Art Institute of Pittsburgh

EDMC in the News:

Charged With Protecting Students, Congressman Kline Instead Serves For-Profit Colleges by David Halperin, RepublicReport.org

Education Management Corp. (EDMC), the second largest business in the industry, marked by exorbitant prices and high dropout and loan default rates. The  U.S. Justice Department and half a dozen states have sued EDMC for fraud, alleging the company paid its recruiters based on the number of students signed up, in violation of federal rules. The Attorneys General of Florida and New York are investigating EDMC schools for alleged misrepresentations to students and state authorities about matters including costs, financial aid, job placement rates, and accreditation. Kentucky’s Attorney General is suing the company over alleged recruiting abuses. The Securities and Exchange Commission also is investigating EDMC.

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For-Profit College Group Sued as U.S. Lays Out Wide Fraud 

By Tamar Lewin, New York Times

The Department of Justice and four states on Monday filed a multibillion-dollar fraud suit against the Education Management Corporation, the nation’s second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.

While the civil lawsuit is one of many raising similar charges against the expanding for-profit college industry, the case is the first in which the government intervened to back whistle-blowers’ claims that a company consistently violated federal law by paying recruiters based on how many students it enrolled. The suit said that each year, Education Management falsely certified that it was complying with the law, making it eligible to receive student financial aid.

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How EDMC Went Bad

By Stephen Burd, Higher Ed Watch

As the Huffington Post reported last week, this new leadership team created a “cut-throat sales culture” that was “laser focused on hitting mandated enrollment targets.” These executives hired thousands of new recruiters and made sure that they knew that their jobs depended on getting students in the door and signed up for loans, even if they knew full well that the students were unqualified for the work and had little chance of succeeding.

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For-Profit College Corporation Accused Of Violating Federal Law By States, Justice Department

By Chris Kirkham, Huffington Post

By unlawfully incentivizing its sales force to recruit as many students as possible, Pittsburgh-based EDMC also illegally took in federal student aid money by making false assurances to the government that its admissions counselors were complying with the government recruiting guidelines, the government alleged.

“EDMC has created a ‘boiler room’ style sales culture and has made recruiting and enrolling new students the sole focus of its compensation system,” reads the complaint, filed by the Justice Department and attorneys general in Indiana, Illinois, Florida and California.

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