The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
A large company that runs for-profit colleges will pay $95.5 million to settle allegations that it unlawfully recruited students and lied about those practices while taking in billions of dollars in federal and state money. U.S. Attorney General Loretta Lynch announced the settlement with Education Management Corp., aka EDMC, in a speech Monday, along with Education Department Secretary Arne Duncan.
Education Management Corp. is the second-largest for-profit education company in the country, and 90% of its revenues come from taxpayer-funded federal education money for students, Lynch said. It includes the Art Institutes, South University, Argosy University and Brown-Mackie College. Enrollment at EDMC schools is about 100,000.
The investigation stemmed from whistleblowers: Former employees came forward in 2007, alleging the company paid recruiters by how many students they enrolled. Such practices are illegal and created a “high-pressure recruitment mill” at EDMC schools, Lynch said. While this was said to be going on, EDMC certified its compliance with the ban on incentive compensation and secured federal grant and student loan money. Such actions violate federal and state False Claims Acts.
“Now more than ever, a college degree is the best path to the middle class, but that path has to be safe for students,” said U.S. Education Secretary Arne Duncan. “This settlement should be a warning to other career colleges out there: We will not stand by while you profit illegally off of students and taxpayers.”
In a separate agreement with 39 state attorneys general and the District of Columbia, EDMC agreed to fund about $103 million in student loan forgiveness for students who left the colleges within 45 days of enrollment.
EDMC have also agreed provide more information to prospective students, including a one-page, easy-to-read disclosure on graduate placement rates and the cost of attendance, among other things.
“Though we continue to believe the allegations in the cases were without merit, putting these matters behind us returns our focus to educating students,” EDMC said in a statement on its website.
Image: iStock
September 13, 2021
Uncategorized
August 4, 2021
Uncategorized
January 28, 2021
Uncategorized