The Vatterott College lawsuit history is really several overlapping legal actions: a $13 million jury verdict won by a defrauded student in 2013, federal criminal convictions of three school officials for financial aid fraud, a Senate investigation that documented predatory recruiting, and a collapse in December 2018 that left behind more than $240 million in federal liabilities. Former students who borrowed federal loans to attend Vatterott can seek relief today through closed school discharge or the Sweet v. Cardona class action settlement.
The $13 Million Jury Verdict in Jennifer Kerr’s Case
The best-known lawsuit against Vatterott was filed by Jennifer Kerr, a single mother from Belton, Missouri, who enrolled in 2009 wanting to become a nurse. Kerr said a Vatterott admissions representative told her a medical assistant’s degree would put her on a “fast track” to nursing and that her credits would transfer. After 60 weeks and about $27,000 in student loans, she learned she had actually been enrolled in a medical office assistant certificate program. Switching to the program she thought she was in would have cost another $10,000 and 30 more weeks of school.1Courthouse News Service. Jury Whacks Chain College for $13 Million
In June 2013, a Jackson County, Missouri jury found that Vatterott Educational Centers Inc. violated the Missouri Merchandising Practices Act. It awarded Kerr $27,676 in compensatory damages and $13 million in punitive damages.2Higher Ed Dive. Misled Student Wins $13M Lawsuit Against For-Profit College The trial judge reduced the punitive award to about $2.08 million under Missouri’s statutory cap and added roughly $388,000 in attorney fees. In August 2014, the Missouri Court of Appeals for the Western District affirmed the judgment in full, sending the case back only to calculate appellate attorney fees.3FindLaw. Kerr v. Vatterott Educational Centers, Inc.
Criminal Convictions for Financial Aid Fraud
Between 2009 and 2010, three former Vatterott employees pleaded guilty in federal court to conspiring to fraudulently obtain federal student grants and loans for ineligible students. The scheme ran from August 2005 through July 2006 and pulled in $361,964 in federal aid. The officials enrolled students without high school diplomas or GEDs, falsified GED verification forms, and coached students to give false information on federal aid applications, including listing fictional dependents.4U.S. Department of Justice. Kevin Earl Woods Sentencing
Kevin Earl Woods, a former campus co-director, got a year and a day in federal prison. Dominic L. Campbell, the former director of enrollment, received three years of probation. Dale Odei Marbell, a former admissions representative, was sentenced to time served. All three were jointly and severally liable for $361,964 in restitution.4U.S. Department of Justice. Kevin Earl Woods Sentencing
What the Senate Investigation Found
A Senate Health, Education, Labor, and Pensions Committee investigation led by Senator Tom Harkin between 2010 and 2012 obtained Vatterott’s internal recruiter training materials. Those materials listed the “Student Profiles” recruiters were taught to pursue: single mothers on welfare, pregnant women, people recently divorced, individuals with low self-esteem, those who had recently been incarcerated, people in drug rehabilitation, and people who had experienced a recent death or physical or mental abuse.5Senate HELP Committee. For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success – Vatterott
Internal communications turned up staff hostility toward the students being enrolled. One staff member complained about “the last batch of students you guys dumped here.” Another asked whether the school’s ads said “losers enroll here.” The training itself defended the targeting: “These Students Are The Reason We’re in Business!”5Senate HELP Committee. For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success – Vatterott
How and When Vatterott Closed
Vatterott failed the Department of Education’s financial responsibility composite score every year from 2006–07 onward, 12 straight failures. The Department kept it in federal Title IV aid programs under provisional certification for about a decade, well past the three-year statutory limit.6Veterans Education Success. Legal Memorandum Re Financial Responsibility
The school filed for receivership in Missouri in May 2017. A January 2018 deal to sell most campuses to Education Corporation of America fell apart after the Department imposed new restrictions on Vatterott’s aid distribution.7Higher Ed Dive. After Midwest For-Profit Vatterott’s Closure, Colleges Line Up to Take On Students The Accrediting Commission of Career Schools and Colleges placed Vatterott on probation in May 2018 and voted in November 2018 to revoke its accreditation, citing failure to demonstrate adequate graduation rates and job placement.8Missouri Lawyers Media. Vatterott College System Closes All 15 Campuses On December 17, 2018, all 15 remaining Vatterott campuses closed.
Loan Relief Options for Former Vatterott Students
Two federal programs are the main routes to relief.
Closed School Discharge
Because Vatterott officially closed on December 17, 2018, students who were enrolled at closure or who withdrew on or after August 19, 2018 may qualify for a full discharge of their federal student loans. You apply through your federal loan servicer using the closed school discharge form at StudentAid.gov.9Federal Student Aid. Vatterott College Closed School Information By late 2019, more than $5 million in loans had already been discharged for former Vatterott and Charlotte School of Law students combined.10Inside Higher Ed. Costs to Federal Government Mount From Profit College Shutdowns
The Sweet v. Cardona Settlement
Vatterott College and Vatterott Educational Centers, Inc. both appear on Exhibit C of the Sweet v. Cardona settlement, a list of schools the settlement identifies with strong evidence of misconduct.11Federal Student Aid. Sweet v. Cardona School List – Exhibit C Borrowers with claims tied to an Exhibit C school who do not receive a decision by January 28, 2026 are entitled to full settlement relief: discharge of the relevant loans, refunds of amounts already paid, and deletion of the associated credit tradeline. As of March 2026, the Ninth Circuit Court of Appeals denied the Department of Education’s request to delay those relief deadlines, so the existing timeline stands.12PPSL. Sweet v. McMahon
These two paths work off different theories. Closed school discharge turns on when you were enrolled. Sweet relief turns on the borrower defense claim you filed and whether the school is on Exhibit C. If you attended Vatterott and haven’t filed either, both are worth looking at.
Why the Company Itself Was Never Made to Pay
On December 8, 2020, the Department of Education assessed Vatterott $244,350,339 in unpaid liabilities tied to inappropriate use of federal funds and to loan discharges triggered by the closure and the school’s misconduct. As of February 2021, none of it had been collected.13Student Defense. The Missing Billion Vatterott’s line was the single largest entry in a June 2021 Student Defense report that found nearly 1,300 institutions collectively owed roughly $1.2 billion to the Department, with only about four percent repaid and an estimated $218 million likely lost to the five-year collection statute of limitations.14Inside Higher Ed. Report: Institutions Owe $1.2 Billion to Education Department
Vatterott was owned by the private equity firm TA Associates, which acquired it from Wellspring Capital Management in 2009. After the closure, no government entity has publicly attempted to hold TA Associates liable for the school’s debts. One account summarized the reason: “no collectors are hitting up private equity,” because deal structures typically insulate the parent fund from the portfolio company’s obligations.15Axios. Private Equity Funds and For-Profit Colleges TA Associates continues to invest in other for-profit education companies, including Full Sail University.5Senate HELP Committee. For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success – Vatterott
For former students, that gap is the practical point. The company that took the tuition is gone, its parent isn’t paying, and the recovery routes that actually work run through the federal loan system rather than through Vatterott itself.