FTC Files Action Against Stratford Career Institute Saying it Mislead Consumers About Online High School ‘Diploma’ Course

FTC Files Action Against Stratford Career Institute for Misleading Consumers About Online High School ‘Diploma’ Course


January 2017 Update:  There has been no additional court activity in the public docket since the October 2016 Order by Judge James S. Gwin on 10/26/16 granting the parties’ joint motion to extend all deadlines pending settlement.

IMPORTANT: The Court amends its trial order as follows: all discovery to be completed by 3/20/17; proposed stipulations of undisputed facts and authentication of documents to be filed by 4/23/17; proposed findings of fact and conclusions of law to be filed by 5/1/17; the parties are to meet and confer by 4/10/17; trial is assigned on a two-week standby basis beginning 5/15/17 at 8:00 a.m., Courtroom 18A; expert reports shall be exchanged at least 90 days prior to trial. (Related Docs. [22] and [38]) (D,MA)

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From the FTC: FTC Files Action Against Stratford Career Institute for Misleading Consumers About Online High School ‘Diploma’ Course

For Release

The Federal Trade Commission has charged online distance education school Stratford Career Institute with misleading consumers about its high school equivalency program that the agency alleges failed to meet the basic requirements set by most states.

In its complaint, the FTC alleges that Stratford’s extensive advertising for its high school program included multiple references to a “high school diploma” leading to an increase in earning potential, access to better jobs and promotions, and the ability to apply for higher education. The FTC’s complaint alleges that Stratford’s high school program fell short of its promises, meaning thousands of students nationwide paid as much as $989 for a diploma that could not meet their educational or career needs.

“Stratford promised that its high school program could help students get better jobs and access higher education,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “For many students, those promises were false because schools and employers rejected Stratford’s supposed ‘diploma.’”

According to the complaint, the school purchased online advertising tied to search terms like “official high school diploma,” “real high school diploma online,” and “legal high school diploma,” among others.

Stratford’s own records, the complaint alleges, show that consumers who tried to use the Stratford diplomas were often told by prospective employers and college admissions officers that the program was not the same as a traditional high school. The complaint notes that the Stratford program requires only 18 credits for completion, while many states require substantially more, including credits in courses not offered by Stratford.

The complaint alleges that Stratford violated the FTC Act’s prohibition on deceptive acts by making false and unsubstantiated promises to consumers.

The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Ohio.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter (link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.

Contact Information

MEDIA CONTACT:
Jay Mayfield
Office of Public Affairs
202-326-2181

STAFF CONTACT:
FTC East Central Region
216-263-3455

https://www.ftc.gov/news-events/press-releases/2016/02/ftc-files-action-against-stratford-career-institute-misleading

Illinois AG Settles With Westwood College

It has been reported that the lawsuit filed by Illinois Attorney General Lisa Madigan against Westwood College alleging violations of the consumer fraud act relating to criminal justice education programs has been settled. Story from ABCNEWS below:

Illinois Attorney General Lisa Madigan has reached a voluntary agreement with Westwood College to forgive $15 million in student loans.
ABC7 I-Team Exclusive

There are major developments affecting area students in an investigation of for-profit colleges, the ABC7 I-Team is reporting exclusively. The Illinois attorney general has reached a multimillion-dollar agreement with Westwood College.

“It’s like we wasted all this time for nothing,” said Kamilah Dew.

Chicagoans Kamilah Dew and her cousin Jamaal Jones dropped out of Westwood College’s criminal justice program after finding out it wasn’t regionally accredited and was being sued by Illinois Attorney General Lisa Madigan.

The I-Team first brought you their story in October. Now, the state has reached a voluntary agreement with the college.

“It all came about through students and former students who started complaining to our office a number of years ago about exorbitant costs, poorly accredited programs, failure to get a job in the field their degree was in,” Madigan said.

The college will put $15 million towards wiping out the loans criminal justice students obtained through Westwood. It covers students who enrolled as far back as 2004.

“It’s a credit to their account so any outstanding balance will be erased and any mention of it on your credit report it will be erased by Westwood at Westwood’s expense,” Madigan said.

The credit does not cover the students’ federal loans.

In a statement to the I-Team, Westwood said: “After nearly four years of litigation, the Office of the Illinois Attorney General voluntarily dismissed its claims and case with prejudice, with absolutely no legal or financial judgments made against the college. We voluntarily forgave debt owed by former criminal justice students who used the college’s institutional financing program. This agreement is in the best interest of students, and upholds and confirms our tradition of providing a quality education for our students and graduates, many of whom can be found working at businesses and law enforcement agencies across the state of Illinois.”

Westwood also told the I-Team that it discontinued its bachelor’s criminal justice program as part of a business decision. Their criminal justice associates degree is still available online.

Westwood was the first for-profit college that the Illinois attorney general sued. Madigan’s office is currently investigating 10 other for-profit colleges that do business in Illinois.

 

NYT: Government to Forgive Student Loans at Corinthian Colleges

From the New York Times:

“In a move against what he called “the ethics of payday lending” in higher education, Secretary of Education Arne Duncan announced Monday that the Education Department would forgive the federal loans of tens of thousands of students who attended Corinthian Colleges, a for-profit college company that closed and filed for bankruptcy last month, amid widespread charges of fraud.”

Photo

Secretary of Education Arne Duncan in Arlington, Va., in May. He said on Monday, “You’d have to be made of stone not to feel for these students.” Credit Jacquelyn Martin/Associated Press