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Dept of Consumer Affairs Charges NY’s Berkeley College With Deceptive & Predatory Practices



Charges Include Making False Representations and Violating Debt Collection Laws

Department of Consumer Affairs (DCA) Commissioner Lorelei Salas last week announced a lawsuit against Berkeley College – one of the largest for-profit colleges in New York State with approximately 4,000 students – alleging violations of the NYC Consumer Protection Law and local debt collection rules. DCA’s lawsuit, filed in New York County Supreme Court, alleges numerous violations and wide-ranging consumer harm, and seeks to end Berkeley’s unlawful practices and restore any illegal profits back to consumers. DCA encourages any consumer who believes they may have experienced any wrongdoing by Berkeley to contact the agency by calling 311, or by filing a complaint at

“For-profit colleges are businesses, and like most businesses, their top priority is generating profits,” said DCA Commissioner Lorelei Salas. “Our investigation into Berkeley College reveals that their recruiters appear to say whatever they think a prospective student wants to hear, especially when it comes to academic programs, employment, transfer credits, and federal student loans – regardless of the truth – to convince them to enroll. These aggressive recruiting tactics are designed to prey on the hopes and dreams of consumers seeking improved career prospects and greater financial security to better care for themselves and their families.”

DCA’s lawsuit – which follows a nearly two-year investigation, including a lengthy battle over subpoenas that DCA issued to Berkeley, was filed after dozens of interviews with current, prospective, and former students; undercover operations; extensive research; and review of thousands of pages of documentation from Berkeley – reveals that Berkeley engages in aggressive recruiting and debt collection tactics. Berkeley lures consumers – many of whom are people of color and first-generation college students with low incomes – to one-on-one sales pitches where they deceive them about potential financial obligations and say misrepresentations about other higher education institutions.

The lawsuit alleges, among other things, that Berkeley’s deception includes:

  • Misleading students about financial aid, including federal financial aid.

Berkeley recruiters pretend to advocate on behalf of prospective students, promising to help them and their families understand their financial options. DCA’s investigation found that these recruiters often misrepresent the facts about a potential students’ rights and obligations regarding financial aid, including how federal student loans work.

For example, one student was told by a recruiter that she qualified for a Berkeley scholarship that would cover practically all of her part-time tuition. She eagerly signed the paperwork Berkeley gave her. It wasn’t until a year later, when she checked with the financial aid office to make sure her scholarship would renew for the next year, that she discovered she had already borrowed $13,197 in federal loans. Her “scholarship” had only amounted to $1,130 per term – while part-time tuition and fees totaled $4,475 per term. She learned that the forms Berkeley had her sign were actually federal student loan paperwork. After multiple attempts to resolve her dispute, she withdrew from Berkeley and has not returned to college.

  • Tricking students into taking out loans directly from Berkeley.

In addition to tricking students into taking out federal student loans, school representatives also bind students to Institutional Loans – loans directly from Berkeley – that are deceptively referred to as “payment plans.” Berkeley representatives block students from paying tuition any other way – even refusing to let students pay tuition balances up front, instead steering them into a payment plan.

  • Deceiving students about institutional grants.

While Berkeley vigorously promotes its grants (which do not need to be repaid) to lure new students, they fail to disclose that the institutional grants require students to borrow the maximum amount of loans available to the student through the federal government before Berkeley will award such a grant.

  • Deceiving students about transfer credits, majors, and careers.

Recruiters are dishonest about employment prospects and transfer credits, sometimes going so far as to guarantee post-graduation employment. One recruiter told an undercover DCA inspector that “96 percent of our students graduate and are employed once they graduate,” when in reality Berkeley’s graduation rate is only 29 percent. Students have also been deceived about the transferability of credits, sometimes resulting in increased enrollment periods.

  • Violating local debt collection laws by concealing its identity from former students when collecting debt, including debt that is not owed.

The City’s debt collection rules prohibit Berkeley from using any name other than its own to collect debt – and yet when Berkeley sends invoices to student who are believed to owe money, it does not identify itself as “Berkeley” but rather as “BES, Inc.” Furthermore, DCA’s investigation found that Berkeley pursues its graduates, seeking payments for debts not owed. In one case, Berkeley refused to release a graduate’s diploma to him because he allegedly owed the school over $3,000 – even though he was previously told that he graduated owing nothing.

“Students attend college to pursue their education – not to get ripped off,” said City Council Speaker Corey Johnson. “If any student feels they have been wronged by Berkeley, I urge them to contact their local Council Member and file a complaint with the Department of Consumer Affairs. Berkeley College should and will be held accountable, and I commend DCA Commissioner Lorelei Salas for taking action and filing this lawsuit against Berkeley.”

“For-profit colleges are primarily concerned with their bottom line, not the welfare of their students,” said Council Member Rafael Espinal. “At a time when student debt is soaring, it is unacceptable that schools like Berkeley are preying on people – many of them from low-income backgrounds – seeking to better their lives. Meanwhile, U.S. Education Secretary Betsy DeVos and the Trump administration are working overtime to roll back regulations on for-profit colleges. That’s why vigorous enforcement at the local level against bad actors has never been more important. I applaud DCA’s actions, and look forward to deepening our efforts to hold for-profit colleges accountable.”

Edited by: JV Staff

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