Minn. AG Sues For-Profit College Company

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 This material may not be published, broadcast, rewritten or redistributed.)

  • Dale Gribble

    Typical socialist move by our treasonous DFL AG. They must do everything they can to destroy free enterprise and Liberty.

    • Mike

      Don’t worry Dale, they will continue to honor the degree you received in the mail from one of these two enlightened universities and besides, you always have that Mensa score you brag about every time you show up at the trailer parks rec.room.

    • tonkahlm

      Oh so you think it’s ok to break federal law? The suit has nothing to do with political affiliations. Mike is right on.

  • Maggie Q.

    I read a little more into this lawsuit elsewhere just now – I don’t see the connection in this article between the lawsuit claim (focused on recruiter incentives), and the transfer of credits/student loan debt/quality of the education these schools provide? Seems like the AP and Swanson and the DOJ has it out for this company for some other reason.

    • Chuck

      M Q :

      The lawsuit is about the Fd Law violation of their recruiter incentives…

      The rest is unrelated, so what is your point?

      Why are you asking about a connection? There isn’t any!

      • Maggie Q.

        There should be responsible connections made, when it comes to news reporting and claims made by state AGs.

  • amber

    I went to the Art Institutes International, and they promised to help me find a job in my field, and pushed financial aid on us as well. They only went over how to handle our loans when we were about to graduate. It was very overwhelming, and if i knew how expensive it was, I probably wouldn’t have went. now I can’t find a job in my field, and cannot afford to pay my student loans. They hassel me constantly, and I just think it’s very unfair.

    • John

      I have a brother-in-law who went to the the Minneapolis Business College and they promised him the same thing. After they took his money, he never heard back about job interviews or anything. No jobs would respect his worthless degree and he is currently working at Lean Chin. He can’t go back to school because no legit school will accept any of his credits. Problem is, he would be considered a transfer student and thus not much scholarship opportunity.

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