Kentucky Sues For-Profit College Over Misleading Job-Placement Stats

Spencerian College, with two campuses in Kentucky, has been sued by the state's Attorney General's office.

Spencerian College, with two campuses in Kentucky, has been sued by the state’s Attorney General’s office.

If you’re comparing college programs and see job-placement rates of anywhere from 80% to 100%, that might sound pretty appealing. But what if the real numbers are not so rosy?

Earlier today, the Kentucky Attorney General’s office filed a consumer protection lawsuit against for-profit Spencerian College — which has campuses in Lexington and Louisville — alleging that the school deliberately misrepresented job-placement statistics to potential students.

“Spencerian College provided students with information that it knew was false. The numbers substantially contradict data that it provided to its accreditors,” said Attorney General Jack Conway in a statement. “I believe Spencerian College was more concerned about signing students up for classes and getting its hands on student loan money than educating students and placing them in jobs.”

According to numbers provided by the AG’s office, in 2010, the school was advertising an 80% placement rate for graduates of its Phlebotomy program. In reality, alleges the suit, the real rate was 40%. In 2009, the school’s posted placement rate for students in the Architectural CADD program was 60%, but only 25% found jobs.

In all, the AG’s office called out 17 programs at the two campuses where the difference between the advertised job-placement rate and the actual placement rate ranged anywhere from 8% to 40%.

The AG alleges that the school not only used these numbers to advertise to students, but provided this inaccurate data to its accreditor,

The Attorney General’s complaint details that since at least 2007, Spencerian reported placement rates to students via its website and by way of a published “interview book.” Spencerian represented that the published rates, which in some cases were 100 percent, were the same placement rates it reported to its accreditor, the Accrediting Council for Independent Colleges and Schools.

According to Conway’s office, once the school received a civil investigative demand, it removed the conflicting graduation placement rates from its website.

Says Conway, “The bottom line is they preyed on people who were trying to build better lives for their families in these tough economic times.”

This lawsuit comes at a time as for-profit colleges around the country are coming under the microscope of the public and legislators who claim these schools are more concerned about enrolling students and getting their financial aid money than they are about actually educating and preparing students for the workplace.

Compared to most non-profit colleges, for-profit institutions have higher drop-out rates and those who borrow money to attend these schools have higher student loan delinquency rates.