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Settlement covers ex-Brown Mackie, Art Institutes students

November 16, 2015

More than 5,500 students of Brown Mackie College and The Art Institutes will receive loan forgiveness totaling more than $5.7 million under one of two settlements,  Indiana Attorney General Greg Zoeller announced Monday.

Education Management Corp., the parent company of the schools, will pay Indiana, four other states and the federal government $95.5 million over a period of years to settle whistleblower lawsuits.

One settlement ends litigation alleging EDMC illegally paid incentives-based compensation to its admissions recruiters, tied to the number of students they recruited, according to the AG’s office. Indiana also will receive a net $1.2 million to reimburse the public treasury for costs associated with EDMC’s fraudulent practices.

The $5.7 million for loan forgiveness is Indiana’s share of proceeds of another settlement totaling $102 million divided among 38 states. Eligible students are those who were enrolled in Brown Mackie College in Indianapolis, Fort Wayne, South Bend, Michigan City and Merrillville; and The Art Institute of Indianapolis.

The settlement covers students with fewer than 24 hours of transfer credit who withdrew within 45 days of the first day of their first term, when their final day was between 2006 and 2014.
 
Loan forgiveness is part of a much larger settlement imposing significant consumer-protection changes to EDMC’s marketing, recruiting and enrollment practices. The settlement also appoints an independent administrator to monitor compliance.

Among other things, EDMC must not make misrepresentations to students or prospective students about accreditation, graduation rates, job-placement rates, transferability of credits, financial aid, veterans’ benefits or licensure requirements. EDMC must not engage in misleading advertising or deceptive or abusive recruiting practices to persuade students to enroll or remain enrolled, and must record online chats and telephone calls with prospective students. Students will be able to obtain a refund for the unused portion of the tuition and fees.

EDMC has a toll-free number that students of Brown Mackie and The Art Institute can call with questions about student loan debt forgiveness.  The number is 1-855-725-4301.

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