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ATI Career Training Centers in Texas were informed by the Texas Workforce Commission that they were to cease enrolling students in their programs as of 2014. ATI, a formerly $400 million company may have gotten away with ripping off its students and the taxpayers for several years, but with the closure of its 16 Texas-based campuses, Texas students will no longer become victims of this for-profit scam artist.
A former employee turned whistleblower led officials to investigate ATI and their discoveries about the company’s practices were quickly found to be true. Predatory enrollment practices were in place which had officials targeting strip clubs, homeless shelters, and low income neighborhoods for prospective students. If students didn’t have the required educational backgrounds, no worries, ATI would simply forge any compliance documents required in order to make the student eligible for federal financial aid programs. Students unable to speak English were also enrolled in English-only classes to fill seats and meet the strict enrollment requirements set out by administration.
ATI committed fraud in several ways and was found to be fiddling around with grades, attendance reports, transcripts, and those who had never even set foot on campus found they had huge loans in their names which had been sent directly to ATI. If that weren’t enough, officials also discovered that ATI was lying about its job placement successes and job placement salaries. It was even found that companies listed as employing graduated ATI students had no such employees on site.
The investigation which led to this demand by TWC claims that ATI was lying about its job placement reports and that students were not even working in the places it indicated. These false hopes came with a hefty price tag and left many students unable to find employment or pay off their student loans. Texas told ATI that current students must be allowed to finish the program at no additional cost or that ATI must arrange for students to complete their program at a comparable school at no charge to the student.
Why go through all that, you ask? ATIs fraudulent and predatory actions allowed them to dip into lucrative federal student loan programs and Pell Grants they could never have gotten their hands on otherwise without doing things by the book. The systemic, nationwide fraudulent activity got the company to a $400 million net worth but all it got students was huge debts and expensive fire starter.
Students enrolled in programs and failing were often recycled into other programs by the school in order to continuously receive federal student loan disbursements, maintain their eligibility status, and receive new funding. In the end, many of these students failed to meet course objectives, maxed out their federal loan amounts, and had no education to show for it. With tuition fees ranging from $13,741 to $46,744 per program, those dollars certainly added up quickly. Students showing interest in the predatory enrollment schemes were lured in by the rosy picture painted that they could escape poverty forever with ATIs guarantee of job placement with hefty salaries at the end of their programs.
While recent suits have resulted in settlements, none of them mean that ATI has had to admit to any wrongdoing. What’s $3.7 million to a company that defrauded the people and government out of $400 million, after all? Approximately $2 million of those settlements will go to refunding federal student loans for moneys ATI wasn’t entitled to, the remainder will go to other arbitration and a portion of what is left will go to the whistleblower that turned ATI in. Those not part of the settlement are left to struggle with student debt for years to come, have few job prospects with their diploma, and many didn’t even manage to get out of it with the paper in hand. Those students who are affected by the settlement will still have to find another college, go through the entire program, and effectively start from square one.
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