Nov. 16--About 2,700 Illinois students will have $3 million in loans forgiven by a for-profit education company as part of a national settlement deal announced Monday.
The U.S. Justice Department took action against Education Management Corporation over its recruiting and enrollment practices.
The state of Illinois will also receive $1.9 million, said Illinois Attorney General Lisa Madigan.
The settlements involve Pittsburgh-based Education Management Corporation, which in Illinois operates Illinois Institute of Art Chicago, the Illinois Institute of Art Schaumburg, Illinois Institute of Art Tinley Park, Argosy University Chicago and Argosy University Schaumburg.
The schools are expected to contact students eligible for the settlement. Students can also call the state's student loan helpline at 800-455-2456. Education Management also has a hotline to answer questions on the settlements: 855-725-4301.
To be eligible for loan relief, students must meet certain conditions, including having withdrawn within 45 days of the first day of their first term, and the final day of attendance must have been between Jan. 1, 2006, and Dec. 31, 2014.
Education Management said it was "pleased to have resolved the civil claims raised by" state attorneys general and the Justice Department.
"Though we continue to believe the allegations in the cases were without merit, putting these matters behind us returns our focus to educating students," Education Management said.
One settlement, involving consumer fraud allegations brought by attorneys general in about 40 states, will provide $102.8 million in loan forgiveness for more than 80,000 U.S. students. Of that, nearly 2,700 Illinois students will have a total of $3 million in loans forgiven. That settlement also requires the company to fully disclose both the cost of the school to students, and the expectations for job placement after graduation.
A second agreement, which also includes the federal government and whistleblowers, requires the company to pay $95.5 million, including $1.9 million to Illinois. That deal resolves allegations that the company illegally paid incentives to its admissions recruiters for the number of students they enrolled.
"Under the terms of the consent judgments with the state attorneys general, Education Management will provide prospective students with additional disclosures, which will provide more transparency during the recruiting process," the company said in its statement.
byerak@tribpub.com
