LVC invited The Morning Call to see its slide show. The presentation consisted of 19 slides. The one that would apply to high-interest loans didn't include specific rates, although the school official giving the presentation mentioned a range of 7 to 17 percent.
Former students who were asked about the slide show said they didn't remember sitting through it.
Carpenter also said interest rates are based on individual students' credit histories over which the school has no control. The number of LVC students with high-interest loans is a reflection of "the economic circumstances" of the school's student body, LVC spokesman Praschak later added. A disproportionately large part of LVC's student population consists of people who are the first in their families to go to college.
High-interest loans are used only when cheaper alternatives -- federal student aid, parental loans, co-signed loans -- have been exhausted, Carpenter said. In such cases, she said, the rates are justified.
"It's absolutely fine," she said, "if it's the only way they can finance their education."
LVC has 1,350 students at its two-year-old building. The school awards associate degrees after 18 months of study. Its programs range from computer networking to massage therapy.
Unlike traditional colleges, it's a for-profit school. Shares of parent company Career Education, based in Hoffmann Estates, Ill., trade on the New York Stock Exchange.
At the annual meeting Friday, Career Education shareholders rebuked the company's leadership after more than a year of scandal and falling stock prices. They voted to withhold support for three directors and approved a slate of reforms.
Career Education, which had revenues of $1.7 billion last year, is the subject of a dozen lawsuits and investigations by the Justice Department, the Securities and Exchange Commission, the Education Department and the U.S. Postal Service. The company has been accused of, among other wrongdoings, falsifying student records to get financial aid money.
High-interest loans are a new complaint.
LVC, Carpenter said, is not to blame. She said while LVC helps students understand the complexities of financial aid, ultimately it's the lender, not the school, that is responsible for disclosing the terms of a loan.
"That's between Sallie Mae and the student," she said.
Leon, whose mother told her education was the key to a better life, was 19 in late 2002 when a Lehigh Valley College recruiter repeatedly called her.
Finally, Leon responded, and she was sold on the school's criminal justice program. The recruiter told her the school would help her line up loans to cover tuition.
Leon went to the school and was directed into the financial aid office. There, an adviser dialed the number to the lender and handed her the telephone; the lender told her she was approved for a loan, she said.
Some paperwork was then presented to her, she said. "They told me what to put in [the blanks], because I didn't know anything."
Leon said the transaction took about 15 minutes, and she recalled no discussion of interest rates. "No, never," she said.
Leon's story meshes with the inside account provided by the former financial aid director of another school owned by Career Education. He said he did not want his name published because doing so could hurt his new career at a traditional college.
The former director said he had frequent conference calls with officials at Career Education's corporate headquarters near Chicago. Also on the call were the financial aid directors of other schools owned by the company, he said.
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