Piscataway IT School Fined $1.2 Million For Fraud, Scam On Students

PISCATAWAY, NJ — A for-profit IT training school in Piscataway agreed to a $4.6-million settlement with the state of New Jersey to resolve allegations it used false advertising to lure students into its expensive IT programs.

The school is called Sollers College, and it is located at 33 Wills Way, Building 9 in Piscataway.

Its founder and president is Siba Padhi. Padhi agreed to the settlement, the terms of which you can read here. Padhi also agreed to pay a $1.2-million civil penalty.

Here is how it worked: NJ Attorney General Matt Platkin says people applied to online IT job ads on sites such as indeed.com. After they applied, they received a response from Sollers College saying they needed to complete an IT training program in order to be eligible for the position.

In other words, Soller was posting the jobs online, and then using the job ads to lure people into their trainings.

Sollers told applicants they must pay the $15,000 cost of the training program, but assured consumers that a job was "essentially guaranteed at the end of the program," according to the complaints.

But multiple Sollers students said no employment was ever obtained after they finished their training.

Sollers also required students pledge a portion of their future income upfront to pay for the programs. Sollers called these "Income Share Agreements" or ISAs.

Several students reported Sollers to the NJ Division of Consumer Affairs, which is run by the Attorney General. The state of NJ started investigating Sollers in late 2020. The AG also got a complaint from the District of Columbia Attorney General about Sollers.

The Federal Trade Commission (FTC) got involved, and the federal government says Sollers committed a number of violations:

• The state says Sollers lured students into its IT programs via misleading job placement ads for high-salary IT jobs. However, Sollers never mentioned their fees, which typically ranged from $10,000 to $15,000 for four- to six-week programs.
• Advertised false hiring rates for its graduates, including claims that it had “an 82% placement rate within three months of graduation” and that “90% of our students are placed within 3 months of graduation." In reality, the job placement rate was much lower.

• Advertised false claims of corporate and academic partnerships.

Do you think fraud or scams are happening where you live, work or go to school? Anyone can file a complaint with the NJ Division of Consumer Affairs, which is meant to protect the public of New Jersey: File a Complaint with NJ Division of Consumer Affairs

Sollers College will cancel $3.4 million in student debt

It was Padhi who agreed to settle with the state of New Jersey and the FTC, and personally pay the $1.2-million fine.

Padhi agreed Sollers will cancel a total of approximately $3.4 million in student debt from the ISAs. Of the nearly 400 students nationwide whose debt will be erased under the settlements, more than 60 are New Jersey residents.

NJ Attorney General Platkin said his office is trying to protect New Jersey young people from being taken advantage of by predatory, for-profit schools.

“New Jersey will not allow for-profit schools to deceive students with false claims and promises or subject them to unlawful financing schemes that push them into debt instead of helping them reach their career goals,” said Attorney General Platkin. “Schools will be held accountable.”

Padhi is also prohibited from issuing ISAs to any students in relation to any of Sollers programs, and permanently barred from attempting to collect any debt Sollers claims it is owed, including all unpaid interest and fees. Sollers and Padhi must direct collection agencies and other parties to cease attempts to collect the debt and direct credit reporting agencies to delete the debt from students’ credit report.

Any student debt payments received by Sollers or Padhi must now be returned to the payee within 10 days.

“For many students, the decision to pursue education and training programs requires careful consideration of the upfront cost and the long-term financial benefits after graduation,” said Cari Fais, Acting Director of the Division of Consumer Affairs. “This settlement holds Sollers and Siba Padhi responsible for the financial harm they caused students and requires them to make changes to their business practices to ensure this doesn’t happen again.”

Sollers is required to notify students of their debt forgiveness and, going forward, to provide the FTC with detailed records of the school’s business transactions for a 20-year period.

Students do not need to take any action to qualify for or receive the benefits provided under the settlements.

Michelle Davis was the lead investigator for the NJ Division of Consumer Affairs/the state of New Jersey.