Whistle-Blower: For-Profit College Operator Allegedly Inflates Job Placement Rates

ABC News an gets exclusive look at marketing practices at for-profit colleges.

ByABC News
November 26, 2012, 10:23 AM

Nov. 26, 2012— -- Jason Sobek says he left his job as admissions supervisor at the nation's second-largest operator of for-profit colleges -- the Education Management Corp., or EDMC -- on good terms. But before he quit, Sobek filed a whistle-blower lawsuit against this provider of post-secondary education, alleging its marketing materials deceived prospective students by falsely inflating job placement statistics at its many campuses around the country.

"They manipulated the job placement rates by counting students working in a job that they did not need the degree for," Sobek told ABC News. "In my opinion, it's a wretched fraud."

Before he left EDMC, a publicly traded for-profit corporation that operates such colleges as the Art Institutes, Brown Mackie College, Argosy University and South University Online, Sobek downloaded a trove of data and documents, which, he alleges, support his claims.

Sobek gave ABC News an exclusive look at one of the internal nationwide job placement databases at EDMC, which shows the degrees students received upon graduation and what jobs (if any) they obtained. Sobek says the database also stated whether the job could be counted as "related" to their degree for the purpose of marketing job placement success rates to potential students.

Sobek claims the data reveal a pattern of fraudulently counting students as landing great jobs to create a false impression for future students.

"It is intentional. It's the business model," he says.

Sarah Fisher, a graduate of EDMC's business management program at Brown Mackie College in South Bend, Ind., says she believes the school made her false promises.

"They told me I'd be making $35,000 to $40,000 a year," she says.

To help pay her way through school, Fisher, a single mother, took a job at Walmart making $16,000 a year. She took the job long before she graduated, but Brown Mackie College still counted that customer service job as "related" to her business management degree.