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Former students Daymar College, which is actually a for-profit Kentucky company, have filed multiple lawsuits with claims that the company misled them, according to a copy of the proposed settlement deal, which was obtained by The Courier-Journal, a newspaper in Louisvilla, KY.
According to the details within the settlement and The Courier-Journal, the former students are accusing the for-profit college of “duping students into enrolling through bogus claims about job placement and transferring credits.”
The company, which runs the school, has agreed to pay $1.2 million to the former students. The agreement actually calls for a payment of $1.4 million to Kentucky Attorney General Jack Conway, but $200,000 will be kept for attorney’s fees and to pay a claims administrator, leaving $1.2 million to distribute to ex-students who attended Daymar within the five years ending in July 27, 2011.
Amounts will be determined based on how many students decide to join the settlement and how many terms an individual was enrolled. Individual amounts were not disclosed within the settlement proposal.
Unfortunately, the proposed settlement is likely to provide less than the full amount many of the students took on in loans, which they are now working to pay off in low-income jobs – part of the reason for the lawsuits in the first place.
For example, the lead plaintiff, a former student named Brittany Dixon, said she borrowed $30,000 to attend Daymar’s paralegal studies program. Dixon now works for $8 per hour at a Sav-A-Lot store.
There are 413 private plaintiffs (former students) and the The Courier-Journal estimates that if they divided the settlement, they’d receive about $2,900 each. However, the proposed settlement deal includes all of the students who were enrolled over the specified period of time, which would lower each individual’s settlement amount sum even more.
The deal does not include federal debt relief, but the documents do show that some students who owe funds directly to Daymar will be forgiven their debts, reportedly smaller amounts.
“The U.S. Department of Education says any student who believes that a school committed fraud by doing something or failing to do something may be eligible for loan forgiveness of the federal direct loans taken out to attended the school,” as stated within The Courier-Journal article.
Additionally, under the terms of the agreement, Daymar will pay an additional fee up to $250,000 for a compliance monitor, who would be permitted to employ “mystery shoppers” posing as prospective students in order to ensure Daymar meets all terms of the agreement, especially within the consent decree. Former Tennessee Attorney General Robert C. Cooper is said to be the choice appointee for the position.
Another $350,000 is required as payment to the plaintiffs’ council. From that amount, non-Kentucky plaintiffs will receive $110 per term enrolled and will be relieved of all debts to Daymar, although the agreement additionally stipulates that any debts relieved $1,000 or more would not receive any payment.
There is also a consent decree within the settlement agreement, which basically requires Daymar to inform prospective and future students about graduate rates, median debt and default rates for loans to avoid any confusion in the future.
The company will also be required to create a pamphlet entitled, “Know Before You Go,” informing students that “it is unlikely that any credit earned at Daymar will be accepted at any other institution.”
The agreement limits what Daymar is allowed to tell students about prospective jobs – figures, numbers can data and only be used if they can be backed up by government data for the areas near the campus.
Another stipulation details that the school must provide free, bimonthly career services workshops (including to past employees), a free skills class to first-term students and an anonymous students’ complaints hotline.
Any violations of the terms have significant penalties, which are specified within the terms of the agreement.
The Kentucky Attorney General, Jack Conway, and Daymar’s lawyer, Kenyon Meyer, issued a joint statement which said, “Daymar and the Office of Kentucky Attorney General Jack Conway have not yet reached a settlement. However, both parties have been cooperating in attempts to reach a fair and appropriate resolution.”
The students involved declined to comment on the proposed settlement agreement, citing a non-disclosure portion of the agreement which only allows them to discuss the terms with their spouses, lawyers and financial advisers.
The Courier-Journal, however, obtained a copy of the settlement offer and was able to confirm its validity and the terms of the agreement.
As in all settlement agreements, Daymar would maintain its denial of any wrongdoing or liability.
At one point, Daymar College had nine campuses in Kentucky, but now only has four located within the state: Bowling Green, Madisonville, Owensboro and Russellville.
The company, founded in 1963 in Owensboro, also has locations in Lancaster, OH and in Clarksville, Murfreesboro and Nashville, TN.
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