WASHINGTON (AP) — The Obama administration has reached a $95.5 million settlement with a Pittsburgh firm that runs for-profit trade schools and colleges.
The Justice Department settlement resolves allegations that Education Management Corporation used enrollment incentives to pay its recruiters and exaggerated its career-placement ability.
The government says the firm relied on deceptive recruiting tactics to sign up students it knew were unlikely to succeed or finish its programs.
Attorney General Loretta Lynch says the company acted as a “recruitment mill” and violated students’ trust.
The company faces financial and regulatory troubles. Eight directors resigned earlier this year as the firm restructured to cut its debt.
The settlement resolves a consumer fraud investigation brought by a coalition of attorneys general and separate whistleblower lawsuits.
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This settlement is atrocious. These for profit colleges should have been hit with a billion dollar plus fine for all the damage they have done.
Exactly. Another “We’ll slap one hand while you clutch $900 million in the other” settlement.
Well you two answered my question, I think? I was wondering what percentage this represents of profits and how that could be found out.
At least they are being fined and exposed and hopefully shut down. These are vultures preying on the innocent and unwary.
Just saw this article. For more info, the website Think Progress has a more detailed article.
Here is a key quote: “Education Management Corporation, or EDMC, reached the settlement with the New York Attorney General Eric Scheiderman’s office, along with 38 other state attorneys general, including the District of Columbia. Schneiderman alleged that EDMC — which owns the Art Institutes, Argosy University, and Brown Mackie College — used “high-pressure” recruitment tactics, misrepresented the educational benefits the colleges offer, gave inaccurate information about some of their programs’ accreditation, and misrepresented job placement rates and graduation rates. Back in May, EDMC announced it would gradually shut down 15 of 52 campuses of The Art Institutes.”