Online for-profit colleges compared to ‘predatory lending industry’ in whistleblower lawsuit

South University recruiters were told to target low-income families.

Allegations brought by a former admissions manager at an online for-profit college describe a systematic attempt to deceive incoming students into signing up for pricey college loans while the school overstated students’ success in finding jobs after graduation.

The whistleblower lawsuit is the latest legal blow to Education Management Corp. (EDMC), a Pittsburgh-based for-profit college company that drew scrutiny from the Department of Justice last year after a former employee charged that EDMC violated federal law by awarding bonuses to school recruiters based solely on the number of students they enrolled.

The latest whistleblower suit, made public March 15, accuses EDMC of defrauding U.S. taxpayers by enrolling “as many students as possible for as long as possible to maximize financial aid” while targeting “a troubled population, including … the poor, the undereducated, the homeless, those who were the first in their families to attempt higher education, those with criminal records … and those living in shelters and halfway houses.”…Read More