Rutledge: For-Profit Higher Education Company to Change Practices, Forgive LoansMon, Nov 16, 2015
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced that a for-profit higher education company, Education Management Corp. (EDMC), will significantly reform its recruiting and enrollment practices, and forgive more than $703,000 in student loans for approximately 800 former college students in Arkansas, through an agreement with Rutledge and a group of State attorneys general.
“Education Management Corp. used unfair and deceptive enrollment practices in providing loans to Arkansas students, said Attorney General Rutledge. “These loans, backed by Arkansas taxpayers, were destined to fail. I am pleased this agreement provides needed relief to a large number of former students in Arkansas who have been affected, and it requires Education Management Corp. to make numerous changes to protect future students.”
The agreement with attorneys general in 39 States plus the District of Columbia, through a consent judgment to be filed in Pulaski County Circuit Court, mandates added disclosures to students, including a new online financial disclosure tool; bars misrepresentations to prospective students; prohibits enrollment in unaccredited programs; and institutes an extended period when new students can withdraw with no financial obligation.
EDMC, based in Pittsburgh, Pennsylvania, operates 110 schools in 32 States and Canada through four education systems, Argosy University, The Art Institutes, Brown Mackie College and South University.
Nationwide, the agreement requires the for-profit college company to forgive $102.8 million in outstanding loan debt held by more than 80,000 former students.
Those who will receive automatic relief related to outstanding EDMC institutional loans must have been enrolled in an EDMC program with fewer than 24 transfer credits; withdrawn within 45 days of the first day of their first term; and their final day of attendance must have been between Jan. 1, 2006 and Dec. 31, 2014.
The agreement is expected to provide an average of $1,370 per person in loan forgiveness.
The agreement will also put in place a significant online financial disclosure tool required for all prospective students who utilize federal student aid or loans. The impending system, called the Electronic Financial Impact Platform (EFIP), is currently under the final stages of development by the U.S. Consumer Financial Protection Bureau and State attorneys general.
Based on a prospective student’s individual data, EFIP will produce a detailed financial report that includes the student’s projected financial commitment, living expenses and potential future earnings.
Under the agreement, EDMC must:
- Not make misrepresentations concerning accreditation, selectivity, graduation rates, placement rates, transferability of credit, financial aid, veterans’ benefits, and licensure requirements. EDMC shall not engage in deceptive or abusive recruiting practices and shall record online chats and telephone calls with prospective students.
- Provide a single-page disclosure to each prospective student that includes the student’s anticipated total cost, median debt for those who complete the program, the default rate for those enrolled in the same program, warning about the unlikelihood that credits from some EDMC schools will transfer to other institutions, the median earnings for those who complete the program, and the job placement rate.
- Require every prospective student utilizing federal student loans or financial aid to submit information via the EFIP in order to obtain a personalized picture of the student’s projected education program costs, estimated debt burden and expected post-graduate income.
- Reform its job placement rate calculations and disclosures to provide more accurate information about students’ likelihood of obtaining sustainable employment in their chosen career.
- Be honest with prospective students regarding EDMC’s accreditation for positions that require state licenses.
- Require incoming undergraduate students with fewer than 24 credits to complete an orientation program prior to their first class.
- Permit incoming undergraduate students at ground campuses to withdraw within seven days of the beginning of the term or first day of class (whichever is later) without incurring any cost.
- Permit incoming undergraduate students in online programs with fewer than 24 online credits to withdraw within 21 days of the beginning of the term without incurring any cost.
- Require that its lead vendors, which are companies that place website or pop-up ads urging consumers to consider new educational or career opportunities, agree to certain compliance standards. Lead vendors shall be prohibited from making misrepresentations about federal financing, including describing loans as grants or “free money;” sharing student information without their consent; or implying that educational opportunities are, in fact, employment opportunities.
After receiving numerous complaints from current and former EDMC students, State attorneys general initiated a multistate investigation in January 2014. Attorneys and investigators reviewed consumer complaints, reviewed company documents and interviewed former EDMC employees.
Today, EDMC also agrees to pay a $95 million settlement of a separate federal whistleblower lawsuit under the False Claims Act. In that case, brought by the U.S. Department of Justice on behalf of the Department of Education, the government alleged that EDMC illegally paid incentive-based compensation to its admissions recruiters tied to the number of students they recruit.
Rutledge Announces Lake City Woman Sentenced for Medicaid FraudFri, Nov 13, 2015
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge announced today that a Craighead County woman has been sentenced to three years of probation on a Medicaid fraud charge.
Martha Renshaw, 51, of Lake City pleaded guilty to billing for Medicaid services not provided, a Class C felony. Renshaw must also pay a total of $4,210.95 in restitution and $6,632.85 in fines.
“Medicaid fraud is a serious issue, and investigators and attorneys from the Attorney General’s office continue to work to protect those receiving care,” said Attorney General Rutledge. “Those receiving Medicaid deserve the best care, and I remain committed to making sure those attempting to defraud Arkansans will be held accountable.”
Renshaw was arrested in December as part of an investigation into Allcare Homecare in Jonesboro. Renshaw has already paid nearly half of the required restitution to the Arkansas Medicaid Program Trust Fund. Renshaw pleaded guilty in Pulaski County Circuit Court on Tuesday.
Rutledge Celebrates Veterans DayWed, Nov 11, 2015
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today released a statement in recognition of Veterans Day.
“Today, we pause to celebrate and thank the brave men and women who have worn our nation’s uniform for generations to heroically protect our freedoms at home and abroad. Their courage and commitment is an inspiration to us all. I join with all Arkansans to express my sincere gratitude to our service members, as well as their families, for their steadfast devotion, which is second to none around the world.”
Rutledge will attend the Central Arkansas Veterans Day Ceremony at the North Little Rock Community Center on Willow Street at 11 a.m., as well as the ARVets Salute Gala fundraiser at the Clinton Presidential Library at 6 p.m.
5th Circuit Blocks Immigration ActionTue, Nov 10, 2015
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today released a statement in response to the 5th Circuit Court of Appeals decision to affirm and maintain the injunction on President Barack Obama’s executive action on immigration.
"Arkansas, like other States, would be forced to invest more tax dollars in law enforcement, health care, education and many other areas to handle the federal government's heavy-handed and unlawful attempt to expand and modify the deferred action program. Our country is a nation of laws, and the President's decision to use executive action to bypass Congress is a complete disregard for the U.S. Constitution. I commend the 5th Circuit for maintaining this injunction as the legal process continues, and I will continue to work with my colleagues from across the country to see that this decision is upheld and the Constitution is protected."
Arkansas joined the coalition in December, at the request of then Attorney General-elect Rutledge, along with Alabama, Arizona, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maine, Michigan, Mississippi, Montana, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wisconsin.
Rutledge Provides Resources to ADVA to Help Open Veteran Service Offices Across StateTue, Nov 10, 2015
FAYETTEVILLE – Arkansas Attorney General Leslie Rutledge today joined the Arkansas Department of Veterans Affairs (ADVA) in partnership with the Arkansas Department of Workforce Services for a ribbon cutting of the District 2 Veteran Service Office in Fayetteville. In addition to North Little Rock and Fayetteville, ADVA will establish district offices in Forrest City, Fort Smith, Hope, Jonesboro, Monticello, Mountain Home and Russellville. The Attorney General’s office has committed to contributing $170,000 to assist ADVA with opening the offices.
“I am proud to join with ADVA Director Matt Snead and so many others who stand ready to empower and assist our veterans,” said Attorney General Rutledge. “The opening of the Veteran Service Office in Fayetteville, as well as the others planned across the State, will have a direct impact on Arkansas’s more than 250,000 veterans in providing them much-needed resources and services. ADVA is taking a proactive approach to reach veterans statewide, not just those in central Arkansas, and their efforts should be commended.”
The District 2 Veterans Service Office is located at the Department of Workforce Services at 2143 West Martin Luther King Blvd. in Fayetteville.
Mobile Offices for Remainder of NovemberFri, Nov 6, 2015
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced mobile office locations for the remainder of November.
Attorney General Rutledge created the mobile office initiative to make the office accessible to everyone, particularly to those who live outside the capital city. Last month the initiative celebrated the milestone of holding office hours in all 75 counties for the first time.
The mobile offices assist constituents with consumer-related issues in filing consumer complaints against scam artists. Attorney General Rutledge believes there is no issue too small for her staff to have a face-to-face conversation.
For more information about services provided by the Attorney General’s office, visit ArkansasAG.gov or call 501-682-2007 or 800-482-8982. Rutledge can also be found on Facebook at facebook.com/AGLeslieRutledge and on Twitter at twitter.com/AGRutledge.
The upcoming mobile office schedule is below:
Monday, Nov. 9
10:30 a.m. – 12:30 p.m.
Van Matre Senior Center
1101 Spring St. #1100
Mountain Home, AR 72653
Tuesday, Nov. 17
9:30 – 11:30 a.m.
Lightle Senior Center
2200 E. Moore Ave.
Searcy, AR 72143
Monday, Nov. 23
10:30 a.m. – 12:30 p.m.
Schmieding Senior Center
1801 Forrest Hills Blvd. #200D
Bella Vista, AR 72715