Press Release  American Military University Pays $270,000 for Alleged Failure to Disclose Job Prospects, High-Pressure Enrollment Tactics

Boston — Attorney General Maura Healey today announced a settlement with an online for-profit school over allegations that the school violated Massachusetts law by failing to make mandated disclosures to prospective students about job placement rates, violating requirements that the school provide important information about loan repayment and graduation rates to prospective students 72 hours before enrollment, and engaging in predatory enrollment tactics, including making excessive recruitment calls.

The assurance of discontinuance, filed Tuesday in Suffolk Superior Court against American Public University System, which runs American Military University (AMU), alleges that it violated the state’s for-profit and occupational school regulations aimed at protecting Massachusetts students from the deceptive and unfair practices of for-profit schools.

According to the AG’s Office, American Military University’s students are primarily veterans or serve in the military. The school’s name and other visual images suggest it is part of the United States Armed Services, but the company in fact is not part of the U.S. Military and is not affiliated with it.

“Online, for-profit schools that mislead veterans and military families are not welcome in Massachusetts,” said AG Healey. “This settlement will provide money back to students who didn’t get crucial information about the American Military University. We will be closely monitoring this school in the future.” 

The regulations, the first of their kind in the United States, protect students from the unsubstantiated claims made by many for-profit schools of high earnings and exciting job opportunities, often included as part of luring students into expensive, low-quality educational programs. State Attorneys General and the Consumer Financial Protection Bureau (CFPB) have documented widespread abuse of veterans and military families by for-profit schools, which have focused on enrolling students with access to G.I. Bill grants.

The investigation into AMU’s recruitment practices revealed that the school violated state regulations by failing to make important employment disclosures to prospective students and failing to provide certain other disclosures in advance of enrollment. The AG’s regulations require for-profit schools offering Massachusetts programs to provide certain disclosures to prospective students 72 hours in advance of enrollment, including the cost of a program, the program’s graduation rate, and the percentage of students who are not paying their loans. Many for-profit schools are also required to list the percentage of students who obtained full-time permanent employment within their field of study.

The AG’s Office also alleges that AMU engaged in high pressure enrollment tactics, including excessive telephone calling, which is a well-documented tactic that is specifically barred by state law.

Under the terms of this settlement, the American Public University System will pay a total of $270,000 to the AG’s Office to provide relief to eligible AMU students, and has agreed to change its disclosures to prospective students.

This investigation was handled by Assistant Attorney General Elizabeth Nsahlai, as well as David Lim, Legal Analyst, of the Attorney General’s Insurance and Financial Services Division.

AG Healey’s Office works in a number of other ways to help the veteran community, including raising awareness of the high rate of suicide among veterans, ensuring inclusion in the military, awarding grant funding to provide legal assistance, and protecting veterans from predatory lending practices. Most recently in July, the AG’s Office announced a settlement with a veterans charity that misled donors.

In November, AG Healey announced a new Veterans Affairs Coordinator within her office to assist Massachusetts veterans, servicemembers and their families, and enhance efforts across the office to provide services to veterans in need.

The AG’s Consumer Advocacy and Response Division also works closely with the state’s Department of Veterans Services and with the Massachusetts Veterans Services Officer Association to support the organizations in their efforts to support veterans who have concerns around their economic stability.

Veterans looking for more information or assistance with their student loans should visit the AG’s Student Lending Assistance page or call the Student Loan Assistance Unit Hotline at 1-888-830-6277. Consumers with other questions or concerns can call the Attorney General’s consumer hotline at 617-727-8400 or file a complaint with the office.

For more information on the AG’s Veterans Resource Guide, click here.

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