The main U.S. branch of Laureate Education, a for-profit education company former President Bill Clinton spent years promoting, is facing an investigation by Minnesota’s state government along with a class-action lawsuit claiming the school scammed students out of thousands of dollars.
Clinton served as the “honorary chancellor” of Laureate International Universities from 2010 to 2015, and traveled around the world promoting Laureate as an innovative, positive force in the world of higher education. Despite the honorary nature of his position, Clinton was paid handsomely, taking home more than $17.5 million from the company in that span.
While Laureate is based in the U.S., a large majority of its operations are outside the country. The major exception is Walden University, an online-only school enrolling roughly 40,000 students in numerous degree programs.
Now, though, the school is under investigation by government regulators in Minnesota, where it is based.
According to NBC News, which first reported on the investigation, officials with the Minnesota Office of Higher Education (MOHE) are investigating a series of complaints from students who claim the school’s marketing is deeply misleading. The office said the number of complaints about Walden had surged in the wake of an August investigative report by NBC, which interviewed several unhappy former Walden students.
Many complaints accuse the school of downplaying how long it takes to complete degree programs, causing students to spend much more time (and money) than they expect getting a degree.
“I want to make sure the proof is in the pudding that their marketing claims match with student outcome,” MOHE official Elizabeth Talbot told NBC.
Along with Minnesota’s investigation, Walden is also being targeted by a class action lawsuit filed in Ohio. The plaintiffs were enrolled in doctoral programs with Walden, and claim the school misrepresented how long it took for students to complete a dissertation, causing students to pile up six figures in debt pursuing degrees they expected to complete in three years at a cost of about $60,000.
“Walden does not act like a university (for-profit or otherwise). Rather, Walden acts like a for-profit corporation,” plaintiff LaTonya Thornhill told Courthouse News Service. Thornhill was motivated to pursue a lawsuit after seeing NBC’s August report, According to NBC.
Even before the lawsuit and investigation, Walden was causing problems for Laureate. The school’s former students are carrying more than $6 billion in student loan debt, and only 40 percent of them are making payments on that debt, below the national average. That figure, and the potential federal scrutiny it may invite, is one of the factors that has imperiled Laureate’s planned IPO, which was announced a year ago but has yet to materialize.
While Laureate is only now under attack in the U.S., it has been controversial abroad for some time. In Chile, a school owned by Laureate lost its accreditation due to a sharp increase in enrollment coupled with nosediving academic standards. In general, the school has been criticized for buying up existing, struggling schools and boosting spending on marketing, to the perceived detriment of academic quality.
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