For-Profit Chain to Pay Up to $2.5M to Settle Whistleblower Lawsuit

American Commercial Colleges Inc., a Texas-based for-profit higher education provider, has agreed to pay the federal government up to $2.5 million to settle claims that it falsely certified that it was in compliance with certain requirements to receive federal student aid, the U.S. Department of Justice announced last week.

The lawsuit alleges that American Commercial Colleges "orchestrated certain short-term private student loans" that the college repaid in order to appear to comply with the "90/10" rule, which requires that institutions seeking to participate in federal student aid programs receive at least 10 percent of their revenues from sources other than federal student aid.

The for-profit chain will pay $1 million plus interest over five years to settle the whistleblower lawsuit. The company could be obligated to pay an additional $1.5 million more under the terms of the settlement, the Justice Department said in its announcement.


Related Links

U.S. Department of Justice Statement

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