The Suit Magazine

The Education Management Corporation is in hot water after a lawsuit was filed by the Justice Department that alleges the for-profit online college company issued unfair and illegal incentives to recruiters to lure potential students, resulting in a high number of unqualified college applicants. Not only were the college students who enrolled in one of the Pittsburgh-based company’s 105 online schools not academically eligible to receive instruction, says the Justice Department, EDMC’s aggressive recruitment tactics got students to sign up for loans that came with high default rates. The company then made false claims to federal aid providers, bringing in $11 billion in revenue.

EDMC denies the allegations.

"The pursuit of this legal action by the federal government and a handful of states is flat-out wrong," said Bonnie Campbell, an adviser to the college's legal counsel, in a statement.

“EDMC's colleges are accredited institutions offering career-focused academic degrees to its students, many of whom would not otherwise attend college, and EDMC's combined graduation rate is better than other schools serving similar student populations, whether those schools are public, private or proprietary,” she added.

If found guilty, EDMC will be required to pay back three times the money it received in federal and state funding.

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