Washington, DC: A federal fraud class action lawsuit has been filed against Richmond School of Health and Technology, alleging that the school targets poor African Americans students and uses their student loans as its "source for cash".
The lawsuit alleges the school is a sham, stating the school "exists to make money without any regard for the education its students receive in exchange." The for-profit college reportedly received 86 percent of its income from financial aid programs in 2008-2009.
The class claims the Richmond School of Health and Technology (RSHT) almost exclusively enrolls students who get financial aid. The suit alleges that RSHT plays "an extensive role in the financial aid process, including filling out most or all students' federal financial aid forms and gathering and submitting the students' necessary paperwork to the United States Department of Education," and says the school "has cut and pasted students' signatures from other documents onto financial aid forms that are submitted to the federal government."
RSHT tutition for programs including massage therapy and surgical technical training are $10,000 to $20,000. "Targeting African Americans to take out loans on the basis of deceptive and otherwise unfair practices constitutes 'reverse redlining.' Reverse redlining has repeatedly been held to violate federal anti-discrimination laws, including the Equal Credit Opportunity Act," the students claim.
"RSHT commits fraudulent and dishonest acts in obtaining federal student loans for its students," the suit alleges. Furthermore, The suit claims the school leads students to believe they are getting grants when they in fact they are getting loans. Additionally, student attendance records are falsified, the suit claims, and RSHT also lies about the employment status of graduates.
The plaintiffs are seeking punitive damages for the class for violations of the Equal Credit Opportunity Act, the Consumer Protection Act, fraud and breach of contract.
