In a significant legal development, Walden University agreed to a $28.5 million settlement in a class-action lawsuit that accused the institution of deceptive practices, particularly targeting Black and female students. The lawsuit, filed in the U.S. District Court for the District of Maryland, alleged that Walden’s Doctorate in Business Administration (DBA) program deliberately prolonged students’ coursework to increase tuition fees, disproportionately affecting Black and female students. The lawsuit claimed that this predatory practice was in violation of federal consumer protection laws and civil rights statutes such as Title VI of the Civil Rights Act of 1964 and the Equal Credit Opportunity Act (ECOA).

Key Allegations in the Lawsuit

The plaintiffs, led by Dr. Aljanal Carroll and others, argued that Walden University falsely advertised the time and costs required to complete its DBA program. According to the lawsuit, students were promised a degree within a specified period and at a defined cost. However, the reality was quite different. Many students, particularly Black and female enrollees, found themselves having to take additional courses beyond what was originally outlined, inflating their costs substantially. The plaintiffs argued that the university intentionally delayed the dissertation review process, forcing students to continue paying tuition for extra semesters.

This practice, known as “reverse redlining,” was at the core of the lawsuit. Reverse redlining refers to targeting certain demographic groups—in this case, Black and female students—with unfavorable conditions in lending or educational practices. The plaintiffs alleged that Walden engaged in these practices by spending the bulk of its advertising budget in communities with a higher concentration of Black residents and tailoring its marketing to working women and non-traditional students, exploiting their aspirations for career advancement through higher education.

Settlement and Reforms

After months of legal wrangling, Walden University agreed to a settlement totaling $28.5 million. This settlement will provide financial relief to nearly 2,300 students who were part of the class action. The settlement also includes significant programmatic changes. Walden has agreed to increase transparency by providing accurate information regarding the true cost and time required to complete its DBA program. Furthermore, the university has eliminated the role of the University Research Reviewer (URR), which was cited as a key factor in the delays, and pledged to maintain this change for at least four years.

This settlement is not only a financial victory for the affected students but also a major step towards reforming practices in the for-profit education sector. By holding Walden accountable for its practices, the lawsuit aims to protect future students from falling into similar traps.

Broader Impact on For-Profit Education

This case against Walden is part of a broader trend of legal action against for-profit educational institutions accused of exploiting vulnerable populations through misleading practices. Walden University, like many other for-profit schools, has drawn criticism for its high student debt levels relative to the earnings of its graduates. Data from various studies have shown that many Walden students, particularly those in doctoral programs, end up with significantly more debt than they initially borrowed due to the extended time it takes to complete their degrees.

The legal victory in this case sends a message to other institutions in the sector about the importance of transparent advertising and ethical practices. The use of reverse redlining tactics, particularly targeting minority students, raises serious ethical and legal concerns. These lawsuits highlight the need for more rigorous oversight of for-profit educational institutions, particularly those that heavily rely on federal student loans.

Conclusion

The $28.5 million settlement against Walden University marks a turning point in the fight for fairness in higher education, especially for vulnerable students who were targeted by deceptive marketing practices. The reforms resulting from this lawsuit not only benefit the plaintiffs but also set a precedent for increased accountability in the for-profit education industry. Moving forward, Walden and similar institutions will likely face greater scrutiny in how they advertise their programs, disclose costs, and manage student outcomes.

For many students, this settlement provides both financial relief and validation of their claims of exploitation. The case underscores the importance of regulatory oversight to protect students from predatory practices, ensuring that higher education serves as a pathway to success, rather than a financial trap.

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