the Monday, August 29, 2011. Vol 36. Iss. 1.
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University of Colorado Colorado Springs Weekly Campus Newspaper
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Photo By Isaiah Branch-Boyle Taken during a lightening storm at UCCS.
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For Profit College Group Sued by Justice Department Andrew Dyer adyer@uccs.edu
Education Management Corporation (EDMC), the nation’s second largest forprofit higher education company, has received $11 billion in state and federal funds, but has been accused of fraud based on the way it enrolls its students. The corporation received these funds even though they were ineligible. The suit charges that EDMC enrolled paid recruiters, who were paid based upon the number of
students solicited, which is against a proposed federal law. This rule was proposed because it alleges that if the recruiters’ pay is based upon the number of students enrolled, they have incentive to use forceful sales tactics that persuade students who may not be ready for college to take out loans that they cannot afford to pay back. The U.S. Department of Education wants the law created because the education that these colleges provide tends not to lead to
the earning potential needed to pay back the debt. There have also been arguments suggesting that minority students will be disproportionately hurt financially by these colleges. EDMC admits no guilt, arguing that it followed the government’s rules against incentive enrollment, which bans financial compensation as the sole factor in an admission officer’s decision to enroll students. The Federal Justice Department and four states have brought a civil suit against the for-profit
college group’s chairperson and former Governor of Maine, John McKernon, who was CEO of the company in 2003. EDMC is known under four names in 105 colleges across the country: Art Institute, Argosy University, Brown Mackie College and South University, which, when combined, serve 150,000 students. This is not the first time that fraud has been uncovered in the for-profit college industry. From May through July 2010, the U.S. Government Accountability Office (GAO) investigated online and on-ground colleges in another
investigation, including leading for-profit colleges such as Kaplan University, University of Phoenix and Argosy University. The GAO used “secret shoppers” to pose as prospective applicants, as the colleges receive approximately 25% of all Federal education loans (about $20 billion in 2009). Among their findings:
-Four of the colleges encouraged applicants to commit financial aid fraud on their FAFSA paperwork. After the findings of the 2010 investigation were released, Kaplan University suspended applications at two of its campuses.
Another suit, filed in 2009, was brought against the Coloradobased school Westwood College and -Each of the 15 col- Westwood Online by leges investigated two former students. engaged in high-pres- One of the plaintiffs, sure, suspicious mar- Amanda Krol, argued that when she keting techniques. enrolled as a teen, -Of the 15 colleges, 14 she expected to find were more expensive than local non-profit Continued on page 3 colleges.