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Kentucky AG Reveals Trade School Chain’s Sleight of Hand

Published:  October 5, 2011

Kentucky Attorney General Jack Conway has exposed yet another trick of the trade that some for-profit schools use to mislead prospective students about their success in placing graduates into jobs.

Last week, Conway filed a consumer protection lawsuit against National College, accusing the small for-profit school chain of deceiving prospective students by disclosing job placement rates for its Kentucky campuses that are significantly higher than those it reports to its accreditor. The company, which enrolls about 5,000 students in the state, trains students in fields such as “medical office assistant, surgical technology, nursing, information systems engineering, and business administration,” the lawsuit says.

According to the complaint, from 2008 through the end of 2010, National College published on its website the following “successful employment” rates for graduates at its Kentucky campuses:

  • 94% at Lexington
  • 96% at Louisville
  • 84% at Pikeville
  • 91% at Richmond

But during the same period of time, the lawsuit says the company disclosed to the Accrediting Council for Independent Colleges and Schools (ACICS) much lower rates for each of these campuses. For example, National College reported the following rates for students who graduated from these schools from July 1, 2009 to June 30, 2010:

  • 79.5% at Lexington
  • 60.1% at Louisville
  • 70.3% at Pikeville
  • 78.2% at Richmond

So what accounts for these differences? National College officials have not officially responded to this question yet. But after learning that Conway was investigating their schools, they showed their hand.

According to the lawsuit, “sometime between December 15, 2010 when the Attorney General served National with a civil investigatory Subpoena and Investigative Demand and March 15, 2011,” the trade school chain added a disclaimer on its website noting that “the successful employment” rates that it advertises represent graduates “who are employed in any field.” [Emphasis added] In other words, it doesn't matter what kind of job its graduates get. As long as they are not unemployed, they are considered to be "successfully placed." Presumably, these figures include some who are flipping burgers at McDonald’s or serving coffee at Starbucks because their training did not pay off.

This is not an isolated case.

A year ago, the investigative news team at WFAA-TV in Dallas learned that the trade school chain ATI Enterprises was advertising one rate to prospective students and reporting an entirely different one to the Texas Workforce Commission, the state regulatory agency that oversees for-profit schools. In a newscast at the time, the station reported:

To get prospects in the door, ATI saturates daytime TV with commercials. In a YouTube video, ATI founder Arthur Benjamin praises ATI’s job placement rate.

‘Ninety percent of the people get jobs they were trained to do within a short period of time,’ Benjamin said.

But the real number is much lower.

State records show 70 percent of ATI’s North Texas graduates got jobs in the most recent reporting period.

Of course, WFAA's reporters ultimately discovered that the job placement rates that ATI was reporting to the Texas Workforce Commission were also wildly inflated. After conducting its own investigation, the Texas commission agreed with this assessment and forced ATI to shut down 22 training programs that it was offering in Texas.

Could the same be true of the rates that National College reports to ACICS? We don't know because Attorney General Conway has not delved into this area yet. But at Higher Ed Watch, we hope he turns his attention to it soon. Because given the for-profit higher education industry’s track record in this area (and that of the schools’ accreditors), there’s plenty of reason to be suspicious.


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