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Education Management enters settlement with DOJ, will forgive debts

Staff writer |
Education Management has reached agreements with 39 state attorneys general and the District of Columbia to end state-level investigations into its recruiting practices.

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Concurrently, EDMC reached a settlement agreement with the U.S. Department of Justice, 12 state attorneys general, the District of Columbia and relators resolving all known cases filed under federal and state False Claims Act (FCA) provisions.

EDMC worked with state attorneys general to develop new, more transparent recruiting and disclosure standards, which the company hopes will serve as a model for higher education.

Under the terms of the consent judgments with the state attorneys general, EDMC will provide prospective students with additional disclosures, which will provide more transparency during the recruiting process.

Students interested in attending EDMC's post-secondary institutions will:

Receive an easy-to-read, single-page disclosure that details important information like graduate placement rate and student financial impact;

Be able to use an interactive tool which will personalize and assist in their higher education decisions;

Receive no-cost orientation when they start as an undergraduate at one of EDMC's institutions; and

For undergraduate students, have the ability to withdraw with no tuition obligation up to 7 days after their first class at on-campus schools and up to 21 days after the start of the term at online programs (if they have less than 24 credits).

EDMC will also implement additional internal controls governing admissions representatives.

For example, EDMC will have all telephone calls and online chats recorded, unless the student requests otherwise, between students and admissions and financial services representatives and use call analytics to validate that contacts with students are handled appropriately.

Furthermore, EDMC will forgive the debts owed to its institutions by qualified former students.

Specifically, former students who enrolled with less than 24 hours of transfer credit and who left within 45 days of the first day of their first term, and whose final day of attendance at an EDMC school was between January 1, 2006, and December 31, 2014 will qualify for loan forgiveness from the loans that EDMC institutions made to them.

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