Washington, D.C. — Today, the U.S. Department of Justice announced a $95.5 million settlement with the Education Management Corporation, or EDMC, to resolve claims that it used fraudulent and abusive practices to acquire federal and state education funds. A group of 40 state attorneys general also settled allegations of EDMC’s unfair and deceptive conduct in recruitment and enrollment. Elizabeth Baylor, Director of Postsecondary Education at the Center for American Progress, released the following statement:
As part of its day-to-day practices, EDMC preyed on students and lured them into programs with questionable value. Investigations have documented that the company lavished recruiters with prizes—such as trips to Hawaii—to push the envelope as far as possible. In the most recent school year, EDMC collected $985 million in federal student aid funds, representing approximately 90 percent of the company’s revenue. Proceeds from this settlement should be devoted to borrower relief, and the U.S. Department of Education should alert EDMC borrowers so that students who were lied to can file defense to repayment claims.
For more information or to speak with an expert, contact Allison Preiss at [email protected] or 202.478.6331.
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