Department of Education

On Wednesday, April 29, the Eighth Circuit issued an opinion holding that evidence of a for-profit college’s falsification of grades and attendance records may support a claim that it “fraudulently induced the Department of Education [“DOE”] to provide [it] funds,” and was thus liable under the False Claims Act (“FCA”).  Specifically, the claim alleged that, in an effort to obtain funds from DOE, the college agreed to accurately maintain certain records, but had no intention of actually doing so.  Finding that the evidence was sufficient to be submitted to a jury on this issue, the court reversed in part the district court’s summary judgment ruling in favor of the defendant, and remanded the case.

In 2009, the college signed a Program Participation Agreement (“PPA”) with DOE under which it could receive funding in the form of federal grants, loans, or scholarships under Title IV of the Higher Education Act of 1965 (“Title IV funding”).  To be eligible for funds, however, a student had to make “satisfactory progress” — a standard measured by cumulative grade point average.  If a student withdrew, the college may have had to submit a refund to DOE “depending on how much of a program the student completed.”  From 2009 to 2012, DOE disbursed over $32 million to the college.
Continue Reading College’s Falsification of Grades and Attendance Records May Trigger FCA Liability