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It is pretty apparent that Education Secretary Arne Duncan was close to Education Management Corp. This for-profit company is the second largest in the country. This company recently agreed to make a payment of $95.5 million spread over a period of seven years.

This promised amount was towards a joint state-federal law suit. This lawsuit was initiated against Education Management Corp also known as EDMC for lying to the government and breaking the law. This was pointed out by Arne Duncan who did not go to the extent of saying that EDMC did the same to students.

EDMC faces lawsuit for having defrauded taxpayers through the “high pressure boiler room” scheme for years to the tune o$11 billion in grants and federal student loans. Regarding the fund eligibility, EDMC allegedly lied according to the state prosecutors and Department of Justice. 

In order to dispatch another lawsuit filed by state attorney general group, EDMC agreed to forgive up to $102.8 million student loans disbursed to students who eventually dropped out after enrolling. The charge here is that EDMC lured students to enrol by projecting false job placement statistics.

EDMC schools such as the South University, Brown Mackie College, Argosy University and the Art Institutes are deceiving for financial gain, the federal government, states and students allege whistle blowers. To resolve these allegations, officials referred to the global settlement through separate deals.

As compared to the overall fraud committed by EDMC, the settlement amount is paltry say higher education experts and consumer advocates. For defrauded students, EDMC did not actually provide meaningful relief, they opine.

Experts and advocates are angry over the fact that EDMC is even allowed to dispute the allegations and they feel that this company must come forward and acknowledge their wrong doing.
In the recent trading, this company’s stock reached all time high prices which mean that it has the express ability to pay, Says Loretta Lynch, the Attorney General. Adding fuel to the fire are the two gifts received by EDMC as a part of the settlement.

For its crime lasting years, EDMC will not be affected or be held accountable due to the settlement. The company will continue to access federal student funds and aid. Secondly, our Education Secretary lied that students were never misled by EDMC. To drive home the point, he repeatedly declared his support to EDMC.

Affected and misled students are greatly disadvantaged by Duncan’s actions as they will now not be able to petition Duncan’s department for debt discharge. This is because, EDMC has not admitted to its crime nor has the Education Department found the company guilty in any manner.

According to David Halperin, a Washington attorney, crime will continue to pay unless such companies are made to pay huge penalties and there is better enforcement. Former EDMC students are burdened with huge debts and Duncan has no intention of cancelling them and this worries some state prosecutors and student advocates. Duncan coyly says that he is open to hearing about any evidence of misrepresentations to students.