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

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

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.

"They're lying," Fisher says. "I placed myself in that job, not Brown Mackie."

Sobek says the data offer other striking examples that don't hold water with him.

He pointed to how EDMC claims other students were placed in jobs related to their degrees, such as a fashion marketing graduate, an accounting major and a business graduate. He says the EDMC data he provided show the fashion marketing student was actually selling shoes at a Converse outlet store, while the accounting graduate was working at McDonald's as a cashier.

As for the related job the business graduate was counted as receiving after graduation, Sobek says the data reveal he was actually working as a janitor.

EDMC declined an interview with ABC News but says in a statement, "We believe that the claims raised [by Jason Sobek] are wholly without merit.

"We understand that Sobek has made statements to ABC News alleging that EDMC's institutions have made false statements concerning career placement statistics. It is noteworthy that Sobek was not employed at EDMC in a career services role."

The statement went on to say, "For more than 40 years, EDMC schools have adhered to the highest ethical standards."

ABC News asked Senate Majority Whip Dick Durbin of Illinois, a critic of the way many for-profit colleges have operated, to review the documents Sobek provided.

"It's just plain fraud and your whistle-blower has brought it to light," Durbin told ABC News.

"These students get sucked in by these ads, sign up for debt, sign up for courses that lead to nowhere," Durbin says.

Fisher, who says she is reeling in debt and that prospective employers do not take her new degree seriously, says the school had no right to hold up her job at Walmart as a placement success to prospective students.

"I'm about $24,000 in the hole for a degree I can't use," she says.

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