A Michigan college will pay a $2.5 million fine for misrepresenting its graduates’ job placement rates and potential salaries, according to a federal settlement announced Tuesday.
Baker College reached a settlement with the United States Department of Education’s Federal Student Aid office over violations of the Higher Education Act of 1965, the department announced on January 7.
The department investigated the private college and discovered that it falsely claimed its graduates had significantly higher job placement rates and salaries than they actually did, according to officials.
Baker College has five locations in Michigan, including Cadillac, Jackson, Muskegon, Owosso, and Royal Oak. College President and CEO Jacqui Spicer stated that the college made no misrepresentations, and that the resolution agreement “contains no admission of wrongdoing.”
“Notably, the DOE did not assert that the College provided false information, as part of our marketing and recruitment data,” Spicer informed reporters.
“The DOE identified certain instances in which our materials had what the DOE viewed as insufficient background or explanation which presented the potential for a statement to be misinterpreted.”
The department discovered that Baker College had published inaccurate and misleading career outcome rates on its websites for up to five years, officials said.
The college website featured a section titled “Career Outcome Rates” based on graduate survey responses, but the published rates represented fewer than all of its graduates, according to officials.
“They did not disclose how many students responded to the survey,” the department stated in its release. “(This lead) students to believe that the career outcomes rates related to more graduates than they actually did.”
Baker College also advertised in emails that its overall career outcomes rate was around 91%, with its automotive program at nearly 96%, according to officials.
However, the term “career outcome” was not defined, “giving prospective students the impression that nearly all Baker graduates earned employment in a paid position,” according to officials.
“The institution did not explain in those emails that the ‘career outcomes rates’ included unpaid options like continuing education,” officials alleged.
The college also overstated the number of employers who hired graduates, with 14 of the more than 100 listed employers hiring graduates before they enrolled, according to officials.
Another misrepresentation occurred when the college published the median annual income and salary for executives on most of its program pages. Officials stated that this information was based on national US Department of Labor statistics rather than data from their own graduates.
According to officials, the college inflated the employment rates for two of its culinary programs by 16 and 60 percentage points, respectively.
The university’s office “determined that these misrepresentations constituted substantial misrepresentations because they could harm students, who may reasonably rely on this information when considering their higher education options and potential outcomes,” spokespersons stated.
In addition to the $2.5 million fine, Baker College must agree to stop making misrepresentations, provide marketing materials to the federal department for review for three years, and inform current students and employees how to file complaints about misconduct with the Department of Education.
“This settlement demonstrates the Department’s ongoing commitment to enforcing higher education laws and regulations and protecting students and taxpayers,” according to a release from the agency.
Spicer stated that the college is already taking steps to meet and exceed the DOE’s expectations.
“We believe the resolution enables us to move forward so we can focus on what matters most: offering a supportive and innovative education that empowers students to improve their lives and make a difference in the world,” Spicer told the crowd.
StudentAid.gov provides additional information and data regarding the Department’s enforcement and oversight efforts.
