted by Kaplan University and other for-profit institutions.
In response to these allegations, Kaplan Higher Education entered a civil settlement with the United States Department of Justice, agreeing to pay roughly $1.3 million in the form of tuition refunds for 289 students. While this does provide some relief, it does not fully alleviate the financial burdens placed on students and the US Government.
The impact of the Kaplan University lawsuits and the claims of defrauding by the institution have led to increased scrutiny of for-profit colleges, placing pressure on the higher education industry as a whole. Accountability for academic programs, financial transparency, and the consequences on both students and the US Government have been brought to the forefront, necessitating change and improved oversight in the sector.