As reported by the Charleston, S.C. Post and Courier newspaper, the Charleston School of Law is facing upheaval after the founders of the decade-old school withdrew about $25 million in profits. According to the newspaper report, "Kevin Hall, a Columbia lawyer who represents InfiLaw System, a company trying to purchase the school, revealed the surprising financial information about founders Robert Carr, George Kosko, Ralph McCullough, Alex Sanders and Ed Westbrook at a public hearing last week. 'The Charleston School of Law, ladies and gentlemen, is in a financial tailspin,' Hall said. Carr, Kosko and Westbrook, the three remaining owners, confirmed Hall's description of the school's financial situation, and they all agreed that it got that way because owners for years had been pulling profits from the institution. But they disagree sharply on the school's future."
Virginia Intermont, a private college near Bristol, closed following its final graduation ceremony, bringing an end to the school that failed to find the merger partner that it had hoped would rescue the school from financial troubles.
The NY Times is calling for stricter federal regulations aimed at colleges that saddle students with crushing debt and few job prospects. In an editorial, the Times wrote, "The Obama administration’s proposed rules that would deny federal aid to career training programs that saddle students with crushing debt and useless credentials are a clear improvement over the disastrous status quo. But they will need to be strengthened to fully protect students and taxpayers from predatory for-profit schools that rely on federal student aid for up to 90 percent of their revenue and are well versed in the art of evading the law."
For-profit education company Bridgepoint Education and its Ashford University have settled with the State of Iowa following a dispute about whether the school misled and pressured students to enroll. According to the Chronicle of Higher Education, the company agreed to pay $7.5 million to resolve the dispute. Bridgepoint and Ashford denied any wrongdoing, but agreed not to use any "unconscionable or coercive" tactics in student enrollments. As part of the settlement, Ashford also will inform students in writing that online degrees from its College of Education do not lead to immediate licensure in any state and that its education college is not accredited by three major teacher-accreditation bodies. An independent administrator is scheduled to oversee the settlement and submit annual reports to the state for a period of three years. A copy of the settlement is available here. If you are a student or administrator with a new concern about Ashford or Bridgepoint that you wish to share with an attorney, you may submit it to attorneys at College Watchdogs via e-mail at firstname.lastname@example.org.
One of the nation's largest for-profit education companies -- Education Management Corp ("EDMC") -- "cannot put to rest allegations that it lied to snag" billions of dollars in federal student aid, according to a Courthouse News Service report. The federal whistleblower lawsuit was started in 2007 by a former admissions officers, Lynntoya Washington, who had worked at one of EDMC's schools, Art Institute of Pittsburgh. In 2011, the federal government along with 11 states and the District of Columbia joined the lawsuit, claiming that EDMC had improperly collected more than $11 billion in student aid while violating federal rules that prevented admissions counselors from being paid incentives to recruit students. According to the Courthouse News report, the federal judge to whom the case is assigned is permitting fact-finding in the case to proceed.
A young woman recently shared on Daily Kos her unfortunate story of pursuing a law school degree at a Florida for-profit law school -- including what she describes as incurring $150,000 in debt. "I bet on the American Dream: invest in your own education and work hard, and you can rise. Now’s it’s a nightmare--one that’s drained my will to live a few times in ways I’d rather not even describe," writes the former student, Summer Boggs. "My school did a heck of a sales pitch, with great-looking promotional materials, and really persistent recruiters who called around-the-clock. I was led to believe that I’d land a high-demand career in the legal field, earning a six-figure salary in just a few years." According to Ms. Boggs, her reality has proved to be much different: "I’m drowning in debt, and working at a non-profit making $30,000 a year. Not a lawyer’s salary, barely enough to make ends meet, and nothing extra to keep up with my massive monthly payments."
With a deadline for comments on the Obama Administration's controversial "gainful employment" rules nearing, for-profit colleges and other groups are girdling for a battle on the shape of final rules tying schools eligibility for student aid to proof that students are attaining jobs after completing educational programs. As reported in USA Today, "stakeholders on both sides of the debate are ramping up their push on the administration" in advance of the May 26 deadline for public comments to be considered by the administration in connection with final rule making. The proposed rules unveiled in March would require "colleges . . . to demonstrate that graduates' debt load on average does not exceed 30 percent of their discretionary earnings or 12 percent of their total earnings," among other requirements.
Two former employees-turned-whistleblowers at Stevens- Henager College recently spoke out about allegedly illegal recruiting techniques used at the Utah for-profit school, including payment of bonuses. The college denies any wrongdoing.
A federal judge has refused to dismiss a multi-billion dollar lawsuit brought by former employees and the federal government against one of the nation's largest for-profit education companies. The lawsuit against Pittsburgh-based Education Management Corp. (EDMC) alleges that the company illegally paid its admissions personnel based on the number of students that they each enrolled. The lawsuit, pending in federal district court in Pittsburgh, was filed in 2007 by former employees under a federal whistleblowing statute and joined in 2007 by the U.S. Department of Justice. In a ruling issued on May 5, federal district judge Terrence F. McVerry denied EDMC's request that the case be dismissed. Judge McVerry's decision was reported in the Pittsburgh Post-Gazette. "To put it starkly, plaintiffs allege a coordinated, multibillion-dollar corporate-wide fraud," U.S. District Judge Terrence F. McVerry wrote in the decision. "The fact that EDMC’s paperwork and salary database appear to be compliant [with federal law], on its face, is entirely consistent with Plaintiffs’ theory of the case." "What EDMC portrays as 'getting behind the numbers' may really be only manipulation of its numbers," the judge wrote. EDMC denies any wrongdoing and says it will continue to vigorously defend the lawsuit.
The U.S. Justice Department announced that it was accusing Stevens-Henager College and its owner in a civil lawsuit of illegally compensating recruiters. The college and its owner, The Center for Excellence in Higher Education, are alleged to have "falsely certified compliance with provisions of federal law that prohibit a university from paying incentive-based compensation to its admissions recruiters based on the number of students they recruit," according to the DOJ news release. The college and its owner are denying wrongdoing, and the lawsuit is pending. Under the federal False Claims Act, two former employees of the school who were "whistleblowers" and reported suspected wrongdoing to the government stand to receive financial rewards if the government is successful in recovering money previously paid to the college in the form of federal student aid. If you have concerns about possible wrongdoing at a school that you wish to share with an attorney, complete this form or call 877-540-8333 to contact the attorneys who operate www.collegewatchdogs.net.