A for-profit college is facing a lawsuit filed on behalf of students who say the school ripped them off. It's the latest in a series of hits the for-profit higher education industry has taken recently.
Earlier this month, investigators showed members of Congress that some schools use high-pressure sales tactics and deceptive marketing to lure students.
Krystle Bernal, 25, says that was her experience at Denver-based Westwood College. Bernal is one of the lead plaintiffs in the class action suit.
In 2005, Bernal vowed to become the first in her family to get a bachelor's degree. She met with a representative of Westwood College who, she says, acted more like a salesperson than an adviser.
"I was really hesitant -- she could tell -- and she just told me, like, 'I don't think you want to better your life. I don't think you want to better your future. If you can't commit to this, you can't commit to school,' " recounts Bernal.
Bernal says she was told that with a fashion merchandising degree from Westwood, she'd pull down a $65,000 salary after graduation in three years. The cost of the degree was a bit of a shock -- $75,000 -- but Westwood helped Bernal get federal student loans.
Two years after graduating, the only work she can find is a $12 per hour, part-time job as a bank teller.
Bernal says she checked out a community college to see if she could pursue a second degree, but the school said none of her Westwood credits were transferable. Now she's left with loans hanging over her head and few prospects in a poor economy.
"That's what I wake up with every single morning -- I think about my debt and where I'm at and how I thought my life would be different," says Bernal.
The lawsuit Bernal is a part of was filed in federal court in Colorado last week. It claims Westwood committed basic fraud -- that it lied to get students' money.
The school has posted a lengthy defense on its website. The company argues it is the victim of a predatory law firm that has filed a series of suits in an attempt to extract a fee-rich settlement. Westwood says the overwhelming majority of its students are satisfied with the education they received, so the company thinks there's no basis for a class action lawsuit.
The Tampa-based firm that filed the suit, James Hoyer, says almost 800 former Westwood students have contacted the firm saying they were cheated by the school. Senior partner Chris Hoyer says he hopes his firm's suit will change the entire for-profit college industry, which has grown quickly in recent years with the help of federal student loans.
"There's $20 [billion] to $30 billion in federal money going into these schools every year," says Hoyer. "The schools get their money as soon as they get you to sign; and then it really falls on the shoulder of these kids and taxpayers."
Meanwhile, for-profit colleges are acting quickly to repair their image. The Career College Association is developing a new code of conduct for its members. The head of CCA admits that some schools have problems.
"Whether it's a few or whether it's a lot, the reality is that it's too many," says CCA president and CEO Harris Miller. "We are going to adopt and promote to our members a zero-tolerance policy."
Miller says his industry also is developing a self-policing program and calling on state and federal regulators and accrediting bodies to more closely monitor private, for-profit colleges.
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