Gigats.com is an education lead-generation company based in Orlando, Fla., that claims to prescreen job applicants for employers. However, the company was instead gathering information for for-profit colleges and career training programs, according to the FTC.
The federal agency alleges that consumers who provided Gigats with personal information typically requested in a job application were directed to call "employment specialists" who steered consumers to enrolling in education programs that paid Gigats for consumer leads.
"The FTC alleges that these so-called advisers falsely claimed to be independent education advisers but in fact only recommended schools and programs that had agreed to pay the defendants, typically from $22 to $125, for consumer leads that met their enrollment requirements," according to a news release.
A proposed court order imposes a $90.2 million judgment that will be suspended upon payment of $360,000. Gigats is operated by Expand Inc., which also does business as EducationMatch and SoftRock Inc.
Apollo Education Group shareholders will have more time to vote on a proposed change in ownership for the parent company of the University of Phoenix.
The vote, which was scheduled to take place today, has been delayed until May 6 to give shareholders more time to make their decision. The proposal would sell the company to a consortium of private investors for $1.1 billion.
Of the votes that have come in so far, "nearly 58 percent voted for the proposed transaction," according to an Apollo news release.
"We are gratified that the shareholders who voted in favor of the transaction recognized that this offer represents the best available outcome," said Greg Cappelli, chief executive officer of Apollo, in a statement.
In a letter to shareholders on Tuesday, the company recommended they vote in favor of the proposal. If they didn't, the company would explore other options, including selling Phoenix separately.
A New York judge ruled Tuesday that the state's attorney general's case against Trump University will go to trial, according to an ABC News affiliate.
Donald Trump, the front-runner for the Republican presidential nomination, could testify at the trial, which could be held this fall.
The case is part of an ongoing lawsuit brought by New York Attorney General Eric Schneiderman, which alleges that Trump University made false and deceptive claims to students. The unaccredited institution didn't operate as a traditional school or job training program, but more of an opportunity for students to seek advice from purported experts in real-estate and business.
Capella Education Co. last week announced the purchase of Hackbright Academy, a nondegree coding boot camp for women, for $18 million. Capella, a publicly traded for-profit chain, said in a written statement that the San Francisco-based Hackbright’s "mission to increase female representation in the tech workforce through education, mentorship and community is a strategic fit with Capella’s focus on providing the most direct path between learning and employment, and Capella’s historic base of largely female students."
The purchase is the fourth major investment by a for-profit in a boot camp, which tend to offer postcollege training in immersive, 12-week sessions that cost around $12,000. Kaplan Inc. two years ago bought Dev Bootcamp. Apollo Education Group made a "significant" investment in the Iron Yard last year. And Strayer Education Inc. bought the New York Code and Design Academy this year.
BMO Capital Markets, which analyzes the for-profit sector, said boot camps could help for-profit chains lessen their reliance on federal financial aid while also reaccelerating the companies' growth.
Wright Career College, a small, Kansas City-based career college chain, closed its five campuses last week and filed for bankruptcy. The college said in a written statement it had sought to bring in an outside group to gradually phase out the campuses, but that effort failed. Wright emailed its students about the closure on Thursday night, The Kansas City Starreported.
The chain included campuses in Kansas, Nebraska and Oklahoma. It enrolls about 1,400 students, according to federal data.
“We are saddened by these events,” said John Mucci, Wright's president. “From our beginning in 1921 until our closure, we have always operated with the focus of putting the interests of our students first. It is unfortunate our students cannot complete their programs at Wright Career College. I would like to thank our employees for their tireless dedication and commitment in helping our students achieve their educational and career goals.”
The University of Phoenix laid off 470 employees on Tuesday, according to The Arizona Republic. The move comes after Phoenix's parent company, Apollo Group, announced in February that it was in the process of selling the company to a group of private investors for $1.1 billion.
"A significant workforce reduction was announced today in departments across the university. I support the decisions and am gratified by the planning that ensures a seamless student experience with minimal disruption. I am also grateful for the work of our human resources leaders to ensure our colleagues affected by the restructuring receive severance and outplacement services," said Timothy Slottow, president of the for-profit institution, in a statement. "This difficult decision came after careful deliberation and analysis with a focus on streamlined workflow serving fewer students than in years past, improved use of technology and ultimately an approach that ensures our students have the transformative experience that leads to higher retention and improved learning outcomes."
A memo from Yale Law School's Veterans Legal Services Clinic finds that the U.S. Department of Veterans Affairs had the authority to protect veterans from institutions that use deceptive recruiting practices by denying GI Bill funds to those colleges. But the VA and other state approving agencies have failed to do so.
"Although the VA is responsible for overseeing education benefits for veterans, it has been slow to join other agencies in addressing deceptive practices, drawing criticism from congressional and veterans' leaders," said the memo.
The memo prompted Connecticut Senator Richard Blumenthal, a Democrat, to call on the VA to act against deceptive recruitment by predatory colleges.
“The VA has a clear moral and legal obligation to identify fraudulent behavior at schools that enroll veterans,” said Blumenthal. “The VA should also partner with the Federal Trade Commission and other agencies to crack down on predatory for-profit schools so that veterans do not waste their hard-earned benefits on worthless degrees.”
The Florida Senate and House of Representatives have passed a bill to close a loophole legislators created to allow the state to license unaccredited for-profit degree programs for physical therapy assistants, The Miami Herald reported. The move follows a Herald series that noted that many graduates of the programs were unable to find work and left with large debts.