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Kaplan Inc. has gotten its fingers slapped again, this time for its CHI Institute school for a lawsuit regarding its surgical technology program. The lawsuit was filed after a whistleblower reported that the school was knowingly signing students up for a program it knew they could never graduate from.
David Goldstein, former director of education at CHI, turned whistleblower stated that the program knew it could not fulfill the clinical portion of the program required to obtain the certification necessary to work in the field. The clinicals themselves were part of the graduation requirements but CHI knew it didn’t have enough placements available and enrolled students anyway.
Most of the students attending the program were low-income individuals trying to do better for themselves and the majority received federal funding to attend CHI Institute. The majority of students enrolled in the program were impoverished individuals hoping to make themselves a better life. This means CHI set out not only to commit fraud against its students, but also against the federal government and the taxpayers. As students could not graduate they would be unable to get jobs in their field of study. Without jobs they would be unable to repay their federal student loans and taxpayers would be left footing the bill once the student’s loans were in default
When the time for clinicals would come, students were sent home on leaves of absences and told to wait for a placement…placements which didn’t ever happen. Because Kaplan and CHI Institute settled in this case, neither party had to admit to any wrongdoing and, as a result, they ended up escaping the charges of fraud.
The CHI Institute is in Philadelphia and offers programs in allied health, information technology, and most ironic of all…criminal justice. In addition, the school also has trade programs in air conditioning and heating repair. Cost of the program was over $16,000 per student. The settlement The Institute is in Philadelphia and offers programs in information technology, allied health, and ironically, criminal justice. The school also offers trade-level programs in heating and air conditioning repair and costs the average student over $16,000. The settlement will pay off the loans of 43 students off who could not graduate or gain licensing necessary to work in their field of study.
The whistleblower and lawyer will receive approximately $225,000 of the settlement amount and the students will have their loans cleared. Many students were unaware they were covered in the lawsuit decision and only found out about it after the settlement was finalized. The school is forced to pay the amounts to banks and lenders cancelling the students’ debts and allowing them to pursue further educational opportunities and restore their credit.
Parent company Kaplan is plenty familiar with lawsuits against its various for-profit schools initiated due to disgruntled students and employees turned whistleblower. The company had sufficient lawsuits against it that they were all consolidated into one large suit which will be held in multidistrict litigation in Florida.
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If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, take the free challenge debt review to find out what options you have regarding your student loans.