Recently-shuttered Career Point College’s operators are being sued by over 50 former students for breach of contract, among other issues. The students claim they were told by the college to take out high-interest loans to cover financial aid expenses. Some students were supposed to receive federal grant money from Career Point but claim the school never sent it to them. After students took out the loans, the college abruptly closed, leaving many students in debt and wondering what happened.
Career Point was a technical college focused on trades like nursing, IT, business, and cosmetology. Unfortunately, students had trouble with the school from the very start: several students were given different tuition rates and were told to apply for financial aid in amounts ranging from $19,000 up to $30,000. One student was given an actual tuition amount of $19,440, but was then told that the amount was really more of an estimate.
These students were not informed that Career Point would retain control over grant money and would have the sole decision over who might receive these funds. Those who were expecting grant money never received it and were never told what the college did with their money. When the school closed, CEO and President Lawrence D. Earle sent an email informing the student body that three individual employees had acted on their own accord to misappropriate over $4,600,000 in federal loan funds. President Earle claimed the school had come up with a method to pay the money back, but the U.S. Department of Education has rejected the plan. Because the school was essentially broke, he said he had no choice but to close down.
Students have continued to get the runaround from the college. They were told by Career Point that the college would assist them in finding other schools, and would provide all the necessary documents they needed to transfer credits so they could continue their education with another college. However, none of the students has gotten any paperwork, and those who try to call or go online find that Career Point has disconnected all phone lines and pared its website down to a mere skeleton of its former site, void of any pertinent information or links. The students who have filed the lawsuit against Career Point are seeking damages for “breach of contract, fraud, deceptive trade, misrepresentation, usury and conversion.” The judge has granted a restraining order that stopped the college from actions such as destroying student information or hiding any assets. The school has also been ordered to provide students with the information they need to transfer credits to new colleges.
Garcia-Martin & Martin, P.C., is a business and employment law firm in Sugar Land, Texas. We provide education and representation on a number of business law topics, such as breach of contract, throughout the Houston metro area. To speak to one of our experienced business attorneys, call us at (281) 277-3066.
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