Union to sponsor panel on the dangers of for-profit colleges

By | 01.30.12 | 2:43 pm

The Education Management Corporation logo (Pic via lovemytool.com)

The Service Employees International Union will be sponsoring a panel discussion and nationwide webcast on “the dangers of for-profit colleges” this Thursday. “Good for Wall Street, Bad for Students” will concentrate specifically on the Art Institutes, Argosy University, Brown Mackie College and South University — all of which are owned by Pittsburgh-based Education Management Corporation.

Education Management Corporation and its 105 schools (including nine in Florida) were all named as defendants in an $11-billion lawsuit brought by the Department of Justice last August. The suit, filed under the False Claims Act, was driven by questionable student recruitment practices at the for-profits.

According to the Service Employees International Union, recruitment practices are “only the tip of the iceberg of what’s wrong with for-profit colleges,” as the schools are often accused of targeting those with low-incomes, as well as minorities and veterans.

Whistleblowers at for-profits like Kaplan, University of Phoenix and Everest University have alleged that the schools engage in illegal recruitment practices that lead to hundreds enrolled in degree programs that never lead to salaried jobs.

The Department of Justice filed suit against the company that owns the schools, Education Management Corporation, alleging that it fraudulently collected $11 billion in government aid by recruiting low-income students between July 2003 and June 2011. According to the action, the company collected $2.2 billion of that money in 2010 alone — amounting to almost 90 percent of its revenue for that year.

According to a press release, Thursday’s panel will examine “every phase of the for-profit student experience—recruitment often followed by high costs, poor instruction, dropping out, weak job-placement programs, excessive debt loads, and default on loans.”

Panelists include professors from the University of Miami School of Law, SUNY-Albany and several former Education Management employees.

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