Download the entire study, “For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices.”
You can also check out the GAO videos.
- Patricia
by Jamaal Abdul-Alim | Diverse Issues in Higher Ed
August 5, 2010
WASHINGTON – Secretly-recorded videos of shady practices within the for-profit college sector got aired Wednesday during an occasionally testy Senate committee hearing that probed the extent of those practices among the proprietary schools.
“Critics say it’s only a few bad apples. But I question if it’s the entire orchard,” said Sen. Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor and Pensions Committee.
Harkin was referring to for-profit colleges as a whole in light of a new Government Accountability Office (GAO) report based on an undercover investigation this summer that found 15 out of 15 for-profit colleges had made “deceptive or otherwise questionable statements” to GAO workers who posed as prospective students with hidden cameras to conduct their investigation.
The for-profit college sites that were targeted by the investigation were: the University of Phoenix in Arizona and Pennsylvania, Everest College of Arizona; Westech College and Kaplan College, of California; Potomac College and Bennett College, of Washington, D.C.; Medvance Institute and Kaplan College, of Florida; College of Office Tech and Argosy University, of Illinois; Anthem Institute, of Pennsylvania; and Westwood College, Everest College and ATI Career Training, of Texas.
Four of the 15 school sites the GAO investigated this summer encouraged students to commit fraud, according to the GAO report titled For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices.
The schools’ practices are of concern, Harkin said, because they are reaping a growing amount of federal aid--$23 billion today versus $4.6 billion a decade ago—that is flowing largely into the pockets of their executives and investors.
“I’m not certain regulations will suffice,” Harkin said at the hearing, titled For-Profit Schools: The Student Recruitment Experience.
“Where this is headed is toward legislation,” Harkin added, explaining that he wanted to come up with a permanent legislative solution that could not be overturned by another administration or rendered ineffective by regulatory exceptions.
Sen. Mike Enzi, (R-Wyoming) suggested the investigation be expanded to include all types of colleges, not just for-profit colleges -- a suggestion that drew a cool response from Democratic members of the committee.
Gregory Kutz, managing director of Forensic Audits and Special Investigations for the GAO, outlined and commented on the secretly-recorded video clips during the hearing that showed for-profit college officials telling students to falsify their federal student aid forms in order to get more federal aid, misleading them about the cost and value of the colleges’ offerings, and pressuring them to enroll without being able to consult a financial aid adviser.
In one clip, a for-profit college worker told the federal worker posing as a student not to disclose that he had $250,000 in savings from an inheritance because it was “none of the government’s business.”
In another clip, the government’s undercover worker is told that spending $115,000 for a computer drafting course was a “good value,” when in reality the same type of certificate earned through the program could be gotten for $520 at a local community college.
Other clips showed the for-profit college workers telling undercover government workers that they would earn more money than statistics suggest is true. For instance, one worker at a school with a program for barbers claimed that a barber in Washington, D.C., could make from $150,000 to $200,000 a year when statistics show most barbers in D.C. earn about $19,000 a year.
The clips repeatedly showed officials at the for-profit colleges denying the government’s undercover workers’ requests to speak with financial aid advisers before they actually enrolled.
“We kept saying, ‘We want to know how much it is,’” Kutz, of the GAO, said. “They kept saying, ‘No, no, no.’”
Kutz said the colleges' wrongdoings had been referred to the U.S. Department of Education's Inspector General's Office and might be referred for criminal prosecution or civil action, depending on the circumstances.
So damning were the clips that the Career College Association, which represents the for-profit college sector, issued a statement that was void of any direct appeals to not judge the entire sector by the actions of a few.
“Even if the problems cited in the GAO report are limited to a few individuals at a few institutions, we can have zero tolerance for bad behavior,” CCA president and CEO Harris Miller said.
Joshua Pruyn, a former admissions representative at Westwood College, a subsidiary of Alta College Inc., testified that admissions representatives were coached and pressured to act as sales representatives—something critics say undermines students’ interests.
“Students were absolutely not allowed to speak to anyone in financial aid,” Pruyn testified. “Our response was, ‘This was step one, you’re not allowed to jump to step two.’”
Pruyn said that, when he asked why this was standard practice, he was told the reason was not to overburden the college’s financial aid staff. But the real purpose, he said, was to get the students to make a commitment to enroll in the college up front.
“We were directed to say things like, ‘I thought you wanted to make a change,’” Pruyn testified.
That runs contrary to the standard practice espoused by the National Association for College Admission Counseling, according to David Hawkins, director of public policy and research at the organization, who also testified at the hearing.
“Our standard practice is to allow students to ask the kinds of questions about the things they need to know about financial aid,” Hawkins said.
One of the more heated moments occurred when Sen. Al Franken (D-Minn.) took witness Michael McComis, executive director of the Accrediting Commission of Career Schools and Colleges (ACCSC), to task on McComis’ testimony that the accrediting agency he oversees strives to “hold institutions accountable to ensure that only the highest level of integrity is injected into the student recruitment and admissions process” and to make sure that students are “accurately and fully informed” of an institution’s program.
Franken asked how those statements could be true when three schools that McComis’ agency accredited were found to have misled prospective students.
“Do you think perhaps your rigorous standards aren’t rigorous enough?” Franken asked.
“I don’t think so,” McComis responded.
“To me,” Franken shot back, “there is a real discrepancy here. Doesn’t this industry have any interest in self-policing itself?”
Later, under questioning, McComis acknowledged that a “key” part of its accrediting process is a self-evaluation done by the college that is seeking accreditation.
“You kind of go to the school, ask them how they’re doing, and if they say good, you say fine,” Sen. Harkin observed.
Harkin also questioned why the ACCSC accredited 41 schools with default rates higher than 30 percent within the first three years.
McComis said the ACCSC currently uses two-year default rates but doesn’t take them into account when accrediting a college.
“We have found in our data no correlation to indicate that default rates are directly statistically correlated to the quality of the education,” McComis said, adding that graduation and employment rates are better indicators of a program’s effectiveness.
The U.S. Department of Education has proposed a set of rules that would, among other things, take the student loan default rates among students into account when determining whether the schools should be eligible for federal aid.
Wednesday’s hearing was the second in what Harkin says will be a series of hearings on the for-profit college sector in the coming months. Harkin stated that accreditation was one of the areas he planned to look at in a future hearing.
Click here for a link to the GAO videos.
Showing posts with label for-profit colleges. Show all posts
Showing posts with label for-profit colleges. Show all posts
Thursday, August 26, 2010
Wednesday, July 21, 2010
Private, For-Profit Colleges Under the Microscope
by Reeve Hamilton | Texas Tribune
July 20, 2010
Dallas personal injury lawyer Julie Johnson’s foray into the fight against private, for-profit colleges began with a handful of would-be interior designers.
A few years ago, a group of students had come to Johnson for help: They had forked over thousands of dollars at a private, for-profit school, but their non-accredited course work didn’t pass muster for an interior design license. Since then, Johnson has devoted most of her practice to hounding “proprietary” or “career” colleges for failing to make good on their claims.
She’s not alone in her focus. Career colleges find themselves in the hot seat this year, as U.S. Sen. Tom Harkin, D-Iowa, leads federal hearings on the need to regulate for-profit recruitment practices and the warnings of hedge-fund manager Steven Eisman (who famously predicted the crash of the housing market) that the student loan market is the next bubble to burst. And one of Johnson’s most recent cases — Dallas-based students claiming they were misled into believing that their psychology doctoral program was in the process of being accredited by the American Psychological Association — landed a prime-time slot on PBS’s Frontline.
Bob Cohen, senior vice president of the Career College Association, a national coalition of proprietary schools, dismisses what he describes as self-interested detractors who tend to generalize isolated incidents for the sake of publicity. “A lot of what we’re seeing is the attempt by short-sellers on Wall Street or trial lawyers who have made a specialty practice to try to drum up this story,” he says. “But the basic fact remains that you have 2.8 million students in career schools, and they’re getting a good education.”
The pitch at these schools — ITT Technical Institute, Everest Institute and Kaplan College are some of the more pervasive names in Texas — is simple: Without the hassles of developmental courses and required liberal arts courses, students can get career-focused training and join the workforce in less time. Cohen says for-profit schools avoid what he dubs the “scavenger hunt” for courses that can occur at community colleges. “There, a lot of the onus was put on the student to get over that steeplechase and graduate,” he says. “At career colleges, we say, forget all that.” To the dismay of education traditionalists, that’s not a tough sell for an increasing number of Texans, even if the short-term cost of attendance is steeper than comparable public-sector options.
Johnson argues that the pitch is too often made to the most vulnerable Texans, who might not be aware of other options like a traditional community college route. “The kids that go to these schools do not come from three generations of Longhorns,” she says. “They’re the first to go.”
The population served by career colleges — which accounts for about 5 percent (more than 72,000) of total fall enrollments in the state and 7 percent (more than 130,000) of 12-month enrollments — mirrors that of community colleges: Nearly two thirds are minorities, many of them first-generation college-goers. But unlike their counterparts at community colleges, students at proprietary schools have difficulty transferring their credits to other Texas schools. Often this is a matter of traditional universities opting to only recognize the more prestigious regional accrediting bodies, whereas for-profit schools are generally accredited by national organizations.
At an April 20 hearing of the House Higher Education Committee, Joe Fisher, the former chair of the Career Colleges and Schools of Texas and the current president of for-profit Hallmark College, laid out his understanding of the dynamic. “It’s a turf war,” he said. “It’s elitism."
More than half of institutions of post-secondary learning in Texas are for-profit schools. Of those 216 schools, 72 percent offer certification in less than two years, while only 7 percent offer four-year degrees. A number of the certificates offered are not often found in traditional academia. For example, according to the Career College Association, 97 percent of somatic bodywork and related therapeutic services awards in Texas come from career colleges, which account for approximately 46 percent of all awards for health and clinical-related professions in the state.
Getting those awards (certificates, associate's degrees, bachelor's degrees or beyond) doesn’t come cheap. Argosy University, for example, charges $510 per credit hour for undergraduate courses, as opposed to the $50 per credit hour charge for Texas residents at public universities. As is the case at most schools, the answer for many students lies in loans — primarily of the federal variety, which career college students receive at rates similar to and occasionally higher than they would at public and private non-profit schools.
[For a breakdown of federal grants — totals and averages — given to Texas students at different types of institutions, click here.]
Education is changing, Cohen says, and to maintain the working middle class, it needs to be more tailored toward professions with a “tangible” return. “It can’t be where you go to school for six years and come out with a degree in Chaucer,” he says.
Speaking of return on investment, what if you take out a big loan and end up with a credential that employers and schools won’t recognize? The 16.5 percent default rate for proprietary schools in Texas notably outpaces public schools (7.7 percent) and private nonprofit institutions (4.9 percent). And that debt never goes away — student loans cannot be discharged, even in bankruptcy.
Johnson says she fully understands why people like Eisman are calling it the next housing crisis. “These students are being charged for educations that are poorly run with promises of employment that are undeliverable,” she says. “What are they going to do?”
Cohen insists that the default rates are in line with the expectations for the less well-off population they serve. As for the credential they receive, and how and if they can use it, that’s up to the student. While some professional societies require certification, sometimes certificates earned at career colleges can only be used as a resume booster — at best. “There’s various ins and outs,” Cohen says, “and the students really need to do their homework to understand what the circumstances are going in.”
“There is an element of self-responsibility to getting an education and getting a job,” Johnson acknowledges. “I think that there are students who go to one of these schools and then, depending on the degree that they choose, may ultimately get a career. But those are fewer than the norm.”
One bet that can be taken to the bank: Career colleges aren’t going anywhere. Faced with a budget shortfall projected to be as much as $18 billion at a time of record enrollments in higher education, Texas needs all the capacity-expanders it can get.
“They play a unique role,” says state Rep. Dan Branch, R-Dallas, who chairs the higher ed committee. “But they’ve got to balance access and quality. Obviously, we don’t want the credential to be illusory.” The regulatory structure in place to prevent degree mills is provided by the two agencies: the Texas Workforce Commission, which licenses institutions to operate, and to a lesser extent the Texas Higher Education Coordinating Board, which oversees degree programs. Currently, no state version of proposed federal regulations to curb predatory recruitment is in the works.
“We are monitoring the activities at the federal level, but I think Texas remains confident they have structured themselves right with the Workforce Commisson and the Coordinating Board,” says Jerry Valdez, a lobbyist for the Career Colleges and Schools of Texas.
Last session, Branch passed a bill bolstering (to the modest tune of $1.2 million) the Texas Career Opportunity Grant, which provides awards to economically disadvantaged Texans enrolled in career schools. He says career colleges are increasingly drawing attention as more education statisticians begin to count an individual with a certificate from a less-than-two-year program as a credentialed adult. Such considerations are important as Texas tries to close the achievement gaps that exist between it and other states in the next five years.
As proprietary schools stand to increase in numbers, capacity and relevance to the state’s higher education strategy, Johnson hopes that so, too, will the number of watchful eyes upon them.
July 20, 2010
Dallas personal injury lawyer Julie Johnson’s foray into the fight against private, for-profit colleges began with a handful of would-be interior designers.
A few years ago, a group of students had come to Johnson for help: They had forked over thousands of dollars at a private, for-profit school, but their non-accredited course work didn’t pass muster for an interior design license. Since then, Johnson has devoted most of her practice to hounding “proprietary” or “career” colleges for failing to make good on their claims.
She’s not alone in her focus. Career colleges find themselves in the hot seat this year, as U.S. Sen. Tom Harkin, D-Iowa, leads federal hearings on the need to regulate for-profit recruitment practices and the warnings of hedge-fund manager Steven Eisman (who famously predicted the crash of the housing market) that the student loan market is the next bubble to burst. And one of Johnson’s most recent cases — Dallas-based students claiming they were misled into believing that their psychology doctoral program was in the process of being accredited by the American Psychological Association — landed a prime-time slot on PBS’s Frontline.
Bob Cohen, senior vice president of the Career College Association, a national coalition of proprietary schools, dismisses what he describes as self-interested detractors who tend to generalize isolated incidents for the sake of publicity. “A lot of what we’re seeing is the attempt by short-sellers on Wall Street or trial lawyers who have made a specialty practice to try to drum up this story,” he says. “But the basic fact remains that you have 2.8 million students in career schools, and they’re getting a good education.”
The pitch at these schools — ITT Technical Institute, Everest Institute and Kaplan College are some of the more pervasive names in Texas — is simple: Without the hassles of developmental courses and required liberal arts courses, students can get career-focused training and join the workforce in less time. Cohen says for-profit schools avoid what he dubs the “scavenger hunt” for courses that can occur at community colleges. “There, a lot of the onus was put on the student to get over that steeplechase and graduate,” he says. “At career colleges, we say, forget all that.” To the dismay of education traditionalists, that’s not a tough sell for an increasing number of Texans, even if the short-term cost of attendance is steeper than comparable public-sector options.
Johnson argues that the pitch is too often made to the most vulnerable Texans, who might not be aware of other options like a traditional community college route. “The kids that go to these schools do not come from three generations of Longhorns,” she says. “They’re the first to go.”
The population served by career colleges — which accounts for about 5 percent (more than 72,000) of total fall enrollments in the state and 7 percent (more than 130,000) of 12-month enrollments — mirrors that of community colleges: Nearly two thirds are minorities, many of them first-generation college-goers. But unlike their counterparts at community colleges, students at proprietary schools have difficulty transferring their credits to other Texas schools. Often this is a matter of traditional universities opting to only recognize the more prestigious regional accrediting bodies, whereas for-profit schools are generally accredited by national organizations.
At an April 20 hearing of the House Higher Education Committee, Joe Fisher, the former chair of the Career Colleges and Schools of Texas and the current president of for-profit Hallmark College, laid out his understanding of the dynamic. “It’s a turf war,” he said. “It’s elitism."
More than half of institutions of post-secondary learning in Texas are for-profit schools. Of those 216 schools, 72 percent offer certification in less than two years, while only 7 percent offer four-year degrees. A number of the certificates offered are not often found in traditional academia. For example, according to the Career College Association, 97 percent of somatic bodywork and related therapeutic services awards in Texas come from career colleges, which account for approximately 46 percent of all awards for health and clinical-related professions in the state.
Getting those awards (certificates, associate's degrees, bachelor's degrees or beyond) doesn’t come cheap. Argosy University, for example, charges $510 per credit hour for undergraduate courses, as opposed to the $50 per credit hour charge for Texas residents at public universities. As is the case at most schools, the answer for many students lies in loans — primarily of the federal variety, which career college students receive at rates similar to and occasionally higher than they would at public and private non-profit schools.
[For a breakdown of federal grants — totals and averages — given to Texas students at different types of institutions, click here.]
Education is changing, Cohen says, and to maintain the working middle class, it needs to be more tailored toward professions with a “tangible” return. “It can’t be where you go to school for six years and come out with a degree in Chaucer,” he says.
Speaking of return on investment, what if you take out a big loan and end up with a credential that employers and schools won’t recognize? The 16.5 percent default rate for proprietary schools in Texas notably outpaces public schools (7.7 percent) and private nonprofit institutions (4.9 percent). And that debt never goes away — student loans cannot be discharged, even in bankruptcy.
Johnson says she fully understands why people like Eisman are calling it the next housing crisis. “These students are being charged for educations that are poorly run with promises of employment that are undeliverable,” she says. “What are they going to do?”
Cohen insists that the default rates are in line with the expectations for the less well-off population they serve. As for the credential they receive, and how and if they can use it, that’s up to the student. While some professional societies require certification, sometimes certificates earned at career colleges can only be used as a resume booster — at best. “There’s various ins and outs,” Cohen says, “and the students really need to do their homework to understand what the circumstances are going in.”
“There is an element of self-responsibility to getting an education and getting a job,” Johnson acknowledges. “I think that there are students who go to one of these schools and then, depending on the degree that they choose, may ultimately get a career. But those are fewer than the norm.”
One bet that can be taken to the bank: Career colleges aren’t going anywhere. Faced with a budget shortfall projected to be as much as $18 billion at a time of record enrollments in higher education, Texas needs all the capacity-expanders it can get.
“They play a unique role,” says state Rep. Dan Branch, R-Dallas, who chairs the higher ed committee. “But they’ve got to balance access and quality. Obviously, we don’t want the credential to be illusory.” The regulatory structure in place to prevent degree mills is provided by the two agencies: the Texas Workforce Commission, which licenses institutions to operate, and to a lesser extent the Texas Higher Education Coordinating Board, which oversees degree programs. Currently, no state version of proposed federal regulations to curb predatory recruitment is in the works.
“We are monitoring the activities at the federal level, but I think Texas remains confident they have structured themselves right with the Workforce Commisson and the Coordinating Board,” says Jerry Valdez, a lobbyist for the Career Colleges and Schools of Texas.
Last session, Branch passed a bill bolstering (to the modest tune of $1.2 million) the Texas Career Opportunity Grant, which provides awards to economically disadvantaged Texans enrolled in career schools. He says career colleges are increasingly drawing attention as more education statisticians begin to count an individual with a certificate from a less-than-two-year program as a credentialed adult. Such considerations are important as Texas tries to close the achievement gaps that exist between it and other states in the next five years.
As proprietary schools stand to increase in numbers, capacity and relevance to the state’s higher education strategy, Johnson hopes that so, too, will the number of watchful eyes upon them.
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