The U.S. Department of Education (Department) today announced that its office of Federal Student Aid (FSA) reached a settlement agreement with Baker College (Baker), which includes a $2.5 million fine, due to violations of the Higher Education Act of 1965 (HEA) and related regulations. FSA determined through an investigation that the private, non-profit institution in Michigan made misrepresentations about its graduates’ job placement rates and potential salaries that could harm students relying on the college’s website and marketing materials. Among other misrepresentations, Baker falsely claimed that its graduates had significantly higher job placement rates and salaries than they actually did.
Nearly five years of substantial misrepresentation
FSA's thorough investigation determined that, for several years, Baker published "career outcomes rates” on its websites that were both inaccurate and misleading. While these websites gave the impression that all of Baker’s graduates were included in the Career Outcomes Rates, they did not disclose how many students responded to the survey. The rates actually represented fewer than all of the graduates, leading students to believe that the career outcomes rates related to more graduates than they actually did. In addition, for several years, the institution also advertised via email that it had an overall career outcomes rate of about 91% and that its automotive program had a rate of nearly 96%, without defining what a “career outcome” meant in that email. These figures give the impression to prospective students that nearly all Baker graduates earned employment in a paid position. The institution did not explain in those emails that the “career outcomes rates” included unpaid options like continuing education.
Baker also provided a list of employers on its website that it claimed had hired Baker graduates. However, FSA’s investigation found that fourteen of more than 100 listed employers had actually hired those individuals before they enrolled at Baker, creating the impression that a Baker degree had an impact on the employer’s decision to hire these individuals when it did not.
FSA’s investigation also determined that Baker misrepresented its graduates’ earnings. Baker published on its website a median yearly income and salary for executives on most of its program pages. On these pages, Baker used national data from the U.S. Department of Labor’s Bureau of Labor Statistics for its advertised incomes, rather than data from its own graduates.
Finally, Baker failed to appropriately calculate, report, and publish employment rates each year for its culinary programs as required by the American Culinary Federation Education Foundation Accreditation Commission. Instead, Baker published information for two of its culinary programs that included rates that were between 16 and 60 percentage points higher than was accurate.
FSA 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. As a result of these misrepresentations, Baker agreed to pay a fine of $2.5 million. The institution also agreed to other terms, including committing to making no misrepresentations, providing copies of all marketing materials to FSA for review for a period of three years, and sending communications to current students and employees informing them about how they can submit complaints or provide information about misconduct to the Department.
Holding institutions accountable and protecting students and taxpayers
This settlement demonstrates the Department’s ongoing commitment to enforcing higher education laws and regulations and protecting students and taxpayers.
As a part of this effort, FSA also publishes enforcement bulletins to proactively make schools aware of potential violations and aid schools in their compliance efforts. In September 2024, FSA published an enforcement bulletin about conduct by institutions that creates risk of engaging in misrepresentations, similar to Baker’s violations. For example, FSA warned schools about:
- Publishing salary information that is based on broadly applicable data (including from the Bureau of Labor Statistics) but presenting that information as data reflecting salaries earned by the school’s graduates;
- Comparing their job placement rates to that of peer institutions without sufficient substantiation; and
- Stating or implying that their degrees or certificates will help students become licensed in a field that does not require a license.
The Department also recently published a bulletin warning institutions they could violate the HEA if they do not make their cost of attendance readily available without including barriers, such as demanding that prospective students come in-person to the school or provide personal information before receiving cost of attendance information.
More information and data about the Department’s enforcement and oversight efforts are available on StudentAid.gov.