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Second lawsuit takes aim at Globe enrollment practices

Editor’s note: This is the first in a two-part series examining Globe University’s admission practices.

WOODBURY, Minn. -- When Alexenderia Romig-Palodichuk enrolled in Globe University’s medical assistant program, she was promised a job upon graduation, an over-the-top starting salary and the ability to transfer credits to further her education.

She was sold dreams, and delivered debt.

That’s according to a class-action lawsuit the Woodbury student filed with four former students who attended various Globe University programs in Minnesota and South Dakota.

Court documents filed in Hennepin County District Court allege the school inflates potential salaries, falsely advertises job prospects in prestigious fields and overpromises credit transfer opportunities.

Globe was criticized for its admission practices locally during the trial of a former dean who won a whistleblower lawsuit against the school in August, and was awarded nearly $400,000 in damages by a Washington County jury.

The for-profit college industry as a whole has been the subject of heightened scrutiny and part of a two-year investigation by the U.S. Senate committee on Health, Education, Labor and Pensions, which found more than half of the students who enrolled in those colleges in 2008-09 left within just four months without a degree or diploma.

The investigation, led by Sen. Tom Harkin, D-Iowa, revealed that although for-profit colleges play an important role in higher education and satisfy a growing demand, they’re not well-equipped to meet the needs of nontraditional students.

“For-profit colleges also ask students with modest financial resources to take a big risk by enrolling in high-tuition schools,” according to the report, published in 2012. “When students withdraw, as hundreds of thousands do each year, they are left with high monthly payments but without a commensurate increase in earning power from new training and skills.”

Romig-Palodichuk borrowed $65,000 in student loans, according to the suit filed Oct. 2, while other students involved in the lawsuit borrowed anywhere from $15,000 to $41,000 each. The class action represents students enrolled at Globe since 2007.

“Most of the people that we represent have paid Globe tens of thousands of dollars, and they are unable to find jobs using their education, unable to transfer their credits,” said Scott Carlson, attorney for Halunen and Associates, the firm representing students. “Every dollar they paid to Globe was a waste, and they ought to get it back.”

Targeting ‘vulnerable students’?

Noelle Jacquet-Morrison, a former Globe University recruiter who was hired in 2006 to start Globe’s cosmetology program in Maplewood, was terminated one year later after raising concerns about alleged unethical practices.

“I had some good feeling when I started, but I was quick to be squashed of that,” she said. “It became apparent really quickly that at first they didn’t care about who you recruited and how you recruited.”

Jacquet-Morrison said the school preys on vulnerable students who couldn’t get into other four- or two-year public or nonprofit institutions.

“Especially in the cosmetology field,” she said. “They were women, older, or had children very young.”

But Globe officials say the company is being criticized for practicing career-focused education, which gives opportunities to all kinds of people in all income brackets. They say the school has processes in place to ensure all students are successful.

“People criticize us because we give opportunity to those that nobody would give opportunity to,” said Chris Schmitz, director of admissions for Globe who oversees online admissions. “That’s what I think we’re great for, but yet that’s what other people sometimes criticize us for.”

But Jacquet-Morrison said the admission process required her to recruit as many students as possible with a minimum quota of about 40 students per semester, even if she had doubts about their ability to graduate.

“The name of the game was you enroll, you enroll, you enroll,” she said. “If you didn’t, your job is on the line.”

Like Heidi Weber, who sued the school for wrongful termination and violating the Minnesota Whistleblower Act, Jacquet-Morrison said she went to Globe executives to express concerns over the school’s admission practices.

“It’s unethical, what we’re doing is unethical,” she said was her message. “There must be a better way to get people to come to school and to be successful.”

She was told that shouldn’t be her concern, she said.

“They didn’t care, they really didn’t care,” she said.

Schmitz said those allegations, aside from violating educational standards, don’t make sense as a business model. He said it’s saddening to hear that former recruiters believe that was the case.

“Take it outside of the educational realm and think of any customer service or product exchange,” he said. “Why would I sell a bad product when I’m going to want a repeat customer? … There is no way you can last 130 years by doing that.”

The school believes students enroll there because of its mission, career-focused model and specific training programs, not because they’re being manipulated.

“That’s why students want to come here – not because of a marketing ploy, not because of a target that we’re going after,” Schmitz said.

For Jacquet-Morrison, though, the class-action suit is “not an unusual story.” Many students she worked with saw Globe as an opportunity to better themselves, get a job and make a decent living.

But like other for-profit schools around the country, Globe is being criticized for relying on high levels of student borrowing.

Most students are eligible for grants in addition to subsidized federal loans, putting millions of dollars in the pockets of Globe executives, according to the lawsuit.

Citing U.S. Department of Education figures, the class-action suit says Globe “took nearly $140 million in federal, state and private loans, grants and scholarships from its students” between 2011 and 2012.

The network also earned an additional $30 million in financial aid from Duluth Business University, Minnesota School of Cosmetology, the Institute of Production and Recording and Broadview University, which are all part of Globe Education Network, according to the complaint.

The lawsuit identifies former enroller Hannah Von Bank, who testified that she was instructed to target low-income students eligible for Pell grants because it’s “free money.” She said executives told her it was general “corporate practice.”

Globe trains its enrollers to manipulate students – they read from a script or present the same generic slideshow to every student who comes through the door, according to the lawsuit.

Additionally, attorneys allege the school doesn’t have a legitimate admissions board, though Globe officials say they have 81 admissions representatives who have goals, not quotas.

The complaint lists a number of other unethical practices, including “hounding” family members of prospective students.

“You know Sally would have a great future in business and would make lots of money if she just got an education first and enrolled at Globe,” Von Bank stated as an example. She said she was told that was also general corporate practice.

Schmitz explains that although the admission process does include a scripted presentation, it’s intended to be a comprehensive overview of the school’s mission so that every student who comes through the door gets the same information.

Then as relationships between admissions representatives and prospective students form, the information becomes tailored to students’ interests and skills, he said.

Schmitz said Globe practices “full disclosure” with salary numbers, job placement rates, graduation and retention rates for each program, following federal government guidelines.

“We think it’s best to be transparent and so we have throughout the presentation a couple of different areas that we talk about,” he said. “One of them is our placement rates. Most times those are fun slides for us to present because we do fairly well.

“But we have to show it, and we do show it, even when they’re not so hot because we want to be honest with the students.”

Students in the class-action suit, however, say they learned real job and salary potential later after starting their programs. Those students who joined Romig-Palodichuk in filing the suit are Melissa Beck, Sarah Beck, Cherida Brom and Reginald Holmes.

Riham Feshir
Riham Feshir is a reporter and photographer for the Woodbury Bulletin. Her coverage includes Woodbury City Hall, Washington County Board of Commissioners and business news.  Follow Riham on Twitter @RihamFeshir for the latest updates.