NEWARK – New Jersey Attorney General Gurbir S. Grewal today announced that the Division of Consumer Affairs has directed the Harris School of Business to stop advertising that its students are eligible to receive state supplemental loans to help pay for college.
In a letter delivered yesterday, the Division asserted that students enrolled at the Harris School of Business are ineligible for loans under the New Jersey College Loans to Assist State Students (“NJCLASS”) Program due to the high rate of default among the school’s graduates.
According to the latest data available from the U.S. Department of Education, the cohort default rate for the Harris School of Business’s campuses in Cherry Hill and in Linwood was 35% for 2015. For the Harris School of Business in Voorhees, the cohort default rate was reported to be 28.1% for 2015. By way of comparison, the average cohort default rate for schools in New Jersey in 2015 was 9.7%.
Harris School of Business is a trade name of Premier Education Group, a privately owned career-training organization that operates schools in several states.
The Division asserts that the Harris School of Business’s website can lead prospective students to misleading information about their eligibility for NJCLASS loans, in apparent violation of the New Jersey Consumer Fraud Act. The Division directed the school to immediately remove any and all representations concerning the NJCLASS Program from its websites or face possible civil action.
“Governor Murphy and Secretary of Higher Education Zakiya Smith Ellis have unveiled a plan to ensure that our colleges and universities deliver real value to their students and advance opportunity across New Jersey,” said Attorney General Grewal. “Our Division of Consumer Affairs is supporting that mission by taking action to ensure that prospective students can make informed decisions about their educational options and aren’t misled by for-profit and other schools that fail to deliver on what they advertise.”
NJCLASS loans, administered through the New Jersey Higher Education Student Assistance Authority, are intended to supplement federal student loans and make State-sponsored student loans available to students who cannot obtain federally backed student loans.
To be eligible for the NJCLASS Program, a student must be enrolled or accepted for enrollment on at least a half-time basis in an “eligible institution.” Eligible institutions include proprietary institutions that, among other things, have an annual cohort default rate of 25 percent or less.
With annual cohort default rates over 25 percent, the Harris School of Business is not an "eligible institution" under the NJCLASS Program. Yet, the school directs visitors to its websites to advertisements that misrepresent that the NJCLASS Program has "expressed [its] -willingness to lend to students attending" the Harris School of Business, the Division asserts in its letter.
“Through these websites, Harris School of Business is providing misleading information to current and potential students,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs. “New Jersey students have a right to make informed decisions on the front end of college enrollment, which for many represents one of the biggest financial decisions they will make in their lives. Our letter to the Harris School of Business puts educational institutions on notice that New Jersey will hold them accountable for their advertising and recruiting efforts.”
“HESAA’s mission is to provide the financial resources students need to earn a quality postsecondary education and succeed in life after college,” said David J. Socolow, executive director of the New Jersey Higher Education Student Assistance Authority. “When large numbers of students depart any given institution saddled with unsustainable debt that leads them to default on their loans, that school should not further mislead students into believing they can participate in our State’s NJCLASS supplemental loan program.”
The Division’s cease and desist letter to Harris School of Business comes amid Attorney General Grewal’s efforts to protect New Jersey residents from unmanageable student loan debt and educational programs that target students with predatory and fraudulent recruitment efforts yet yield few viable job opportunities.
In comment letters filed with U.S. Education Secretary Betsy DeVos last year, Attorney General Grewal joined Attorneys General from throughout the nation in demanding that the U.S. Department of Education scrap its proposals to rescind various rules that protect higher education students from predatory and fraudulent recruitment and lending practices.
Attorney General Grewal has also called on the U.S. Department of Education to resume its stalled investigations of fraudulent and predatory practices among for-profit and other colleges, or share its investigatory files to allow the State take over the probes.