Education Management Corp., the Pittsburgh-based for-profit education giant with more than 100 campuses around the country, is undergoing major structural change.
EDMC operates around 110 schools in more than than 30 states, including The Art Institutes, Argosy University, Brown Mackie College and South University.
Eight members of the company's 11-person board of directors have resigned as the company repositions itself by cutting debt in the wake of financial losses and federal regulation, according to news reports
. EDMC's president and chief executive officer Edward West will remain on the company's smaller board.
According to the Associated Press, "The company is now privately held and two of its new board members announced Tuesday are John Danielson, chairman and managing director of the Chartwell Hamilton Group LLC, a New York-based educational consulting firm; and Johnathan Harber, the founder of Schoolnet Inc., a firm that develops online learning solutions and helps schools implement learning standards, including Common Core."
The AP noted that the changes come at a time when the company has lost $684 million during the last year "and could face penalties from the federal government based on the alleged recruiting violations as well as a class-action suit by investors filed in U.S. District Court in Pittsburgh in September."
"The company is still attempting to settle U.S. Justice Department litigation accusing it of illegally using enrollment incentives to pay its recruiters, and Tuesday's moves are believed to be part of an overall effort to solve the company's regulatory, legal and financial troubles," the AP said.
A former academic adviser at University of North Carolina Chapel Hill, who revealed academic fraud and then sued the school to get her job back, is speaking out now after settling her case. "I don't think whistleblowers are very popular to employ . . . after they speak out," Mary Willingham tells Time Warner cable
, after settling her case for $335,000 in a deal that did not allow her to return to the university.
In the wake of the revelations made by Willingham, UNC now faces two class action lawsuits from former athletes claiming they did not receive the education to which they were entitled.
In the wake of revelations over academic fraud aimed at keeping athletes eligible, University of North Carolina is facing multiple lawsuits over denial of education opportunities.
that former basketball player Kenya McBee has joined a putative class action lawsuit filed by former football player Mike McAdoo claiming that the university denied athletes the education to which they were entitled by forcing them to take classes that actually never met.
According to CNN, former basketball player Leah Metcalf and former football player James Arnold filed a separate class action making similar allegation.
An independent investigation launched by the university revealed last fall that academic fraud had been rife at UNC for many years, with officials wrongly denying any involvement within the athletics department.
A whistleblower, Mary Willingham, recently settled a lawsuit relating to her contentions about the university.
Kaplan Education Services — the for-profit company that operates Kaplan University and Kaplan College campuses across the country — has agreed to pay $1.5 million to settle a whistleblower lawsuit raising allegations of unqualified instructors in Texas. The lawsuit, initiated by whistleblower Leslie Powell, prompted a federal investigation into allegations of unqualified instructors leading medical assistant courses at the company's San Antonio campus. The San Antonio Express News reported
that the "lawsuit alleged that Kaplan knowingly requested, received, and retained federal tuition funds for courses taught by individuals who did not meet the minimum requirements established by Texas law. Following the federal investigation, the parties negotiated a settlement. The majority — roughly $1.07 million - will be paid in the form of tuition refunds. The refunds will benefit 289 students, whose student loan debt will decrease as a result of the settlement, Durbin said. The whistleblower also will receive a portion for bringing the allegations to light."
Complaints about unqualified instructors are common in the for-profit school industry in which students often are charged tens of thousands of dollars for career training programs. If you have concerns about the qualifications of instructors at a for-profit school, you may share them here
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.
EDMC headquarters in Pittsburgh
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.
The U.S. Department of Justice has joined a lawsuit against the for-profit Stevens-Henager College that alleges that the school paid recruiters bonuses and incentive compensation in violation of federal law. The lawsuit, pending in federal court in Idaho, was filed by two former employees of the college who are pursuing the claims under a federal whistleblower law. The employees and the Justice Department accuse Stevens-Henager College and two affiliated schools, CollegeAmerica and California College of San Diego, of additional improprieties, including faculty members lacking minimum qualifications required by its accrediting body and officials falsifying student records. The lawsuit was disclosed
by the Huffington Post. According to the 99-page Complaint
filed in federal district court, the defendant schools have received more than $660 million in federal student aid since 2002. One of the alleged violations of federal law detailed in the lawsuit is a practice in which the schools "pay bonuses, commissions, and other forms of incentive compensation to employees in the admissions departments based directly and indirectly on the number of students that these employees enroll." The defendant schools deny any wrongdoing in the lawsuit, which is pending. Incentive compensation in enrollment has been a recurring problem at for-profit colleges. The federal whistleblower law provides an opportunity for employees and students who are witnesses to fraud to be rewarded financially for their reporting of such practices. If you wish to share a concern about improper practices at another college or trade school with an attorney, you may send an e-mail to firstname.lastname@example.org, or
complete this form.
A substantial jury verdict against a for-profit school in Minnesota has been upheld by a judge. As reported
in the Huffington Post, a Minnesota judge not only refused to set aside a jury verdict of $395,000 against Globe University, but also awarded $500,000 in attorney's fees to be paid by the school.
The lawsuit was filed against the for-profit school by a former dean, Heidi Weber, who claimed she had been fired for complaining to the school about use of false job placement statistics and other misconduct.
The Huffington Post reported:"Weber's suit claimed that Globe had violated a state whistleblower law when it fired her from her job as dean of the school's medical assistant program. The Washington County, MN, jury concluded that Weber was indeed fired in 2011 for raising with management that Globe was providing false information to students about placement rates, starting salaries, and the school's accreditation; failing to provide adequate training for students; and improperly paying commissions to school recruiters. The jury awarded Weber $205,000 for lost wages and $190,000 for emotional distress.
"Globe runs 11 campuses in Minnesota, Wisconsin, and South Dakota and has more than 10,000 students. From 2011 to 2012, the company obtained more than $170 million from federal student aid. More than half of Globe's students drop out without graduating; on some campuses, three-quarters drop out."
Questionable representations about job placement are a recurring problem at for-profit colleges and trade schools. If you are an employee or student at a for-profit school with concerns about representations made to students at the school that you wish to discuss with one of the attorneys operating this College Watchdogs site, call us at 877-540-8333, or complete this form