The U.S. Department of Justice and attorneys general in four states, including California, filed a complaint last week against for-profit college giant Education Management Corp., which operates 14 campuses in the state under the Argosy University and Art Institute brands.
The 122-page complaint contends the Pittsburgh-based for-profit college company illegally paid admissions employees based on the number of students they recruited, regardless of the students' qualifications. The Higher Education Act prohibits colleges and universities that participate in the federal financial aid program from paying commissions, bonuses or other incentive payments to recruiters based on how many students they enroll.
The exact amount of California's claim is still unclear, but state Attorney General Kamala Harris is suing Education Management for all the state financial aid the colleges have received since 2003, mainly in the form of Cal Grants. The state is also seeking $10,000 per false claim.
. . .
The lawsuit says the company created a "boiler room"-style sales culture in which recruitment of students was the sole focus. A guide for assistant directors of admissions includes a points-based salary chart, described internally as "the matrix." The chart rewards a set number of points for each type of student recruited in one year.
The company relentlessly monitors each recruiter's enrollment statistics, the complaint states. Admissions personnel who recruited the most students in a year won all-expenses-paid "President's Club" trips to Puerto Vallarta and Cancun in Mexico and Las Vegas.
Education Management also instructs its sales force to enroll applicants regardless of whether they can write coherently and even if they appear to be under the influence of drugs, the complaint says.…
* * *I did some digging. Sure enough, I reported the following in early March, 2009:
[O]n Saturday, members of the Irvine Valley College community received a curious email from Dean Elizabeth Cipres (Counseling and Library Services). She wrote:
I have attached a Lunch and Learn invitation from Argosy University that will be held in our Career & Transfer Center … on Wednesday, March 25, 2009 at 11:30 am to 1:00 pm. Also if you are considering a doctorate program, I have attached the recently updated doctoral matrix for your review.
Liz CipresLike Raghu Mathur, Cipres has a gig at Argosy.
I made a big point of Argosy's unsavoriness back then. I don't think it had any effect. We're still promoting the crap out of these for-profits.