NJ School Ordered to Cancel $3.4M in Student Debt
PISCATAWAY — A New Jersey for-profit school that lured students into its IT program with false promises has reached a $4.6 million settlement with the state, authorities announced Wednesday.
The debts of nearly 400 students including more than 60 students from New Jersey who attended Somers College in Piscataway will be completely erased as part of the settlement, according to the Attorney General's Office.
In total, around $3.4 million in student debt will be wiped clean because the school lied to the students about their payment plans, officials said. Sollers and school founder Siba Padhi are barred from offering similar payment plans, called income share agreements, to students in the future.
The school and Padhi must also pay a $1.2 million fine as part of the agreement.
"New Jersey will not allow for-profit schools to deceive students with false claims and promises or subject them to unlawful financing schemes that push them into debt instead of helping them reach their career goals,” said Attorney General Platkin.
Students were told payments would not create debt
Sollers College funneled students into its IT program by enticing them with false claims about the income share agreements that they would enter to pay off their debts, the OAG said.
Many of the students found the school's programs through job postings on websites like indeed.com and reached out to Sollers.
The school then responded to the applicants and told them they needed to complete a training program through Sollers College; upon completing the IT program, Sollers promised a guaranteed job, officials said.
However many of the students told authorities that they never got a job at the end of the program despite Sollers touting job placement rates of 90% three months after completion.
Students had to pay $10,000 to $15,000 for IT courses spanning four to six weeks, officials said.
The payment plan makes students pledge a portion of their future income in exchange for money upfront but Sollers falsely told its students that the agreements weren't loans and wouldn't create debt, authorities said.
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