College Used Strippers as Student Recruiters, Feds Say

The legal pursuit of a defunct for-profit college in Florida and its former owner gets wilder with each filing. A new civil suit filed by a U.S. attorney and the state's attorney general, Pam Bondi, alleges that FastTrain College defrauded the federal government with false claims for millions of dollars in financial aid.

The seven-campus for-profit, which offered credentials in IT and medical professions, closed in 2012. In October the Federal Bureau of Investigation arrested Alejandro Amor, the college's former owner, and three of its admissions representatives. They were charged with the theft of government funds. FastTrain allegedly submitted fraudulent aid claims for 1,300 students, netting $6.5 million.

According to the civil suit, however, the college received more than $35 million in Pell Grants and other federal aid. And, as The Miami Herald reported, the lawsuit said one campus "hired attractive women and sometimes exotic dancers and encouraged them to dress provocatively while they recruited young men in neighborhoods to attend FastTrain."

Amor, who owned a $2 million home, 54-foot yacht and private plane, faces multiple charges that could include jail time. 

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New President of Charleston School of Law Quits After 8 Days

Maryann Jones, incoming president of the Charleston School of Law, resigned after just eight days on the job, according to The Post and Courier, a Charleston newspaper. The law school's possible sale to a for-profit chain, the InfiLaw System, has been a source of controversy. Jones said in a written statement that she decided not to sign her job contract because of "the level of vitriol, with all sides making me a lightning rod for an unfortunate situation that was not of my making."

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Rep. Kline Will Again Lead House Education Committee

U.S. Representative John Kline of Minnesota, the Republican who leads the House education committee, will keep that post in the next Congress.

As was expected, Kline's Republican colleagues voted Wednesday to officially name him as the committee's chair for the next two years.

Kline said in a statement that "strengthening higher education" was among the "national priorities that will remain at the forefront of the committee's agenda."

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Thurgood Marshall Fund Partners With U. of Phoenix

The Thurgood Marshall College Fund and the University of Phoenix this week announced an alliance through which students at historically black colleges and universities (HBCUs) will be able to take online courses from the for-profit chain to supplement their on-campus studies. Phoenix and the scholarship fund will subsidize the online courses so participating students at HBCUs will not have to pay more than their usual, semester-based tuition and fees. "This opportunity will give HBCUs access to online learning not previously available,” said Johnny C. Taylor Jr., the fund's president and CEO, in a written statement.

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For-Profit Groups Sue to Block Gainful Employment Rules

The for-profit sector's primary trade group on Thursday filed suit in federal court to block gainful employment regulations, which the U.S. Department of Education unveiled last week. A federal judge in 2012 halted a previous attempt by the Obama administration to enact rules for vocational programs at for-profits, community colleges and other institutions. The judge said the department failed to establish its reasoning behind one of the metrics. However, the judge also ruled that the department was within its rights with the overarching thrust of the regulations.

The new lawsuit from the Association of Private Sector Colleges and Universities (APSCU) alleges that gainful employment "repeats and exacerbates" problems that led to its previous version being held up in court, calling the rules arbitrary. In a written statement, the department said it is confident that it is "within its legal authority in issuing gainful employment regulations that will protect students and taxpayers’ investments by bringing more accountability and transparency to career training programs."

Separately, a trade association representing for-profit colleges in New York filed its own federal lawsuit Thursday over the gainful employment regulations. That complaint by the Association of Proprietary Colleges echoes some of the arguments in the APSCU lawsuit: that the rule sets arbitrary standards and goes beyond the bounds of federal law. 

But the New York lawsuit also raises issues about the rule that have not yet been litigated. For example, the group argues that the Obama administration's regulation conflicts with the standards for for-profit colleges set by New York state regulators. In addition, the group claims the rule violates its due process rights because its members could be stripped of federal aid on the basis of graduate earnings data that it would not be allowed to challenge. The group says that there are serious flaws in how the Education Department plans to obtain graduate earnings data from Social Security Administration. 

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"This Week": Gainful Employment and the Future of For-Profit Colleges

On the latest "This Week," Inside Higher Ed's free weekly news podcast, Ben Miller of the New America Foundation and Vickie Schray of Bridgepoint Education join Inside Higher Ed's Doug Lederman to discuss the new gainful employment regulations. Sign up here for notification of new editions of "This Week."

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Wisconsin Sues Corinthian

Wisconsin's attorney general, J.B. Van Hollen, this week sued Corinthian Colleges over allegations that the for-profit chain engaged in "unfair, false, misleading and deceptive trade practices." The struggling Corinthian, which is trying to sell or close its 107 campuses, briefly operated an Everest College campus in Milwaukee. The lawsuit alleges that the campus, which closed after just two years, made false claims about job-placement rates.

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For-profit chain leaves the stock market to save money on public disclosures

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Education Management Corp. goes private as its enrollment and revenue slump, raising questions about the end of an era for publicly traded chains with disparate holdings.

Federal Policy and the Skills Gap

The relationship between federal policy and the skills gap is misunderstood, according to a new report from the New America Foundation. The paper looks at five "policy gaps" in the Higher Education Act, the law governing federal student aid programs, that could be closed to build stronger connections between learning and work. Those gaps include an excessive focus on institutional and internal indicators of quality; a lack of attention to student employment outcomes; and aid eligibility requirements that fall short of the needs of adult learners, according to the report, which was authored by Mary Alice McCarthy, a senior policy analyst at the foundation who previously worked for the U.S. Department of Labor and the Education Department.

More for-profit colleges would fail 90/10 rule if veterans benefits are included, analysis shows

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As lawmakers contemplate change to the federal rule that caps for-profit colleges' receipt of student aid to include veterans benefits, analysis shows that many would have trouble complying. 


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