Cases & Developments

Settlement Agreement between the U.S. Department of Education, Office of Federal Student Aid (FSA) and Baker College resolving alleged misrepresentations made to prospective students in violation of the Higher Education Act (HEA). The FSA investigated claims that the College made misrepresentations to prospective students regarding its graduates’ job placement rates and potential salaries through the College’s website and marking materials. Specifically, FSA considered whether over the course of nearly five years the College “misrepresent[ed]” its graduates had higher job placement rates and salaries than they actually did. The investigation found that the College did not accurately disclose how many students responded to the survey that was used in its Career Outcomes Rates or define what “career outcome” means. “Career Outcomes Rates” included unpaid options like continuing education, and the figures of over 90% “g[a]ve the impression to prospective students that nearly all of [the College’s] graduates earned employment in a paid position.” Further, FSA’s investigation reported that of the list of employers on the College’s website it claimed had hired the College’s graduates, fourteen of the 100+ listed employers had hired those individuals prior to their enrollment at the College, “creating the impression that [the College’s name] had an impact on the employer’s decision to hire the individuals when it actually did not.” Finally, the FSA charged that the College published data from the U.S. Department of Labor’s Bureau of Labor Statistics rather than from the College’s own graduate data. Under the Settlement, the College agreed to pay a fine of $2.5 million, committed to avoid misrepresentations and provide copies of all marketing materials to FSA for review for the next three years, and to remit communications to current students and employees informing them of how to submit complaints or provide information about any further misconduct to FSA.