The Education Management Corporation, dinged in a Frontline program this week for allegedly stampeding students to enroll at its Argosy University by pushing their “hot button,” now faces a whistle-blower lawsuit alleging that student recruiters at its South University Online had been paid based on how many students they drummed up, according to the Pittsburgh Tribune-Review. The practice, if proven, would be a violation of federal student-loan law and could be costly to the university — the False Claims Act, under which the lawsuit was filed, calls for triple damages. The allegation, from a former employee, doesn’t specify how much money is at stake, but the university is disclosing the lawsuit in a Securities and Exchange Commission filing today, suggesting it could have a material affect on its finances.
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12 Responses to Whistle-Blower Alleges That For-Profit College Paid Incentives to Student Recruiters
disembedded - May 7, 2010 at 2:44 pm
Yes, this is hardly news to people who really know about allegations of corruption at EMC and Argosy. I kept quiet when the Chronicle published a glowing report on 2/7/2010. But the Chronicle really should have looked into the Chicago Sun-Times investigations of fraud at Argosy/Chicago just a few years ago.
john_d_foubert_phd - May 7, 2010 at 5:18 pm
Seriously. Time for some more investigative journalism from y’all on this issue. The for profits are running rough shod on students, tax-payers, and higher education as an institution. Y’ll need to get on the ball.
glapidus - May 8, 2010 at 4:14 pm
The recruiters are relentless. Once theyhave your contact information, the calls and e-mails do not stop. For eager, vulnerable potential students who have had other doors closed to them, the promises that are made are extremely seductive.
handley - May 10, 2010 at 8:24 am
Would anyone care to hear the facts before weighing in?
willynilly - May 10, 2010 at 9:15 am
Soon this recent outbreak of “deap throating” be some folks with a conscience will turn into a pandemic of truth admissions by current or past employees of the for-profits. Then the public will know for certain the extent of the pre-planned scams and schemes routinely hoisted upon the public by most of these rouge “institutions”.
willynilly - May 10, 2010 at 9:16 am
Sorry for the typo. It is “deep throating”.
washingtonwarrior - May 10, 2010 at 9:56 am
Does anyone know where the Dept. of Ed. has information on recruiters? I would like to read the actual law.
whm3113 - May 10, 2010 at 10:48 am
You can find the regulation here.http://frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi?TITLE=34&PART=668&SECTION=14&TYPE=PDF&YEAR=2009
whm3113 - May 10, 2010 at 10:56 am
668.14(b)(22)(i) It will not provide any commission, bonus, or other incentive payment based directly or indirectly upon success in securing enrollments or financial aid to any person or entity engaged in any student recruiting or admission activities or in making decisions regarding the awarding of title IV, HEA program funds, except that this limitation does not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive title IV, HEA program funds.
ellenhunt - May 10, 2010 at 12:37 pm
Shut them down. Give all the students their money back, and get them an opportunity to enroll at a real university.
washingtonwarrior - May 10, 2010 at 3:04 pm
What about schools with tiered salaries? It’s not a bonus, rather raises based on enrollment numbers are built into yearly salaries.
kellybauman - January 24, 2011 at 4:12 pm
What people don’t seem to understand is that advisors are SCRIPTED SALES PEOPLE. Sales managers roam the aisles of high volume call centers. They enroll homeless people. And whether or not they’ve formally ended enrollment incentives, you will be let go if you don’t enroll students. It’s that simple.
There is no debate on the subject of what I described, and it rampant. Also, don’t expect anything to happen until 2012; that’s the earliest any 90-10 or gainful employment law will be enforced.
So bend over for another year, and try to get it out of your mind that someone’s picking your pocket and creating the next subprime bubble.
So depressing.