Hundreds of students enrolled in Medtech College in Falls Church, Silver Spring and the District will no longer have access to federal loans and grants because the for-profit trade school allegedly lied to authorities about the number of graduates who landed jobs, the Education Department said Tuesday.
“Students should be able to trust that colleges are telling the truth — not using smoke and mirrors — about their graduates’ job placement rates. Unfortunately, Medtech violated the trust of both students and taxpayers by valuing profits over the students they serve,” Undersecretary of Education Ted Mitchell said in a statement. “When schools mislead students, accreditors or the federal government, we will take action.”
Investigators in the department’s new enforcement unit uncovered widespread misrepresentation of job-placement rates and discovered that Medtech overstated the numbers to prospective students, the department and its institutional accreditor, the Council on Occupational Education. Medtech, which is owned by JTC Education Holdings, is also accused of violating federal regulations by hiring a third-party company to verify its employment data without informing the department.
In response to the findings, the government is cutting off aid to three of the Medtech’s nine campuses. The company, which did not respond to requests for comment, has until Aug. 5 to provide evidence disputing the department’s claims.
The three schools in the Washington area enroll about 750 students, who received roughly $16 million in Pell grants and federal student loans in the 2014-2015 academic year. The Falls Church campus was one of several locations previously placed under a form of oversight known as “heightened cash monitoring.” The department subjects schools to cash monitoring for all sorts of reasons, including operating with a lot of debt, turning in late financial statements or having accreditation problems.
Department officials declined to discuss whether the job placement rates at any of Medtech’s campuses in Florida, Indiana or Kentucky are being investigated. The agency is requesting that the Indianapolis-based company set aside more money to cover losses at those remaining locations in the event of its collapse, citing an increased risk to the taxpayer dollars funneled to students attending the schools. Medtech must provide a letter of credit from a bank assuring the availability of about $37 million for those campuses to fully participate in the federal financial aid program, or $18 million for provisional participation. Either option would be a significant increase from the current $9.8 million letter the department has on file for the company.
Founded in 2004, Medtech specializes in medical education, offering degrees and certificates in nursing, medical billing and dental care. The company entered the Washington area in 2010, when it acquired Sanz Schools.
Tuesday’s action against Medtech is the department’s latest effort to rein in schools accused of violating regulations on federal financial aid. In the past three fiscal years, the department has barred more than 30 schools from receiving federal loans and grants. Marinello Schools of Beauty, for instance, lost access to federal funds in February for illegally requesting federal financial aid for students with invalid high-school diplomas, charging students for excessive overtime and withholding a portion of students’ federal aid. The for-profit chain shut down within days of the department’s decision.
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