For-Profit School Operator to Pay $95.5M to Settle U.S. Lawsuit

WASHINGTON — The Obama administration has reached a $95.5 million settlement with a Pittsburgh firm that runs for-profit trade schools and colleges.

The Justice Department settlement resolves allegations that Education Management Corp. used enrollment incentives to pay its recruiters and exaggerated its career-placement ability.

The government says the firm relied on deceptive recruiting tactics to sign up students it knew were unlikely to succeed or finish its programs.

Attorney General Loretta Lynch says the company acted as a “recruitment mill” and violated students’ trust.

The company faces financial and regulatory troubles. Eight directors resigned earlier this year as the firm restructured to cut its debt.

The settlement resolves a consumer fraud investigation brought by a coalition of attorneys general and separate whistleblower lawsuits.

Advertisements