More than 80,000 students who attended for-profit schools in North Carolina and around the country will have more than $100 million in student loans forgiven thanks to a landmark settlement, Attorney General Roy Cooper announced Monday.
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The company denies that but says it will “provide more transparency during the recruiting process” of students.
That would also violate a ban on per capita compensation at schools that participate in federal student-aid programs, according to the Times.
The Obama administration has reached a $95.5 million settlement with a Pittsburgh firm that runs for-profit trade schools and colleges.
EDMC, based in Pittsburgh, Pennsylvania, operates 110 schools in 32 states and Canada through four education systems: Argosy University, The Art Institutes, Brown Mackie College and South University. It offers undergraduate and graduate degrees.
The University of Phoenix – another largely for-profit operator – also is under investigation by the Securities and Exchange Commission for claims of deceptive and unfair practices.
The investigation was specifically targeted toward EDMC’s misrepresentation to authorities, officials said, but additional investigations could stem from potential misrepresentation to students.
Require orientation for new students who don’t have much prior college experience. The Huffington Post reported on the settlement over the weekend.
Permit incoming undergraduate students at ground campuses to withdraw within seven days of the beginning of the term or first day of class (whichever is later) without incurring any cost.
Permit incoming undergraduate students in online programs with fewer than 24 online credits to withdraw within 21 days of the beginning of the term without incurring any cost. Lead vendors shall be prohibited from making misrepresentations about federal financing, including describing loans as grants or “free money”; sharing student information without their consent; or implying that educational opportunities are, in fact, employment opportunities.
The agreement will put in place a significant interactive online financial disclosure tool, the EFIP, which will be required for all prospective students who utilize federal student aid or loans.
McKernan is married to former U.S. Sen.
Eligible students are expected to get an average of $1,370 in loan forgiveness per person.
The Justice Department joined the lawsuit in 2011 and several other states have since signed on. The four false claims act cases constitute the only known FCA-related litigation pending against EDMC. EDMC worked with state attorneys general to develop new, more transparent recruiting and disclosure standards, which the company hopes will serve as a model for higher education.
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False Claims Act Settlement Agreement with United States Department of Justice The comprehensive settlement with the Department of Justice, state attorneys general and other private parties resolved the following false claims act cases: United States of America ex rel. Lynntoya Washington and Michael T. Mahoney v. Education Management Corporation (“Washington”) (California, Florida, Illinois, Indiana, Kentucky MA, Minnesota, Montana, New Jersey, New Mexico, NY and Tennessee, and the District of Columbia were either parties in or otherwise made claims in Washington); United States of America, ex rel. Jason Sobek v. Education Management Corporation, et al.
