The GAO released a damning study of the for-profit college industry which showed outright lying and deceptive tactics by personnel in order to dupe prospective students into enrolling in their programs when it was questionable as to whether doing so was in their best interest. Many of the personnel used high pressure sales tactics and provided erroneous information in order to get undercover prospective students to sign up.
Why is the GAO Involved?
Well, based on the exploding student enrollment at these colleges, the government has issued Pell Grants totaling $4 Billion in 2009 and over $20 Billion in loans to students. Therefore, our taxpayer dollars are paying for/subsidizing these programs. In order to conduct their study, the GAO used undercover investigators at 15 for profit colleges. The GAO was very careful to not name the schools (so neither have I, ehem, lawyers) and claimed that this is not a portrayal of the whole industry, but surely you can for your own opinion after reading the report in its entirety:
The findings were numerous, but here were some of the most egregious from the report:
- Undercover applicant was falsely told that the college was accredited
by the same organization that accredits Harvard and the University
- Admissions representative said that barbers can earn up to
$150,000 to $250,000 a year, an exceptional figure for the industry.
The Bureau of Labor Statistics reports that 90 percent of barbers
make less than $43,000 a year.
- Admission representative told an undercover applicant that student
loans were not like a car payment and that no one would “come
after” the applicant if she did not pay back her loans.
- Admissions or financial aid representatives at all 15 for-profit colleges
provided our undercover applicants with deceptive or otherwise
questionable statements. These deceptive and questionable statements
included information about the college’s accreditation, graduation rates
and its student’s prospective employment and salary qualifications,
duration and cost of the program, or financial aid. Representatives at
schools also employed hard-sell sales and marketing techniques to
encourage students to enroll.
First of all, I’m not surprised by this at all. Many of these statements by admissions officers are outright lies, especially by people IN the industry who know the truth. This is completely outrageous. From what I’ve read, this is often preying on the poor as well because they are lured into these programs and haven’t conducted thorough research nor had other college opportunities. I had read this article in BusinessWeek all the way back in April, indicating that these schools were actually recruiting the HOMELESS! – yes, homeless, to attend their schools so they could inflate their bottom line. Since these folks are often qualified to receive grants and loans in federal money, some of these unscrupulous colleges target them. How this went on for so long is beyond me; perhaps it was the BusinessWeek article that spurred the GAO to finally act.
While I’m a free market guy and I believe virtually all services are best provided in a for-profit free market environment, based on the preponderance of evidence in this report and what I’ve read elsewhere, I really have to question why anyone would use one of these outfits over a typical local, state or community college. You can get a quality degree there without the stain of this behavior on your resume.
Do You Have Any Experiences with For Profit Colleges?
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