WASHINGTON — Education Management Corp., one of the nation’s largest for-profit education companies, has agreed to pay $95.5 million to resolve allegations that it engaged in long-running, illegal recruiting practices in which staffers’ pay was based on the number of students they enrolled.
Attorney General Loretta Lynch said the high-pressure recruiting operations resembled a “boiler room” in which prospective students were targeted regardless of their abilities to succeed.
The settlement represents the largest False Claims Act settlement involving a for-profit educational institution in U.S. history, Justice Department officials said.
EDMC, which draws 90% of its revenue from federal student aid, enrolls 100,000 at its schools Argosy University, the Art Institutes, Brown Mackie College and South University.
Lynch said the company’s actions represented a “betrayal of trust and violation of federal law.”
EDMC President and Chief Executive Officer Mark McEachen said in a written statement that the company was “pleased” to have resolved the civil claims.
“Though we continue to believe the allegations in the cases were without merit, putting these matters behind us returns our focus to educating students,” McEachen said.