> Skip to content
FEATURED:
  • Student-Success Resource Center
Sign In
  • News
  • Advice
  • The Review
  • Data
  • Current Issue
  • Virtual Events
  • Store
    • Featured Products
    • Reports
    • Data
    • Collections
    • Back Issues
    • Featured Products
    • Reports
    • Data
    • Collections
    • Back Issues
  • Jobs
    • Find a Job
    • Post a Job
    • Career Resources
    • Find a Job
    • Post a Job
    • Career Resources
Sign In
  • News
  • Advice
  • The Review
  • Data
  • Current Issue
  • Virtual Events
  • Store
    • Featured Products
    • Reports
    • Data
    • Collections
    • Back Issues
    • Featured Products
    • Reports
    • Data
    • Collections
    • Back Issues
  • Jobs
    • Find a Job
    • Post a Job
    • Career Resources
    • Find a Job
    • Post a Job
    • Career Resources
  • News
  • Advice
  • The Review
  • Data
  • Current Issue
  • Virtual Events
  • Store
    • Featured Products
    • Reports
    • Data
    • Collections
    • Back Issues
    • Featured Products
    • Reports
    • Data
    • Collections
    • Back Issues
  • Jobs
    • Find a Job
    • Post a Job
    • Career Resources
    • Find a Job
    • Post a Job
    • Career Resources
Sign In
ADVERTISEMENT
News
  • Twitter
  • LinkedIn
  • Show more sharing options
Share
  • Twitter
  • LinkedIn
  • Facebook
  • Email
  • Copy Link URLCopied!
  • Print

Education Management Corp. Improperly Paid Recruiters, Prosecutors Say

By  Josh Keller
August 8, 2011

The U.S. Justice Department and four states accused the Education Management Corporation in a complaint filed in an existing lawsuit Monday of improperly paying recruiters and fraudulently securing more than $11-billion in federal student aid.

Prosecutors said Education Management pays its recruiters solely based on how many students they enroll, which would violate the Higher Education Act’s ban on incentive compensation. The government allegations were filed as part of a whistle-blower lawsuit by two former employees that the Justice Department joined in May.

We're sorry. Something went wrong.

We are unable to fully display the content of this page.

The most likely cause of this is a content blocker on your computer or network.

Please allow access to our site, and then refresh this page. You may then be asked to log in, create an account if you don't already have one, or subscribe.

If you continue to experience issues, please contact us at 202-466-1032 or help@chronicle.com

The U.S. Justice Department and four states accused the Education Management Corporation in a complaint filed in an existing lawsuit Monday of improperly paying recruiters and fraudulently securing more than $11-billion in federal student aid.

Prosecutors said Education Management pays its recruiters solely based on how many students they enroll, which would violate the Higher Education Act’s ban on incentive compensation. The government allegations were filed as part of a whistle-blower lawsuit by two former employees that the Justice Department joined in May.

“In practice, the sole factor that determines changes to the compensation of admissions personnel is the number of students the admissions employee recruited during the previous 12 months,” the complaint says.

Prosecutors said that Education Management, the second-largest for-profit college company by enrollment, had illegally received more than $11-billion in student aid since it adopted its compensation policies in 2003. California, Florida, Illinois, and Indiana joined the complaint. The company owns Argosy University, the Art Institutes, Brown Mackie College, South University, and Western State University.

The claims are “flat-out wrong,” a legal adviser to Education Management, Bonnie Campbell, said in a written statement. The company’s compensation plan complies with federal regulations by paying recruiters based on five “quality factors” in addition to how many students they enroll, Ms. Campbell said.

ADVERTISEMENT

“The complaint is wrong in its claim that EDMC disregarded the quality factors in the compensation plan,” Ms. Campbell said. “EDMC worked rigorously to ensure that the plan was properly implemented companywide.”

The largest for-profit college, the University of Phoenix, paid $78.5-million in 2009 to settle a whistle-blower lawsuit that accused the college of improperly compensating recruiters. Other for-profit colleges have faced similar complaints.

We welcome your thoughts and questions about this article. Please email the editors or submit a letter for publication.
Law & PolicyPolitical Influence & Activism
ADVERTISEMENT
ADVERTISEMENT
  • Explore Content
    • Latest News
    • Newsletters
    • Letters
    • Free Reports and Guides
    • Professional Development
    • Virtual Events
    • Chronicle Store
    • Chronicle Intelligence
    • Find a Job
    • Post a Job
    Explore Content
    • Latest News
    • Newsletters
    • Letters
    • Free Reports and Guides
    • Professional Development
    • Virtual Events
    • Chronicle Store
    • Chronicle Intelligence
    • Find a Job
    • Post a Job
  • Know The Chronicle
    • About Us
    • Write for Us
    • Work at The Chronicle
    • Our Reporting Process
    • Advertise With Us
    • Brand Studio
    • DEI Commitment Statement
    • Accessibility Statement
    Know The Chronicle
    • About Us
    • Write for Us
    • Work at The Chronicle
    • Our Reporting Process
    • Advertise With Us
    • Brand Studio
    • DEI Commitment Statement
    • Accessibility Statement
  • Account and Access
    • Manage Your Account
    • Manage Newsletters
    • Individual Subscriptions
    • Institutional Subscriptions
    • Subscription & Account FAQ
    Account and Access
    • Manage Your Account
    • Manage Newsletters
    • Individual Subscriptions
    • Institutional Subscriptions
    • Subscription & Account FAQ
  • Get Support
    • Contact Us
    • Reprints & Permissions
    • User Agreement
    • Terms and Conditions
    • Privacy Policy
    • California Privacy Policy
    • Do Not Sell My Personal Information
    Get Support
    • Contact Us
    • Reprints & Permissions
    • User Agreement
    • Terms and Conditions
    • Privacy Policy
    • California Privacy Policy
    • Do Not Sell My Personal Information
1255 23rd Street, N.W. Washington, D.C. 20037
© 2023 The Chronicle of Higher Education
  • twitter
  • instagram
  • youtube
  • facebook
  • linkedin