Education Corporation of America, headquartered in Birmingham, Alabama, was a privately held company that operated proprietary colleges across the United States.
The students alleged that they learned the day after graduation that, because the school not been given SBCJC program accreditation, they could not take the nursing exam required to become licensed.
The document includes a notice that Virginia College's program accreditation process was not complete and that this could jeopardize students' ability to take the licensure exam.
The students alleged similar deception about the school's program accreditation status, as well as fraudulent fees for dormitory and cafeteria expenses.
The investigations "found that recruiters would lure students—often members of minorities, veterans, the homeless and low-income people—with promises of quick degrees and post-graduation jobs but often leave them poorly prepared and burdened with staggering federal loans."
In response the proposals, ECA's owners were instrumental in a lobbying effort, along with other colleges, that found errors in conclusions from a Government Accountability Office investigation, leading the GAO to revise some of its statements about industry practices.
[citation needed] During the lobbying blitz, Senator Tom Harkin, Democrat of Iowa, who led congressional hearings into the colleges, claimed he was directly threatened by Avy Stein, a partner in the private equity firm that owns ECA.
"[5] In the end, Duncan and his department decided that the initial criteria for determining how effectively schools prepared students for jobs simply went too far.
"[7][8] In April of 2023, the Supreme Court rejected a challenge to the settlement and allowed to proceed the debt cancellation due to alleged fraud.