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Tuesday, January 24, 2012

Insiders: Layoffs coming at EDMC

Posted By on Tue, Jan 24, 2012 at 2:59 PM

Employees with Education Management Corporation (EDMC), the Pittsburgh-based for-profit educator, are bracing for layoffs which could come in the next few days.

Employees who have asked not to be identified have told City Paper that departmental meetings were held throughout the Pittsburgh office this morning. While some employees say they were assured their own jobs would be safe, supervisors have told employees that the layoffs would be coming by week's end. Early indications are that layoffs may hit EDMC's Online Higher Education staff hard, but employees have said details were "scarce." They were not told, for example, how many positions overall are to be cut.

Calls to EDMC spokeswoman Jaqueline Muller have not yet been returned.

The layoffs would come in the wake of significant challenges for the company over the past year.

In 2011, the U.S. Department of Justice hit the school with a civil lawsuit over its recruitment policies.

Congress too has stepped up its scrutiny of the for-profit industry as a whole. There has been Congressional testimony accusing EDMC of aggressive recruitment strategies, including "gaming" statistics on post-graduate employment. (EDMC has denied the accusations, citing the results of an internal investigation.) And just yesterday, U.S. Senator Dick Durbin of Illinois introduced legislation to curb the amount of taxpayer-funded tuition aid such schools could get for educating veterans.

The bill is in response to claims that companies like EDMC and the University of Phoenix were targeting veterans and their education funds earned through the G.I. Bill.

In a statement reported by Bloomberg News, Iowa Senator Tom Harkin said the proposed legislation "will close a loophole that has made veterans and active duty military major targets of deceptive marketing and aggressive recruitment, rather than students treated with the respect their service deserves."

More on this story as it develops.

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