Obama administration crackdown forces $95 million settlement from for-profit college chain

Cracking down on for-profit colleges may be the single best thing the Obama administration has done on education, and it’s gotten another win on that front. The Education Management Corporation, the nation’s second-largest for-profit chain, has agreed to pay a $95.5 million settlement in a case over its recruitment practices.

"Recruiters were pressuring students, supervisors were pressuring recruiters, managers were pressuring supervisors, all the way up the chain," [attorney Harry] Litman said. "The whole operation was designed with one goal in mind: to recruit anyone with, as they put it at EDMC, ‘a pulse and a Pell’ — a federal student-aid Pell Grant." […]

Education Management, partly owned by Goldman Sachs, allegedly violated a federal ban on per capita incentive compensation at schools that take part in government financial aid programs.

"Operating essentially as a recruitment mill, EDMC’s actions were not only a violation of federal law but also a violation of the trust placed in them by their students — including veterans and working parents — all at taxpayer expense," Attorney General Loretta E. Lynch said in a statement.

If you’re thinking, “Why have I never heard of this Education Management Corporation if it’s so big,” think of its brand names like The Art Institutes, Brown Mackie Colleges, and South University. Between 2003 and 2011, EDMC schools raked in $11 billion in federal education funding. And please, please don’t miss the part where it’s partly owned by Goldman Sachs.

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