For-profit college operator Education Management Corporation will forgive more than $95 million in student loans to 80,000 former students, including almost 6,000 in Georgia, as part of a settlement agreement regarding the company’s recruitment practices.
EDMC, based in Pittsburgh, operates 110 schools in 32 states and Canada through four education systems: Argosy and South universities, The Art Institutes and Brown Mackie College.
The settlement announced Monday by the U.S. Department of Justice ends investigations several state attorneys general began after numerous complains from current and former EDMC students, and settles a lawsuit that accused the company of illegally paying bonuses to admissions recruiters based on the number of students they enrolled.
“This civil enforcement action holds EDMC accountable for what we allege were unfair and deceptive recruitment and enrollment practices,” Georgia Attorney General Sam Olens said in a statement. “Our investigation gave us a pretty clear picture of how EDMC lured prospective students into its programs and how many students left the program with unfulfilled promises and oftentimes tremendous debt.”
As part of the agreement, EDMC does not admit the conduct the attorneys general alleged. The company does agree to reform its recruiting and enrollment practices, including providing an orientation program for incoming students and a free online tool to help students make financial decisions while enrolled. Earlier this year EDMC announced it was closing 15 of its Arts Institute campuses, including the Decatur location which enrolled about 400 students.
The agreement is expected to provide an average of $1,370 per person in loan forgiveness. The 5,826 former students in Georgia will see more than $6.8 million forgiven, according to information from Olens’ office.
About 300 private and for-profit colleges operate in Georgia and are regulated by the Georgia Nonpublic Post Secondary Education Commission.
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