For-Profit Colleges Caught On Video Encouraging Financial Aid Fraud

According to the Dept. of Education, enrollment in for-profit colleges has exploded in recent years, growing nearly 500%. Last year alone, students at for-profit colleges received more than $4 billion in Pell Grants and more than $20 billion in federal loans. With all that money floating around, the Government Accountability Office was asked to investigate — and their findings will probably not please taxpayers.

The GAO sent a handful of investigators undercover as prospective students to 15 different for-profit colleges in six states and the District of Columbia. Among the colleges investigated were some that received at least 89% of their revenue from federal student aid.

Investigators found that all 15 colleges “made deceptive or otherwise questionable statements to GAO’s undercover applicants,” and four of them “encouraged fraudulent practices.”

Among those fraudulent practices encouraged:
* A financial aid rep at a school in California encouraged the undercover applicant “to change the FAFSA to falsely increase the number of dependents in the household in order to qualify for Pell Grants.”

* At a school in Florida, a financial aid representative suggested to the undercover applicant “that he not report $250,000 in savings reported on the FAFSA. The representative told the applicant to come back once the fraudulent financial information changes had been processed.”

* When an undercover applicant in PA told a financial aid rep he’d received $250,000 in inheritance, he was told “he should have answered ‘zero’ when asked about money he had in savings.” The applicant was also told to “correct” his application to reflect the change to zero.

* Everything is bigger in Texas, including the fraud. That’s where an admissions rep “encouraged applicant to change the FAFSA to falsely add dependents in order to qualify for Pell Grants,” and then “assured the undercover applicant that he did not have to identify anything about the dependents, such as their Social Security numbers, nor did he have to prove to the college with a tax return that he had previously claimed them as dependents.”

Admissions and financial aid officers also misrepresented and misled the applicants in other ways:
* Undercover applicants were frequently told they would attend classes for 12 months a year, but were quoted an “annual cost” that only accounted for for 9 months of classes.

* College reps exaggerated 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.”

* Applicants were pressured to sign a contract for enrollment before being allowed to speak to a financial advisor about program cost and financing options. Fast forward to 8:28 in the video and watch what happens when an applicant refuses to sign the enrollment form without first discussing financial aid.

GAO also investigated the practices of for-profit colleges as they relate to websites designed to link applicants to educators.

Writes the GAO:

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.

The investigation also found that for-profit colleges are often a waste of money because the same associate’s degrees and certificates are usually available at nearby public colleges and community colleges for significantly less.

For example:

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.

Here’s the GAO video. It’s all intriguing, but if you want to see how nasty these high-pressure sales pitches can get, skip to 8:28. If you’re averse to video-watching or can’t watch the clip at work, here’s a link to the transcript of the video.

To read the entire GAO report [PDF] click here.

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  1. Wang_Chung_Tonight says:

    I’m not shocked.

    My alumni keeps sending me requests for money. Like I’m just going to shell out some cash cause they are awesome (not).

    Between 2004-2008 the cost of admission doubled. Any that’s not enough?

    I’m going to send them a letter asking for money.

    • danmac says:

      Every now and then my alma mater sends me money; it’s always from class-actions lawsuits that they lose.

    • tbax929 says:

      My (state) university made me pay out-of-state tuition even though I was told when I transferred I would be considered in-state (working full-time, maintaining my own residence, guardian of two kids, etc., etc.)

      I appealed their decision. The appeal was a joke, it was heard by their own board. No conflict of interest there! They charged me 3X what an in-state student would pay. I wouldn’t have transferred had I known I was going to have to pay that much. But I bit the bullet and paid the money and graduated. Now when they ask me for money, I laugh and hang up on them.

      • APriusAndAGrill says:

        If it is a public school then they get paid the same whether you are in state or out of state…. it is just that in state tuition is usually about 70% subsidized by the state. At least that is how it is in NC. Basically, any public university will receive about $7000 a year per student if they are in state.

    • agent 47 says:

      I hear ya. Once I get a job that is worthy of what I spent to go to college, then I’ll donate…

    • sonneillon says:

      Oh yeah. Those bastards. Maybe if my alumni actually help me get a higher paying position then maybe I’ll give back to them, but I look at my 60k of student loans from my BA and MBA, and just frown super hard at alumni letters.

  2. Fineous K. Douchenstein says:

    Where there is free money, there will be crooks. Guaranteed.

    • mac-phisto says:

      this is why i think education as a whole has outpaced inflation consistently over the past couple decades. between government funding & government protection of loan investors from bankruptcy, the business of “financial aid” is a cash cow.

      i appreciate the existence of government education loans & grants (& was lucky enough to get some help financing my education), but sometimes i think the whole system would be better off without uncle sam’s help.

      • hansolo247 says:

        Agree fully.

        The easy aid and protection of lenders has made student credit flow like wine.

        More qualified (financially) students to the same number of seats means the colleges can charge more. State schools do it too. While they can’t technically profit from it, they are adding amenities that any fiscally prudent person would see as excessive.

        Problem is, then the students get USED TO IT. They come out with a $40K job…if lucky…and to live in the same lifestyle, they pull out the credit card. Sadly, the whole “living on Ramen” thing is now gone. Students now live VERY well, but at great cost.

        Of course, this is all part of the plan. Debt fuels the economy…it’s the only way the powers that be can keep it going.

        Then you have the students that go to the for-profit schools. Next to no one in the business world takes them seriously. The students have $50K+ in debt at graduation, and then find they can’t get a job because hiring managers consider their degree a joke. While it may not be, even the most daring hiring managers still have some skepticism.

        I’m not sure which way the winds will blow, but it seems the government wants to take exclusive control, then forgive debt en masse. This won’t help the cost situation…it will essentially enable kids to live like kings for a few years on my dime. Then, of course, they won’t learn any lessons, and will be financial slaves their entire lives (which, again, keeps this messed up economy we have “going”).

        • sonneillon says:

          It depends. The problem is that without human capital (higher ed) we will lose our edge. The more people with a better education and with extra skill sets the more productive we become as a nation. I think that if we just linked the FAFSA with your IRS return and just say this is my contact and personal information. Here are my parents. Here is the authorization to see my taxes. Then everything is propagated automatically by the IRS. I think we could cut down on a reasonable amount of fraud. Some countries, like Canada, Australia, Parts of Europe just pay the bill for college. At the end of my masters I’ll have 60k in loans and that kind of sucks.

          Although if done correctly (and most of the time it is not) making college a system where if you do well you get a free ride and if not you get the boot isn’t bad, but there are problems there. Whats tye answer to a complex political and social problem?
          I don’t know.

        • chargernj says:

          Why do you say, “the government wants to take exclusive control, then forgive debt en masse.” I’m a financial aid counselor, you would think I might have heard of such a plan coming down the pike.

          • AustinTXProgrammer says:

            Well they did decide to end government guaranteed loans and issue them directly. So the first part of the statement is backed with fact. The second part is speculative.

            I think the move was a good one, I hate the public/private partnerships where the upside is private and the risk is public. It’s the worst possible use of tax dollars.

  3. Thyme for an edit button says:

    This does not surprise me. It’s easy money for the schools.

  4. smo0 says:

    I don’t understand the appeal, I really don’t… if Comm. Colleges offer the same for less – why aren’t they stepping in ? Sort of a “do the right thing” appeal there….

    • target_veteran says:

      Community colleges don’t generally have the same advertising budget these for-profit schools have. Community colleges don’t have the same aggressive recruiting practices. Community colleges have a stigma of not being a “real” university, even though they offer the same degrees and courses that these places do.

      • smo0 says:

        That may be so, but it doesn’t stop them from reaching out.
        There are many counselors and advisors that make visits to highschools… maybe they should push that more… get them while they’re still in the “womb” so to speak.

      • tbax929 says:

        If I had to do it over again, I’d have done my first two years at a community college then transferred to a state school. There is a stigma, but the only school potential employers care about is the last one you attended.

      • psm321 says:

        That’s funny… I’d certainly respect a community college degree more than a DeVry or ITT or Univ of Phoenix degree

        • RvLeshrac says:

          I’m not sure why you’d respect a degree from *anywhere*, really, when it comes to tech. Save possibly MIT. Most schools are years behind the *back end* of the curve, and anyone learning technical skills from a book is going to be completely unprepared to operate in the real world.

          I’ve never encountered an in-the-wild network or server configuration that even came close to spec.

          • mac-phisto says:

            hey, you want to talk about behind the curve? i went to a full-on engineering university that consistently ranks in the top 10 & they were so far behind it, you couldn’t even see the curve ahead. how far behind? they were still teaching FORTRAN* & the entire ENG prof staff had a hard-on for making sure that you could write code in it in your sleep.

            *& i’m not talking modern revisions here – i’m talking ENIAC-era FORTRAN.

            • hansolo247 says:

              Well, there’s another side to that.

              I took many CS classes in 1993-1995 (wound up doing another major…economics).

              The classes I took were good, but the tech was…lame. This was at UT-Austin, which had a well-regarded CS program. I learned a lot before even touching a computer. I think it has helped overall, as what I learned 17 years ago is still applied quite often in my current job. The tools changed, but the thinking did not. When you truly learn the logical thought skills (and not just copy and paste other people’s work) you’ll do quite well.

              While CS and IT are not the same as IT is more practical and needs to be current, you can still get a good education nonetheless.

              • Willnet says:

                I agree. I’ve been a self taught computer tech for a few years and am tired of having to google everything, use utilities to troubleshoot that other people have made, and not knowing the basics of programming. This is why I am studying for a CS degree.

            • flipflopju says:

              In 2005, my school only taught ADA in CompSci I & II. We were in no way placing people in defense department positions either, not that it would matter since even they phased it out in the 90s.

          • psm321 says:

            For very specific IT stuff like that, specific community college courses are going to be more useful than a university CS degree. CS teaches you how to think in the right terms though.

            • MrEvil says:

              What they teach students in a CS program has relatively little to do with how to be a sysadmin. In fact, getting a CS degree just to become a sysadmin is probably a good waste of money because you’re going to have to shell out MORE to learn all the sysadmin stuff. I focused my education more towards electronics and computer networking which DID teach me all the sysadmin stuff I need to know.

        • nybiker says:

          I don’t know about DeVry or ITT, but the folks at U of P must be raking in the big bucks since they were (and still are) able to afford the naming rights for the football stadium for the cardinals.

          Someone mentioned about an IT degree being behind the times at colleges. My university here in NYC was using punch cards at the time I was getting my math/cis degree. The summer I graduated they installed a mainframe system for everyone. Good thing I had my computer lab assistant job so I had an account on the Univac 1106 (ah, text based Dungeons & Dragons!). Of course, at the time I ended up as a programmer at Manny Hanny.

        • megscole64 says:

          Why? My community college financial aid office made “recommendations” for getting more aid all the time. So did our high school counselors.

          My husband got his degree from U of P and they were great for him. He didn’t have anyone pressure or recommend fraudulent reporting for aid.

          All higher education schools are crooks as far as I’m concerned. The price for a degree is ridiculously inflated and paying for all sorts of unnecessary administrators and highly paid staff who don’t actually teach.

    • Gramin says:

      They don’t necessarily offer the same thing for less. For example, to become a cosmetologist requires going to beauty school. Most community colleges don’t offer beauty school. These for-profits provide education for areas that are underserved by community colleges.

      • smo0 says:

        There are reputable cosmetology and cooking schools, for example – they’ve been around for decades… then these “tech” schools popped up and all of the sudden, you have no idea who you can trust for a vocational degree.

        • Gramin says:

          Agree. But it’s not just tech colleges. The GAO report specifically mentions a D.C. area beauty school that was using deceptive practices.

    • TimothyT says:

      Sometimes it’s the time it takes to get the degree. Technical colleges can get you your AS in usually eighteen months, while the traditional college can take years.

    • Verdant Pine Trees says:

      Community colleges are doing their part – and enrollment is up. Way up in many places, like 10 and 15%.

      Ad budget is one thing. Depends on the school and the region.

      There’s also the ignorance of folks who think that “University of Hoohoo” is automatically better place to attend than, oh, Harry Mudd Junior College. Especially since a lot of money is put into the real estate to make it look good at many schools.

      Frankly, some people just don’t look. I know someone who is smart, college-educated, but when it came time to send a child to an art program, completely ignored one of the community colleges, and instead paid the Art Institute a lot of bucks.

    • Brunette Bookworm says:

      I think in part because they aren’t a “for-profit” college so they don’t have the money to advertise like these for-profit ones can.

  5. fredbiscotti says:

    Video of people appearing to break the law or do something unethical or immoral will take down a mid-level Ag Dept appointee or dismantle a community group, but it won’t stop for-profit “education” companies. There will be no outrage, no backlash that will force Congress or the White House to take action.

    It’s sad, really.

    • Veeber says:

      Not sure about that. Congress does seem at least somewhat concerned, especially since we are footing a lot of the bill as taxpayers. The scrutiny could at least encourage some of them to clean up a bit to get out of the limelight.

    • emt888 says:

      Community Colleges also tend to have huge waiting lists for the most popular programs of study. I graduated HS in 1994 and I talked to an advisor at my local comm college and told him I wanted to study nursing there. He said he would add me to the waiting list and that he would see me in the new millenium. I have friends who were on the waiting list for massage therapy for 6 years before giving up. I’m not saying the for profit colleges are a smart way to go, but I can see why people turn to them.

      • jefeloco says:

        Bingo! The long wait is why my wife is getting her nursing junk from a for profit, the wait for any other local program was 1-2 years and the gub’mint was paying for the whole shebang since her job was one of those fancy engineering jobs that Micron sent to China.

        If we were paying out of pocket we would have chosen NNU or CWI but Apollo had openings, the government had a tight timeframe on when she needed to start her edumacation (real word, honest), we’re not paying a dime for a $30,000 program, and finally, the program is a little over a year instead of 2.

      • Conformist138 says:

        My community college only accepted 25 students each year into the professional photography program. I thought there wasn’t a lot of applications (gotta send a portfolio) since I got in right away, but then I met students who had applied for a few years before making it in. Not just the programs you think of have waiting lists, even ones that seem random can be difficult.

    • Verdant Pine Trees says:

      Well, at today’s hearing (this was released in tandem with a hearing), Senator Harkin (the head of the committee), threatened the liaison speaking for the industry and warned that they would need to look at accreditation and their practices.

    • ARP says:

      Do they have a powerful lobby? If so, then you’re right.

      BTW- you’re examples aren’t the best as they both ended up being heavily misrepresented.

  6. RickinStHelen says:

    In my stupider, younger days, I fell in with a bad crowd, a school that sounds a lot like DeCry. When I didn’t do well because I had no math background (kind of important for computers and electronics), I quit and got a low paying job. They called about money I owed, and when I said I was trying to earn enough to pay them they told me the road to hell was paved with good intentions. I went into the Army to pay off school loans, and then older and wiser got a real education.

    In Oregon they are constantly trying to get you to go to cooking school for $40,000 that prepares you to get a $10.00 an hour cooks job when you are done. Sad and dirty industry.These private schools are proven poor performers, and need to be regulated more heavily. And I hate regulation.

    • hansolo247 says:

      No regulation necessary. That attacks a symptom (something the feds do almost always).

      The solution is to stop giving them money, and let the “free market” shut their doors for them.

      Of course, these schools have deep pockets, and the paid-for cronies in DC have their back.

  7. finbar says:

    Maybe the solution is simple; ban for-profit institutions from the federal aid student aid programs.

    • MercuryPDX says:

      Aren’t most colleges considered for-profit? Perhaps federal aid should only be available for accredited institutions.

      • psm321 says:

        Huh? most colleges except for these silly ones are not for-profit. private schools like MIT, Harvard, etc. are non-profit institutions.

        • apierion says:

          That’s right: a private school is not the same thing as a for-profit school, although all for-profit schools are by definition also private.

          Pro-tip: If the name of the school ends in “Technical Institute”, you better do a little googling to make sure they’re not one of these clowns. They probably are.

          • whogots is "not computer knowledgeable" says:

            Unless it’s the college I first went to. They have “technology” and “institute” in their name, and they’re total clowns, but they’re not *these* clowns. :)

            • SunnyLea says:

              Me too!

              • hansolo247 says:

                Heck, even the name “University” now should raise a red flag.

                Bottom line: This administration has an action plan as a big part of the stimulus to grow financial aid. More aid, more students. State/good private institutions are full. There’s nowhere else to spend it.

                I believe they should cut aid when the default rate hits 125% of the average…by DEFINABLE STANDARDS, not the numbers game they use now.

            • Shadowman615 says:

              Sam Houston Institute of Technology?

      • Verdant Pine Trees says:

        Most for-profits are accredited, it’s just what *kind* of accreditation it is. If you watch the full video (I’m sure it’ll pop up – CSpan or YouTube), a young guy who used to work for a for-profit says even he didn’t understand the difference between national and regional accreditation, which has a huge impact on whether credits will transfer.

      • whogots is "not computer knowledgeable" says:

        Uh, no hell no. I’m sitting at one of the most expensive schools in my region right now, with a below-market paystub in my peoplesoft account and a nonprofit tax exemption certificate in my desk drawer.

  8. nova3930 says:

    In related news: No word yet if there will be an investigation into Ivy League schools misleading students into thinking they can actually get a job to pay back $200k in student loans with a degree in “southeast Asian gay Jewish women’s studies”…..

    • Verdant Pine Trees says:

      Nice try. Academic departments like the kind you’re dissing don’t do that. They’re providing a general or specialized humanities degree, and everyone in academia knows that humanities degrees don’t pay back quick on the investment, even if you do go out for an academic position yourself, or even make a run for law school. What you do have is a bachelor’s degree, which used to mean more once upon a time, but now will at least get your foot in the door versus not having one.

      One other thing. The Harvards, the Public Ivies, Moo State, City Tech, and Small Rural College all provide a financial aid package upon acceptance into a program. They don’t scam people by telling them they have to sign up first and then find out how much they owe.

      But you’d know that if you actually watched the video.

      • nova3930 says:

        I did watch the video. I was attempting a bit of humor but some people apparently can’t extract the 2X4 from their ass….

        • JessiesMind says:

          Well, I’ll give you an A+ for your comment! I’m just finishing my general studies at the local community college and will be transferring to a state university this winter to tackle those higher degrees. As a history major, your comment is both hilarious and accurate! Thanks for the laugh!

        • Verdant Pine Trees says:

          Sorry, I only shove coal up my ass.
          Truthfully, as a joke, no, not really funny – because it’s such a cliché, and it usually goes along with jokes about how everyone in higher ed is such a commie. Complete bullshit, by the way. Higher ed has become super-corporate in the last twenty years. Most presidents are anything but liberal stinking hippies.
          And you could have done better, too. You didn’t use the words “pagan” or “basketweaving” (“basketweaving” = the cliché of all college clichés). I think the joke about the Marine Corps being a cult is old too.
          But if I came down hard on you, it’s because I assumed you were not making a joke but a defense masked as sarcasm. Forgive me, but I have to keep up with the academic news for a living. For-profit schools are waging a media war, and they frequently make comments exactly like yours (check out Inside Higher Ed or the Chronicle of Higher Ed) to try and claim that, well, all schools are alike, and that perhaps they’re just more direct about their avarice than say, oh, Harvard. That it’s all a big scam. I’m not sure I would even disagree about the screwed up drivers sending tuition through the roof.
          Your joke also suggests that studying some affinity group or world culture is essentially a useless pursuit. Now, if I were a real longhair, I would start talking now about the usefulness of a liberal education (again, go check out the Chronicle of Higher Ed to see sample comments… there’s one posted every day). I know a few folks with similar degrees and they knew that they were going into a specialized program, and that they’d need grad school or that they’d need to start on the ground floor of some business.
          For my degree, I had to take a required program on multiculturalism, and I didn’t appreciate it too much at first. Then a few of my classmates spewed some seriously ignorant shit about how racism doesn’t exist anymore (right, my buddy only gets followed around department stores on account of his squeaky shoes) and how dare anyone try to make me feel bad about this stuff, racism went away with the end of the Civil War. Look no farther than some recent court cases in which two fundamentalist Christians, at different schools, made it clear that if they got their K-12 counseling degrees, they would tell any gay kids who came up to them to “come to Jesus”. The programs each said, no go, this goes against department / professional standards; you can practice your religion, but you can’t tell gay kids they’re going to hell, etc., in this APA-certified program.
          So, unfortunately, we’re best off pushing back against the reverse racists than completely gutting multiculturalism. It’s just how we talk about multiculturalism is a problem, you know.

    • target_veteran says:

      A BA from an Ivy league has never been about the name of program. It’s always been about the name of the school and the names of your friends.

      The undergrad Ivy league is all about networking. Go there to meet people. After graduation, masters/doctorate degrees in law, medicine, and the sciences are actually worth quite a lot. And for people going into business and finance, the connections you can make at Yale, Harvard, etc., will get you 200k/yr jobs.

    • hansolo247 says:

      Ivy league graduates in these areas are generally quite well off financially.

      Even if not, a degree from one of those schools will get you a good job…no matter how dumb you really might be.

      • Verdant Pine Trees says:

        Well, yes and no. Four people in my family went to Ivy League – one attended a “Big Three” school – or Ivy-caliber schools (i.e. Ivy League really just means athletic conference – MIT and Duke don’t count). It did not automatically translate into fame and fortune, in part because we weren’t already “connected”. I attended a small, expensive school famous for its arts graduates – I would say more than 1/2 my classmates were fabulously wealthy (and many of them were not at all bright), but it didn’t rub off on me or my friends.

        It makes me think of “Mad Men,” to be honest, and Pete Campbell. I believe that often, these environments are really about cementing financial ties among the elite, rather than building new ones.

    • Nick says:

      These for-profits rely on advertising and heavy recruitment tactics because their only source method of financial growth is by enrolling more students. Harvard doesn’t need to convince anyone to attend it–they spend most of their time turning people away.

    • Powerlurker says:

      Most Ivy League students graduate with significantly lower debt loads than people who go to lower tier institutions. If your family makes less than $100,000 (or is it $125,000?) and you can get into Harvard, you won’t pay a dime to attend with no loans. The other Ivies have similar policies. The top of the top tier schools in the US tend to have very large endowments which they use extensively on financial aid. It’s the out-of-state state school attendees and the people going to mid to low tier private schools who get screwed by tuition and loans. The average graduate from my (private) alma mater has less debt than the average graduate from the flagship public institution in the same state.

  9. Dutchess says:

    I’ve long believed that most of these for profit schools are nothing more than a way to bilk students of their financial aid money.

    Worst of them is University of Phoenix. I’m sorry, when I was admited to Cal I didn’t get course credit for “life experience”. What a load of jack.

    The Univ of Phoenix MBA is horrible too, they know a lot of companies pay for executives to go to continuing education and they keep the prices high.

    • MercuryPDX says:

      The thing is, their reputation is already garbage. If our HR department doesn’t screen for “University of Phoenix” as a red flag, I certainly would if I were to see it on a resume.

    • nybiker says:

      To me the first clue that U of P is worthless (as a degree) is their naming rights deal. There’s a reason we don’t see a ‘Harvard Stadium’ or ‘Pace University Field’ for baseball or football stadiums. Of course, the minute they do that, well, no more money from me.

  10. crazy_butch says:

    Some of those tactics made me feel like they were at a car dealership.

    • u1itn0w2day says:

      A car dealership is what I was thinking as well. Car dealers make you decide to buy first then they talk finances. I had to laugh when the supervisor was brought in which is a common tactic at a car dealer-let me get my supervisor.

      I am not surprised at seeing the schools in Florida giving this sales pitch. I know people that took one of these medical assistant programs and they are failing test after test, they commented even the staff told them you can’t keep on flunking these tests they got admitted and FINANCING; even though you could barely understand their English nor could they understand yours.

  11. Applekid ┬──┬ ノ( ゜-゜ノ) says:

    Yikes! 89% of financial revenue from Federal Financial Aid? These private colleges are probably more funded by the taxpayer than the public ones!

    I remember my father looking at the FAFSA question about savings and going “they’re going to look at this number and take it right off the top of your aid.” He’s a big “F the System” guy, so I really had to beg him to be honest on it because I had no idea that, well, nobody even checks!

    Of course, dear old Dad was right. I wound up not going to that particular school. :(

    • psm321 says:

      Actually, I used to think this, but somewhere around 50k (I’m not sure of the exact number) of parents savings is excluded completely, and then after that it’s still a relatively small percentage. A student’s own assets on the other hand, are counted heavily.

      • psm321 says:

        Also, they do sometimes randomly ask for verification. Not sure how they would discover hidden assets though.

        • Pax says:

          Skip trace. Couple hundred bucks, tops, to hire a private investigator. Smart schools probably run a “lotto” to see which 5% (or similar small portion) of students and applicants get the “special treatment” like that.

    • RvLeshrac says:

      Well, I’m glad your father didn’t churn out another one like him. The reason our economy is in the crapper is because there are millions of executives and middle-managers who thought the same way. “Well, no one is ever going to check, so we’ll just lie a little on your loan application,” or “we’ll just lie a little bit on this earnings report,” or “we’ll just lie a little on this liquidity statement.”

      Or even “We’ll just lie a little bit about how much we can pay our real, on-the-ground workers. Because we need new houses and sports cars this year.”

      • evnmorlo says:

        Sometimes the rules are bad, and should be evaded or ignored.

        • hansolo247 says:

          Agreed.

          The simple fact that you saved money should not count against you.

          If your family has the same income as a peer and they get aid because their family is full of financial retards and yours isn’t, that’s not fair.

          The financial retards then end up with an aggregate basket of goods that is larger than yours. They get all the crap they pissed away money on and a free ride to school. You get squat. Totally not fair, and the FAFSA should ignore savings.

          Inheritance or savings over a certain threshold (say 200K) or being a millionaire is different (that SHOULD count), but being a $40K worker drone and having $40K saved up over 20 years should not treated any different than any other $40K worker drone.

          • hansolo247 says:

            And, it should be added that your family pays for part of the scion of the family of financial retard’s schooling.

            The scion of the financial retard family then continues the financial retard ways he learned from his financial retard family, and becomes a burden on society, either through “mortgage modifications” due to all of the crap he pissed his money away on or financial aid for his scions.

          • chargernj says:

            yes it should, in the old days they called it saving up for college. some people used to work their way through college too. Ask your grampa about how that used to work.

            Also they don’t reduce your aid on a dollar for dollar basis. They assume a percentage of your savings can be used for schooling, just like they assume a percentage of whatever you earned can be so used.

            • Shadowman615 says:

              In the old days it was actually possible to pay for college with a summer job.

              • chargernj says:

                It is possible, assuming you consider the community college options. Here in NJ, even if the only financial aid you can get is federal student loans you can go to college. Problem is that too many people look down their noses at such options because they have the mistaken belief that they just have to go to some expensive university or private college. Which is fine if that is you goal, but realize that it will take planning and good grades to get the best possible scholarships.

      • hansolo247 says:

        Lets not forget the other key cause of our problems.

        The half the population that says “give me money that is not mine”

    • Verdant Pine Trees says:

      Yeah, my school did the same thing… everything I’d saved up to that point. So much for living expenses at school!

  12. moyawyvern says:

    I made the mistake of filling out an online request for information from one of these places. About 30 seconds after I hit “send” I got a call from a rep who was ready for the hard sell. He was practically filling out my FAFSA forms for me. I very stupidly almost gave in, mostly due to the fact that I really wanted to complete my education and my schedule precluded a traditional setting. Luckily, I did a little Goggling and found that the degree would not be worth the paper it would be printed on, since the institution lacked accreditation in all the major places one would like their school to be accredited. I guess I will get that degree some day…

    • Verdant Pine Trees says:

      Are you a prospective undergraduate or graduate? If you’re going for an undergraduate degree and you want to stay where you are as far as regionally, the community college nearby you may have a program allowing you to easily transition into a state university. Costs a lot less, and if you’re lucky, they may have online classes, which are more convenient in some ways while you’re working.

      You might also try a small liberal arts college in another state, if you’re willing to move and want to study either science or humanities. Anything listed in the top 100 small colleges is generally about the same in quality if not in name recognition; it’s not like the old days where there was a big, big difference. I.e. the people teaching at Coe College in Iowa went to the same caliber PhD programs at say, those teaching at Amherst. Lesser known but very good schools – say, Kalamazoo College – may be willing to give you a sweet deal and a great education.

      • moyawyvern says:

        It would be an undergraduate degree. The local technical school affiliated with the quite large state university that is a stone’s throw from where I live has quite a good reputation and online classes, which would be required since I work full-time retail management with a highly irregular schedule. The big thing is that I am not sure I want to stay here long term, and I am afraid that credits I take at the technical school would not transfer out of state. I have no problem moving to go to school, I just have to make sure that I have a way to support myself once I am there.

        • mechteach1 says:

          If the technical school is already affiliated with a large university, you should be in good shape with the credits transferring elsewhere. There are no guarantees, of course, but most universities just want to do due diligence on giving credit. If you save the syllabi, coursework, etc., and show that these credits are accepted as transfer credits at Big State U (for example), then you will probably be okay.

        • Verdant Pine Trees says:

          You could figure out what schools you might want to transfer to, and then ask them explicitly whether they would honor transfer credit from that technical school (if it’s regionally accredited, you might have some difficulty in getting it honored). But first, you might want to google “online courses community college MY STATE”. Lots of great community colleges (like Santa Monica College, where a lot of students transfer) offer online classes, and they are far more likely to be accepted at a four year school than ones from a technical school (but again, hedge your bets by checking).

          Some other info that may be helpful:

          http://www.washingtonmonthly.com/features/2007/0709.careyessay.html – info on the best community colleges in the country
          http://www.washingtonmonthly.com/features/2007/0709.ccrankings.html

          http://www.washingtonmonthly.com/college_guide/rankings/liberal_arts_rank.php
          (Note that you can organize the list by state and also switch over to universities; the number of Pell Grant recipients is a potential way of gauging their interest in less than wealthy students… i.e Mount Holyoke is superior to Amherst in this respect. By the way, if you’re a gal, let me put in a good word for the all-women schools.)

          Agnes Scott is one all women school I’ve heard good things about – and it appears on this list, of schools that charge no fee to apply:
          http://talk.collegeconfidential.com/college-search-selection/444532-list-colleges-free-apply.html

  13. AngryK9 says:

    Sounds like some of the things the ITT people said to me when I signed up there. Biggest mistake I ever made. Should have went to a *real* school and got a *real* degree.

    • KarbonKopy says:

      I made the same mistake….

    • Verdant Pine Trees says:

      It’s not too late. Not to sound like a broken record, but try your local CC and see if they will honor any of the credits towards an AA degree. This has helped someone I work with.

  14. ARP says:

    1) make it so that students that attend don’t qualify for government subsidized loans, scholarships, grants, etc. If someone wants to go there, they can get a private unsubsidized loan.

    2) Don’t subsidize them at the school level either.

    Private enterprise is always more efficient than government based solutions anyway, right? So, go forth and be more efficient without the government’s help.

    • Verdant Pine Trees says:

      Unfortunately, during the original hearing, someone who used to work at one of those colleges revealed that

      a) his school does provide a non-government/private loan
      b) they lie about how much it costs to pay back. They claim it’ll only be $150 a month while you’re in school; it’s only a drop in the bucket.

  15. EarthAngel says:

    I attended a for profit college in Utah. Their record keeping was shoddy and I ended up attending school for an entire year without loans or financial aid. After a year they finally dropped me for lack of financial aid, only to inform me that I owed them $22,000.00 but if I reenrolled with them right that minute, they would reduce my debt by half! After filing a complaint with the BBB, the DOE and the state’s AG, they thoughtfully reduced by debt by half, anyway.

    When I signed on initially, they never told me that my Bachelor’s would cost ~$60k. When my job offered tuition assistance, I needed a breakdown of how much each class would cost and it was a complex formula. The coursework required for each degree isn’t publicly listed, nor were the prices, which could have been arbitrary.

  16. Slatts says:

    My own mother got ripped off by one of these places, and it still makes me sad and angry to this day. 25-or-so years ago, I was a preteen and she was a newly divorced housewife with a mere HS diploma who was looking to go “back to school” and start a new life. Computers were the thing to learn, right? She talked to the community college, was put off by having to take English 101 and PE; and then, unfortunately, she got hooked-in by one of these scam schools. The recruiter touted putting her right in front of a computer asap, to learn all these valuable computer skills. Needless to say, it wasn’t accredited and the “skills” they taught, meager though they were, were tough for a woman with no math or science background who was trying to work full time to support two kids.

    She quit after only a couple semesters, owing three or four grand in student loans. These days, you might say she got off easy, but that was a hell of a lot of money for our struggling family. And then the calls and letters from collectors started coming… and coming, and coming. Interest and penalties piled up to somewhere north of five figures. Then sometime in the late 80’s/early 90’s, I seem to recall a crackdown on “deadbeat students” who don’t pay back their loans, and if you know about how they go after “deadbeat dads” with a vengeance, you get the idea of how they went after her. At every job she held, they’d find her and garnisth her paycheck. Her tax refunds would be taken, too. After stories like hers were made public, there were some modest amnesty programs put in place, but they were too little, too late – the paperwork was onerous and they still required some contribution by the debtor; meanwhile, the garnishments had already gone on for years and the debt almost paid off anyway. I think they finally took the last bit out of her paycheck a year or two after the new millennium.

    So, yeah, I would love to see these SOBs shut down in a big way. I’m even tempted to contact this agency to see whether they need any volunteers to pose as students in order to nab these crooks. I would do my heart good to help bust ‘em and see them go down.

  17. dr_drift says:

    Wow, is that Shelly “The Machine” Levine on that video? This is straight outta Glengarry Glen Ross. “Put that FAFSA application down! FAFSA applications are for college-bound students only.”

  18. montusama says:

    This is why I regret my decision to go to Itt-tech after I graduated from high school. The good news is I did drop out only after about 6 months. The bad news is I’m still working on my associates degree and have abut 6k in loans from them. Life lessons are learned through mistakes.

  19. sopmodm14 says:

    college

    how is it that tuition/fees always goes up, while financial aid goes down ? edu in USA is bunk

    they way my school steals/scams their own students is disgraceful

    thank you very much Gov. paterson

    then they have the nerve to ask for alumni donations a year after you graduate, whilst you’re still paying off loans ??

  20. PlumeNoir - Thank you? No problem! says:

    Not surprised at all, sadly.

    Hell, even the university I went to almost twenty years ago had a nice little scam going. I had Pell Grants that covered my entire tuition, books, and a little extra for the small stuff. In theory.

    I don’t have the actual numbers, but let’s say I had a grant for $1500 for the fall semester. My tuiton, et al, was $1200 and books were $250, leaving me with $50. Pell would tell me that my univeristy had cashed the check in September (which was sent directly to the school and they were supposed to give me the post-tuition $300), but the school would tell me they never received it and would start piling on late fess. Somehow, the school would miraculously find the check in December, but by this time I had already bought my own books and, because of the late fees, I owed a small amount of money. This happened every semester.

    So…yeah. Not suprised to see the for-profits doing similar slimy things…

  21. goodfellow_puck says:

    I went to a local uni and a “non-profit” college. BOTH did some of the same dodging bullshit as these “for profit” schools. The “non-profit” even required $500 up front before you could even talk to anyone but the recruitment people. I just did my own research ahead of time. Those people are a bunch of uninformed monkeys anyway. They were always messing up and telling me things that weren’t true. Luckily I’d done my research so I could tell. Everyone else should too.

  22. Memtex784 says:

    I went to a technical college 12 years ago for a 2yr course. Was $1500 to $2000 a semester (including books, fees, etc). Never had any grants or outside help pay. School is long paid off but have friends who are STILL paying for college debt.

  23. lockdog says:

    Defrauding the Federal Government on a far smaller scale was enough for Congress to nuke all funding for Acorn. I say what’s good for the goose is good for the gander. While we’re at it, let’s take a closer look at those Bechtel and KBR contracts. Defraud the US government and you lose your corporate charter.

  24. calchip says:

    For those interested in learning about reasonable cost options, there are two excellent resources I recommend. One is “Bears’ Guide to Earning College Degrees Nontraditiionally”. It’s out of print (may be updated soon) but widely available through bookfinder.com or half.com.

    The other is degreeinfo.com, one of the largest online discussion communities focused on distance learning. THere are lots of threads where people compare expensive for-profit schools like UoP with very reasonably priced nonprofit state-affiliated schools like Bellevue University or Charter Oak State College.

    People are shocked when I tell them they can get an accredited MBA from a well-regarded, 200 year old school for 10 grand, or an undergrad degree in a year’s time from a state school (if you already have a lot of experience and knowledge under your belt) for under 4 grand.

    These schools of course don’t have the enormous ad budgets… but they’re good quality schools, and those and hundreds of others are discussed both on degreeinfo and in the Bears Guide book.

  25. shadydentist says:

    For-profit colleges are really the scum of the earth.

  26. chatterboxwriting says:

    Please do yourself a favor and stay away from these “colleges.” I worked for one for five of the most miserable months of my life. I quit because I did not want to lie to unsuspecting people (a lot of whom did not have the critical thinking skills to make good decisions). My mother thought I was nuts for giving up a salary and benefits, but I spent most of my days throwing up in the bathroom or suffering from headaches due to the stress of the job. One of the most blatant ways they told us to lie was by printing program packets using info from the Bureau of Labor Statistics/Department of Labor. Our receptionist would highlight portions of the packets (the most favorable parts) and we were ONLY allowed to read the highlighted portions. The highlighted portion would say something like “People with this career make an average of $25 per hour with one year of experience.” Two sentences later, the packet might say something like “This salary only goes to this with a bachelor’s degree in this discipline,” but we weren’t allowed to show the applicant that info. Community college is always a better deal. One of the programs we had for $19,000 was offered by the local community college for $900.

  27. CherieBerry says:

    I’m an educational counselor for a non-profit that is in partnership with my city’s community college. Primarily, most of my students are the first in their family to attend college. Once they’re doing well in school, they’ll bring me a friend or boyfriend to enroll and help out. Half-way through the financial aid award process I’ll discover that the prospective student owes $8,000 or more for hair school. School that they went to for three weeks.

  28. faea says:

    my husband went to one of these schools. Years later they were sued class action style. The minute they found out about the lawsuit they liquidated all their assets and left the country, locking out current students at the time.

    I knew a number of people who went to the same school and there were alot of problems, like programs on computer and the person who took it didn’t know how to write a memo in word. Some people found out that they had paperwork processed ‘wrong’ and ended up with double the bill from the Dept. of Ed. We ended up with a check for 8 grand five years later. It didn’t cover the Dept. of Ed. bill. Thanks BCTI

    My plan, Community College.

  29. hegemony says:

    I got degrees at Phoenix University and teach at a University in Nevada now. It was expensive but I paid off all my school loans with credit cards and then filed for bankruptcy.

    • nucwin83 says:

      You teach at a university with a degree from U.Phoenix? Let me guess… it’s another for-profit, if not U.Phoenix itself, right?

  30. zomgorly says:

    I remembering watching the Frontline special on PBS regarding for profit schools. I am really not surprised they are going to try to get you into their school, the admission person is probably trying to meet their quota of enrollment students. According to the Frontline special they enroll 10% of all post secondary students yet receive 25% of all the financial aid.

    http://www.pbs.org/wgbh/pages/frontline/collegeinc/view/?utm_campaign=homepage&utm_medium=proglist&utm_source=proglist

    • booboloo says:

      Bingo,, these schools are ripping off the system exploiting it to sell dodgy and poor value “educational” product on the tax payers dime. Massive riches have been extracted from a system meant to provide real education, these are vultures who prey on our weak, and help to destroy society. The frontline episode on it is just shocking.

  31. u1itn0w2day says:

    What’s that? for profit institutions in one of the biggest industries in the U.S. trying to coach, manipulate and convince the students/it’s CUSTOMERS to go into debt just like a department store sales clerk trying to lure you into opening one of those 30% APR credit cards? ‘

    Someone has to pay for the psuedo economy called a college campus. Without contrived loans there would be no job security or full time administrator positions. The basket weaving major/athlete would have to get a job in the real world and not a gratuitous position in the athletic department. Why without exhorbitant tutition rates funded by coached financing the alumni couldn’t award the landscaping contract to the buddies. The professor/author wanna bes couldn’t ram down a 5$ text book for 30$ or wouldn’t be able to do paid research in comfy confines of a lab or library.

    Well at least the college industry is an example of extreme capitalism in all it’s glory.

  32. Mysterry says:

    At the Ai in NC that friend of mine went to, his financial aid told him to put his puts down as dependents and to put him down as married with no legal marriage certificate (he was married culturally that is not sanctioned by state–but for cultural standards he was considered married WITHIN his culture).

  33. vdragonmpc says:

    Just to be up front I worked at one for a few years.
    I, to this day still google to look to see if there are any complaints about the College System I worked for. To this day I cant really find any. They were horrible. I had to supply my students with computers to work on (I had a brisk business outside of the school). They would not hire qualified instructors as they set the pay far outside of the norm.

    I can say with no worry about slander or libel that:
    -They hired a completely crazy woman to teach evenings.
    -They recruited at shelters and didnt even care if the people could get TO THE CLASSES.
    -Several nursing students had felony charges and found out AFTER attending classes that they could NOT WORK IN THEIR FIELD with those charges and had to change programs.
    -Programs were not taught to any standard and there was no possible way to follow the syllabus (Lets be honest the syllabus was just lifted from the table of contents of the Thompson books they used)
    -Instructors had no idea how to teach many classes and had no background in the material. I watched them assign programming and web design classes to glorified receptionists.
    -You could never really talk to the director of the school as they were never on site.
    -Equipment would be woefully out of date or in disrepair.
    -Teachers may or may not show up for classes or even in the middle of a course just quit.

    I still cant believe no one ever complains about them. I have yet to meet a student that got a job in programming from that campus. Some got entry level repair jobs but not many.

  34. pot_roast says:

    Sadly, some of these schools are nursing schools too. I’ve seen an increase in bad nurses over the past few years… and not bad in the good way. Bad as in borderline negligent patient care skills bad.

  35. somepoet says:

    I teach for a for-profit’s school online division. I feel that I give my students the same quality of education that they receive when I teach at an on-ground community college, but I can’t account for the quality or practices of other teachers. The problem is that I get paid more to teach two classes online than I get for four classes at the local community college. I start to feel guilty when I read these articles, but I make such good money that I can’t give up the online teaching, so I do both. Sometimes I wonder if I am making a “deal with the devil,” but it is frustrating to receive so little pay on ground.

  36. 4Real says:

    I just started a For Profit school after going to a Comm College. and they are a rip off but my CC didnt offer what they had. The school is charging me $9000 a semester but they dont go by per credit hours I was told I would need to take 14 credits a semester because they dont charge by credits. oh well.

  37. Guppy says:

    “Let me see what I can do, give me one second. But here’s the thing…I thought you wanted to really do this?”

    I hate when people use this kind of vague terminology for an event like this to make it seem like a bigger idea or something. Like THIS IS IT. I hear this kind of talk on reality TV shows more often then anywhere else and it seems like the only purpose is to get the person listening immersed (or to express the immersion of the person talking) into whatever the situation is. It seems sleazy and just kinda irks me.