College accused of being a 'high-pressure recruitment mill' agrees to a record $95.5 million settlement
The nearly $100 million settlement is the largest false claims settlement with a for-profit educational institute in history, US Attorney General Loretta E. Lynch said during a press conference Monday announcing the resolution.
The college operated as a "high-pressure recruitment mill" and illegally paid recruiters based on how many students they enrolled, according to Lynch.
EDMC is the nation's second-largest for-profit college system and the parent company of four higher education systems: Argosy University, The Art Institutes, Brown Mackie College, and South University. It was acquired by Goldman Sachs in 2006, which retains 40% ownership in the company today.
"This settlement should be a very clear warning for other career colleges out there," Secretary of Education Arne Duncan said at the press conference. "We will not stand by when you profit illegally off of students and taxpayers."
For its part, EDMC acknowledged the settlement's allegations, though it claims the allegations were unmerited.
"We are pleased to have resolved the civil claims raised by the Department of Justice and state attorneys general," EDMC wrote in a press release. "Though we continue to believe the allegations in the cases were without merit, putting these matters behind us returns our focus to educating students."
The school has been accused of using predatory tactics to lure in military personnel.
Another for-profit behemoth, Corinthian Colleges, abruptly filed for Chapter 11 bankruptcy protection in April after an ongoing investigation by the ED and a $30 million fine.
That fine, which was just the latest blow for the troubled for-profit network, set into motion a number of events that led Corinthian to announce that it would close its remaining campuses for good.
Across the entire for-profit sector, there have been allegations that the schools focus on signing up students and depositing their federal financial aid checks rather than providing a quality education.
Almost all of the biggest players in the for-profit sector have been investigated by state attorneys general, including EDMC, ITT, Career Education Corporation, Kaplan, DeVry, and Bridgepoint.