Kaplan Education Services Settles False Claims Act Allegations With Federal Government

Over the past several years, there have been several lawsuits and allegations made involving for-profit universities essentially swindling unsuspecting college students out of their tuition money in exchange for a sub-par education that does not meet general academic standards. For instance, several claims have been made about Tier 4 law schools taking thousands of dollars in tuition money in exchange for a shoddy legal education.

The federal government and the False Claims Act come into play whenever these students are recipients of federal loan or grant money from the Department of Education. In the event a for-profit university engages in fraudulent inducement or kickbacks for enrollment, this could trigger an investigation by government officials as to whether the school is unlawfully taking federal funds on behalf of unknowing college students seeking a quality education.

In today’s post, we discuss a recent settlement with Kaplan Education Services, a for-profit “education company” alleged to have allowed unqualified instructors into their programs in violation of state and federal academic standards.

Details of case against Kaplan Education Services

In 2012, a whistleblower and former employee of Kaplan Education Services filed a whistleblower complaint in Texas federal district court alleging that the company had allowed instructors into its programs that did not meet minimal requirements.

Kaplan Education Services has locations throughout the state of Texas, including several campuses in the San Antonio area. It offers a mix of degree and certification programs, many of which are designed to train students for entry-level positions in industries like healthcare and medical billing.

Allegedly, for a period spanning several years, Kaplan allowed several unqualified instructors to teach its medical assistant courses in its San Antonio campus locations. More specifically, the whistleblower alleged that Kaplan accepted federal student financial aid money on behalf of several of its enrolled students despite hiring course instructors that did not meet applicable academic standards set by Texas law (e.g., background, experience, and education requirements).

As a result of an investigation, Kaplan agreed to settle the claims for $1.07 million, the majority of which will be offered to students as a tuition reimbursement. Approximately 289 students are considered to have been affected by this lack of adherence to compliance and most of them will be able to reduce their student loan debt following the settlement.

According to a 2012 Senate hearing, Chicago-based Kaplan Education Services has been problematic for several years, garnering hundreds of student and employee complaints. Moreover, the institution is described as having “poor student outcomes,” with over 60 percent of its enrollees never finishing their degrees. In addition, Kaplan was described in the hearings as having an over-dependence on federal financial aid money.

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