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Potential Students Drawn To For-Profit Colleges By Misleading 'Obama Mom' Grant Ads

First Posted: 07/26/10 09:35 AM ET Updated: 05/25/11 06:10 PM ET

Obama Mom Ads

There's no such thing as an "Obama Mom" grant for single mothers who wish to return to school -- but some advertisements for for-profit colleges are saying otherwise.

A report by ProPublica found that lead generation business such as Experian PLC operate the ads -- perhaps the most ubiquitous of which features two women walking under the headline "Obama Asks Moms To Return To School" (pictured below) -- on websites like LowerMyBills.com and ClassesUSA.com. The ads direct users to lead generators, from which for-profit colleges can buy information about potential students.

When members of ProPublica's Reporting Network clicked on them and subsequently gave over their information, they were inundated with calls and e-mails from recruiters at the University of Phoenix, Kaplan University and Capella University, among other for-profit institutions. And when Reporting Network members asked the recruiters about Obama Mom scholarships and grants, answers were vague:

While no recruiter claimed the grants actually existed, they generally did not dispute that they did. More often, said [Reporting Network member Hana] Shepherd, "I was told that a financial aid person could assist me later when I asked about the Obama grants."

Former Education Department Deputy Undersecretary Robert Shireman denounced the ads to ProPublica, but said that the department doesn't have the power to stop them.

On Friday, the Education Department proposed new, strict regulations for for-profit colleges that would end federal funding to schools who could not prove that their students went on to gainful employment or were able to repay their loans. An April report from the College Board revealed that more than 50 percent of for-profit students graduate with substantial debt -- twice the rate of students from private non-profits.

For-profit schools are known for targeting vulnerable student bases. They came under fire earlier this year after BusinessWeek published a report detailing how the colleges were recruiting students from homeless shelters.

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Filed by Leah Finnegan  |