Westwood College accused of fraud
Last month, Westwood College paid the U.S. government $7 million for violations of the False Claims Act. The violations involve recruiting and reporting infringements.
Westwood College, owned by Alta Colleges, Inc., has 17 campuses. The school, made $250 million last year, was accused of knowingly violating more than 14 provisions of the Texas Educational and Administrative Codes.
No admission
The U.S. government accused Westwood College of lying to students during the recruitment process. The filed complaint also said Alta misrepresented graduation rates, employment rates and quality of education for certification in reports to the federal government.
However, the case was dropped after Westwood College agreed to pay the $7 million. Alta Colleges CEO George Burnett says the school did not do anything wrong.
Allegations
Paying the fine won’t help students, or their parents, who took out hefty personal loans to pay for attending Westwood College. Many will still need debt relief help in order to be able to pay off their tuition bills. Several former employees of Westwood College say that recruiters lied to prospective students. From the Consumer Warning Network:
Recruiters would promise students that credits could transfer to another school, when there was no known accredited school in Texas that would accept Alta’s credits. They would promise that more than 90% of past graduates had jobs in their field with Alta’s help, even if the student was signing up for a program that didn’t have any past graduates. The real average for employment is just over 50%, and less than a third had any help from Alta.
Previous infractions
This isn’t the first time that a company Burnett was involved with has settled a lawsuit. Burnett was an executive at Qwest Communications in 2004, when the company settled a $250 million lawsuit. Qwest was accused of falsely reporting company expenses.
Joe Nacchio, who was Qwest CEO at the time and a personal friend of Burnett’s, started a six-year federal prison sentence this year. He was convicted of insider trading. Consumer Warning Network reports that “Burnett’s career was largely built by Nacchio.”
Why $7 million?
The complaint from the U.S. government was filed based on the fact that Westwood College fraudulently led the government to believe it was eligible for a federal loan program.
The government is requiring Westwood College to pay back all of the federal funds it received.
This is why state universities are always a better bet. Not all of them are the easiest to get into, but that’s why they invented the transfer system. Well, then again, a lot of state universities, especially the ones with Div 1 NCAA sports teams, are likely lying to students about just what the bulk of their tuition is funding, but it makes money, which seems to matter more than the quality of education for students.