A.G. Schneiderman Encourages New Yorkers To Report Deceptive Conduct At For-Profit Schools To His Office.
New York, NY - October 13, 2017 - Attorney General Eric T. Schneiderman today announced a $375,000 settlement with Flatiron School, Inc. (“Flatiron”), a New York city-based coding school that operated without a license from the New York State Education Department (“SED”) and improperly marketed and promoted its job placement rate and the average starting salary of its graduates. Today’s settlement follows a series of groundbreaking actions taken by the Attorney General’s Office hold for-profit colleges accountable and to provide relief to victimized students.
Under today’s agreement, Flatiron will pay $375,000 in restitution to eligible graduates who file complaints against the coding school with the Attorney General’s Office within three months of the effective date. Affected Flatiron students and consumers who wish to report deceptive conduct at for-profit schools can file a complaint online at ag.ny.gov or by calling 1-800-771-7755.
“Coding boot camps have become popular as students seek careers in the tech industry, but for-profit coding schools must comply with state requirements, including obtaining a license before operating,” said Attorney General Schneiderman. “Schools must also provide clear explanations of advertised job placement rates and salary claims of their graduates.”
Flatiron, a for-profit career school doing business in New York City, offers web applications and computer coding classes at its Broadway location and online. The school, which has taught approximately 1,000 students, charges students between $12,000 and $15,000 for a 12 to 16 week in-person class and approximately $1,500 a month for online coding classes.
According to the Attorney General’s investigation, Flatiron operated without a license from SED and without authorization to provide online classes between October 2013 and September 2017.
The Attorney General’s investigation also uncovered that Flatiron made inflated claims on its website concerning the percentage of its graduates who obtained employment after completing their courses and the average salaries of their graduates. For example, between January and June 2017, Flatiron claimed that 98.5% of its students received employment less than 180 days after graduation and that Flatiron graduates had an average salary of $74,447. However, Flatiron did not disclose clearly and conspicuously that the 98.5% employment rate included not only full time salaried employees but also apprentices, contract employees and self-employed freelance workers, some who were employed for less than twelve weeks. Similarly, Flatiron failed to disclose that its $74,447 average salary claim included full time employed graduates only, which represent only 58% of classroom graduates and 39% of online graduates.
In order to obtain a SED license, a non-degree granting career school must meet a number of criteria, including using an approved curriculum and employing a licensed director and teachers. The school must also demonstrate financial viability. These requirements help safeguard students who attend licensed schools.
The Attorney General’s settlement provides that Flatiron:
Not operate any educational institution without obtaining necessary licenses and complying with SED laws, rules and regulations
Clearly and conspicuously disclose the method and categories by which its employment rate and average salaries were calculated in any advertising or oral or written disclosure to students
Clearly and conspicuously disclose the population comprising the average salary, as well as the population comprising the employment rate calculation wherever it discloses both its employment rate and average starting salary of its graduates
Not count nonpermanent graduates as employed unless they (1) receive compensation in return for services provided; (2) are anticipated to be employed for at least three months and (3) the position requires that the individual work at least 20 hours a week
The case was handled by Assistant Attorney General Benjamin J. Lee under the supervision of Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia in the Consumer Frauds and Protection Bureau. The Consumer Frauds and Protection Bureau is overseen by Executive Deputy Attorney General of Economic Justice Manisha M. Sheth.