A Judge in federal court has denied a motion to dismiss a case against the Kaplan Higher Education Corporation for its providing incentive compensation to its recruiters of students in violation of the Higher Education Act (HEA) and the False Claims Act (FCA). According to the Complaint filed by former employees now whistleblowers, Kaplan University has 79 campuses nationwide and an online program. It enrolls approximately 25,000 students and receives over half a billion dollars in HEA and Title IV funds from the United States. The Complaint also explains that in order to receive the federal funds, an educational institution must certify compliance with the Higher Education Act and Department of Education. The participation agreement says that the educational institution will not pay any commission, bonus or other incentive payment based directly or indirectly on success in securing enrollment.
The written decision by Justice Patricia A. Seitz means that the case may move forward into the “discovery” phase of the case and ultimately to trial. The case was filed in Florida.
Jeffrey Newman represents whistleblowers but not those involved in the Kaplan case.