11.16.15

Durbin Statement on DOJ, ED, State Attorneys General Settlement with EDMC

Senator to meet with interagency federal taskforce overseeing for-profit college industry later this week

[WASHINGTON, D.C.] – U.S. Senator Dick Durbin (D-IL) released the following statement today after the Department of Justice, Department of Education, and state Attorneys General announced an agreement to settle litigation with Education Management Corporation (EDMC) over the company’s illegal use of incentive compensation for recruiters and deceptive and misleading recruitment practices. Under today’s agreement, EDMC will pay $95.5 million to the federal government and states, including $1.9 million to the State of Illinois. 

   

“EDMC’s ‘recruitment mill’ swindled federal taxpayers out of nearly $11 billion over the course of more than 10 years and lured thousands of students into taking on mountains of federal student loan debt for a worthless diploma,” Durbin said. “Where’s the accountability for the executives who ran this scheme and ran away with our tax dollars?”

    

Today’s agreement comes amid a string of bad news for the for-profit education industry which is reeling from public and regulatory backlash over widespread abuses and exploitation of students.  Last week, Westwood announced it would suspend enrollment nationally after years of investigations and settlements involving its recruitment tactics and placement figures. In light of these and other developments within the industry, Durbin will meet later this week with the members of the interagency committee tasked with coordinating federal oversight of for-profit colleges.

   

Earlier this month, Durbin led five of his colleagues in a colloquy on the Senate Floor to highlight unfair and deceptive for-profit college industry practices and the resulting increase in oversight of the industry by federal, state and local agencies. His remarks can be accessed on his YouTube page. 

   

Since the collapse of Corinthian Colleges, Incorporated, the for-profit college industry is experiencing a long overdue reckoning as state and federal investigations and lawsuits against the largest companies continue to accumulate.

   

  • ITT Tech is under investigation by at least 18 state Attorneys General and the U.S. Department of Justice and is being sued by the New Mexico Attorney General, the Consumer Financial Protection Bureau, the Securities and Exchange Commission.

   

  • Career Education Corporation is under investigation by 21 state Attorneys General.

   

  • Other major for-profit college chains such as Apollo, DeVry,and Kaplan are also facing additional regulatory scrutiny.