For-Profit College System Expected to Pay Millions
The nation’s second-largest for-profit college operator, Education Management Corporation, is expected to agree to pay nearly $90 million to settle a case accusing it of compensating employees based on how many students they enrolled, encouraging hyperaggressive boiler room tactics to increase revenue.
The civil settlement, the largest ever involving false claims made to the Department of Education, is expected to be announced in Washington on Monday. The case against the school was initially brought by whistle-blowers and joined by the Department of Justice and several states in August 2011.
Education Management could not be reached for comment.
The settlement would resolve accusations against the company under the consumer protection laws of 39 states and the District of Columbia. Two whistle-blowers, former Education Management employees whose complaints initiated the suit, are also set to receive some of the proceeds.