Kaplan College Reaches Settlement with Feds

Kaplan College will pay the federal government more than $1.3 million to settle a whistleblower lawsuit. - PHOTOBUCKET
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Kaplan College will pay the federal government more than $1.3 million to settle a whistleblower lawsuit.

The for-profit Kaplan College has agreed to pay the United States Department of Justice more than $1.3 million to settle a whistleblower lawsuit.

While Kaplan College won't have to admit liability, a DOJ investigation found the education company, which received federal tuition funds, hired instructors who didn't meet minimum requirements set out in Texas law.

Leslie Coleman, a Kaplan College employee in San Antonio, filed a whistleblower lawsuit in 2012, under the False Claims Act, accusing Kaplan of hiring unqualified instructors to teach medical assistance courses at its San Antonio campuses.

According to the lawsuit, five unqualified instructors taught more than 4,500 students in the medical assistant program, with Kaplan charging each student $2,000 for the course. However, according to the lawsuit, the five instructors "represent a small sampling of the many unqualified instructors KHEC (Kaplan College) has used to fraudulently generate Title IV income."

Title IV of the Higher Education Act of 1965 authorizes the Federal Pell Grant Program, the Federal Direct Loan Program and the Federal Family Education Loan Program. 

Kaplan will pay $1,329,753.25 to settle the whistleblower claims and of that sum, roughly $1,077,000 will be paid in the form of tuition refunds, benefiting 289 students, "whose student loan debt will decrease as a result of the settlement," according to the DOJ press release, which notes that "Kaplan fully cooperated with the government's investigation and negotiated the settlement in good faith." 

The U.S. Attorney's Office for the Western District of Texas and the Department of Education Office of Inspector General investigated the case.



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