Saturday, May 12, 2007

Computer School Case Settles

An insurance company for Business Computer Training Institute in Gig Harbor (now defunct) have reached a settlement with students who sued for fraud, saying the school took advantage of low-income students, charging high tuition (taking the students' federal and state financial aid money) and saying the students could get good jobs, but offering poor training that resulted only in minimum-wage jobs. Ex-BCTI students will collect, News Tribune, May 12, 2007.

The class includes over 600 students. Many of the students defaulted on their student loans and have had significant financial problems because of their BCTI experience The settlement amount is $9 million and must still be approved by Pierce County Superior Court Judge Thomas Larkin. The plaintiffs have not settled with a second insurance company.

Problems related to BCTI and similar schools led to new legislation. For-profit vocational schools will have tighter financial standards; there will also be minimum standards for instructors and administrators.

The new legislation is SB 5402. Governor Gregoire is scheduled to sign the bill into law on Monday.

Earlier coverage (most by Dave Wickert):

Update (May 25): Catching up on some new books lists, I noticed that our library recently got a new edition of a book from the National Consumer Law Center: Student Loan Law: Collections, Intercepts, Deferments, Discharges, Repayment Plans, and Trade School Abuses (3d ed. 2006), KF4235 .L66 2006 at Reference Area. 562 pages plus a CD-ROM -- that's a lot of student loan law!

1 comment:

Spartacus O'Neal said...

The implicit and often explicit misperception that higher ed. will lead to higher pay is unfortunately not limited to schools that commit fraud. Many private and public institutions of learning regularly promote the economic rewards without statistical basis. Race is frequently taken into account in planning marketing of programs as well. While I don't blame academia for our dysfunctional economic system, a little more truth in advertising would be refreshing.