PENNSYLVANIA INDEPENDENT: Despite school closing, Education Management ‘committed’ to repaying state grant

Career College Central Summary:

  • Education Management Corporation, which operates private, for-profit colleges across the country, announced earlier this month it will close 15 of its locations, including the Art Institute of York.
  • It’s another blow for Pennsylvania taxpayers who backed a $3 million state grant to the company in 2010, and evidence the state doesn’t always do a bang-up job of picking winners and losers.
  • Based in Allegheny County, Education Management was among the grant and loan recipients included in a state audit of five economic development programs. Auditor General Eugene DePasquale late last year found Pennsylvania over a three-year period directed $93.5 million to entities that failed to meet job pledge numbers.
  • Education Management pledged 3,313 jobs for the grant but settled at 2,894, according to data obtained from the Department of Community and Economic Development. The state levied a $798,329 penalty.
  • The company has been making its regularly scheduled repayments, said Lyndsay Kensinger, a spokeswoman for the Department of Community and Economic Development. It has repaid the state $399,164.50 so far, she said.
  • “We remain committed to fulfilling our obligation with the state of Pennsylvania regarding this matter,” Education Management spokesperson Chris Hardman said.
  • When releasing his finding in December, DePasquale failed to name the entities that fell short and said he didn’t intend to beat up businesses that missed their marks.
  • “We’re not saying that anybody did anything inherently wrong. We should be looking to examine why that happened and what needs to be done to fix it,” he said at the time.
  • The audit examined 600 contracts awarded from 2007 to 2010, including 72 recipients in detail. Education Management Corporation was among them.

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