Florida For-Profit Colleges Sued for Selling Predatory Product and Targeting Black Students | Press Release

April 20, 2020

Florida For-Profit Colleges Sued for Selling Predatory Product and Targeting Black Students

  • Investigation exposes Florida Career College’s misconduct and race discrimination violating federal and state law
  • For-profit colleges have a long track record of aggressively targeting vulnerable populations during economic downturns

 

BOSTON – Today, students filed a class action against Florida-based for-profit college chain, Florida Career College (FCC), for selling a predatory product using false representations and high-pressure sales tactics that leave students in mountains of debt they cannot repay and systematically targeting Black students.

FCC is a for-profit college that operates multiple campuses in Florida and Texas. The complaint alleges that FCC uses high-pressure sales tactics and false representations to recruit students. The complaint also alleges that FCC targets students based on race, focusing many of its predatory marketing and deceptive recruitment practices toward Black students.

“Florida Career College was a scam and a total waste of time and money. Their ads made me think that the HVAC program would give me a good career, but like everything else they told me, it was a lie. They didn’t teach even basics, and they didn’t care. Almost all of my classmates were minorities and many barely even had high school level reading skills. Their business is all about taking advantage of people who are just trying to better their lives. It’s not right and they shouldn’t be able to get away with it,” said Named Plaintiff Kareem Britt.

“FCC talked up how the school would give you a career, not just a job, and they convinced me that the medical assisting program was the only way to get to the next level. But then I realized I was just a number to them. They didn’t even try to hide it. Students got pulled out of classes all the time to talk about financial aid and they would pressure you to sign confusing papers on the spot. It made me sick to my stomach. I just want to make sure others aren’t duped into this scam like I was,” said Named Plaintiff Monique Laurence.

The students can avail themselves of the Federal Courts, despite FCC’s attempt to force students’ claims into secretive arbitration proceedings, because a 2016 federal rule requires schools taking federal student aid—like FCC—to agree that students may bring claims like this in court. In 2018, a federal court struck down the Department of Education’s attempt to delay implementation of this important rule. If the company were to try to force the claims to arbitration, it would lose access to federal student aid, which provides the majority of its revenue.

According to the complaint, FCC’s business model is simple. It uses high-pressure tactics and false statements to induce people to enroll and borrow thousands of dollars. It then allocates those funds to profit, recruitment, and advertising instead of instruction. FCC also targets Black people with false promises that it will provide high-value career training.

The reality is that FCC peddles a predatory product and does not provide the career training it promises, leaving students in mountains of debt and no ability to pay it back. Only 1 of 17 FCC programs passed the federal metric measuring whether graduates’ earnings are sufficient to cover their loans and their basic needs. The median annual earnings of students who were able to graduate and find employment in those programs were between $8,983 and $32,871.

FCC management trained recruiters to tell students that programs are full, even when they are not, in order to push students into programs that start earlier so FCC gets their student loan money sooner. Recruiters tout FCC’s ability to provide students with stable, lucrative careers, when in fact, all it provides is debt. Recruiters unscrupulously create an inaccurate image of the school regarding the students’ experiences and how the school improves students’ lives.

FCC uses the student loans it takes in for profits, recruitment, and advertising instead of instruction. FCC’s programs cost up to $51,925, yet it spends little on instruction. In Fall 2018, FCC spent only $2,952 on instructional expenses per student at FCC Hialeah, $3,032 at FCC West Palm Beach, and $4,483 at FCC Lauderdale Lakes, between 4 and 18 percent of the tuition for these campuses’ programs.

An extensive investigation revealed many ways that FCC targets Black students in its marketing and recruiting for its high-priced, low-value product. Its racially-focused tactics include:

  • Using Black models in many of its advertisements;
  • Targeting students on Facebook and Instagram where advertisers can target based on interest in “African Americans” and/or “African-American Culture;
  • Advertising on radio stations with predominantly Black audiences;
  • Advertising on certain public buses, bus benches, and bus stops; and
  • Conducting outreach at local high schools with a high percentage of Black students.

Due to these tactics, as of Fall 2018, every FCC campus has a larger percentage of Black students than the overall percentage of Black residents of the city where it was located. For example, FCC in Hialeah has 55% Black student enrollment while the City’s Black population is just 2.5%. FCC in Margate has 70% Black student enrollment while Margate itself has a Black population that is 28.6%.

“For-profit colleges have a long history of perpetuating racial and economic injustices,” Project on Predatory Student Lending Director Toby Merrill said. “FCC targeted Black students with a predatory product using the for-profit college playbook of lies and high-pressure recruitment, and left them in debt they could never repay. Race-conscious recruitment can be a tool to provide opportunity and promote diversity. But FCC’s racial targeting for predatory products is discrimination and violates the law. We must hold FCC accountable for its discriminatory tactics.”

Adam Schachter, a partner at Gelber Schachter & Greenberg, commented on why this case is of particular importance right now. “We can’t allow FCC to continue its predatory practices against individuals who were already facing significant economic hardship, especially during a time of such severe social and financial dislocation.” According to Schachter, “we have filed this lawsuit because FCC has conducted its educational business in a manner that places its own financial interests above those of its students. We look forward to providing our clients their day in court.”

Zach Bower, a partner at Carella Byrne Cecchi Olstein Brody & Agnello P.C., notes that “for-profit colleges, that prey on particularly vulnerable student populations by promising a better life meanwhile sticking them with outsized debt, no real chance for employment, and ultimately financial failure, are the epitome of predators that need to be brought to justice particularly in times of economic uncertainty, such as these.”

The complaint recounts the experience of several FCC students. One, Kareem Britt, saw Facebook ads about FCC and inquired about the Heating, Ventilation and Air Condition (“HVAC”) program at FCC’s Lauderdale Lakes campus in 2018. His recruiter made a lot of promises, none of which were true. After his interview, he felt pressured into taking out loans. Once enrolled, Mr. Britt observed that a majority of the students were Black or Latinx and believes this is due to the school’s advertisements being designed to induce people of color like him to attend FCC. He also realized that the school did not have appropriate equipment or tools required to train the students. Since completing the program, Mr. Britt has not been able to find a steady job as an HVAC technician and works as a cook at a hotel, a position he held before attending FCC. He has fallen behind on his loan payments, and FCC has refused to provide him his diploma.

 

About the Project on Predatory Student Lending

Established in 2012, the Project on Predatory Student Lending of the Legal Services Center of Harvard Law School represents former students of the predatory for-profit college industry. Its mission is to litigate to make it legally and financially impossible for the for-profit college industry to cheat students, and to relieve borrowers from fraudulent student loan debt.

The Project has brought a wide variety of cases on behalf of former students of for-profit colleges. It has sued the federal Department of Education for its failures to meet its legal obligation to police this industry and stop the perpetration and collection of fraudulent student loan debt.

About Gelber Schachter & Greenberg, P.A.

Gelber Schachter & Greenberg is a Miami-based litigation firm that represents individuals and businesses in complex civil litigation and white collar matters in Florida and across the country. The firm’s lawyers are all either former federal prosecutors or former law clerks to federal judges. The firm has extensive experience trying and litigating cases in state and federal courts.

About Carella, Byrne, Cecchi, Olstein, Brody & Agnello

Carella Byrne is a full service law firm with offices in Roseland, New Jersey and Miami, Florida that is committed to achieving justice for our clients in class action and individual lawsuits against dishonest corporations that use deceptive practices to defraud consumers. Carella Byrne attorneys have successfully litigated against major corporations in some of the largest lawsuits in the country including the Volkswagen “Clean Diesel” emissions scandal and the Takata airbag litigation, resulting in valuable relief for consumers.