HARRISBURG – Attorney General Tom Corbett announced that the Attorney General’s Bureau of Consumer Protection has reached a $200,000 settlement with the two parent companies for Lehigh Valley College, located near Allentown, resolving allegations that the school misrepresented information about student loans, job-placement and the ability to transfer credits to other institutions.
“This consumer settlement will ensure that students receive accurate information and full disclosure about financial aid, the ability to transfer credits to other schools and the likelihood of finding work following graduation – all key issues in a student’s selection of a school,” Corbett said. “Additionally, the civil penalties and costs included in this settlement will be used to help launch a new statewide education program about consumer credit, helping every Pennsylvania family make wise choices about college financing, credit cards, home loans and other financial issues.”
Corbett said the Assurance of Voluntary Compliance covering the conduct at Lehigh Valley College was reached with Allentown Business School Ltd. and Illinois-based Career Education Corporation, which owns Lehigh Valley College and numerous other for-profit schools across the country; including the Katherine Gibbs School, in Norristown, Montgomery County.
Corbett said the consumer settlement resolves allegations that Lehigh Valley College rushed students through the loan financing process, failed to disclose terms of student loans, made inflated claims about its ability to place students in jobs following graduation and misrepresented the ability of students to transfer credits to other schools.
According to the AVC, the owners of Lehigh Valley College are required to pay $50,000 in civil penalties for alleged wrong doing. They are also required to take the following steps to ensure that students receive accurate information:
-No false or misleading statements about future employment opportunities.
-No false or misleading statements about the ability to transfer credits to other schools.
-Clear and detailed disclosures about student loans and student financial aid.
-Clear disclosures about the selection of lenders for any “preferred lender lists.”
-Fully comply with Pennsylvania’s Consumer Protection Law.
“This case sends a clear message that we will vigorously investigate any allegations of deceptive marketing or unfair trade practices involving schools and colleges operating in Pennsylvania,” Corbett said. “Additionally, this settlement will benefit every college-bound student, every family and every consumer in Pennsylvania – helping to better educate and inform all state residents about essential financial issues.”
Corbett said that the settlement includes $150,000 in costs, which will be used to create a statewide consumer education program about financial issues, including a new “Your Money” section of the Attorney General’s website. The education program and interactive website will include information on college financial aid, mortgage lending and refinancing, credit cards, predatory lending, debt collection and other common topics of financial complaints.
The new consumer financial education program and interactive financial website are expected to be launched in June 2008.
Corbett noted that credit issues impact every Pennsylvania household and generate a regular flow of complaints to the Attorney General’s Office.
“Every year, consumer credit issues are typically the number one topic for complaints to the Attorney General’s Bureau of Consumer Protection,” Corbett said. “Last year alone, we received more than 7,500 complaints, spanning a wide range of credit problems – from disputes over loans and credit cards to difficulties with credit ratings and debt collectors.”
The Assurance of Voluntary Compliance was filed on Tuesday, Feb. 19 in Lehigh County Court of Common Pleas by Senior Deputy Attorney General William A. Slotter, of the Attorney General’s Bureau of Consumer Protection.