A federal judge cleared the way on Friday for a whistle-blower lawsuit accusing the University of Phoenix of improperly paying recruiters of students.
The lawsuit, filed in September 2010 by two former admissions recruiters, alleges that the for-profit university and its parent company, the Apollo Group, violated a ban on paying recruiters based on the number of students they enrolled.
The judge did not rule on the merits of the case, but he denied a request by the University of Phoenix to dismiss the lawsuit.
Previously, the university paid $78.5-million to settle a whistle-blower lawsuit involving similar accusations by two other former recruiters. But that settlement, reached in December 2009, did not deter the company from continuing to improperly compensate recruiters, the current lawsuit alleges. It says that the institution, among other things, created a sham "performance matrix" for recruiters in order to disguise the fact that it was continuing to pay them based solely on enrollment numbers in violation of federal and state rules.