Orwell Award Announcement SusanOhanian.Org Home


Educational Management Corporation: for-profit disaster school may soon give up the ghost


Ohanian Comment; In 2011, Goldman Sachs owned 41 percent of Education Management Corporation whose schools operate under four names: Art Institute, Argosy University, Brown Mackie College and South University. Below, Danny Weil points to the involvement of Olivia Snowe's husband. I wonder how many other members of Congress are involved in for-profit education schemes. Let's hope Muckety: Mapping influences of rich, famous, and influential provides some interesting EMC connections:

  • Michael Powell,former chairman of the Federal Communications Commission and current president of the National Cable & Telecommunications Association; Powell has had many government connections, serving as a policy advisor to the Secretary of Defense and Chief of Staff of the Antitrust Division in the Department of Justice.

  • Heather Podesta Partners, lobbyist known in Washingtin as "the insider's insider." he previously worked as a congressional aide to numerous US Members of Congress, including US Representatives Robert Matsui and Earl Pomeroy, and US Senator Bill Bradley. She also served as assistant general counsel at the Air Transport Association. Her outfits bundles money for Democrats in election campaigns.

  • Brian Napeck, former Macmillan CEO

  • Barnes & Thornburg LLP: As well as a being a large law firm, this is a lobbying group.


  • And so on.

    For starters, we might wonder why an educational institution needs half a dozen lobbyist firms on their payroll.

    Speaking of payroll, Edward West, President and Chief Financial Officer, received $4,100,539 in 2012. Now he's Chief Executive Officer.

    In 2011, members of the board of directors received $113,000.

    But we must remember the real point: Education Management Corporation is one of the of the largest providers of post-secondary education in North America, and it is accused of cheating the most vulnerable among us.
    Danny Weil reports on EMC's financial troubles below. This just in from the Wall Street Journal, Feb. 5, 2011:

    "While we still confront a challenging operating environment, several key measures of performance were favorable this past quarter, most notably the new student enrollment at The Art Institutes and South University and the continued improvement in our overall 180-day new student cohort retention rate," said Edward H. West, Education Management's president and CEO. "We have adjusted our outlook for the remainder of the fiscal year based on current business trends and an increased investment in scholarships and other initiatives that we believe will improve the student experience and result in long-term success."

    For the three months ending Dec. 31, 2013, average enrolled student body at EMC was approximately 122,990. The Justice Department lawsuit for fraud was filed in 2011, stemming from whistle-blower complaints filed in 2007. What's taking so long?

    Think of the lives ruined.



    by Danny Weil

    Education Management Corporation ("EDMC") is a Goldman Sachs operation, extracting as much from the working class as they possibly can. The stock has dropped nearly 60% in the last four months as enrollements drop (and consumers learn more about the fraud perpetuated by these schools).

    As I wrote in March 2012 regarding Olympia Snowe, former Senator from Maine:

    "Snowe's announcement she will not seek another term in the Senate may have little to do with "civility" or "loss of the center" within contentious politics and more to do with the fact her husband is knee-deep in controversy over an educational for-profit college chain know as Educational Management Corporation or Wall Street ticker (EDMC). Snowe's husband is former Maine Gov. John McKernan, and he is currently the chairman of the board of directors of EDMC and former CEO of what is the second-largest owner of for-profit colleges in the country.

    The for-profit educational retail chain has been sued by the Justice Department and eleven states, based on allegations that the firm falsely reported to government officials that it was not basing recruiter salaries on incentives, which is an illegal ploy the for-profits have used to increase enrollment. The government alleges that they did use incentive pay for recruiters.

    If the allegations are proven, then EDMC will be held liable for the theft of billions in government funds from Title IV. This could raise some eyebrows regarding McKernan's role as CEO during the time that the company allegedly received Title IV monies illegally and could subject the former governor of Maine to criminal liability.

    The Sunlight Foundation reported:

    According to the senator's most recent financial disclosure form, she and her husband, former Maine Gov. John McKernan Jr., have investments worth between $2 million and $10 million in Education Management Corp., a Pittsburgh-based company that operates for-profit higher education institutions.

    Snowe's husband owns more than 835,000 shares in the company, worth more than $14.9 million at current prices. That was up from the 128,000 shares he owned when he became CEO in 2003â


    The influence-mapping web site Muckety provides a stunning chart that details both Snowe and McKernanâs political and economic ties to the for-profit educational companyâ ((http://truth-out.org/news/item/8160-why-olympia-snowe-really-resigned).).

    That was back in 2012. Why is the company still allowed to exist and why have there been no prosecutions?

    I found this entry from a former EDMC employee who was harassed after finding out the true story.

    WORST WORK EXPERIENCE OF MY LIFE
    Admissions Rep â Art Institute Online (Former Employee), Pittsburgh, Pa. â April 13, 2013
    Pros: high pay
    Cons: short work life; high anxiety; greedy managers & upper mgmt...etc

    I have NEVER worked for a place like EDMC in my life. I've always had positive work experiences and my employers were always sad to see me leave and often invite me to work at the company again from time to time. But EDMC is the worst place to work...they find out what you really know about the dishonesty, the cost and the morality of putting students -- moreâ¦...into this horrible situation.
    If you are smart enough to figure it out early, then you are targeted for the opportunity to get you out of there before you let any other employees know what is going on. They criticize you for things that you would never dream would be cause, they micro manage and listen to your every word when on the phone or speaking to co-workers and wait to pounce on you. If you speak up in meetings to say what is on your mind, you add another dart to your time there.

    If you ask, "How can these students attend an online college when they have no computer...some of my students didn't even have a place to liveâ¦.you have a dozen darts in your profile and they are desperate to get you out.
    EDMC is causing students to ruin their lives and credit and they are stealing from the government, and in turn, the taxpayers. Most of these online students would have a very difficult time surviving in a Community College for about a tenth of the money.

    Most of these online students cannot write a one paragraph essay without many grammatical and spelling, punctuation, capitalization errors. They fail out of their first introductory class due to not being able to do the work or not having a computer and the Admissions Rep takes the wrap for it. They want the Admissions Rep to keep the students in long enough to get the first financial aid payment dispersed to the school. The student then fails, owes the money and EDMC has been paid. The student defaults on the loan and the Admissions Rep can be fired if they didn't keep the student in class until that all takes place. Many more horrible incidents...you have NO IDEA! Many employee's lives have been ruined and even worse...some were destroyed.

    And about $100K for a degree in Fashion & Retail Management (not fashion design) or to become a Restaurant Mgr when you could get on the job training for those careers is a disgrace.

    — Danny Weil
    Daily Censored

    2014-02-07

    http://www.dailycensored.com/educational-management-corporation-for-profit-disaster-school-may-give-up-the-ghost/?utm_source=feedburner&utm_medium=ema

    na


    MORE OUTRAGES


    FAIR USE NOTICE
    This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of education issues vital to a democracy. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information click here. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.