Dreams protected: A new approach to policing proprietary schools' misrepresentations

Georgetown Law Journal, Mar 2001 by Linehan, Patrick F

In the proprietary school business what you sell is dreams, and so ninety-nine percent of the sales were made in poor, black areas [at] welfare offices and unemployment lines, and in housing projects. My approach was that if [a prospect] could breathe, scribble his name, had a driver's license, and was over 18 years of age, he was qualified for North American's program.

-Testimony of a former truck-driver training school owner before Senate Permanent Subcommittee on Investigations.1

INTRODUCTION

Consider the story of Michael Joyner.2 Joyner, a sixty-nine year-old man with a sixth grade education, worked as a factory worker for twenty-two years. After seeing subway advertisements and television commercials portraying enrollment in the Albert Merrill School as offering a sure path to a well-paying job, Joyner inquired about the school's computer programming training program. A school representative immediately administered an "aptitude test," purportedly aimed at measuring Joyner's ability to handle the coursework. Joyner neither understood nor completed the exam in the allotted time. Even after observing Joyner's poor performance, however, the representative assured the eager Joyner that "he had a good head, worth a $10,000 job." The representative further stated that the school would place Joyner in such a job following his completion of the school's program. Upon enrollment, representatives had Joyner sign documents that he did not understand and that were not explained. Joyner learned later that these documents were loan applications for approximately $1,500. In the course of his program, Joyner voiced his desire to withdraw from the school and receive a refund of his tuition. His apprehension was met with reassurances from the school director that "everyone passes." Throughout, the course, Joyner took open-book tests during which students were permitted to copy the answers from other students' papers. Upon graduation, the school supplied Joyner with a false resume to use in his job search. In the five years after graduation, Joyner interviewed for fifty to sixty potential computer programming positions but did not receive any job offers; he was unable to pass the prospective employers' proficiency tests. Unable to find a higher-paying computer programming job, Joyner eventually defaulted on his student loan. As a result, Joyner lost his life savings and his meager factory worker wages were garnished.

Joyner's experience is typical of many individuals, often of low socioeconomic and educational status, who attempt to improve their labor skills by enrolling in vocational training schools. While the events described above occurred over twenty years ago, such horror stories are repeated over and over again, involving students who are promised much but provided little by private proprietary trade schools.3 And as the number of U.S. proprietary schools supplying oversaturated trades rise, individuals are enrolling in proprietary school programs based on inflated (if not outright false) representations made by proprietary school representatives.4

Joyner fortunately was able to. recover his losses,5 in large part because he had an ideal set of facts. In Joyner's case, the school behaved fraudulently in every respect, from blatant false representations to fraudulent test administration. But in most cases, however, the harm proprietary school students suffer flows from representations far more subtle and nuanced than those the Albert Merrill School employed. Unfortunately, existing legal doctrine and regulatory regimes are ill-suited to protect proprietary school students from such predatory marketing practices.

This Note argues that existing state law, either through public or private enforcement, does not provide proprietary schools with adequate incentives to implement honest, non-predatory marketing techniques, nor does it provide victimized students with adequate remedies when schools do employ these dishonest, predatory techniques. This Note argues that the U.S. Department of Education is the superior entity to police proprietary schools. Although the Department of Education has its own institutional and legal handicaps, any meaningful attempt to address the problem of proprietary school fraud committed against students must take place at the federal level.

Part I of this Note attempts to define the problem of proprietary school fraud in specific terms by describing proprietary schools' role in post-secondary education and illustrating how proprietary schools' structure and operations are susceptible to abuse by school administrators. Part II argues that while in theory private actions maximize deterrence and provide individuals with remedies for proprietary schools' dishonest and predatory practices, the available legal doctrine presents aggrieved students with evidentiary and procedural burdens that hamper success in practice. Part III discusses the theoretical and institutional strengths and weaknesses of the Department of Education and argues that it is best positioned to provide the necessary deterrence and remedy mechanisms. Finally, Part IV explores possible solutions to the institutional and legal deficiencies that prevent the Department of Education from protecting students from proprietary school fraud.