Education Management could face a hefty settlement.
A large for-profit education company has asked a judge to throw out a Department of Justice lawsuit that claims it used improper sales tactics to lure unqualified students and the billions of dollars in financial aid they bring.
Education Management Corp. runs more than 100 higher-education programs across the country, offering diplomas and degrees in fashion, culinary arts, business and other fields, some through online courses.
A whistleblower lawsuit backed this year by the Department of Justice accuses the company of paying illegal incentives to recruiters to sign up students, in violation of a 1992 law that bans such practices.
The company received $11 billion, nearly all its revenue, from student financial aid from 2003 through this year, the government’s lawsuit said.
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The company, in its response Wednesday, said the law prohibits schools from considering only enrollment figures when setting an admission officer’s pay.
However, the company said, it also weighs five other “quality” factors: job knowledge, business ethics, professionalism, customer service and initiative.