RICHMOND, Va. (AP) -- A federal judge has approved a $5 million class action settlement between a two-year college and thousands of primarily African-American students saddled with loans in return for what their attorneys called a sham education in which teachers sometimes failed to show up for classes.
The settlement involves the former Richmond School of Health and Technology, which is now operating as Chester Career College. The for-profit school offers classes leading to careers in nursing, massage therapy and other medical-related fields.
U.S. District Judge John A. Gibney entered a final order Thursday requiring the school to establish the fund and to reimburse more than 4,000 students and for attorneys' fees.
The settlement also requires Chester Career College to institute changes that will provide prospective students with "much more transparency" before they enroll, said John P. Relman, the attorney representing eight students who brought the class action.
The college specifically courted inner city students with ads on hip-hop stations and other media aimed at their demographic.
"This is where they trolled for business," Relman said Friday. "They boasted that they were on the bus line. In Richmond, that's vernacular for minority community."
The college enrolled "almost exclusively" students who qualified for federal financial aid, primarily in the form of student loans, the students' attorneys wrote in the complaint.
Once a prospective student took the bait, Relman said, the school helped him or her arrange federal loans for up to $25,000 or more for a nine- or 12-month course.
The college was "defrauding the government by taking these students' loans and providing what amounted to a sham education," Relman said. "They didn't deliver any kind of education to these students. Students could not pass any of the certification exams. Teachers didn't show up at classes."
An attorney representing the college did not immediate respond to a request from The Associated Press for comment. An official of the school who refused to give her name declined comment.
Relman compared the college's tactics to the predatory lending of banks and reverse redlining, or the specific targeting of minority students. Redlining typically has been a business practice to exclude black Americans, a practice deemed a violation of federal anti-discrimination laws. The school's enrollment is approximately 75 percent African American, he said.
"In my mind, it is just another version of targeting the minority community for predatory loans," Relman said. "You just have debt for no good reason."
The class action was brought by eight former students. They cited breach of contract and violations of the Civil Rights Act and the Virginia Consumer Protection Act.
One of the students, Kyra Franklin, was enrolled in a surgical technology program that the college said would pay her up to $60,000 a year. She took out more than $20,000 in loans but later learned she could not get certification because the college had never obtained the necessary accreditation.
"Although she graduated near the top of her class at RSHT, Franklin has not been able to find work as a surgical technician, much less a position that pays mover $50,000 a year," the lawsuit states.
Under the settlement, Franklin and the other students named in the class action will receive nearly $200,000 for their expenses and liabilities from attending the college.
Notices will be mailed to thousands of other students who qualify for claims. Any money that is not claimed from the remaining funds in the escrow account after one year will be donated to nonprofit organizations dedicated to assisting the economically disadvantaged.
Steve Szkotak can be reached on Twitter at http://twitter.com/sszkotakap.