Office of the Attorney General
Attorney General Conway Files Suit against Third For-profit School

Press Release Date:  Tuesday, September 27, 2011  
Revision Date:  Tuesday, August 20, 2013 
Contact Information:  Shelley Catharine Johnson
Deputy Communications Director
502-696-5659 (office)
 


Attorney General Jack Conway today announced that his office has filed a consumer protection lawsuit against National College of Kentucky, Inc. over allegations that the for-profit school misrepresented job placement numbers. This marks the third lawsuit General Conway has filed as part of his ongoing investigation of the for-profit college industry. National College operates six Kentucky campuses in Lexington, Louisville, Florence, Pikeville, Richmond and Danville.

The three-count complaint filed in Fayette Circuit Court alleges that National College violated the Kentucky Consumer Protection Act by making false, misleading and deceptive disclosures regarding the rate at which its students were able to obtain employment in their field of study.

"This type of deception must stop," General Conway said. "National College is putting its bottom line before the hopes and dreams of students who are trying to better their lives. The reality is that more and more students are leaving for-profit schools with high debt loads and without the high-paying jobs they were promised."

The Attorney General's complaint details that since at least 2008, National College has publicly represented that students achieve "success" in obtaining employment at rates that are significantly higher than the job placement rates National actually reports to its accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS). For example, the complaint alleges that during or before 2008 and continuing through at least December of 2010 (when the Attorney General issued National a subpoena and civil investigative demand) National represented on its website certain "successful employment" figures for graduates of its Lexington, Louisville, Pikeville and Richmond campuses. Those numbers on the website are significantly higher than the job placement numbers National was reporting to ACICS, to whom it reported the following numbers for the years 2008-2010:

National's Webpage
December 2010 and earlier
AS REPORTED TO ACICS
2010
2009
2008
Lexington — 94%
79.5%
82.0%
83.6%
Louisville — 96%
60.1%
65.1%
67.2%
Pikeville — 84%
70.3%
71.6%
77.4%
Richmond — 91%
78.2%
80.6%
79.3%

Sometime between December 15, 2010 and March 2011, after the Attorney General's investigation began, the complaint alleges that National changed its webpage- lowering the numbers for "successful" employment and added a disclaimer for the first time that the numbers represent graduates "who are employed in any field."

Webpage March 2011:

  • Lexington — 91%
  • Louisville — 81%
  • Pikeville — 78%
  • Richmond — 87%
  • Florence — 83%
  • Danville — 84%

The complaint further alleges that the website's current representations concerning "successful" placements are still unfair, false, misleading and deceptive because the disclaimer is not plain and does not undo the false impression that the numbers represent employment in the careers studied.

The Attorney General's complaint seeks an order enjoining National from violating the law, civil penalties of $2,000 per violation and recovery of investigative costs and attorneys fees.

The lawsuit follows efforts by National College to block the Attorney General's investigation. National filed a lawsuit in Franklin Circuit Court in January of 2011 claiming that the investigation by the Office of the Attorney General was not supported by sufficient evidence of wrongdoing. Circuit Judge Philip Shepherd ruled in the Attorney General's favor finding it is "in the public interest that an investigation should be made to ascertain whether [the plaintiff] in fact has engaged in, is engaging in or is about to engage in, any act or practice declared to be unlawful by KRS 367.110 to 367.300." National College has appealed that ruling to the Kentucky Court of Appeals, where the matter is pending.

Combating Abuse in the For-Profit College Industry

Attorney General Conway continues to lead a national bipartisan effort to examine potential abuses in the for-profit college industry. There are currently 22 states involved in the working group.

As part of this effort, General Conway filed suit in July against Daymar College over allegations that the for-profit college violated Kentucky's Consumer Protection Act by engaging in a sophisticated practice of deceiving and misleading students about their textbooks and financial aid so students were forced into purchasing higher-priced books and supplies from Daymar.

In August, General Conway's office filed a motion to intervene in a whistle-blower suit against Education Management Corporation (EDMC), the parent company of Brown Mackie College, over allegations that the company illegally paid recruiters based on the number of students they enrolled in EDMC programs.

Attorney General Conway also has active investigations examining the activities of five other proprietary colleges operating in Kentucky. Those investigations are ongoing.

Link to the Complaint: http://goo.gl/GV37e2