2 For-Profit Colleges Will Pay Former Students $2.3 Million in Settlement

[Updated (7/30/2015, 4:26 p.m.) with a statement from Lincoln Educational Services.]

Kaplan Career Institute and Lincoln Technical Institute will pay a combined $2.3 million to former students to settle claims by the Massachusetts attorney general, Maura Healey, that the two colleges intentionally misled students. Specifically, Ms. Healey says the colleges advertised job-placement rates of more than 70 percent, when in reality they were much lower, and used unfair recruiting tactics to attract prospective students.

“We allege these for-profit schools lured hopeful students into enrolling in their vocational programs by promising certain careers, but only left them with substantial debt,” Ms. Healey said in a news release.

In a statement, Kaplan Inc., which owns the career institute, said “there was no finding of wrongdoing” in the settlement. “Sadly, in the world of business today, it is often less damaging to settle such a matter even when there is no wrongdoing,” said Janice Block, the company’s chief legal and administrative officer, in the release.

The career institute closed in 2012.

In a statement, Lincoln Educational Services, which owns the technical institute, denied the attorney general’s claims, but said it was “gratified that the judgment enables our former students to benefit from the $850,000 in direct funds to be distributed by the attorney general as she determines, and $165,000 in loan forgiveness.”