Study Across the Pond, LLC (SATP) and its principal, John Borhaug, have agreed to pay $1.3 million to settle allegations that they caused United Kingdom schools to submit false claims for federal student aid to the U.S. Department of Education. The settlement follows a lawsuit filed by the United States in April 2024, which accused SATP and Borhaug of encouraging foreign schools to make arrangements that violated federal rules prohibiting incentive-based compensation for student recruitment.
“Today’s settlement resolves the United States’ lawsuit against Study Across the Pond and Mr. Borhaug, who used improper incentives in an attempt to influence American students to attend foreign schools,” said United States Attorney Leah B. Foley. “My office is committed to ensuring American students are not taken advantage of for financial gain and protecting the integrity of federal student financial aid programs.”
Assistant Attorney General Brett Shumate added: “American students deserve to make enrollment decisions free of the improper influence of third-party recruiters who pursue their own financial gain rather than the students’ best interests. Today’s settlement demonstrates the Department’s commitment to holding accountable individuals and corporate entities who violate the Incentive Compensation Ban and to protect the integrity of the federal student aid programs like the Direct Loan Program.”
Jason Williams, Assistant Inspector General for Investigation Services at the U.S. Department of Education Office of Inspector General, stated: “Today’s settlement is a result of the hard work and effort of the Office of Inspector General, the U.S Department of Education, and the U.S. Department of Justice to protect and maintain the integrity of Federal student aid programs by enforcing applicable laws, including the incentive compensation ban. We will continue to work together to ensure that Federal student aid funds are used as required by law.”
Federal law under Title IV of the Higher Education Act bars institutions receiving federal student aid from paying commissions or bonuses based on how many students recruiters enroll—a rule known as the Incentive Compensation Ban. This regulation aims to prevent aggressive recruiting practices that prioritize recruiter profits over students’ educational needs.
The settlement agreement states that SATP entered into contracts with UK schools where it received a percentage share of tuition paid by American students recruited through its efforts. These tuition payments were often funded by federal student aid programs, meaning SATP benefited financially from arrangements prohibited under federal law. In some cases, when UK schools questioned whether these agreements were allowed, SATP switched to so-called “flat fee” contracts instead.
The case also involved claims brought under whistleblower provisions in federal law that allow private parties—known as relators—to file lawsuits on behalf of the government and receive part of any recovered funds if successful.
U.S. Attorney Foley announced today’s resolution along with Assistant Attorney General Shumate and DOE-OIG Assistant IG Williams. The matter is being handled by Assistant U.S. Attorneys Brian LaMacchia and Alexandra Brazier from Massachusetts’ Affirmative Civil Enforcement Unit and Trial Attorney Allison Carroll from DOJ’s Civil Division.