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Minn. AG Sues For-Profit College Company

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ST. PAUL, Minn. (AP) — The Minnesota attorney general has joined a lawsuit against the country’s second-largest for-profit college company, alleging that two of its schools in the state illegally collected taxpayer-financed financial aid.

Attorney General Lori Swanson announced the lawsuit Thursday against Education Management Corp. and its Argosy University and Art Institutes International schools.

She alleged that the colleges were ineligible to receive the state financial aid because the company paid incentives to its recruiters based on the enrollment of new students, in violation of federal law.

Swanson’s office joined the U.S. Department of Justice and five other states in the lawsuit filed this summer against EMC in federal court in Pennsylvania.

Swanson said the lawsuit aims to recoup public aid payments under the Minnesota False Claims Act. She said Minnesota has wrongly paid almost $1.3 million to the two for-profit colleges covering more than 1,200 students since the law took effect in July 2010.

She said the lawsuit probably won’t help people like Dustin McIntyre, a 19-year-old from a St. Paul suburb, who said he went online last year to learn more about the Art Institutes International Minnesota, touching off a flood of phone calls from a recruiter.

On a school tour, he said school officials began selling him hard on financial aid plans before he even decided on applying for admission.

“They were talking numbers with me before they even talked about the number on my ACT score,” McIntyre said Thursday. He signed up mere days before the academic quarter began and now has regrets.

Less than a year later, he said he’s $13,000 in debt and is worried that his class credits wouldn’t be recognized if he tried to transfer to another school offering a digital film production degree.

On Thursday, the company released a statement from spokeswoman Bonnie Campbell — a former Iowa attorney general and former member of the Iowa Board of Regents, which oversees the state’s universities.

“Education Management Corporation believes the state of Minnesota’s pursuit of this case is wrong,” Campbell said, adding that the company believes its compensation plan is legal.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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