For-profit colleges: Money buys government, not quality for students

12 Dec

For-profit education institutions are problematic. There is an inherent possible conflict. The goal of an education institution should be to provide a quality education for those who attend. The goal of a for-profit institution is to provide a return to its shareholders or owners. The conflict is when the profit motive is supreme to providing a quality education. The General Accounting Office (GAO) has a report which details just how far from bargains some for-profit schools are. According to the article, GAO: 15 For-profit Colleges Used Deceptive Recruiting Tactics written by Daniel de Vise and Paul Kane some for-profit schools used deceptive practices to recruit students.

The GAO summarized their findings:

Undercover tests at 15 for-profit colleges found that 4 colleges encouraged fraudulent practices and that all 15 made deceptive or otherwise questionable statements to GAO’s  undercover applicants. Four undercover applicants were encouraged by college personnel to falsify their financial aid forms to qualify for federal aid–for example, one admissions representative told an applicant to fraudulently remove $250,000 in savings. Other college representatives exaggerated undercover applicants’ potential salary after graduation and failed to provide clear information about the college’s program duration, costs, or graduation rate despite federal regulations requiring them to do so. For example, staff commonly told GAO’s applicants they would attend classes for 12 months a year, but stated the annual cost of attendance for 9 months of classes, misleading applicants about the total cost of tuition. Admissions staff used other deceptive practices, such as pressuring applicants to sign a contract for enrollment before allowing them to speak to a financial advisor about program cost and financing options. However, in some instances, undercover applicants were provided accurate and helpful information by college personnel, such as not to borrow more money than necessary. In addition, GAO’s four fictitious prospective students received numerous, repetitive calls from for-profit colleges attempting to recruit the students when they registered with Web sites designed to link for-profit colleges with prospective students. Once registered, GAO’s  prospective students began receiving calls within 5 minutes. One fictitious prospective student received more than 180 phone calls in a month. Calls were received at all hours of the day, as late as 11 p.m. To see video clips of undercover applications and to hear voicemail messages from for-profit college recruiters, see Programs at the for-profit colleges GAO tested cost substantially more for associate’s degrees and certificates than comparable degrees and certificates at public colleges nearby. A student interested in a massage therapy certificate costing $14,000 at a for-profit college was told that the program was a good value. However the same certificate from a local community college cost $520. Costs at private nonprofit colleges were more comparable when similar degrees were offered.

Eric Lichtblau’s New York Times article, With Lobbying Blitz, For-Profit Colleges Diluted New Rules  is yet another example of we have the government money has bought, not the best government money could buy.

Last year, the Obama administration vowed to stop for-profit colleges from luring students with false promises. In an opening volley that shook the $30 billion industry, officials proposed new restrictions to cut off the huge flow of federal aid to unfit programs.

But after a ferocious response that administration officials called one of the most intense they had seen, the Education Department produced a much-weakened final plan that almost certainly will have far less impact as it goes into effect next year.

The story of how the for-profit colleges survived the threat of a major federal crackdown offers a case study in Washington power brokering. Rattled by the administration’s tough talk, the colleges spent more than $16 million on an all-star list of prominent figures, particularly Democrats with close ties to the White House, to plot strategy, mend their battered image and plead their case.

Anita Dunn, a close friend of President Obama and his former White House communications director, worked with Kaplan University, one of the embattled school networks. Jamie Rubin, a major fund-raising bundler for the president’s re-election campaign, met with administration officials about ATI, a college network based in Dallas, in which Mr. Rubin’s private-equity firm has a stake.

A who’s who of Democratic lobbyists — including Richard A. Gephardt, the former House majority leader; John Breaux, the former Louisiana senator; and Tony Podesta, whose brother, John, ran Mr. Obama’s transition team — were hired to buttonhole officials.

And politically well-connected investors, including Donald E. Graham, chief executive of the Washington Post Company, which owns Kaplan, and John Sperling, founder of the University of Phoenix and a longtime friend of the House minority leader, Nancy Pelosi, made impassioned appeals.

In all, industry advocates met more than two dozen times with White House and Education Department officials, including senior officials like Education Secretary Arne Duncan, records show, even as Mr. Obama has vowed to reduce the “outsize” influence of lobbyists and special interests in Washington.

SHAME on the weasels who caved.  The reasons for the attempt to regulate for-profit colleges were detailed by Tamar Lewin in the New York Times article, For-Profit College Group Is Sued As U.S. Lays Out Wide Fraud

Before signing-up for any course of study, people must investigate the claims of the institution of higher learning regarding graduation rates and placement after completion of the degree. The U.S. Department of Education has an accreditation database and you can always check with the department of education for your state. Back to College has a good explanation of College Accreditation: Frequently Asked Questions

Too bad, we have the government which money has bought, not the best government money could buy.


For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices

GAO-10-948T August 4, 2010

Highlights Page (PDF)   Full Report (PDF, 30 pages)   Accessible Text   Video

Dr. Wilda says this about that ©

3 Responses to “For-profit colleges: Money buys government, not quality for students”


  1. Online for-profit K-12, good for bankers, bad for kids « drwilda - December 14, 2011

    […] For-profit colleges: Money buys government, not quality for students […]

  2. For-profit colleges: It’s all about the $$$ « drwilda - October 16, 2012

    […] For-profit colleges: Money buys government, not quality for students                                                                       […]

  3. Center for Analysis of Postsecondary Education and Employment study: Community college students who transfer to for-profit higher education don’t earn as much | drwilda - January 29, 2014

    […] For-profit colleges: Money buys government, not quality for students […]

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