According to a story by David Walker at Photo District News, the US Department of Justice is suing Education Management Corporation claiming they recruited unqualified students into their for-profit schools to collect student aid money. The suit alleges they fraudulently collected $11 billion in state and federal student financial aid over the last eight years. Because it is in the form of federally backed student loans, if students default the government is on the hook for the money.
These for-profit schools are trade schools, essentially, that offer specialized training in targeted areas. Recruiters have allegedly been encourage to enroll anyone, regardless of their skill level or potential. From the story:
At the Art Institute of Pittsburgh campus alone, there were reportedly about 600 photography students pursuing a bachelor of arts or associates degree as of last summer, says Kathleen A. Bittel, the whistleblower whose testimony before a US Senate committee last fall helped trigger the federal lawsuit against EDMC. Bittel was a recruiter for Argosy University and then a career counselor for Art Institute’s online division.
“Where are 600 photography graduates going to go? You cannot absorb that many in one city. How are they going to make money?” she says.
If this was the one campus that was doing this, maybe the country could handle all of them. But there are over 100 of these for-profit campuses in the Education Management Corporation’s system.
(Thanks to Stanley Leary for the lead.)