The governments’ complaint says the company, which offers classes online and at 105 locations in 32 states and Canada, repeatedly made false statements to conceal its practices and receive $11 billion in federal and state financial aid.
The complaint alleges student enrollment was the sole focus of its compensation system and that the company had recruiters use high-pressure sales techniques such as playing on an applicant’s psychological vulnerabilities and inflating claims of career placement opportunities to enroll students regardless of ability.
A statement issued by Education Management says federal regulations issued in 2002 allow companies to consider enrollment in compensating admissions officers as long as it isn’t the sole factor considered. The statement says the company’s plan required consideration of five “quality factors” along with enrollment numbers to determine salary.
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