A local for-profit college might be close to ending a two-year legal battle against its former students.
A settlement has been proposed in the class action lawsuit between the Richmond School of Health and Technology Inc. and students who claim the school used deceptive practices to lure them in while allegedly not providing adequate education.
The case, filed in federal court in 2011, claimed Richmond School of Health and Technology carried out a scheme that targeted African American people in low-income areas of Richmond in an attempt to profit from federal financial aid dollars. The school advertised classes for careers for surgical technicians, medical assistants, massage therapists and others.“RSHT is a sham,” the initial suit claimed in 2011. “It exists to make money without any regard for the education its students receive in exchange.”
According to the terms of the proposed settlement, which received initial approval last month in federal court, RSHT would pay $5 million to a pool of potentially any students who were enrolled at the school between July 1, 2004, and Feb. 28, 2013. That could be as many as 4,000 students, depending on how many make a claim.
The Washington law firm that is representing the students has been running ads and attempting to contact the students for participation in the settlement.
“We’re trying to inform people through the ad and also by sending out mail notices to all the individuals based on the school’s records we believe are members of the class,” said Glenn Schlactus, an attorney with Relman, Dane & Colfax.
There is a three-month notice period in order to give class members a chance to respond, and a hearing will then be held in July for final approval.
The $5 million mark was agreed upon during a mediation process last fall that included the school, the plaintiffs’ attorneys and the school’s insurer, Schlactus said.
The proposed settlement allows the school to put an end to the suit without admitting any wrongdoing. And the school has continued to deny the allegations.
RSHT is now known as Chester Career College. The school rebranded this year, according to an employee at the school. It is under new management but has the same owner. It is down to one classroom building at 751 West Hundred Road. It previously also had a large office at Willow Lawn.
A message left at the school for Margaret Knight, who founded it originally in 1997, was not returned by press time.
Ted Brenner, the school’s attorney with Richmond firm Brenner, Evans & Millman, declined to comment beyond what’s in the court filings.
The suit against the school claims breach of contract, fraudulent inducement and violations of the Equal Credit Opportunity Act and the Virginia Consumer Protection Act.
According to the suit: “Among other failings, RSHT does not prepare its students to take and pass certification tests that they must pass to be licensed; does not provide adequate externships to students who require externships for licensing; does not provide adequate equipment to train students properly; and does not always provide teachers for its classes.”
The school charged students $10,000 to $20,000 for tuition, which was often paid for with financial aid.
That aid totaled more than $5 million a year, or 86 percent of the school’s revenue, the suit claimed.
“RSHT treats the Department of Education as its source for cash, with the students serving unwittingly as the means by which RSHT enriches itself at the expense of both the students and the public.”
Other for-profit colleges and vocational schools across the country have been caught up in lawsuits in recent years. Allegations range from deceptive recruiting practices to fraud against U.S. taxpayers.