Qui Tam relators and the Department of Justice are targeting for profit colleges for violations involving the 90/10 Rule, job placement rates, incentive-based compensation to recruiters, and enrolling ineligible students.
This article by TELG managing principal R. Scott Oswald and David L. Scher was published by eCampus News on August 25, 2014. The full article is available at eCampus News.
Where the False Claims Act meets for-profit colleges: 4 hot areas for compliance
Administrators and employees of for-profit colleges need to be aware of a federal statute that may not immediately associate with these institutions: the False Claims Act (“FCA”).
Pressure has been building from the Department of Justice (“DOJ”) to prosecute civil FCA cases against for-profit colleges in a growing number of areas.
Four such example areas include the 90/10 Rule, job placement rates, incentive-based compensation to recruiters, and enrolling ineligible students. FCA actions in these areas have resulted in, and will likely result in additional, multi-million dollar settlements. These cases build on an enforcement trend that should be on the mind of every administrator and employee of a for-profit college.