California University to Pay$225,000 for Allegedly Violating Ban on Incentive Compensation

(Excerpts from DOJ News)

    • San Diego Christian College (SDCC), based in Santee, California, will pay $225,000 to resolve allegations under the False Claims Act for submitting false claims to the U.S. Department of Education in violation of the federal ban on incentive-based compensation, the Justice Department announced today.
    • Title IV of the Higher Education Act (HEA) prohibits any institution of higher education that receives federal student aid from compensating student recruiters with a commission, bonus, or other incentive payment based on the recruiters’ success in securing student enrollment.  The incentive compensation ban protects students against admissions and recruitment practices that serve the financial interests of the recruiter rather than the educational needs of the student.
    • The settlement, which was based on SDCC’s ability to pay, resolves allegations that between 2014 and 2016, SDCC hired Joined, Inc., a California-based student recruiting company, to recruit students to SDCC.  The United States contended that SDCC compensated Joined with a share of the tuition that SDCC received from the enrollment of recruited students, in violation of the prohibition on incentive compensation.
    • The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act by Maurice Shoe, the co-owner of Joined.  The Act permits private parties to sue on behalf of the government for false claims and to receive a share of any recovery.  As part of today’s resolution, the whistleblower will receive $33,750.