Another Proprietary school, another (same ole) lawsuit.

The University of Phoenix has reached a settlement in a False Claims Act lawsuit, in which it was charged with violating Federal law by paying admissions recruiters based on how many students they recruited. It had set aside slightly over $80 million for a settlement, and came in slightly below that. In the Chronicle piece about it, DeVry and Grand Canyon Education are alleged to have set aside about $5 million each to settle similar suits.

To my mind, a settlement makes perfect sense in this case, since in a meaningful sense, both sides are right. And the stock going up makes sense, too.

A college professor repored that having worked at a proprietary, she could attest that the Admissions side was a sales force, and was unapologetic about it. Admissions reps did what they had to do to close the sale. On the bright side, that meant that students got terrific help in navigating the bureaucracy of financial aid and registration. On the dark side, and it was much more dark than bright, students frequently came in with wildly absurd expectations that they got from somewhere.

And that is the bane of the proprietary for profit schools. Something which congress has never addressed.

These lawsuits are nothing new. We hear about them all the time. Yet again congress does nothing, and the students get the shaft.