North Greenville University has been ordered to pay $2.5 million for making false claims to the U.S. Department of Education, the Justice Department announced this week.
The university was accused of participating in incentive compensation from 2014 to 2016, which is banned by the federal government. North Greenville University lied to the education department by making false claims, attracting the provisions under the False Claims Act.
Under Title IV of the Higher Education Act (HEA), colleges are banned from giving student recruiters any financial incentives such as bonuses or commissions based on the number of students they persuade to enroll. The rule aims to protect prospective students from aggressive recruitment and admission practices.
“Offering unlawful financial incentives for recruiting undermines the integrity of our higher education system,” Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division, said.
“Prospective students are entitled to make enrollment decisions without the improper influence of recruiting companies who pursue their own financial gain at the expense of the students’ best interests.”
The allegations were brought into a lawsuit under the whistleblower provisions of the False Claims Act by Maurice Shoe, the co-owner of Joined, Inc. which was hired by the university to increase enrollment. Shoe will receive $375,000 as a part of the resolution.
According to Sherri A. Lydon, a U.S. Attorney for the District of South Carolina, the settlement will serve as a lesson for higher education institutions to put the interests of students before those of the school.
“It should serve as a warning to institutions that would attempt to maximize enrollments to line their own pockets, disregarding the best interests of students in the process,” Lydon said.
“Through False Claims Act cases like this one, the U.S. Attorney’s Office will continue to help protect federal taxpayer dollars from waste, fraud, and abuse.”