A federal appeals court on Wednesday overturned a lower court ruling that dismissed a False Claims Act lawsuit in which two former employees accused a for-profit college of falsifying grades to keep students eligible for federal financial aid. The ruling by the U.S. Court of Appeals for the Eighth Circuit means that Heritage College, a for-profit chain that prepares health care workers, will have to defend itself in federal court against charges that it fraudulently induced the Education Department to give it funds by falsely promising to keep accurate student records when it was purposefully manipulating them.
Ernesto Perez, the owner of the defunct Dade Medical College in Miami, was charged with two misdemeanor counts related to the abrupt closure of eight of the college's campuses, according to The Miami Herald.
About 2,000 students and 400 employees were affected by the closure. Under state law, college owners must notify Florida's Commission for Independent Education at least 30 days before closing. Investigators found that Perez notified the state, students and later the commission within a five-hour time frame.
The college closed in October 2015 after receiving increased scrutiny from federal officials.
Career Point College, a for-profit institution in San Antonio, notified students and faculty members that it is shutting down, The San Antonio Express-News reported. A letter from the college said that three long-term employees had "collaborated to violate the rules related to student aid funds." After the college reported these violations to the U.S. Education Department, the department rejected a plan by the college to repay funds it received "inappropriately" and restricted the use of federal funds at the college, forcing the shutdown.
The U.S. Department of Education announced today that it reached a settlement with DeVry University over a charge that the for-profit institution used unsubstantiated job placement claims in recruitment and advertising materials.
Last year, the department requested that DeVry provide data and information to back the institution’s claim that, since 1975, 90 percent of its graduates were employed in their field of study within six months of graduation. The Federal Student Aid Office determined that DeVry could not provide sufficient evidence to support that claim.
The settlement requires DeVry to post a five-year letter of credit no less than $68.4 million. The institution must also take steps to rid the internet of the “since 1975” marketing language on its own website and on websites not under its direct control.
“The settlement in no way hinders DeVry University’s ability to serve current or future students,” said a statement from the institution’s parent company, DeVry Education Group. “DeVry University is pleased to have resolved the notice in full cooperation with the department and continues to cooperate with the department to resolve the remainder of its August 2015 investigation. The settlement allows DeVry University to continue communicating its strong student outcomes while providing assurances regarding the extent of its graduate employment data.”
DeVry is still facing a Federal Trade Commission lawsuit over its job placement rates and claims.
Walden University's online Ph.D. programs are under review by the Minnesota Office of Higher Education, according to NBC News. The university is a for-profit based institution that is also the U.S. flagship of Laureate Education.
The review is following news reports that some students felt victimized by the institution's practices and were forced to take on large student loans. Laureate has faced public scrutiny in recent months after it was revealed that former President Bill Clinton received nearly $18 million in payments from the company as its honorary chancellor. Clinton stepped down from the position last year prior to Hillary Clinton's presidential run.
Submitted by Paul Fain on October 7, 2016 - 3:00am
B Lab is a nonprofit group that issues a seal of approval to companies across 120 industries that adhere to voluntary standards based on social and environmental performance, accountability and transparency. After a two years of work, the group on Friday released a new benchmarking tool for colleges. The voluntary standards are designed to enable comparisons of both nonprofit and for-profit institutions.
"B Lab recognizes that the cost and outcomes of higher education, particularly regarding for-profit institutions, have become increasingly controversial, but regardless of structure institutions should put their students’ needs first," Dan Osusky, standards development manager at B Lab, said in a written statement. "We see our role as the promoter of robust standards of industry-specific performance that can be used by for-profits and nonprofits alike to create the greatest possible positive impact and serve the public interest, ultimately by improving the lives of their students."
A committee of experts, working with HCM Strategists and with funding from the Lumina Foundation, devised the standards. Laureate Education, a global for-profit chain, already uses the assessment tool.