Indiana, Other States Sue College

Brown Mackie Got Financial Aid Funds Illegally, States Say

Indiana is among several states that have filed a federal lawsuit against a college with six locations in the state.

The attorney general's office claims Brown Mackie College received financial aid illegally on behalf of students who weren't eligible, adding up to about $12 million since 2003 in Indiana alone.

The lawsuit alleges the college violated a federal law that bans incentive compensation for college admissions employees based on the number of students they enroll.

“Paying recruiters incentives based on the number of students they enroll is a violation both of federal aid regulations as well as the responsibility to the students that the school serves. This violation renders the company ineligible to receive funds under the Indiana financial aid programs," Attorney General Greg Zoeller said in a release.

The law was passed in response to reports of overly aggressive sales techniques in the industry. It was the first time the federal government intervened in a suit alleging a violation of the ban.

The suit was filed in federal court in Pittsburgh, where Brown Mackie's parent company, the for-profit Education Management Corporation, is based.

According to the school's website, it has 27 branches in all, including six in Indiana -- Fort Wayne, Indianapolis, Merrillville, Michigan City and South Bend, as well as The Art Institute of Indianapolis.

Indianapolis' Brown Mackie branch has been in the process of expanding to the fourth level of Circle Centre Mall.

Other states involved in the lawsuit are Florida, California and Illinois.

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