Fayette County

Did for-profit college deceive students? After six years, a trial begins

Albert Grasch Jr., right, an attorney for American National University of Kentucky, presented his opening statement Monday at the start of a trial. The state attorney general’s office has accused the for-profit school of violating the Kentucky Consumer Protection Act. At left is Fayette Circuit Judge Thomas Travis.
Albert Grasch Jr., right, an attorney for American National University of Kentucky, presented his opening statement Monday at the start of a trial. The state attorney general’s office has accused the for-profit school of violating the Kentucky Consumer Protection Act. At left is Fayette Circuit Judge Thomas Travis. gkocher1@herald-leader.com

Testimony began Monday in a trial in which Fayette Circuit Judge Thomas Travis must decide whether a for-profit college misled prospective students.

In Sept. 2011, the Kentucky attorney general’s office accused National College, now known as American National University of Kentucky, of violating the Kentucky Consumer Protection Act by advertising misleading information about the job success of its graduates.

The civil suit alleges that between 2008 and 2011, the college publicly represented that its students achieve “success” in getting jobs at rates that are significantly higher than the rates the school reported to the Accrediting Council for Independent Colleges and Schools.

“Was National successful in getting some students jobs? Sure,” assistant attorney general Leah Boggs said in her opening statement. “Did 91 percent of the students get jobs, like they advertised on their website in their overall campuswide rate? No.”

Boggs argued that the college should be penalized for each day that allegedly false and misleading information was on the website. The lawsuit sought a $2,000 fine for each willful violation.

“It will be clear that National was willful for the entire time period,” Boggs said. “This was a combined effort of the defendant to hide the ball from consumers.”

Albert Grasch Jr., the attorney for the college, said no evidence will be presented that employment rates on the website are the reason why students decided to enroll.

“We won’t have anyone say that, ‘Hey, they intentionally failed to update the rates on the website,’” Grasch said. “There is no proof of willfulness here. …When it comes to intent to deceive or to mislead, there is simply no evidence about that.”

Updated employment and placement information was handed to each student, Grasch said.

“Were we perfect? No, but that’s not the standard,” Grasch said. “Did we meet the attorney general’s standard? No, apparently not, but that’s not the standard, either. Our use of employment rates taken as a whole, in full context, simply does not constitute a deceptive or inappropriate trade practice that violates the Consumer Protection Act.”

The trial is expected to last two weeks.

In October, the school learned that it had to pay $147,000 in sanctions after exhausting an appeal for refusing to comply with a subpoena as a delay tactic.

In 2010, during an investigation, the college refused to comply with a subpoena from the attorney general’s office and filed suit in Franklin Circuit Court. The court ruled that the subpoena was authorized, but the college didn’t fully comply with the subpoena until Feb. 11, 2014.

The court assessed monetary sanctions of $147,000 against the college because of that. The college had appealed the case all the way to the U.S. Supreme Court, and on Oct. 10, the court declined to review the case, meaning the lower court’s decision stands.

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