Education Management Corp. (EDMC), the second-largest for-profit education company in the country, will pay $95.5 million for falsely certifying compliance with Title IV of the Higher Education Act and parallel state statutes, Secretary of Education Arne Duncan and U.S. Attorney General Loretta Lynch announced at a joint press conference Tuesday.
“This historic resolution exemplifies the Justice Department’s deep commitment to protecting precious public resources; to defending American consumers; and to standing up for those who are vulnerable to mistreatment, abuse and exploitation,” said Lynch.
The Departments of Justice and Education found that EDMC unlawfully recruited students and incentivized employee pay based on the number of students enrolled.
“Operating essentially as a recruitment mill, EDMC’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,” said Lynch. “In the days ahead, we will continue working with our invaluable partners at the U.S. Department of Education, through initiatives like the interagency task force on for-profit education, to ensure that our nation’s aspiring learners are finding and gaining access to educational opportunities that are right for them.”
This represents the latest in the Obama administration’s attacks on for-profit colleges.
“Now more than ever, a college degree is the best path to the middle class, but that path has to be safe for students,” Duncan said. “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. The federal government will continue to work tirelessly with state attorneys general to ensure that all colleges follow the law.”
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