The for-profit education company Education Management Corporation (EDMC) will pay $95.5 million, including $1.9 million to the state of Illinois, to settle litigation over allegations that the company used deceptive recruitment and enrollment practices.
The settlement was announced Monday by the U.S. Justice and Education Departments and state attorneys general, including Illinois Attorney General Lisa Madigan.
A loan-forgiveness agreement with EDMC was also announced by government officials on Monday, under which the company must “provide $102.8 million in outstanding student loan debt relief held by more than 80,000 former students nationwide,” according to Madigan’s office.
Some 2,700 Illinois students will see over $3 million in loan debt relief as part of the settlement, which further requires that EDMC “provide disclosure to students about the true cost of the school and expectations for job placement after graduation,” reads a news release from Madigan’s office.
The agreement also “bans the school from making misrepresentations to prospective students, prohibits enrollment in programs that lack the programmatic accreditation required for state licensure or required for employment by the bulk of employers, and institutes an orientation period when new students can withdraw with no financial obligation.”
EDMC operates 110 schools in the United States and Canada as part of the Argosy University, Art Institute, Brown Mackie College and South University systems.
Locally, EDMC runs the Illinois Institute of Art in Chicago, Schaumburg and Tinley Park as well as Argosy University locations in Chicago and Schaumburg.
“EDMC will be held accountable for deceptive recruitment and enrollment practices that were unfair and misleading to Illinois students,” Madigan said in a statement. “The settlements will provide former students with debt relief, recoup money that was fraudulently obtained from the state, and help ensure the company will make substantial changes to its practices for future students.”