I-Team: Four for-profit colleges under state investigation

Senate report says 62% of students withdrawing

TAMPA - Education Management Corporation, or EDMC, is one of the biggest for-profit college companies in the country, operating 110 schools across the U.S. and Canada.  Now, the I-Team is uncovering big questions about whether they are providing the education they promise.

Lisa Hloska is a single mom with three kids who dreamed of becoming a clinical psychologist. Argosy University in Tampa was the most convenient place to get her doctorate.

"You were going to be able to be a doctor at the end of this program. You were going to be able to afford paying these student loans back," Hloska said.

Not long after she started, she says things at Argosy started to change. She says there were too many new students, and good professors were leaving. She claims after three years of being a good student, she was stunned when they told her she'd failed out of the program.

"We just feel that based on your interview, you're not someone who should be here. That was it," Hloska said.

Three other psychology students also claim they were forced out of Argosy and they're joining Hloska in a lawsuit.

You can read the entire complaint at http://wfts.tv/RZQmHS .

Rick Kriseman represents the students, and he says Argosy is failing good students because they recruited too many. So many, he says, that they couldn't place them all in the internships they were promised. Kriseman says they school wants to keep their internship placement rates high in order to maintain their accreditation.

"You're saying they're flunking students intentionally to boost their own statistics?" asked I-Team investigator Michael George.

"Absolutely," Kriseman said.

A report by a U.S. Senate committee obtained by the I-Team shows that in 2010, 62% of students at all of the schools operated by Argosy's parent company, EDMC, withdrew or failed out.  EDMC disputes that number, saying they didn't count students who left and later came back.

When students don't get their degrees, they can't get high-paying jobs and pay back their massive student loans. In the end, the taxpayer is on the hook for the students' education. In 2010, EDMC received $1.8 billion dollars in federal grants and loans, according to the U.S. Senate report.

EDMC has more than 150,000 students in its colleges: Argosy University, South University, the Art Institutes, and Brown Mackie College. This isn't the first time they've faced serious accusations. They've been sued by 11 states and the Justice Department for allegations of illegal recruiting practices.

"It's the biggest mistake I ever made," said a current Argosy student, who agreed to speak to the I-Team if we did not reveal her identity.

She claims administrators have delayed her from graduating multiple times, and she's concerned they will fail her out of the program if she goes public. She's one of 32 students who have filed complaints with Florida's attorney general. The AG is now investigating EDMC for allegations ranging from problems with accreditation to lying about financial aid.

"I can't transfer because I'll lose everything and then have to do the work all over again," the student claims.

EDMC wouldn't agree to an on-camera interview to discuss the allegations, but they tell us in a written statement, regarding the attorney general's investigation, "The decision to open a civil investigation should not be taken as an indication of wrongdoing."

"We conduct ourselves with honesty and integrity. We remain committed to providing quality education for our students and will continue to operate with transparency," wrote EDMC spokeswoman Jacquelyn P. Muller.

You can read the entirety of EDMC's response to our investigation at http://wfts.tv/TJfCBp .

EDMC wouldn't respond to Lisa Hloska's claims because of the pending lawsuit. Hloska says she has given up on becoming a psychologist.

"I was only there for three years and I owe $100,000," Hloska said.

"What do you have to show for it?" asked I-Team investigator Michael George.

"Nothing," she responded.

Florida's attorney general is also investigating seven other for-profit colleges for similar allegations.

If you have a tip or a story idea for I-Team Investigator Michael George, contact him at mgeorge@abcactionnews.com .

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