New York City Accuses For-Profit College of Violating Local Debt Collection Law

The City of New York has filed a lawsuit against Berkeley College, alleging the for-profit college engaged in a number of deceptive and predatory practices, including violating city debt collection laws by not properly identifying itself when collecting on unpaid student loans.

The lawsuit, which was filed Friday in New York County Supreme Court, is the culmination of a two-year investigation into Berkeley, the city said.

“For-profit colleges are businesses, and like most businesses, their top priority is generating profits,” said Lorelei Salas, the commissioner of the city’s Department of Consumer Affairs. “Our investigation into Berkeley College reveals that their recruiters appear to say whatever they think a prospective student wants to hear, especially when it comes to academic programs, employment, transfer credits, and federal student loans – regardless of the truth – to convince them to enroll. These aggressive recruiting tactics are designed to prey on the hopes and dreams of consumers seeking improved career prospects and greater financial security to better care for themselves and their families.”

The suit accuses the institution of:

  • Misleading students about financial aid
  • Tricking students into taking out loans directly from Berkeley by referring to them as payment plans
  • Deceiving students about institutional grants
  • Deceiving students about transfer credits and careers
  • Concealing its identity when collecting on unpaid student loans

The city prohibits any entity from using a name other than its own to collect on unpaid debts. When collecting on unpaid student loans, individuals were sent invoices by BES Inc., not Berkeley. The city also accused Berkeley of attempting to collect on debts that were not owed.


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