Star Career Academy, which operates four campuses in New Jersey, was found by a jury to have mislead students about its accreditations.
CAMDEN -- A for-profit occupational training school must pay $9.2 million in a class-action verdict for defrauding students, a Camden County jury ruled last week.
The attorneys who represented more than 1,000 current and former students of Star Career Academy's surgical technology program said the jury came to the decision on Oct. 29 after a five-week jury trial in Camden County Superior Court.
The class-action suit was brought against the Academy -- which operates four New Jersey campuses in Newark, Clifton, Brick and Egg Harbor townships, as well as four in New York and Pennsylvania -- argued Star Career Academy violated New Jersey's Consumer Fraud Act by engaging in unconscionable commercial practices, and misrepresenting facts about the surgical technology program's accreditations.
Much of the case centered around a 2011 state law regarding program accreditations, and whether or not the school properly notified students about the law.
Patricia Pierce, an attorney who represented the students during three years of "grueling" litigation said that the school did not inform students that while it had institutional accreditations, its surgical technology program did not have its own program-based accreditation.
Pierce added that the lack of program-specific accreditation meant students couldn't test for the industry's most accepted certification, resulting in the overwhelming majority of students being unable to find work in the field.
A spokesman for Star Career Academy said in a written statement Monday that the school previously determined the state law did not impact its students ability to practice as surgical techs in the state and stands by its program.
"The company believes that the law and abundant facts in the case simply do not support any verdict against it," said Jeff Schoenborn for Star Career Academy, who said the company plans to "argue for the entire $2.9 million verdict to be vacated on appeal."
The $2.9 million figure Schoenborn referenced is the base amount in the verdict, but state statute regarding treble damages triples that figure. Interest is also included in the overall sum, which the students' attorneys said comes to $9.2 million. The jury verdict also orders Star to pay attorneys fees in addition to the judgement.
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Pierce said the case additionally focused on allegations Star did not provide the volume or variety of externships students needed to gain certification, and advertised a drastic misrepresentation of job placement statistics, Pierce said.
The school had reported a job placement rate for the program at 80 percent, Pierce said, but the law firm's research found the complete opposite -- 87 percent of the school's graduates were not working in the surgical technology field.
She said many of the students are single parents or recent high school graduates who took out sizable federal loans to pay for the program, and when they were unable to find employment or pay them back, went into default.
"These are people who were living paycheck to paycheck before they tried to change their lives by going to Star," said Pierce. "Instead of a career they came out with $20,000 in debt."
Star's spokesman Schoenborn defended Star's education and career services, which serve 2,000 students in a range of programs including allied health, culinary arts, cosmetology, hospitality management, professional education, continuing education and business, among others.
"The jury's decision on the company's disclosures relating to the four-year old statute was not a statement on the excellent quality of the education and career services provided by the school today," he said. "Star Career Academy is extremely proud of its talented faculty, alumni in New Jersey and beyond, and the dedicated students who continue to work toward graduation and rewarding careers in the field."
Michelle Caffrey may be reached at mcaffrey@njadvancemedia.com. Follow her on Twitter @ShellyCaffrey. Find the South Jersey Times on Facebook.
