College ripped off students for profit, says the city’s top consumer advocate

MIDTOWN MANHATTAN — It promotes itself as a pathway to a career and to middle class security. However, now, New York City's top advocate for consumers has accused Berkeley College of preventing its students from entering the middle class by saddling them with unnecessary debt that benefits the college, not the students.

"We will be asking the court to set up a restitution fund for current and former students,” said Lorelei Salas, the New York City Commissioner for Consumer Affairs.

Her statement was part of a news conference Friday morning announcing a lawsuit against the college, which is headquartered in Manhattan, but has campuses in Westchester County and North Jersey, as well as in Midtown.

In its lawsuit, the Department of Consumer Affairs, or DCA, alleges that the 87-year-old college encourages its recruiters to promise financial incentives to prospective students that it can't deliver. More specifically, the DCA's two-year investigation found that the college had frequently gotten prospective students to sign for loans when they thought they were signing to receive grant money, which students thought did not have to be repaid.

Some of the loans, the DCA commissioner said on Friday, weren't from banks or other financial institutions, but were instead from Berkeley College itself. It, in turn, turned over its loans to third party bill collectors, according to the DCA.

It drew that conclusion from specific complaints from students.

"I didn't know I needed to pay it back," said former student Natalia Morales in a phone interview. "They simply sent my bill to a collections agency and my credit score dropped."

She said that she ended up with five-figure debt, and couldn't afford to return to college.

The college is one of nearly three dozen in New York State that are established as business institutions. That's in contrast with the dozens of non-profit colleges and universities in the state, which are established primarily as educational institutions.

That difference—a drive to maximize profits—is why Berkeley College was so eager to give out loans, according to the DCA.

However, some current students who spoke with PIX11 News had only positive comments about their alma mater.

"I feel Berkeley is a good school," first-year business student Jordan Coleson said. "The professors really care about you."

Christina Canela, a second year associate's degree candidate, said, "I think our tuition gives us the education that we want."

The city's lawsuit disagrees with that assessment.

So does Lindsey Marks, a former student, whose situation is part of the DCA's investigation.

She said that when she'd met with a financial aid advisor at Berkeley College in 2014, "he said he got me a scholarship, and all I would have to pay was $200 a semester."

She said that he asked her to sign forms to receive her education funding. "I thought I was just signing scholarship papers," she told PIX11 News.

She said that two semesters later, she went to the financial aid office to check on the status of what she'd thought was a scholarship.

Instead, she said she was told by the bursar, "'You have a $14,000 loan.' I never [knew I] signed up for a loan."

Now, she says, she's had to set up a repayment plan with a third party lender, and pays about $144 a month, until the full $14,000 is repaid. She has not been able to afford to return to college.

"For the next 30 years, I'm probably going to have to pay off that loan, which could have been college for my daughter," said Marks, who gave birth recently to her first child.

She also expressed skepticism over the restitution fund that the DCA is hoping to force Berkeley College to establish in order to repay students like Marks.

"I doubt it," she said in a phone interview. "I don't mean that disrespectfully, [but] I don't think that our system looks out for the middle man."

If anything, she said, "I hope that whatever comes out of this case, at least the system will put in some sort of way of working that they can't do this again to somebody."

For its part, Berkeley College issued a statement, which said, in part:

"Berkeley College vigorously denies the allegations contained in the DCA's lawsuit and denies that it has done anything to violate the New York City Consumer Protection Law. Berkeley College will vigorously defend the College against the DCA's accusations."

The statement went on to say that "This year, Berkeley College New York received its reaffirmation of accreditation by the Middle States Commission on Higher Education, the regional accrediting body of top colleges and universities in New York State. In 2017, Berkeley College New York was cited by the Income Mobility Report Card for being in the top one percent of colleges that help increase income mobility among graduates."