Yesterday a Senate committee convened to discuss investigations the U.S. Government Accountability Office conducted on 15 for-profit colleges. As we’ve reported in previous posts, a growing number of schools have been engaging in deceptive marketing and fraudulent financial aid practices. The U.S. GAO report undergirds our own findings that the schools exploit prospective students’ economic hardship and federal funding, while lying to students about their accreditation and job placement opportunities to boost their bottom lines.

According to Senator Michael Enzi (R-WY), “It is crystal clear that some programs at for-profit schools are misleading students and possibly defrauding taxpayers out of millions of dollars in student aid funds.”

As federal funding for financial aid is expected to total $145 billion this year alone, this is a potentially huge problem.  Are we moving from one predatory lending scheme to another?  It may seem overly sensational to compare our problems with subprime mortgage lending to the student loan industry, but talk to former students struggling to pay off their student loan debts while barely finding a job in their field.  You may feel a sense of déjà vu creep in while tent city images return to your memory bank of televised tragedy.  Students who had to take more than one loan find that most of their loans cannot be consolidated, and when extreme hardship forces them into bankruptcy, they often cannot be released from student loan debt.

According to the Bankruptcy Law Network, a blog about bankruptcy news:

The big difference between student loans and unwieldy home loans is the inability of most borrowers to rid themselves of the resulting debt. Federal student loans can follow the borrower to the grave. They have no statute of limitations and can be collected from the estate of the borrower even after death.

Statistics analyzed in 2003 by the Department of Education state that an average of 1 in every 3 students defaults his or her student loan.  Now add into the equation how many for-profit schools encourage prospective students to lie on  financial aid forms so that they can attend their non-accredited or sub-standard program that does not lead to the job opportunities they claim, and a bigger, and more frightening, picture emerges. 

Director of policy and research for the National Association of College Admissions Counseling, David Hawkins, testified at today’s hearing. “In an unregulated environment,” he stated, “the potential for misrepresentation and outright fraud is a clear and present threat, which can result in harm to students and, in the case of federal aid and loans, to the taxpayer.”

We should encourage our lawmakers to crack down on these unscrupulous institutions and add consumer protections to student loans.  And meanwhile, let’s spread the word to as many people as we can so others don’t fall into the cycle of student loan debt and pervasive joblessness.

To learn more about how to avoid deceptive recruiting tactics read our previous post “Tips to Avoid Trade School Fraud,” and follow our Fight Trade School Scams Facebook Page to contribute to the conversation.

For additional media coverage on this topic, see:

Consumerist.com: For-Profit Colleges Caught on Video Encouraging Financial Aid Fraud

Consumer Affairs: For-Profit Schools get More Scrutiny

NPR: For-Profit Colleges Encouraged Fraud, Used Deceptive Marketing, GAO Reports

Bloomberg: Harkin Seeks Data on For-Profit Schools After Hearing

New York Times Education Blog:  Commentary:  A Plea to Add Consumer Protections to Student Loans

For more information about the student loan industry, visit http://studentloanjustice.org/


As reported in our previous post,

Enrollment at for-profit colleges and trade schools has tripled in the last decade to about 1.8 million, or nearly 10 percent of the nation’s higher education students… This year, federal financing for financial aid is expected to total $145 billion.

Trade school fraud is becoming a major problem.  Far too many unemployed Americans trying to improve their lives by learning a new trade finish school with huge debt and no job prospects.

At Kershaw, Cutter & Ratinoff, we have represented hundreds of students defrauded by for-profit trade schools.  Our clients spent thousands of dollars on their educations and hours of study, only to be left with nothing more than a worthless certificate.  Don’t let this happen to you!  Do your research, read and pass on this list we have composed of specific actions you can take to ensure that you won’t fall prey to fraudulent trade schools.

Whenever dealing with a for-profit trade school, it is important to always remember that these schools are very different than any other school you may have attended in the past.  Unlike a public high school or college, the ultimate goal of these schools is not to provide you with a high quality education.  The number one goal of a profit trade school is just that: profit.  In fact, the president of the largest for-profit institution is paid nearly 25 times the compensation level of the president of Harvard.  Shareholders for these schools have made millions.

Beware of Enrollment Counselors

Most trade schools start the recruitment process by having “enrollment counselors” contact students either in person or on the phone.  These “counselors” will appear to be interested in your career and will provide you with information about the various programs the school offers.  During this process counselor will try to gain your trust and make you believe they are truly interested in helping you with your future.


“Counselors” at for profit trade schools are not really “counselors” who are interested in your well being.  In reality, they are salespeople whose primary goal in the enrollment process is to “close the deal.”  You may not realize this, but enrollment counselors are under immense pressure to “keep their numbers up” and are given enrollment quotas they are required to meet in order to keep their job.  As a result, many of these counselors will say anything to get you in the door and get your student loan money.  They do not care about you or your career, they only care about meeting their numbers and getting your money.

Common misrepresentations include:

  • Misrepresenting the prospects for obtaining employment following graduation;
  • Lying about the potential earnings you can make following graduation;
  • Lying about whether the program is accredited;
  • Misrepresenting just how “difficult” it is to get into their school in order to create the false impression that there is a huge demand for the school.

Never blindly accept anything an enrollment counselor tells you when you are looking at a trade school.  Always independently verify everything they tell you before making an enrollment decision.

Make Sure You Understand Whether Your School Has the Right Accreditation

Whether a trade school has the appropriate accreditation for the career you are seeking is often the source of much confusion for students trying to select a trade school.   The confusion arises because there are two types of accreditation: accreditation for the school as a whole, and accreditation for specific programs within the school.

For example, someone looking for a program in ultrasound technology may come across a trade school that is accredited by the Western Association of Schools and Colleges (“WASC”).  WASC is a regional accrediting body that accredits schools as a whole.  It does not accredit specific programs within the school.  During the enrollment process, you may ask about accreditation and the enrollment counselor will repeatedly assure you that “our school is fully accredited.”

However the fact that a school is accredited as a whole is meaningless if the ultrasound program itself has not obtained the appropriate “program specific” accreditation.  Often times program specific accreditation is critical to obtaining employment following graduation and is a prerequisite to being able to sit for various board or certification exams.  For example, in the area of ultrasound technology, it is almost impossible to obtain employment or sit for the ultrasound board exams unless you graduate from a program that has been specifically accredited by an entity known as CAAHEP.  Accreditation of the school as a whole by WASC means nothing.

Therefore, before selecting a trade school you should:

  • Make sure you know what type of program specific accreditation is required for your career;
  • Independently verify that the school and its program is in fact accredited (don’t trust the enrollment counselors); and
  • Independently verify whether graduation from the trade school will allow you to sit for various board or certification exams that may be required to pursue your chosen career.

Additionally, if an enrollment counselor tells you that the program is not accredited yet but “it has applied for accreditation and should have it shortly,” beware.  There is no way for a school to guarantee that it will obtain accreditation for a specific program and often program specific accreditation is very difficult to receive.  Since the failure to obtain accreditation could mean the difference between having a career or not, you need to consider whether this is a risk worth taking.

Ask For Placement Rate Data In Writing

The most important reason to attend a trade school is to obtain employment after graduation.  Therefore, before quitting your job, going into debt, and expending huge amounts of energy on a program, make sure it is an investment worth making.  Virtually all schools keep track of their placement rates and should have this data available for you to review.  Also, insist that the data include the salary ranges for students who supposedly obtained employment.  Although counselors may tell you “don’t worry, you will get a job,” do not attend a school that refuses to give you their placement rate data in writing.

However, even with this placement rate data, proceed with caution.  Many schools have been accused of fudging placement rate data in order to boost their stats.  For example, if someone graduates from an ultrasound program and then later obtained a job as a receptionist at an ultrasound lab, many schools may consider that person “placed” in an ultrasound job.  Also, the school may consider a person “placed” even if that person was fired only a week after obtaining a job.

Ask for the School’s Student Loan Default Rate

One of the best ways to verify the accuracy of a school’s placement rate statistics is to look at the school’s students default rate.  Under Federal law, schools that qualify for Federally Insured student loans must have a 2 year default rate that is less than 25%.  What this means is that the percentage of graduates who have defaulted on their student loans within two years of graduation cannot exceed 24%.  Therefore, if a school a school is telling you they place 90% of their graduates in good jobs but their default rate is 20%, watch out.

You also may want to ask what percentage of the graduates included in the school’s default rate have deferred their loans.  Sometimes, the two year default rate does not tell the whole story since students are able to defer student loans for up to a year or more.  Students who defer their loan payments usually do so because they were unable to obtain employment after graduating.  However, these “deferrals” will show up in the school’s default rate statistics even though these students are not paying their loans.

Do Your Research And Be Realistic

Before attending a trade school, make sure you fully research your prospective career.  Make sure you completely understand the qualifications of the job you are looking for and whether the school you are attending will give you those qualifications.  For example, if you learn that 90% of employers in your chosen field require a bachelor’s degree and you do not have one, you may want to reconsider whether the trade school is right for you.  Remember, just because the trade school tells you there is a “huge demand” for employees in your field, make sure that the “huge demand” is for someone with your qualifications.

Also, go online and research what other people are saying about the trade school you are thinking of attending.  The Internet is a huge sounding board for people who are dissatisfied with trade schools and there are plenty of news groups and message boards where information can be obtained.

For more information, visit and friend our Facebook page to stay abreast of the latest information on trade school fraud.

As reported in the New York Times, for-profit colleges and trade schools are taking advantage of unemployed and underemployed Americans looking to break into a new career. Recruiters for these schools promise practical training, professional certification, and placement at high-paying jobs after graduation. Relying on these promises, students are taking on debt of up to $30,000 per year. The schools make massive profits by preying on their students, bringing in billions of dollars per year in federal grants and loan money.

On entering the programs, students begin to realize that the training offered is completely inadequate and the certification promised is often years away. At graduation the students find themselves weighed down by debt and without any of the promised job opportunities. Most students will send out resume after resume, only to be told that, without the certification the school promised but didn’t deliver, the students are simply not qualified for the jobs they’re applying for. Students are lucky if they can find even part-time or per diem work in their field, earning a fraction of what the school recruiters told them they would earn.

Enrollment at for-profit colleges and trade schools has tripled in the last decade to about 1.8 million, or nearly 10 percent of the nation’s higher education students. Through massive advertising campaigns, these schools primarily market their services to poor students who qualify for federal student aid, the life blood of the for profit school industry.  This year, federal financing for financial aid is expected to total $145 billion.

Certainly there are some legitimate trade schools who offer quality education and the opportunity to forge a new career path.  But it is disturbing to find this rising trend of sub-standard schools scamming more and more students who were simply looking to better their lives, only to be left with mounds of debt and no jobs. 

Some of the most notorious programs for these kinds of abuses are programs for ultrasound technicians, especially programs that are not CAAHEP accredited. Our firm, Kershaw, Cutter & Ratinoff, has represented nearly 100 former students of ultrasound technician programs at trade schools in both Northern and Southern California. We’ve set up a Facebook page with information to help potential students avoid the traps of fraudulent trade schools.  Friend us here and help us spread the word.

Another accident involving a commercial bus took the lives of six people and injured many more. The wreck occured shortly after 2am this morning on Highway 99 in Fresno, California. Of the 47 passengers on board, about 30 were injured and 6 died, including the bus driver.

This tragedy brings to light several previous accidents involving Greyhound buses where individuals died or were severely injured as a result of its failure to equip its buses with seatbelts. Although the National Transportation Safety Board (NTSB) has been recommending the installation of seatbelts on buses since the 1960s, companies like Greyhound have simply refused to act.

One of our attorneys, Stuart Talley, is all too familiar with Greyhound’s resistance to the seatbelt issue.  He deposed a Greyhound representative in 2005, when another Greyhound accident resulted in serious injuries of 8 passengers near Williams, California.  Talley found that Greyhound had very little justification for their refusal to install seatbelts, other than to state that the Federal Government didn’t mandate seatbelts for their buses.

Here are some important facts about seat belts on buses:

  • Over the past 30 years the NTSB has issued multiple recommendations that buses be equipped with passenger seat belts.
  • Since the early 90s, seatbelts have been required on all buses operating in Europe and Australia and have saved countless lives.
  • Of the 60 serious bus accidents investigated by the NTSB over the past 30 years, 11 involved Greyhound buses. In those accidents, 47 people died and more than 250 were injured. Despite this, Greyhound did nothing to research or examine the issue of whether seatbelts should be installed on its buses.
  • Although the technology available to equip buses with seatbelts has been available since the early 90s., Greyhound waited until 2008 to request that its buses be equipped with seatbelts. Six months later, it began receiving buses with seatbelts. However, only new buses will have seatbelts and none of its older buses are being retrofitted.
  • The extra cost to Greyhound of purchasing buses with seatbelts is only $20,000 per bus. It only cost $30,000 to retrofit existing buses with seatbelts.
  • Despite these minor costs, Greyhound has refused to retrofit its buses.

The simple use of seatbelts would prevent unnecessary injury and death in accidents such as these.

“It’s common sense. Everybody knows that seatbelts save lives,” says Talley.

Do you think Greyhound should install seatbelts in their buses?  Should our government enact new legislation to enforce seatbelts on buses?  Leave a comment and let us know your thoughts!


On Friday, our firm, Kershaw, Cutter & Ratinoff, published a letter to all iPhone 4 consumers who contacted us regarding the reception problems they’ve experienced with Apple’s controversial new cellular phone. 

Dear Friends:

Today Apple announced that it will take the first steps toward making things right since the introduction of the iPhone 4. After we announced our investigation into the matter, our firm was shocked by the initial overwhelming response from iPhone 4 users who reported reception problems, and puzzled by Apple’s unfortunate response–“hold it differently” or “buy a bumper.” Today, Apple’s CEO Steve Jobs announced that the company will apparently provide free “bumper” cases, or equivalent third-party cases, for all iPhone 4 owners, and reimburse customers who already bought “bumpers” for their new phones. Full refunds for undamaged phones will apparently be available for 30 days after purchase, and there will be no fees for early contract termination for returned phones. This process is supposed to be unveiled on Apple’s website next week, and we will let you know when you can begin applying for your cases or refunds.  

While we still believe that Apple misguided consumers by marketing a flawed product, we are pleased with their announcement.  It reveals that the class action mechanism is effective at holding businesses accountable for their products. 

Many questions remain, and in our opinion Apple sold a flawed phone, and marketed it as if it were flawless. However, we are glad and thankful that, by hearing from all of you, by filing the first case against Apple for the iPhone 4 in the Northern District of California, and by pursuing an appropriate remedy for consumers, we put the pressure on Apple to concede, however reluctantly, that Apple customers deserve a better deal. It remains to be seen what will happen to the many cases that have been filed against Apple, but today I think we can say that the system is working. All of you recognized this problem long before Apple acknowledged there was one, which allowed us to act quickly and decisively. Now it appears Apple is starting to make things right, thanks in part to your assistance.

We will continue to keep consumers updated about the case, as well as the status of Apple’s refund process.


Yesterday was an interesting day.  First, we launched our newly redesigned website, complete with social networking “share this” icons, YouTube video, our first blog, and live chat.  We’ve always wanted to share our passion for civil justice in a more engaging way than the traditional “online brochure,” so we were extremely anxious to unveil the site and finally be able to instantly interact with the world outside of our law firm. 

Well it was on that fateful morning yesterday, just hours after we launched the new site, when an issue was brought to our attention regarding the new iPhone 4 that was released last week.  Apparently the new phone has a problem with intermittent connectivity, depending on how the device is held by the user.  As a result, people are upset. 

Now, we presume that the 1.7 million people who purchased the new iPhone are, like us, eager to get their hands on a new technology that would enhance their ability to communicate.  Hmmm… people anxiously awaiting their moment of mobile interactivity with the rest of the world?  We can certainly relate to that!

So we wanted to know more.  We wanted to know about the problem with the phones and how Apple was planning to address it.  What better way than to post an inquiry on our brand new shiny website and engage the world of iPhone users?

Well, today we know two things:  (1) live chat really works and (2) thousands of people are really unhappy with their new iPhones and Apple’s response to the antenna issue.   

Aside from those revelations, we also know what we’ve known since we started this firm:  we are on the side of the consumer.  We are about holding businesses accountable for the products they create and sell to the masses. 

So we told our audience we wanted to hear from them – and boy, did we!  Over 1400 emails in one day – 98% of which overwhelmingly expressed discontent.  But we also heard from people who want to be fair to Apple, and we appreciate their input because we want to be fair to Apple, too.  We love our gadgets just as much as the next person and we’re excited to see the opportunities new technology creates.  We just want to make sure those opportunities are presented to people with integrity.  Technology isn’t cheap, after all, so people want to get what they pay for.   

We are in a new world today.  We can access one another in ways that create a whole host of new issues and conversations about what’s right and what’s wrong.  And we need those conversations to make sure everyone, from manufacturers to businesses to consumers, makes progress together.

However, for the time being, we just need to make sure that if we’re taking part in those conversations on a new iPhone 4, we’re careful about how we hold the phone.

Kershaw, Cutter & Ratinoff: Civil Justice Attorneys

Hello Blogosphere!

We are Kershaw, Cutter & Ratinoff, a group of civil justice attorneys located in Sacramento, California.  Our firm is comprised of a unique bunch of people who are passionate about many things, above all helping people find justice when they have been injured or wronged. 

We have taken our time entering the world of blogging, but we come with great enthusiasm!  We know there are some very interesting conversations taking place in the world wide web – and if there’s one thing we hate, it’s missing out on a good conversation.  We think we have a thing or two to say on a variety of subjects, and we hope that we can provide some helpful, and perhaps even intriguing, information of our own. 

So thanks for reading.  And stay tuned… we’ll be putting in our two cents very soon.  We’re looking forward to the dialogue.

Kershaw, Cutter & Ratinoff