Whistleblowers Reveal How For-Profit Schools Hurt Students and Rip Off Taxpayers

The False Claims Acts are often invoked in cases involving complex healthcare, environmental or defense contract fraud issues. What many Americans do not realize is that federal and state anti-retaliation and whistleblower laws routinely come into play in areas affecting everyday life, including the most recent challenges by faculty and students against over-endowed, underperforming for-profit colleges and universities. Anti-retaliation laws protect employees from job loss as a direct result of making a complaint against an employer for violations of state or federal law. Whistleblower laws also work to keep colleges and universities honest in their reporting practices – thereby allowing parents and students the opportunity to make informed decisions about higher education. As highlighted by two recent cases described below, anti-retaliation and whistleblower laws help reign in not only big business and big pharma, but local colleges, universities and law schools as well.


Heidi Weber image from twitter.com

Ask anyone under 30 and they will tell you: it’s tough out there. Jobs are limited, employers are cutting back and millions of well-educated, bright Gen-Y’ers are enduring the humbling experience of living in mom’s basement in between bartending shifts. To further compound the problem, universities like the Minnesota for-profit Globe University are daring to step over the line of ethical and honest statistical reporting in exchange for higher enrollment rates and greater revenue. Fortunately for those of us who prefer to rely on the statistics we are given before spending in the high-five figures for an education, whistleblowers like ex-Globe University dean Heidi Weber are shedding light on these less-than-ethical practices and demanding that schools pay up for misleading potential and current students.

Details of Weber v. Globe University Emerge Post-Verdict

     The facts of the case are regrettably common: Ms. Weber was abruptly fired from her position as dean of the medical assistance program after making “good faith” reports of Globe University’s violations of state and federal laws.  More specifically, Ms. Weber was fired after just one year on the job for reporting falsified job-placement rates, commission-based enrollment schemes and lackluster medical assistance training for students.

    In a weeklong trial concluding earlier this summer, the jury was presented with evidence to suggest that Ms. Weber was fired solely for her choice to blow the whistle on Globe University’s enrollment tactics – despite the University’s assertion that she was fired for performance-based reasons. At the conclusion, the jury unabashedly proclaimed that Ms. Weber was in fact, and in law, fired as a direct result of her status as a whistleblower. For her troubles, Ms. Weber received a sizable recompense topping $395,000. The University has announced its plans to appeal the ruling.

Whistleblowers Pursuing Misleading Tactics Used by Other Universities

     In recent years, whistleblower lawsuits affecting America’s young academic sector have sprung up across the nation – particularly in light of the U.S. Department of Education’s decision to closely scrutinize for-profit universities and their enrollment, advertising and admissions practices. In particular, U.S. law schools are facing heightened review by courts and agencies after institutions like the University of Widener, with locations in Delaware, New Jersey and Pennsylvania, went under investigation for the seemingly commonplace practice of enrolling scores of students, for $55,000 per year, only to fail close to one-quarter of those enrollees after the first year. In fact, eight students sued the school, among other reasons, for publishing misleading job placement rates of over 90 percent in the magazine U.S. News and World Report without fully explaining that only 56 percent of those post-graduation jobs are law-related. The case is currently traversing the federal litigation process – however a federal judge in New Jersey denied the University’s motion to dismiss, holding that the case will proceed under the rationale that plaintiffs were reasonable in believing the inflated job placement rates pertained to legal employment only.

For profit vs. non-profit

Image from dailykos.net

An analysis of academic whistleblowers would be incomplete without touching on the burgeoning number of lawsuits against universities found to be defrauding the federal government by submitting falsified information to retain eligibility in student financial aid programs. Under current financial aid laws, a university is only eligible to offer students federal student loans if at least ten percent of its student body is receiving tuition from private contribution. The government’s policy behind this rule is that taxpayers should not have to subsidize any university that is unable to comprise its student body of at least ten percent self-pay students. In several whistleblower lawsuits, reports were submitted to the Department of Justice revealing schemes wherein schools were issuing short-term loans to students at the outset of their enrollment with the intent to manipulate self-pay enrollee data.

A 2012 Senate report detailed just how extensive the manipulation of the market and the theft from taxpayers really was, and the report was dramatically augmented by Weber’s whistleblowing.   What these cases detailed is how for-profit universities, which recruit aggressively and steer people toward federal financial aid, get 90% of their money from the government while misleading students about employment opportunities and otherwise failing them once they are enrolled.  Of the enormous amount of federal money received by the schools, they spent less than 20% of it on education- spending more on recruitment and advertisement.

Apparently, Americans can now rank their trust in for-profit institutions of higher education in the same category as used car salesman and As Seen on TV wonder products. Without the help of whistleblowers like Ms. Weber or the disgruntled ex-Widener University students, parents and pupils alike stand the chance of losing hundreds of thousands of dollars to scam artist colleges eager to fill seats and receive tuition checks. Likewise, whistleblowers have also saved taxpayers millions of dollars in federal aid money by turning in universities guilty of implementing scams to avoid the simple, and not so difficult to meet, student aid program regulations.

Contact an Experienced Whistleblower Attorney Today

Thanks to brave whistleblowers like Weber, and journalistic and legislative investigations, we now know that this fraud exists.  But knowing it is out there is a different animal than actually being able to do something about it.  If you are a staffer or have inside knowledge of illegal or unethical practices, you can help bring a dirty system into the light.  And you should know you are not alone.  A whistleblower attorney like those of Berger Montague can meet with you to discuss your case. Contact us for an appointment.

By | 2018-03-26T10:19:50+00:00 September 4th, 2013|Healthcare Fraud|