Project on Predatory Student Lending v. Department of Justice

Case Outcome

The Court ordered the Department of Justice to provide some of the requested documents about the Education Management Corporation (EDMC)'s recruiting practices.

Overview

Who is involved in this case?

The Project on Predatory Student Lending and Public Justice brought this case against the Department of Justice because of its refusal to provide documents about the Education Management Corporation (EDMC)’s recruiting practices. EDMC owned four chains of predatory for-profit colleges, including the Art Institutes and Brown Mackie.

 

What is this case about?

The Project on Predatory Student Lending is seeking documents from the federal government that shed light on EDMC's recruitment practices. In 2011, the federal government, along with several states, sued EDMC, alleging that it violated state and federal law and then lied about it to get government funding through federal student grants and loans. The government claimed that to maximize enrollments, EDMC paid its admissions employees based on the number of students they could enroll, encouraging a “‘boiler room’ style sales culture” that focused exclusively on the volume of new students each recruiter could sign up, rewarding top sellers with bonuses and gifts. These recruiting practices are not legal for schools receiving federal grants and loans.

 

The lawsuit between the DOJ and EDMC settled in 2015 for $95.5 million - less than one percent of the more than $11 billion in taxpayer-funded federal student grants and loans that the government alleged EDMC had received. Moreover, the settlement did not relieve students of any of their federal student loan debt. As part of the unearthing and poring over documents that happens during the discovery portion of a lawsuit, EDMC produced documents that the Project believes will shed light on the corporation’s illegal recruitment practices. These documents are public records, held by the Department of Justice, but the Department of Justice refuses to grant public access. The Project filed a Freedom of Information request, and is currently litigating the government’s denial of that request. The Project also moved to intervene in the lawsuit the government settled with EDMC to challenge the government and EDMC’s efforts to keep the documents secret.

 

Where is this case filed?

This case is filed in federal court in the Western District of Pennsylvania.

 

When was this case filed?

This case was filed in December of 2016.

“The most palpable way that this will assist students is in getting their federal student loan debt canceled; there is a significant, broader public interest here.”

Project on Predatory Student Lending Attorney, Amanda Savage

Why this Case?

Former students of the Art Institutes and other EDMC-owned chains want these documents to help prove that they were defrauded and are entitled to relief on their student loans. Because these documents have been kept secret — and because EDMC uses forced arbitration clauses to drive students out of the public court system — borrowers seeking debt relief often have little but their own personal experiences to support their claims of misconduct. These documents are public records critical to low-income student loan borrowers’ fight for the relief they deserve.

Case Updates

Update | Despite Court Order in its Favor, the Project on Predatory Student Lending Continues to Wait for DOJ to Produce Documents

Nearly three years after submitting its original Freedom of Information Act (“FOIA”) request, the Project on Predatory Student Lending is still waiting for the Department of Justice (“DOJ”) to fulfill its legal obligations to produce documents that Education Management Corporation produced to it in a federal whistleblower lawsuit.

Update | Project on Predatory Student Lending Statement on Proposed Sale of EDMC to Dream Center Foundation

EDMC’s conversion to nonprofit status raises critical questions, including how the corporation intends to ensure positive student outcomes once it is no longer subject to gainful employment regulations.

Update | Project on Predatory Student Lending Sues Federal Government For Withholding For-Profit College Corporation’s Recruitment Records

On February 14, the Project on Predatory Student Lending of the Legal Services Center of Harvard Law School filed a Freedom of Information Act (FOIA) lawsuit, challenging the government’s refusal to provide documents shedding light on for-profit college giant Education Management Corporation (EDMC)’s recruitment practices.

Case Documents

04/12/2018

Department of Justice Surreply in Opposition to Plaintiff's Summary Judgment Motion

On April 12, 2018, the Department of Justice filed a surreply in opposition to the summary judgement motion.

04/12/2018

Department of Justice Surreply in Opposition to Plaintiff's Motion to Strike

On April 12, 2018, the Department of Justice filed a surreply in opposition to the motion to strike.

07/09/2018

Order Granting in Part Motion for Summary Judgment

The Court ordered the Department of Justice to produce a limited set of responsive documents.

Coverage

Harvard Law School Sues U.S. Department of Justice Over Document Access | Penn Record

A Harvard law project is suing the United States Department of Justice, citing alleged breach of duty. The Project on Predatory Student Lending of the Legal Services Center of Harvard Law School filed a complaint on Dec. 7 in the U.S. District Court for the Western District of Pennsylvania against the United States Department of Justice for alleged violation of the Freedom of Information Act.

Read More

DOJ Must Give Harvard FOIA Docs On For-Profit College | Law360

A Pennsylvania federal judge ruled Monday that the U.S. Department of Justice must turn over some of the documents a Harvard Law School legal clinic had sought from a whistleblower lawsuit over a struggling Pittsburgh-based for-profit college provider’s student recruitment and loan policies.

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These Students are Suing Their For-Profit School | Vice

For-profit colleges and universities have received increased scrutiny in recent years for their part in helping to drive up the level of U.S. student debt, which now tops $1.3 trillion, according to the Federal Reserve Bank of New York.

Read More