Daily Independent (Ashland, KY)

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January 16, 2013

Conway taking aim on for-profit school

FRANKFORT — Kentucky’s Attorney General on Wednesday filed suit against Spencerian College, claiming the for-profit school misrepresented its record of placing graduates in jobs.

Jack Conway’s office filed suit in Jefferson Circuit Court against the college which operates two campuses, one in Louisville and another in Lexington, and is a wholly-owned subsidiary of Sullivan University.

The consumer-protection suit is the fourth such suit against for-profit colleges filed by Conway following a two-year investigation of the colleges resulting from student complaints and reviews of

Conway said Spencerian “misrepresented job placement numbers to consumers,” violating Kentucky’s consumer protection laws against “false, deceptive or misleading advertising.”

He said Spencerian claimed 99 percent job placement for students at the Louisville campus and 98 percent placement for students at its Lexington campus and “you turn around and in actual reports to the national accreditor . . . actual rates of 40 to 60 percent.”

“In short we don’t’ think Spencerian was telling the truth,” Conway said at a morning press conference. “It provided students with information that it knew was false in hopes of luring them into student loan arrangements.”

Conway cited several placement rates claimed by the college on its website and compared those to actual placement rates reported to accreditors and those field reviews turned up, all of which exceeded the reported rates by “30 to 40 percent.”

“We believe Spencerian was more concerned with signing students up for classes and getting their hands on federal student loan money, state student loan money, than it was in educating students and placing them in jobs,” Conway said.

The suit seeks an injunction to prohibit Spencerian from engaging “in further deceptive trade practices” and fines of $2,000 per violation. Conway said those violations cover about four years during which Spencerian averaged an enrollment of 2,000 students.

Conway also invited students at Spencerian since 2007 to register complaints at its website (www.ag.ky.gov) and clicking on the “student complaints” link. He said his office has already received 48 complaints from students at Spencerian.

Conway’s office previously filed suit against Daymar College, claiming the college forced students to buy higher priced textbooks and misled them about those costs and about financial aid. He also sued National the same year, 2011, alleging it misrepresented job placement statistics.

He said Wednesday that both of those suits continue.

Conway also joined with several other state attorneys general to sue QuinStreet and its operation of a site called GIBill.com, claiming its purpose was direct students — and student aid — to for-profit colleges. That suit produced a $2 million settlement with QuinStreet and required it to end its GIBill.com site.

Conway began his investigation of for-profit colleges with subpoenas to seven of the 140 such for-profit operations in Kentucky.

He wouldn’t say if there might be more suits to follow Thursday’s filing.

Conway said he had not contacted officials with Spencerian College Thursday before filing the suit and announcing it to reporters.

Conway named a special prosecutor to look into employee complaints that Sullivan University, Spencerian’s owner, pressured workers to contribute to Conway’s 2011 Republican opponent Todd P’Pool.

He said Thursday he has entirely separated himself from that investigation and could not answer reporters’ questions about it, referring them to special prosecutor and Carroll County Commonwealth Attorney Jim Crawford.

Spencerian College referred CNHI News to Grover Potts of the law firm Wyatt, Tarrant and Combs for comment. Messages left on the voice mail of the number provided had not been returned by deadline.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

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