Kaydean Geist won't spend time in jail for failing to refund student financial-aid checks while running the now-closed Masters of Cosmetology Beauty College.
On Wednesday, Geist was given a suspended two-year sentence, and ordered to pay $300,000 restitution and a $100 special assessment.
Geist failed to refund the student financial-aid funds, instead depositing them in her personal investment account. She required students to sign checks over to the school without allowing them to see the amount borrowed, telling them the loans were part of a government program that would require little, if any, repayment.
The revenue of the school increased, but neither the number of students nor the tuition did, Assistant U.S. Attorney Tina Nommay has said.
At the same time the charge against her was filed in U.S. District Court, Geist filed a guilty plea through her attorney, admitting to violating federal student-aid laws. At the time of her plea, Geist returned $300,000 to the U.S. Department of Education, according to court documents.
Geist and the school were named in a civil lawsuit demanding a combined $11.6 million in repayment.
In April, David Capp, the U.S. attorney for the Northern District of Indiana, announced the "vast majority" of the loans hanging around the necks of the former students of the Masters of Cosmetology school would be declared unenforceable and uncollected.
In March 2015, the U.S. Department of Education released a list of colleges being monitored for student-aid compliance. While five Indiana schools were on the list, only Masters of Cosmetology was listed as "Level 2," which means it cannot apply for federal funds until it has used its initial funds.
As part of her plea agreement with federal prosecutors, Geist conceded to a lifetime ban from all U.S. Department of Education programs.