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Education Management Corp., the second largest for-profit college institution in the United States, has agreed to a settlement which resolves four False Claims Act lawsuits, including concerns by the U.S. Department of Justice and 39 states over its recruitment practices.
Specifically, the lawsuits alleged that Education Management Corp. paid their recruiters based on the number of college students they successfully recruited, which is against federal law.
The U.S. government and several states have laws that prohibit schools from paying recruiters based on their student enrollment if those schools want access to government loans. The government does not want recruiters to use high-pressure, misleading sales tactics to push students into for-profit colleges backed by federal and state student loans.
The DOJ and some states allege that is exactly what Education Management Corp. has been doing since 2003, even though it has certified to the government that it does not pay recruiters in that way.
“Operating essentially as a recruitment mill, [Education Management Corp.’s] actions were not only a violation of federal law but also a violation of the trust placed in them by their students – including veterans and working parents – all at taxpayer expense,” U.S. Attorney General Loretta E. Lynch stated in a press release.
Education Management Corporation also issued a press release, which declares that it has agreed to forgive student loans for students “who enrolled with less than 24 hours of transfer credit and who left within forty-five (45) days of the first day of their first term, and whose final day of attendance at an EDMC school was between January 1, 2006, and December 31, 2014 will qualify for loan forgiveness from the loans that [Education Management Corp.] institutions made to them.”
Education Management Corp.’s institutions include over 110 locations in the United States, under the names of The Art Institutes, Argosy University, Brown Mackie Colleges, and South University. Over 100,000 students are enrolled in for-profit schools under Education Management Corp.
According to the DOJ press release, “the global settlement also encompasses an investigation by a consortium of state Attorneys General, of consumer-fraud allegations involving deceptive and misleading recruiting practices.”
In addition to the loan forgiveness, the settlement with the states requires Education Management Corp. “to undertake various compliance obligations, including detailed disclosure obligations to students, prohibitions on deceptive or misleading recruiting practices, and oversight by an administrator to ensure compliance.”
“This is a rigorous agreement that not only provides some relief to a large number of former students through loan forgiveness, but helps ensure that the company will make substantial changes to its business practices for future students,” Iowa Attorney General Tom Miller stated.
The Education Management Corp. Settlement resolves the following three cases in the U.S. District Court for the Western District of Pennsylvania: United States, et al. v. Education Management LLC, et al., Case No. 2:07-CV-00461; United States, et al. v. Education Management Corp., Case No. 2:10-CV-00131; and United States, et al., v. The Art Institute Online Inc., et al., Case No. 2:11-CV-00601. The settlement also resolves United States, et al. v. Education Management Corp., Case No. 3:12-CV-01008, in the U.S. District Court for the Middle District of Tennessee.
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20 thoughts onU.S. Reaches $95.5M Settlement with For-Profit College Co.
I attended Argosy University in Chicago recently they closed all the schools I heard but I was just talking to the Dean about I haven’t recieved my diploma yet I been waiting since 2012 for it and constantly having all the excuses from it was mailed in 2014 to now last year they said like every time I complete the curriculum they add other classes just to make mire money now just months ago last year I spoke to them about giving me what I paid $64,000 for when it was supposed to been $40,000 from the beginning now I’m finding out after closure of this school this month that they were stealing our refund checks when I asked about them back then and was told I didn’t have ine coming because classes went up to $759 a credit hour I tried to transfer to another school and was told my credits were not transferable and they couldn’t find codes for other classes like they had just made them up I went for Business Administration in Health Care Management I’m so mad they messed up my life I wanted to open a nursing home and a assisted living facility but I can’t do that without credentials can I ? I heard it’s a classes action out there for Argosy University found out today that two yrs before I started in 2007 the students in another state had sued them for the same mess but I started in 2009 coming in from KKC in Chicago it’s a lot more to tell even teachers they hired with out credentials being cheap teachers that quit because of them not paying them it’s was a mess from 2009 to 2012 and now finding out they still stealing students refunds which they depend on rent and food I just want to know now they made them close how can I get my diploma?? Post a comment or email me info
I attended Argosy University in Chicago recently they closed all the schools I heard but I was just talking to the Dean about I haven’t recieved my diploma yet I been waiting since 2012 for it and constantly having all the excuses from it was mailed in 2014 to now last year they said like every time I complete the curriculum they add other classes just to make mire money now just months ago last year I spoke to them about giving me what I paid $64,000 for when it was supposed to been $40,000 from the beginning now I’m finding out after closure of this school this month that they were stealing our refund checks when I asked about them back then and was told I didn’t have ine coming because classes went up to $759 a credit hour I tried to transfer to another school and was told my credits were not transferable and they couldn’t find codes for other classes like they had just made them up I went for Business Administration in Health Care Management I’m so mad they messed up my life I wanted to open a nursing home and a assisted living facility but I can’t do that without credentials can I ? I heard it’s a classes action out there for Argosy University found out today that two yrs before I started in 2007 the students in another state had sued them for the same mess but I started in 2009 coming in from KKC in Chicago it’s a lot more to tell even teachers they hired with out credentials being cheap teachers that quit because of them not paying them it’s was a mess from 2009 to 2012 and now finding out they still stealing students refunds which they depend on rent and food I just want to know now they made them close how can I get my diploma??
I attended BMC in Ohio how do I take part in this lawsuit
I attended bm kc how do I join this
You can contact the DOJ to find out how class members are going to be notified: https://www.justice.gov/opa/pr/profit-college-company-pay-955-million-settle-claims-illegal-recruiting-consumer-fraud-and. Good luck!
I attended Brown Mackie College in South Bend Indiana. I would like to know how to join this suit and would like more information on it.
How can i join the suit against brown mackie? Every other link I’ve found leads to student loan forgiveness programs. I’m not asking to repay the 14 loans they took in my name! I want to see justice not more bills.
I attended vCard a school that did the same thing and now I am going through some extremely stressful complications because of it. The school is CUT online.
I attended Brown Mackie College in Hopkinsville, Kentucky. I know the recruiters were compensated…I got sick while visiting my Parents in Marshall, Texas and was admitted into the hospital and my BMC recruiter tracked me down there and called my hospital room to confirm my attendance the following Monday (my first day of college at BMC). She laughed and commented about how glad she was I was still going to attend the school because her enrollment numbers were very important to her. This school is a joke…teachers were hired that wasn’t certified or capable/knowledgable of teaching the courses. I’ve never even worked in my field of study due to the low level of education I received at a very high dollar cost. They lied to me about the tuition, book cost, certifications, transferring of credits, the teachers credituals. Just lied about everything…and now I have thousands of dollars in student loans in default! I was stupid to go and keep going there…but, some blame is on their hands!
How do you join this?
More information