San Diego Christian College in Santee will pay $225,000 to resolve allegations that it compensated a student recruiting company in violation of a federal ban on incentive-based compensation, the Department of Justice announced Monday.
The university’s settlement resolves allegations that it hired student recruiting company Joined Inc. between 2014 and 2016 to recruit prospective students to SDCC and paid the company a share of the tuition SDCC received from enrolled, recruited students.
Title IV of the Higher Education Act prohibits institutions receiving federal student aid from compensating student recruiters with a commission, bonus, or other incentive payment based on the recruiters’ success in securing student enrollment, according to the Department of Justice.
“Higher education enrollment decisions should put students first,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division. “Offering recruiters financial incentives to enroll students undermines students’ ability to make educational decisions in their own best interests.”
The settlement stems from a lawsuit brought by an unnamed whistleblower, who will receive $33,750 of the settlement proceeds, according to the DOJ.
In a statement, a college spokesman said Tuesday: “Due to the anticipated costs of prolonged litigation as well as the distraction from the pursuit of its mission, SDCC’s Board of Trustees decided that it is in its best interest to come to this resolution. In addition to denying the allegations of the complaint, SDCC assures its students, faculty, staff, alumni, stakeholders, and the public that at no time did it submit a “false claim” to the government nor misuse federal taxpayer funds. This settlement concludes the government investigation into SDCC’s relationship with [Maurice] Shoe,” co-owner of Joined Inc., a California-based student recruiting company.
Reuben Guttman, who represents the whistleblower, told Times of San Diego that his client
lives on the West Coast.
“The case named three defendants: Oral Roberts, North Greenville University and San Diego Christian,” Guttman said. “This marks the third settlement, and approximately $3 million has been recovered.”
He said the settlement with San Diego Christian was small because it reflects the school’s financial condition and ability to pay.
“The settlement is being paid in installments,” Guttman said.
Neil Sanchez is special agent in charge of the U.S. Department of Education Office of Inspector General’s Southern Regional Office.
“Today’s settlement is a result of the hard work and effort of the Office of Inspector General and the Department of Justice to protect and maintain the integrity of the Federal student aid programs,” Sanchez said. “We will continue to work together to ensure that Federal student aid funds are used as required by law. America’s taxpayers and students deserve nothing less.”