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Heads Will Roll at For-Profit Colleges -- But Not the Right Ones

Published:  August 5, 2010

At the moment yesterday when a packed Senate hearing room started watching video of career college recruiters lying to and badgering federal investigators posed as prospective students, the debate over for-profit higher education took a decisive turn.

For-profit college leaders and lobbyists can no longer simply deny that serious recruiting abuses have occurred at their schools, or claim that allegations of deceptive practices are the products of the imagination of “disgruntled” former employees and students, as they have done for years. A recently-completed undercover investigation by the Government Accountability Office -- which found (and secretly recorded) “fraudulent, deceptive, or otherwise questionable marketing practices” at every single one of the 15 for-profit schools it visited -- put those claims to rest.

But that does not mean that the proprietary school companies implicated in the probe are ready to accept blame and change their ways. No, they have come up with a new tack -- scapegoating “rogue” employees. In statements they put out this week, spokesmen for these corporations bent over backwards to make clear that the companies were taking the charges seriously and that heads would roll as a result. They were not, however, talking about the heads of the corporate bigwigs who have created a “recruit at any cost” culture at their schools, but those of the individual employees who were caught red-handed by the GAO’s hidden cameras.

Here’s what these spokesmen had to say:

“We will take all necessary actions – including termination – with respect to any employee found to be in violation of our clearly outlined standards and the code of conduct that is emphasized in our repeated training and our day to day operations.”– Kaplan Higher Education (The GAO visited two of the companies schools, both of which it found had refused to allow the undercover applicant to speak to a financial aid administrator before enrolling.)

The company will take “immediate and decisive disciplinary action up to, and including, termination of the employees involved.” University of Phoenix  (The GAO visited two of the corporation’s schools, both of which it found had failed to disclose accurate graduation rates, gave misleading information on pricing, and encouraged over-borrowing.)

“We are appalled by the actions of our employees included in the GAO investigation. These actions go against everything we stand for as an institution."Westwood College (The GAO visited one school in this chain, which the GAO accused of engaging in fraud by encouraging an undercover applicant to falsify his federal student aid application to qualify for Pell Grants.)

Meanwhile, the Career College Association (CCA) was in full crisis management mode this week, offering a six-point plan to address the problems that the GAO identified. Predictably, the group also focused on individual wrongdoing. “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 Harris Miller said in a statement on Tuesday. Miller was even blunter in a column he wrote for AOL News the next day, saying that the GAO report revealed that “a small number of school admissions and financial aid personnel felt they had to paint outside the lines.”

Speaking at a Senate hearing on Wednesday, Gregory Kutz, managing director of the GAO’s Office of Forensic Audits and Special Investigations, warned that the for-profit higher education industry would react this way. “We’ve seen this before in other undercover investigations we’ve conducted, the organizations say that was a rogue employee,” Kutz told members of the Senate Health, Education, Labor and Pensions Committee. “But I suspect in some of these cases, that’s absolutely not true.”

Kutz said that the enrollment counselors at the largest for-profit higher education companies he investigated seemed to be following a script prepared by their corporate bosses. As a result, holding the individual recruiters responsible, he said “is probably unfair because I expect anybody who would have walked in…and that was trained a certain way in marketing was going to follow the same script.”

At Higher Ed Watch, we couldn’t agree more. As we’ve long argued, the problems that the GAO unearthed are symptomatic of a for-profit higher education culture driven by Wall Street, which demands constant growth from these schools, even if doing so is not in the best interests of their students.

This means that these schools are regularly in a frenzy to meet the aggressive enrollment targets set by their bosses back at the companies’ headquarters. As many current and former for-profit college recruiters have attested, they are under a tremendous amount of pressure to get students in the door and signed up for classes and financial aid, even if they know full well that many of these individuals have little chance of succeeding and don’t fully understand their student loan repayment obligations.

The fact that the GAO was able to so easily find these abuses at a time when the industry is coming under such withering scrutiny shows just how endemic these practices really are. That’s why quick fixes -- like firing a few misguided employees -- won’t make any difference at all.

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