For-Profit Colleges Mislead Students, Report Finds

August 4, 2010 8:23 AM

Undercover investigators posing as students interested in enrolling at 15 for-profit colleges found that recruiters at four of the colleges encouraged prospective students to lie on their financial aid applications — and all 15 misled potential students about their programs’ cost, quality and duration, or the average salary of graduates, according to a federal report. NY Times

Summary

Highlights Page [PDF]

Full Report [PDF]

posted by Think_Long (48 comments total)

You know why this pisses me right the fuck off? Because these bastards aren't aiming for the people who would otherwise be attending $STATE College. They're going after the low-income, first-generation college goers who would otherwise be starting off at a community college and working their way up. Instead they're perverting the idea of what a college education is for (news: it's not supposed to be a vocational school,) while allowing them the ability to work with schedules that don't allow them to be traditional college students.

Hey, non-profit schools. Catch up. Let people go to college on their own time. Let them do it online. Help these people, or the profiteers will destroy them.
posted by griphus at 8:30 AM on August 4, 2010 [8 favorites]

Shouldn't this be added to your other recent post about this topic instead of a new FPP?
posted by briank at 8:36 AM on August 4, 2010 [1 favorite]

I think the US could use a lot more vocational schools, and shuttle the people who don't want to really learn off into them, rather than having them drink their way through 20th century literature and then complain about being in debt.
posted by cschneid at 8:37 AM on August 4, 2010 [9 favorites]

Is there any reason why the names of the specific colleges aren't given in the report? A public shaming might do some good.
posted by theodolite at 8:37 AM on August 4, 2010 [1 favorite]

Shouldn't this be added to your other recent post about this topic instead of a new FPP?

Are "griphus" and "thinklong" the same person? I'm confused.
posted by KevinSkomsvold at 8:38 AM on August 4, 2010 [1 favorite]

Shouldn't this be added to your other recent post about this topic instead of a new FPP?

Hmm, not my FPP but I missed that one the first time around. Mods - delete away if this hews too close to that other thread, I can always plug this report into the thread.
posted by Think_Long at 8:40 AM on August 4, 2010

For-profit colleges. And we wonder why our educational system is broken.
posted by DU at 8:41 AM on August 4, 2010

Hey, non-profit schools. Catch up. Let people go to college on their own time. Let them do it online. Help these people, or the profiteers will destroy them.

Agreed, and I would add: Hey states! Stop cutting your public education budgets to the bone! Stop hamstringing the community colleges and state universities! Stop pouring money into the criminal justice system and prisons! (California, I'm looking at you.)
posted by rtha at 8:41 AM on August 4, 2010 [1 favorite]

Are "griphus" and "thinklong" the same person? I'm confused.

Whoops, sorry. Saw griphus' name on the first post and assumed he was the poster. Nevertheless, this probably should go in the open post.
posted by briank at 8:41 AM on August 4, 2010 [1 favorite]

I'm unemployed right now, despite having graduated from one of the best schools in the country. I see the ads for these for-profit schools during all the daytime TV I watch. Heck, some of their pitches sound enticing, even to my already educated self, in my current desperate state. I can only imagine how these places must sound to folks who haven't been lucky enough to have the opportunities I've had in life.

These places need to come with a warning label. We have it for cigarettes and alcohol, why not for-profit colleges?
posted by phunniemee at 8:41 AM on August 4, 2010 [2 favorites]

I knew getting my masters degree in pinball machine repair was dubious endeavor at best.
posted by KevinSkomsvold at 8:44 AM on August 4, 2010 [1 favorite]

Are "griphus" and "thinklong" the same person? I'm confused.

One of us is an emergent personality gone rogue. But which one?
posted by griphus at 8:45 AM on August 4, 2010

news: it's not supposed to be a vocational school

Wait I thought, "for-profit colleges" meant technical training centers like Devry and all those places that advertise on daytime TV for careers in medical records maintenance and bookkeeping, right? These are definitely vocational schools.
posted by Rhomboid at 8:45 AM on August 4, 2010

Usually, yeah, that is the case Rhomboid. And they've never hidden the fact. But then you get to things like the University of Phoenix, which hands out BAs and MAs and generally presents itself as an online version of a non-profit college or university.
posted by griphus at 8:47 AM on August 4, 2010

One of us is an emergent personality gone rogue. But which one?

We are not amused by your candor and wish you would just get back inside our fucking head
posted by Think_Long at 8:52 AM on August 4, 2010

I'm sorry I have to ask a stupid question:

I thought all colleges were for profit? I never heard of a non-profit college.

Can somebody clarify the difference between a non-profit college and a for-profit one?

Is the Article referring to these colleges "for-profit" because they are greedy?
posted by Student of Man at 9:19 AM on August 4, 2010 [2 favorites]

The university I went to for my graduate degree misled me (and several other people in my class) about the type and amount of financial aid we were getting.

The fact of the matter is, a business is a business, and "non-profit" universities are anything but.
posted by elder18 at 9:28 AM on August 4, 2010 [3 favorites]

The distinction between "for-profit" and "non-profit" lays in a bureacratic one, aspects of which I cannot explain well, but it also lays in its ideology. Ideologically, a non-profit university (which most schools are, whether private [Harvard] or public [Texas State]) holds the education of its students as the highest goal. An institution which operates for-profit, operates with profit in mind as the highest goal. Educating students is secondary to selling the education, and also to receiving financial aid funds from the government. And, yes, they are greedy. Greedy enough to now be constantly probed by the government, who are piping money into their system and now, finally, noticing that something is wrong.
posted by griphus at 9:34 AM on August 4, 2010

I'm shocked, shocked to find that gambling is going on in here!
posted by erniepan at 9:36 AM on August 4, 2010 [1 favorite]

I think the US could use a lot more vocational schools

nay.. more Liberal Arts colleges.
posted by stbalbach at 9:39 AM on August 4, 2010 [1 favorite]

It's not gambling.

The federal government guarantees will pay off the tuition loan, when the school's successful credentialed graduate is incompetent and unable to get a job to pay it off.

No risk involved at all.
posted by hank at 9:43 AM on August 4, 2010

I think the US could use a lot more vocational schools...
There ARE a ton of vocational schools. It's just that they are primarily for-profit businesses. In may cases, a 15-month program at a trade school can leave a kid with as much debt as a 4-year stint in a university.

One of the tricks the for-profit trade schools use is running things on schedules like that 15-month term I mentioned. Federal aid is based on the more traditional 2-semester calendar. Because of this, fed aid can often run way short of what a kid needs to help pay for trade school. Many of those schools will gladly steer a kid to private lender "partners" in order to fill the gap. Profit!
posted by Thorzdad at 9:50 AM on August 4, 2010 [2 favorites]

I think the US could use a lot more vocational schools, and shuttle the people who don't want to really learn off into them, rather than having them drink their way through 20th century literature and then complain about being in debt.

I share a wish for more vocational choices--targeted education for people who want or need specific skills, without all the baggage of a four-year college degree--but I'm troubled by the dismissive, condescending tone of this comment. A person who wants and needs an education targeted at, say, a skilled trade is not a person who "doesn't want to really learn." It's a person who wants to really learn what she is interested in, good at, and can make a living at. And that's not "shuttling them off," that's meeting a need in a more productive way than thinking that everyone needs a four-year degree whether they want it or have aptitude for it or not. People who are not interested in or who don't need a liberal arts education can be skilled, smart, functional, hard-working, and all manner of other good things, and it would be great if we had an educational system that would help them find their way without making them feel like they are failures.
posted by not that girl at 9:53 AM on August 4, 2010 [8 favorites]

I thought all colleges were for profit? I never heard of a non-profit college.

I found a Wikipedia list of for-profit universities and colleges in the previous thread. The Wiki page on for-profit schools has this one-line description: "For-profit schools are educational institutions that are run by private, profit-seeking companies or organizations." According to Private School Review, "Most private schools seek 501(c)(3) (non-profit) status from the IRS once they have incorporated."

The cynical, crass view would be that for-profit schools are looking to make a buck any way they can, where private non-profit schools are limited in these endeavors by federal laws (in the US).
posted by filthy light thief at 9:55 AM on August 4, 2010 [1 favorite]

It would be interesting to see a long-term survey of for-profit college marketing techniques, because they tend to follow current trends much more than other institutions. Depending on the year, you will find colleges who offer careers in the fast-paced and high-reward fields of Video Game design (now), comic book publishing (manga craze from 5 years ago or so), radio broadcasting (the Howard Stern years).

The worst offenders are the ones who offer "certification" in "pc operating systems"*.

* I assume that's bullshit, unless someone tells me otherwise.
posted by Think_Long at 10:02 AM on August 4, 2010

I'm glad they're cracking down. They should really go investigate the new master degree programs at various colleges that are popping up. There are a million new professional master's degree programs at Georgetown and GW sound ridiculous. Master's in Paralegal Studies (I'm told it's not even accredited by the ABA like some paralegal certificate programs that are way cheaper --- there's an intern who is thinking of attending and taking out a huge amount of debt to brand herself as a paralegal), Master's in Sports Management, Master's in Real Estate, Master's in Public Relations. I'm fairly certain they encourage students to take out loans and say that the Georgetown name will open all doors, when it's not true.
posted by anniecat at 10:05 AM on August 4, 2010 [3 favorites]

Hey, non-profit schools. Catch up. Let people go to college on their own time. Let them do it online. Help these people, or the profiteers will destroy them.

As I said on the last thread, some of us are doing just that. And perhaps we should thank the for-profits (a teeny, teeny amount) for forcing colleges to expand their scheduling options. But we don't have the advertising budgets, high-pressure salesmen "advisors," and lax grading standards that many of the other schools do.

Community colleges are hurting for funding but not for enrollment. But I wonder what happens in the future, when enrollment inevitably decline, we no longer have the funds to keep operating, and many of the lower income or first-generation college students we used to attract have racked up thousands of dollars in tuition loans already.
posted by bibliowench at 10:08 AM on August 4, 2010

i can get more cynical than that, filthy light thief:

for-profit schools are looking to make a buck any way they can, where private non-profit schools are limited in these endeavors by federal laws (in the US) have other avenues of federal funding open to them beside student financial aid. these schools can then apply for research grants & tax breaks out the wazoo, while pocketing as much money for 'administrative overhead' as possible. additionally, they keep lowering the educational bar in favor of upping registration so as to continue feeding the golden goose, all the while cranking out grads who have as much trouble finding a job as those who matriculate from for-profit school.

anniecat: i don't believe either Georgetown or GW are for-profit schools.
posted by msconduct at 10:10 AM on August 4, 2010 [1 favorite]

anniecat: i don't believe either Georgetown or GW are for-profit schools.

Sorry. I forgot to say they were non-profits. They are non-profits who are acting like for-profits now.
posted by anniecat at 10:17 AM on August 4, 2010 [1 favorite]

Master's in Paralegal Studies (I'm told it's not even accredited by the ABA like some paralegal certificate programs that are way cheaper --- there's an intern who is thinking of attending and taking out a huge amount of debt to brand herself as a paralegal)

I was a paralegal for a year, and every time I read or hear something about someone actually paying to get paralegal "accreditation" or "training" I just laugh my ass off.

Friends don't let friends enter bullshit programs!
posted by phunniemee at 10:23 AM on August 4, 2010

They are non-profits who are acting like for-profits now.

That kind of thing started with "Executive MBA" programs, which are diploma mills for executives who can fly in a few times a year and get an MBA with minimal time invested, though at a significant price.

Now lots of traditional universities are cashing in on their name recognition with online certificate and degree programs. Bisk Education Inc manages programs for Villanova, Tulane, Notre Dame, and several others through "University Alliance." It's essentially the same questionable business as the other for-profit schools, just trading on the name recognition of nonprofits.

Villanova, for example, heavily advertises its online study programs and even took out a .com domain (villanovau.com) to distinguish it from the traditional programs. Note the disclaimer way down at the bottom of the page: "The university’s online certificate courses are not part of a formal degree program, and as such do not earn credit hours from Villanova."
posted by jedicus at 10:38 AM on August 4, 2010

I noted that the report didn't actually name any of the schools, even the ones encouraging or engaging in fraud. However, one of the schools that encouraged fraud is based in Arizona, owned by a publicly traded company, and offers 4 year degree programs, so it's almost certainly the University of Phoenix.

I'm not sure why the report didn't just come out and say what schools were involved. Even if the schools in question wanted to sue over it, the Federal government is immune to libel and slander claims under 28 USC 2680(h).
posted by jedicus at 10:44 AM on August 4, 2010

I'm not sure why the report didn't just come out and say what schools were involved. Even if the schools in question wanted to sue over it, the Federal government is immune to libel and slander claims under 28 USC 2680(h).

Bizarre that they didn't name names. "Government report: University of Phoenix is a scam" would make a much better headline than "For-profit schools are liars," especially since most people aren't even sure what "for-profit college" means. Of course, then someone important might stand to lose some money..
posted by theodolite at 10:51 AM on August 4, 2010

Villanova, for example, heavily advertises its online study programs and even took out a .com domain (villanovau.com) to distinguish it from the traditional programs.

Apparently that villanovau website automatically loads a chat session with an (exceedinlgy handsome) admissions counselor. I chatted with him for a few minutes and suggested that it is a bit misleading to advertise as V U when you are not, in fact, offering V U courses. I ducked out of there though cause I didn't feel like giving the guy too much grief - I've applied to work at plenty of for-profit admissions offices myself.
posted by Think_Long at 10:56 AM on August 4, 2010

When you see local colleges heavily advertising programs in things like fashion design and promising little or no out-of-pocket expenses while you're earning a degree, it's just so clear that they are churning through large numbers of naive people to keep that guaranteed loan cash flowing.
posted by longsleeves at 10:59 AM on August 4, 2010

Perhaps this has already been posted in one of the open threads, but I ran across this article which called higher education a "bubble," likening it to real estate a few years ago. Many other commentators have made similarly unflattering comparisons; that article is hardly unique.

The comparison deserves a bit of thought and should be a cause for soul-searching among anyone who works in higher ed or academia.

I think it's entirely possible that the flexible-schedule, 'get your degree while you work,' 'credit for job experience' programs -- programs that purportedly help lower-income students get ahead in life -- will turn out to be the no-doc "predatory" loans of higher education. The people making a buck from them say (and perhaps even believe) that they're doing good in the world, but in reality they're saddling people who can ill afford their product with a huge amount of debt, while simultaneously externalizing huge costs on the public.

Part of the problem, perhaps the biggest part of the problem, is that having a college degree became a check-the-box exercise for too many people. They needed a degree to get a job, but otherwise had very little interest in college. So schools catered to that need, creating "degree" programs that require minimal effort and class time; some of which aren't even accredited. Some of the blame rests on Federal regulators who allowed FAFSA monies to flow to these programs, but much should go, indirectly, to the recruiters who decided that presence or absence of a college degree should be a litmus test for too many entry-level jobs, or for promotions beyond a basic level. (And this includes the military, which bought into the college-degree hype and is responsible for a large number of students in for-profit schools.)

Eventually the bubble is going to collapse. Recruiters are going to realize -- I suspect they have already -- that many "degrees" from nontraditional schools aren't the signifiers (either of education or social class, depending on your view) that they hoped they'd be when they made "college degree" a hiring requirement. So they're going to move onto something else as a basis for hiring. Eventually the knowledge that this has happened (and it probably has or is in the process of happening) will propagate down to potential students and enrollment in those schools will drop, and the Federal trough may dry up, but this could take a while -- advertising and lobbying are both powerful tools.

But in the same way that the real estate bubble left a lot of people sitting in McMansions that should never have been built, owing far more on them than they should have paid, the higher-ed bubble is going to leave a lot of students holding worthless or near-worthless degrees, having expended money (theirs and others') and more importantly time on them that could have been better spent elsewhere.
posted by Kadin2048 at 11:05 AM on August 4, 2010 [4 favorites]

Part of the problem, perhaps the biggest part of the problem, is that having a college degree became a check-the-box exercise for too many people. They needed a degree to get a job, but otherwise had very little interest in college.

I think that a lot of naive people with college degrees who are fairly discerning can also get dazzled by certain programs. Again, I'm thinking of the folks Georgetown and GW are targeting with their brand name master's programs. I graduated from a liberal arts college with lots of people who couldn't get their foot in the door to their "dream" job.

Some of the people I knew who decided to go into nursing after college decided to shell out big bucks for Ivy League nursing programs. These programs cost up to six figures for an accelerated bachelor's in nursing when you could go to a cheaper program at a state school. Overwhelmingly though, the idea is that the affiliation with Yale or UPenn will work in their favor when it comes to job opportunities. I would be curious to know if this actually bears out. Because I know these schools really want to instill pride and confidence in their students, and they don't mind leveraging the name across all departments to do so.
posted by anniecat at 11:31 AM on August 4, 2010

Recruiters are going to realize -- I suspect they have already -- that many "degrees" from nontraditional schools aren't the signifiers (either of education or social class, depending on your view) that they hoped they'd be when they made "college degree" a hiring requirement.

Relevant (?) anecdata.

I remember another comment from someone in HR admitting to immediately discarding diplomas with UofP degrees. I'm not saying this is a good thing, but the culling has already started. In the same way that a non-Ivy degree wouldn't get you past the door in certain Bigtime companies, a for-profit degree may not get you in with the middle guys.
posted by griphus at 12:30 PM on August 4, 2010

I took a look over at that Master's in Paralegal Studies GW is promoting, and their marketing seems somewhat comparable to the for-profit schools, except it is targeted to students who already have a BA. There are a bunch of soft promises of it getting students a higher salary.

Nowhere that I see do they make clear it is not ABA accredited (apparently Georgetown's Paralegal Certificate is ABA accredited). GW's law school is ABA accredited and I think they're trying to make it seem like that lends itself to this program.

George Washington University Degree Outcomes
Masters in Paralegal Studies Online

87.5%of students chose this program because of GW’s high academic reputation.

Nearly one-third of students accepted their dream job, even before graduation.

Already, 41.2%of GW’s Masters in Paralegal Studies students have received salary increases within the first year of the program.

What students will achieve with a Masters in Paralegal Studies from GW
… knowledge, career change/advancement and apply to law school
…the ability to think like a lawyer
…deep understanding of the legal world

Hmmm.

It's also not easy to figure out how much it costs because they aren't up front about it:

Your CPS Online education costs will differ depending on:

* Your eligibility for financial aid, scholarships, or other types of aid, such as employer reimbursement.
* The materials/software required.

and from the FAQs

How much does the program cost?
Please contact an Admissions Advisor for the most current information. This is a great investment when you consider the programs allow you to realize career-advancing opportunities while you continue working. You can have the benefits of a degree with the accessibility of taking courses from your home or office.

Everywhere I search for tuition and fees off their specific site and the Continuing Professional Studies site, it says to contact an admissions officer.

Looks like in addition to their current inventory of silly master's programs (two separate programs appear to be a master's in public relations and then a master's in strategic public relations), they are launching a whole new one that should be very attractive to bachelor's degree holders seeking career direction: the Master's in Sustainable Urban Planning.

It's so weird, I know that these degrees are silly because there are so many of them and they are all brand new, but I keep thinking, there must be some regulating body that would put a stop to this. There must be an approval process for non profit universities so they can't just put out as many master's programs or certificate programs as possible.

Because my understanding is that in order for students to be eligible for federal loans, the institution has to grant a certificate or a degree. So what would stop GW from just offering every kind of degree under the sun to attract prospective students?

This is pretty crazy.
posted by anniecat at 1:26 PM on August 4, 2010

Sorry, GW's Paralegal master's does have something about accreditation:

"Accreditation–GW is accredited by the Middle States Commission on Higher Education, which defines, maintains, and promotes educational excellence. GW is also an institutional member of the American Association for Paralegal Education."

Not that that really means anything. I was googling and it looks like in some states you have to be certified to work as a paralegal, and the certification must come from a program that is accredited by the ABA.
posted by anniecat at 1:32 PM on August 4, 2010

Sorry, one more update/clarification:

I found the tuition cost for the whole master's program. It's $21K, which is less expensive than I thought, but still silly when you look at their curriculum requirement.
posted by anniecat at 1:37 PM on August 4, 2010

I did two rounds of interviews for a for-profit college "admissions counselor" job. During the second interview, I learned that:
-All the "admissions counselors" received smartphones and would get an email stating whenever had registered to receive information. You were expected to return the call within fifteen minutes.
-Your goal, once you made this call, was to get them on-campus for a tour within 48 hours.
-Your ultimate goal was to get them to sign up for a program within 72 hours of their tour. Total turn-around time was five days, and this was not five BUSINESS days.
-Nowhere in the packet you gave prospective students was a cost listed. I didn't even find out the final price of a year-long program until the end of my second interview. It was +16,000 dollars for the cheapest program.
-They didn't have recruiting "quotas" as this was illegal. However, you needed to get four people registered each week, and if you did not do this you would be disciplined. Also, bonuses for recruitment were a no-no; however, those with the most registrations got a trip, either quarterly or biannually, to Hawaii or the Virgin Isles.

The stench of high-pressure, shady sales was just reeking from this place, and I went home and drank away the other details. There were five people working in "admissions" when I got there, and in the 10 months since I interviewed there I've seen "admissions counselor" at this place listed at least 8 or 9 times in the local help ads.
posted by Benjy at 6:18 PM on August 4, 2010 [2 favorites]

The buzz on Wall St. is that these companies are doomed. There are still a lot of investors who are trying to be loyal to past performance, but word is federal funding for non-profits is essentially over, just a matter of time.
posted by krinklyfig at 2:59 PM on August 5, 2010

but word is federal funding for non-profits is essentially over, just a matter of time.

Excuse me, that should be "for-profits"
posted by krinklyfig at 3:00 PM on August 5, 2010

Not that that really means anything. I was googling and it looks like in some states you have to be certified to work as a paralegal, and the certification must come from a program that is accredited by the ABA.

In some states you can become a licensed attorney by just passing the Bar exam, no school required. This comes up from time to time here, but I still find this sort of fascinating.
posted by krinklyfig at 3:04 PM on August 5, 2010

The distinction between "for-profit" and "non-profit" lays in a bureacratic one, aspects of which I cannot explain well...

There's been a lot of confusion about this on MeFi lately, which is sad because it's such an important issue.

Most universities are non-profit organizations. They have no owners or shareholders. They are lead by a board of trustees (sometimes called a board of regents), who are usually a mix of major donors and local important people. The board hires a management team, who in turn run the university. The management team is evaluated based on how well they get education and research done, not how much money they make. The university does not have to pay taxes, and donations to them are tax-free too.

Public universities are owned by state governments, but they usually run pretty much the same as non-profit universities. They do get some money from the state, but usually a lot less than you would think. They also don't pay taxes and get tax free donations.

For-profit universities are a pretty recent invention. They are run exactly like a regular corporation. Shareholders invest money, and expect a profit. There's a board of directors elected by the shareholders, which picks a CEO whose job it is to make as much money as possible. They do have to pay taxes and can't get tax-free donations.

To get an idea of the difference between the public, non-profit, and for-profit: the president of public Arizona State University is paid $728,000. The president of non-profit Carnegie Mellon University made about the same, $733,000. For-profit University of Phoenix currently has two co-CEOs, who make $7,000,000 and $11,000,000 each. For-profit Capella University's CEO made $11,000,000.

University of Phoenix made $600 million in profit, and Capella made about $30 million in profit. The state school and non-profit school made no profit at all, because they aren't allowed to.

Arizona State's 5-year graduation rate is 49%, and Carnegie Mellon's 5-year graduation rate is 86%. University of Phoenix's 5-year graduation rate is 16%, and Capella's is 9%.

The question is not whether for-profit schools should exist -- everyone agrees students should get to pick what kind of university they want to go to. The question is whether the federal government should give out student loans and Pell grants for students to go to for-profit universities.
posted by miyabo at 3:09 PM on August 5, 2010 [3 favorites]

The question is not whether for-profit schools should exist -- everyone agrees students should get to pick what kind of university they want to go to. The question is whether the federal government should give out student loans and Pell grants for students to go to for-profit universities.

Yes, and because the business model of these schools depends almost entirely on federal funding to survive, they'll either have to change or die. But that's capitalism, right?
posted by krinklyfig at 3:19 PM on August 5, 2010

Stripper says for-profit college degree ‘worthless’
posted by homunculus at 3:02 PM on August 8, 2010