NYLAG Files Class Action Complaint Against ASA College

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NYLAG’s For-Profit Schools Project investigates for-profit post-secondary schools, which make money from government-guaranteed student loans yet offer little to their students but crushing debt.

NYLAG’s For-Profit Schools Project investigates for-profit post-secondary schools, which make money from government-guaranteed student loans yet offer little to their students but crushing debt.

NYLAG together with Emery Celli Brinckerhoff & Abady LLP (ECBA) filed a class action complaint today in the Southern District of New York on behalf of thousands of current and former students of ASA College, Inc. (“ASA”), a privately owned, for-profit career college based in New York City. In addition ASA officers including Alex Shchegol, Alexander Agafonov, and Victoria Shtamler, are named in the law suit.

ASA students have been victimized by a large-scale scheme to obtain millions of dollars of federal and state financial aid by misrepresenting ASA’s certificate and degree programs to prospective and enrolled students, the U.S. Secretary of Education, the N.Y. State Department of Education, the New York State Higher Education Services Corporation, and ASA’s accrediting agencies, in violation of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act and New York General Business Law §349.

ASA falsely tells potential students that its costly programs lead directly to employment in fields such as healthcare and technology. As a result of ASA’s fraud, ASA procures access to student loans to fund ASA’s exorbitant tuition, leaving students with debts they cannot afford.

“For years ASA has been deceiving students and the government about the nature and worth of its programs, promising that an ASA degree was a fast and affordable way to earn academic credentials that will lead to a well-paying job, when in fact employers look at an ASA diploma as essentially worthless – and even a negative indication of a graduate’s ability,” said NYLAG attorney Eileen Connor.

ASA lures students with promises that its programs will provide training, externships and job placement services, and that ASA graduates have a proven track record of obtaining jobs in their fields of study. None of this has proved true. More than half of all ASA students drop out within two semesters.  Even among those who do finish, few find jobs in their field of study.

ASA invests heavily in advertising and imposes strict quotas on its recruitment employees to ensure a steady flow of new enrollees in whose names it obtains financial aid. In the 2010 – 2011 fiscal year ASA reported revenue in excess of $78 million, of which more than $76 million came from government sources, including $34 million from federally guaranteed student loans, over $27 million from Pell Grants, and over $15 million from New York Tuition Assistance Program awards.

“ASA’s enrollment strategy follows the familiar pattern of for-profit, post-secondary schools, which make money from government-guaranteed student loans yet offer little to their students but crushing debt,” said ECBA attorney Matthew Brinckerhoff. “ASA aggressively targets financially vulnerable individuals, particularly recent immigrants, non-native English speakers, minorities, and those who are unaware of the operating practices of legitimate post-secondary education institutions in the United States.”

Over 80 percent of first-time enrollees at ASA take remedial and/or ESL classes. Students are told these ESL courses will be “free,” while in fact the school arranges that they are paid for by State and federal grants, thus using up the students’ lifetime eligibility for such grants, often without their knowledge.

Plaintiff Karilin Frica Sanchez’s experience with ASA is all too typical. Ms. Frica is 24 years old and lives in Brooklyn. She was born in the Dominican Republic, where she obtained a high school degree. Her primary language is Spanish. Ms. Frica enrolled in ASA in 2012 after an ASA representative persuaded her that she could learn English and also get a degree in criminal justice, and promised that ASA would find her a job in her field before she graduated. She was told her that the first three semesters would be “free,” that she would not need tuition loans until late in the program – loans that would not come due until 6 months after she graduated, and could be paid off in ten years.

At ASA Ms. Frica took mostly non-credit-bearing ESL classes – her few credit-bearing courses were not related to criminal justice. Despite its promises, and marketing material that claimed that graduates of ASA’s criminal justice program hold jobs as police officers, hospital police, and security officers, ASA did nothing to help her find a job. Ms. Frica now works as a cashier at a check-cashing store, a job she got without any assistance from ASA. She owes close to $6,000 in federal student loans. ASA claims that she owes the college close to $3,000.