A for-profit education company has agreed to pay $13 million to settle whistleblower allegations that it submitted false claims to the Department of Education for federal student aid. Education Affiliates (EA) of White Marsh, Maryland provides post-secondary education training programs in several professions at the company’s 50 campuses throughout the U.S.
Five whistleblowers filed suit against EA, claiming that employees at the company’s All State Career campus in Baltimore were altering admissions test results in order to admit unqualified students. These employees were also accused of creating fraudulent high school diplomas and falsifying students’ federal aid applications. These claims resulted in criminal convictions for two All State Careers admission representatives and a test proctor.
The whistleblower lawsuits further contend that multiple EA schools were referring prospective students to “diploma mills” (unaccredited higher education institutions offering illegitimate diplomas for a fee) in order to qualify for federal student aid. EA campuses in Birmingham, Houston and Cincinnati also allegedly violated bans on incentive-based compensation for their enrollment personnel, made various misrepresentations concerning graduation and job placement rates, and altered attendance records and enrollment of unqualified students.
Today’s settlement provides repayment of $1.9 million in liabilities that resulted from EA awarding federal financial aid to students with invalid high school credentials that were issued by a diploma mill. As for the five whistleblowers who filed qui tam lawsuits against EA, they will share a reward of $1.8 million.
The Department of Education has made it clear that abusive behavior on the part of for-profit education companies will not be tolerated, and that it will continue to work with the DOJ and other federal agencies to hold post-secondary institutions accountable when they break the law.
The conduct outlined in these whistleblower claims represent predatory conduct that victimizes students and bilks money from taxpayers. Unfortunately, this type of behavior has become all too common among for-profit education companies. We need more people like these whistleblowers who exposed alleged wrongdoing at EA to come forward and report fraud. It is the right thing to do, it saves taxpayer money and can result in a sizable whistleblower reward if the government recovers stolen funds.