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Attorney General: Daymar College to Refund $1.2 Million to Former Ky. Students

Nearly 3,500 former students at Daymar College's campuses in Kentucky will begin receiving restitution checks totaling $1.2 million, Attorney General Andy Beshear announced on Wednesday.

The payments are being issued by the claims administrator appointed to handle the case pursuant to a settlement the Office of the Attorney General entered into with Daymar in 2015 resolving a consumer protection lawsuit.

Though most Kentucky campuses have been closed, Daymar's Bellevue location continues to enroll new students.

As part of its settlement, Daymar has already forgiven $11 million in student debt to nearly 6,500 students who qualified. The average loan forgiveness amount was $1,700.

“College has never been more unaffordable, and students are being crushed with debt,” Beshear said. “The Attorney General’s office is focused on ensuring Kentucky’s students are treated fairly. Every week it seems our office receives a call by a former Daymar student who is wanting finality in this case. I’m pleased that our office could announce that these students will be receiving restitution.”

Beshear said the average restitution amount to be paid to the nearly 3,500 students who attended a Daymar campus in Kentucky between July 27, 2006, through July 27, 2011, and filed a claim is approximately $345.

Restitution amounts are based on the number of terms students completed at Daymar during the relevant time period and the number of approved claims that were submitted.  

Some students who received debt relief also qualified for a cash payment. Under the settlement, students receiving more than $1,000 in debt relief, however, were ineligible for cash payments.

The lawsuit, filed in 2011 by the Attorney General’s Office, alleged that Daymar College violated the Kentucky Consumer Protection Act by:

  • Denying students access to financial aid to buy their textbooks from vendors other than Daymar’s bookstore, which allegedly charged significantly higher prices than other vendors.
  • Misrepresenting students’ ability to transfer credits earned at Daymar to other institutions.
  • Admitting students who failed Daymar’s admissions assessment in violation of the school’s own admissions policy.
  • Hiring unqualified faculty who lacked the required credentials.

Daymar announced that it continues to "emphatically deny" the allegations brought forth in the suit.

“Daymar’s decision to resolve these claims is not an admission of any wrongdoing,” said Daymar President and Chancellor Dr. Dan Peterson. “Our company policy has always demanded adherence to all laws, rules, and regulations everywhere we operate and we take our compliance obligations very seriously.  This is a decision to avoid the continued expense and time associated with litigation so that we can fully focus on educating our students.”

“The Daymar family is glad to finally put this matter to rest,” said Peterson. “We have used this experience to review our best practices and remain confident as we continue to add value to the communities in which we serve.”

Daymar said that its new student enrollment increased by approximately 30 percent this year and that it is moving into a new campus location in Nashville, Tn., and moving its Lancaster, Oh. campus to Columbus. Both locations offer bigger facilities, improved technology, and are more centrally-located to serve the college's growing student population, all of which will allow Daymar to continue expanding its program offerings, the college said in a news release.

Students receiving restitution and debt relief attended Kentucky Daymar campuses in Albany, Bellevue, Bowling Green, Clinton, Louisville (two locations) Madisonville, Owensboro, Paducah, Russellville and Scottsville.

While most Daymar locations in Kentucky have closed, the college remains open and enrolling new students in online and ground programs in Bellevue and Bowling Green. Daymar locations in Madisonville, Owensboro, and Russellville are no longer enrolling new students but remain open to finish programs for currently enrolled students at those locations.

Daymar also has online programs and campuses in Ohio and Tennessee.

Daymar denied it violated the Kentucky Consumer Protection Act and in agreeing to settle the lawsuit continues to deny any wrongdoing, the Attorney General's office stated.

Daymar also agreed to make changes to its business practices being overseen by a court-appointed compliance monitor, former Tennessee Attorney General Robert Cooper Jr. Cooper will continue to monitor Daymar’s operations until Sept. 10, 2017.

-Staff report

Photo: Daymar College in Bellevue (via Daymar)