Wright Career College will end up stiffing most of the students it took advantage of

In 2014, the Humphrey, Farrington & McClain law firm, in Independence, began assembling complaints from students who had attended Wright Career College.

The stories eventually assembled were typical of persons who have enrolled in any of the profit-seeking schools that exist to rake in grants and loans available to low-income students. Most of the law firm’s clients had borrowed tens of thousands of dollars and put their lives on hold, only to find that the credits and certificates they’d earned at Wright campuses in five cities were worthless in the job market. They talked about chaotic classes, unqualified teachers and expenses they weren’t told about until it was too late.

The one lesson that predatory schools such as Wright Career College teach very well is that justice can be hard to come by. That point was driven home last week in a hearing in a bankruptcy court at the U.S. District Courthouse in Kansas City, Kansas.

In part because of looming fraud and misrepresentation lawsuits, Wright Career College filed for bankruptcy last April. At the urging of a federal judge, lawyers for its owner began negotiating with attorney Ken McClain and his firm on a settlement to provide some sort of redress for 264 students who had sued the school.

Although the purpose of last week’s hearing was to discuss a narrow matter of jurisdiction, some details of the proposed settlement were revealed in the courtroom.

An insurance company representing Wright’s corporate owner, Mission Group Kansas Inc., would pay out $5 million toward the settlement. Of that amount, $750,000 has already been spent in legal costs. An additional $1.25 million would be set aside for future claims. That would leave $3 million to be shared by McClain’s clients and their attorneys.

Bottom line: The 264 students in the lawsuit would receive payouts ranging from about $2,000 to a high of $10,000, based on a formula that involves how much they paid the school, how much debt they incurred, and other factors. If the settlement is approved, most of the students will be compensated in the neighborhood of $5,000. That money won’t make much of a dent in the debt load many of them took on, but it will at least help pay some bills.

Left in the cold, though, are hundreds of students who attended Wright classes in Overland Park, Wichita, Omaha, Oklahoma City and Tulsa, and who didn’t get in on the settlement. About 10 of those students attended last week’s hearing, bearing a vaguely worded notice they’d received in the mail and hadn’t comprehended until it was too late.

Bankruptcy Judge Robert D. Berger appeared pained as the students spilled their sad stories in his courtroom. 

“I know all of you want to share in the [insurance] policy, but the situation is that only the people who sued got in,” the judge said. “I understand that you don’t think it’s fair. Frankly, I don’t think it’s fair, either. But you needed to have filed a lawsuit before the bankruptcy.”

Lynn Bartee, a 46-year-old single mother of three children, had traveled from Omaha to attend the hearing. She told the judge that Wright had charged her lender almost $10,000 for a semester’s tuition after she had signed papers informing the school she was dropping out of her program. Wright officials said she would be reimbursed, but the school filed for bankruptcy and Bartee has received no compensation.

Outside the courthouse, Bartee said she had enrolled in a medical-coding program at Wright’s Omaha campus after she and her husband divorced. She decided not to continue when she discovered that she would be unlikely to transfer her Wright credits elsewhere. Fortunately, after leaving Wright she was able to obtain a certificate in medical coding from a community college — at a fraction of the cost Wright was charging her. She used the certificate to land a job.

But Bartee is now paying interest on the thousands of dollars she owes from her one semester at Wright — plus the semester for which she was charged upfront, despite her having left the program. 

“It’s making me extremely stressed to think about that every day,” she told me. 

All that Bartee gained from her road trip last week was an eight-page “borrower defense” application to file with the U.S. Department of Education, seeking student-loan forgiveness. That’s a tough sell regardless of circumstance. In a federal bureaucracy now headed by U.S. Department of Education Secretary Betsy DeVos — who has a long history of supporting profit-seeking schools, and whose serpentine business portfolio includes past connections to several for-profit colleges and a student–debt collection firm — Bartee’s hope for relief appears dim indeed.

Consumer advocates fear DeVos’ appointment may mean a revival of predatory “career colleges,” many of which have lately staggered under the weight of lawsuits and tougher rules enacted by former President Barack Obama’s administration. Meanwhile, no one is loosening the rules to help students stuck with ruinous debt, worthless credits and static job prospects.