College Students Encouraged To Lie For Financial Aid, Study Finds

Sparked by an increase in defaulting student loans, an undercover government investigation into for-profit colleges has found that campus recruiters used deceit and fraud to lure potential students.

The Government Accountability Office (GAO) will present its findings-- mostly outrageous anecdotes-- from its 30-page study, "For-Profit Colleges: Undercover Testing Finds Colleges Encouraged and Engaged in Deceptive and Questionable Marketing Practices," tomorrow morning at a Senate education hearing.

(SCROLL DOWN FOR THE FULL REPORT)

The GAO sent four undercover employees to pose as potential students at 15 unnamed colleges, chosen because each receives at least 89% of its revenue from federal aid. The "students" spoke to admissions officers and campus recruiters, and expressed interest on school websites.

The "students" quickly discovered all levels of shadiness: one D.C.-based admissions officer at a trade school claimed barbers can earn up to $250,000 a year, while a Florida-based campus recruiter tried to convince a student that a $14,000 massage therapy certificate was a "good value" even though the same certificate was available at a community college for $520.

Other schools urged applicants to falsify information on their financial aid forms. For instance, a Texas college encouraged a potential applicant to add dependents to qualify for a Pell Grant, while an adviser in Pennsylvania told another student to delete his $250,000 savings declaration.

Although none of the schools' names were disclosed, analysts interviewed by Businessweek speculated that two of the campuses are owned by Apollo Group, two by Corinthian Colleges and one by the Washington Post, which owns Kaplan, the educational-testing behemoth.

The damning report is the latest blow to the for-profit sector, which currently receives $24 billion of federal aid each year, the GAO reports. These schools include any privately owned certificate programs, associate's degrees, and bachelor's degrees.

In a final memorable anecdote, the report describes a Florida-based admissions officer who said student loans are nothing like car payments. And in fact, this is sort of true -- when students default on these loans, taxpayers end up bearing most of the costs.

READ the entire report here:

gaomarketing

Comments

[Y3rMawm]

02:32 PM on 08/04/2010

Sounds just like the housing bubble. This makes perfect sense as the next bubble. Leveraged invested capital now for some future return on earnings power.

Just like the housing bubble, this is fraud, and the liars should go to jail. Period.

[dukesman2000]

10:07 PM on 08/03/2010

This is nothing new. If Uncle Sam hadn't paid for my college degree, I'd lie too.

[strick9]

06:37 AM on 08/04/2010

In most civilized societies education and health care are government funded to level the playing field allowing citizens to reach their full potential without selling themselves into indentured service for half their life. I say indentured service not slavery because they must provide the basic needs of a slave.

[Y3rMawm]

02:34 PM on 08/04/2010

In leveling the playing field, you must teach to the lowest common denominator. See, isn't math fun?

[research]

09:46 PM on 08/03/2010

lying is perfect training for the USA economy of robber barons.

[Dylan Henrich]

09:24 PM on 08/03/2010

When capitalism meets education. Part II.

[goplayrabbit]

09:22 PM on 08/03/2010

this should be front page news. for-profit colleges giving useless diplomas to students, and we're paying for it. we should strip funding from for-profit colleges.

[edgarcaycedoc]

09:16 PM on 08/03/2010

Where's (not so) Breitbart?? I am sure he can find a way to blame this on Obama!!

[tigerianwinter]

08:59 PM on 08/03/2010

I think the question just needs to be asked. What would you expect? This is a FOR profit organization. The recruiters are SALESPEOPLE! They are there not to educate you but to sell you a degree or a certificate. Of COURSE they will say anything to get you in the door. Not to be a jerk, but if you deal with an educational institution that behaves this way, you kind of deserve what you get. Dealing with a genuine University is challenging enough.

[breakingpoint]

08:56 PM on 08/03/2010

if education was free to all citizens based on entry scores we wouldn't have people trying to cheat to get into schools and people cheating to keep their jobs.

these are acts of desperation not people trying to get a Maserati

[wkrett]

08:29 PM on 08/03/2010

Wow; just like the housing bubble.

[Dan Kushner]

08:22 PM on 08/03/2010

There's strict regulations and laws already in place. This kind of thing is illegal. So just bust the perps! If there's scammers out there, just take them out. You mean to tell me that a local AG couldn't bring a lawsuit to bear on the offending parties?

The problem with studies like this is there's a ton of very good schools that are for-profit. Schools with good curricula, strong teachers, good outcomes for students. But releasing an anonymous report like this tarnishes all for profits alike.

[xilduq]

08:44 PM on 08/03/2010

yah! just like the strict laws and regulations covering financial fraud. get real, the Great American Ponzi Scam cares nothing about "laws".

[clearwaterclearmind]

09:48 PM on 08/03/2010

hold on hold on hold on...

someone, somewhere COULD possibly be offended if charges are brought, ergo; we can can not enforce any law pertaining to this fraud.

[omega777]

08:16 PM on 08/03/2010

A word to the wise ain't necessary - it's the stupid ones that need the advice.

[iqfinsvcs]

08:13 PM on 08/03/2010

The New Welfare System: ENTITLEMENT!

[TXfemmom]

08:12 PM on 08/03/2010

The names of the schools and the individuals, if the GAO had the evidence, most certainly should have been named.

The institutions and the individuals should be on their way to COURT and jail, as well.

[OldFreddie]

11:27 PM on 08/03/2010

Agree.

[California88]

07:49 PM on 08/03/2010

While generally, I am supportive of GAO efforts, it is hard to take this report seriously when the 15 schools are not mentioned by name. By doing this, the report effectively tarnishes all for profits with the same brush. Just like traditional “not for profit” schools, not all for profits are the same. Similarly, why don't traditional schools get the same amount of scrutiny as we are now seeing for profits undergo. All higher education has become about making money. Let’s not pretend there is something “sacred” about a so called “not for profit” college or university.

[iowamiddleguy]

08:20 PM on 08/03/2010

Actually for-profit are receiving on a whole less scrutiny than most new not-for-profit universities receive.

All not-for-profit schools have to produce reporting ad naseum that is required by law. Any individual who has examined the same reporting required of for profits finds that the for-profit institutions are lacking in providing details, let alone realistic numbers.

While I might get behind your dislike of the GAO not identifying the school my guess is because this is just hte first of a handful of reports. Either way I want to see the schools named!

[peterg76]

07:47 PM on 08/03/2010

The people filling out the forms know what fraud is. The schools are co-conspirators.