Richmond Students Charge Medical Tech School Is a 'Sham'

A federal class action accuses the for-profit Richmond School of Health and Technology (RSHT) of targeting poor and black students and using their student loans as its "source for cash."

The suit calls the Richmond, Va., school - which got 86 percent of its income from financial aid programs in 2008-2009 - "a sham," which "exists to make money without any regard for the education its students receive in exchange."

The suit charges that the school makes its money by enrolling almost exclusively students who receive federal financial aid, mostly consisting of student loans.

Most students leave RSHT "saddled with large debts … without the prerequisites and knowledge to obtain a license and/or a job in their field of study," the class action charges.

This, the suit says, often leads to students defaulting on their student loans, which destroys their credit ratings and impairs their ability to get credit and to pass workplace background checks in the future.

School earns an 'F'

"RSHT does well in earning money off its students, but it earns an 'F' in serving their educational interests because it is concerned only with profit, not education," the complaint alleges.

In the suit, Mary Morgan, 49, of Richmond says she was a student in the school's Community Home Health program. Amanda Smith, 28, was a student in the Surgical Technology program.

Morgan paid $10,000, most of it with federal student loans and Pell Grants after the school persuaded her that taking the home health program would qualify her for a "license in community home health" and that this credential would be "higher" than the Certified Nurse Aid (CNA) license she had previously held, the suit says. In fact, no such certification in community home health exists in Virginia.

Smith received $20,000 iin federal financial aid, all of it student loans, based on the school's allegedly telling her the course would enable her to become a license surgical technician, but Smith said the training she received "was not remotely sufficient" to prepare her for the written exam. She was able to pass only through self-study, she said.

Smith said RSHT also failed to arrange the surgical internship she needed to be licensed. She arranged an internship at a surgical center on her own but RSHT failed to follow through and, as a result, Smith did not get the internship and cannot get her license, she said.

Tougher rules

RSHT is one of about 2,000 for-profit colleges in the country that will soon be facing tougher regulations if they want to continue receiving federal funds.

The U.S. Department of Education recently issued a new rule that sets a standard for these schools: their programs have to ensure graduates can earn enough to pay off the hefty student loans they must carry to pay for their enrollment.  But consumer advocates say the rule doesn't go far enough.

The RSHT suit charges the school with violating the Equal Credit Opportunity Act, the Virginia Consumer Protection Act, breach of contract and fraudulent inducemnt. It was filed in U.S. District Court in Washington, D.C., by attorneys John Relman and Glenn Schlactus.