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Education Management Corp. suit settled for $3.4 million

| Tuesday, Dec. 10, 2013, 12:01 a.m.

Education Management Corp. agreed to pay $3.4 million to settle civil claims that one of its for-profit universities misled students pursuing doctorate of education degrees in counseling psychology about their employment prospects after graduation.

The Downtown corporation's settlement with the Colorado Attorney General's Office includes paying $2.9 million to reimburse 66 students of EDMC-run Argosy University in Denver for their tuition costs.

EDMC operates 20 Argosy universities in 13 states, but not in Pennsylvania. Its total of 110 schools in 32 states and Canada includes the Art Institute of Pittsburgh.

“Our investigation revealed a pattern of Argosy recklessly launching doctoral degree programs without substantiating or supporting that they led to the advertised outcomes,” a violation of Colorado law, said Deputy Attorney General Jan Zavislan in a statement.

The attorney general investigated EDMC because the office received student complaints starting in 2007 that Argosy was not seeking accreditation of its doctorate program by the American Psychological Association, although the university said it was.

Without the program accreditation, students found it hard to secure internships or become licensed psychologists.

The settlement did not require EDMC to admit liability, but it would impose a $1 million penalty if the company in the next three years violates the terms of the agreement.

“At Argosy, university student achievement is our top priority, and we are committed to constant improvement,” EDMC spokesman Chris Hardman said in an emailed statement.

The Colorado case is not the first time EDMC, which is the nation's second-biggest operator of for-profit post-secondary schools, has faced a government lawsuit.

The company faces lawsuits by the federal government and 11 states seeking the return of more than $11 billion paid in federal student aid over several years. The lawsuits claim EDMC improperly paid recruiters based on the number of students they enrolled. The company denies the allegations.

Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at tolson@tribweb.com.

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