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Business and Economy

Maine Students to Get Loan Forgiveness in EDMC Settlement

AUGUSTA, Maine — More than 200 Maine students will receive loan forgiveness from Pennsylvania-based Education Management Corporation.

Attorney General Janet Mills is one of a group of 40 attorneys general to reach an agreement with the for-profit education company for deceptive recruitment and enrollment practices.

"We've got a pretty good idea about how EDMC historically lured prospective students into their programs, and how so many students left the programs with unfulfilled promises and many times, tremendous debt," she says.

Mills says the company lured prospective students into unaccredited programs and encouraged students to take out loans they could never repay.

"We think that these practices will stop now," she says. "They have agreed to change their practices — their enrollment and recruitment practices."

Education Management Corporation will forgive more than $100 million in outstanding loan debt held by more than 80,000 former students from schools across the U.S. and Canada.

The company also agreed Monday to pay $95 million to settle a federal lawsuit for paying recruiters incentive — based compensation for the number of students they recruited.

Former Maine Gov. John McKernan has held leadership positions at the school since 1999. He's currently on the board of directors.

The company operates more than 100 schools in the U.S. and Canada.