|November 17, 2015
Contact: Whitney Ray
Phone: (850) 245-0150
|en Español||Print Version||Tweet|
TALLAHASSEE, Fla.—Attorney General Pam Bondi today announced an unprecedented global settlement with Education Management Corporation to resolve a whistleblower lawsuit alleging the company violated federal and state law by submitting fraudulent claims. Florida was one of five states, along with the United States, that actively litigated the lawsuit. As part of a separate settlement, Florida also joined 40 other state attorneys general and the District of Columbia in resolving a consumer fraud investigation into EDMC's deceptive and misleading recruiting and enrollment practices.
As part of the agreement, EDMC is required to significantly reform its recruiting and enrollment practices, and forgive more than $6.5 million in loans for more than 4,500 former students in Florida. Nationwide, the agreement requires EDMC to forgive more than $100 million in outstanding loan debt held by more than 80,000 former students. The students receiving the relief incurred debt even though they enrolled at EDMC without obtaining significant college experience.
EDMC, based in Pittsburgh, Pa., operates 110 schools in 32 states and Canada through four education systems, including Argosy University, The Art Institutes, Brown Mackie College and South University.
According to a consent judgment, the agreement includes the following actions:
- · Mandates added disclosures to students, including a new interactive online financial disclosure tool;
· Bars misrepresentations to prospective students;
· Prohibits enrollment in unaccredited programs; and
· Institutes an extended period of 21 days when new students can withdraw with no financial obligation.
As part of the settlement, EDMC must send a notice letter to each qualifying former student and each of the credit reporting agencies. Those who will receive automatic relief related to outstanding EDMC institutional loans must have been enrolled in an EDMC program with less than 24 transfer credits; withdrew within 45 days of the first day of their first term; and their final day of attendance must have been between Jan.1, 2006–Dec. 31, 2014. Students and former students who have questions about whether they are eligible for the student loan debt forgiveness can contact EDMC directly at 1-855-725-4301.
To view the consent judgment, click here.
To view the settlement agreement, click here.