Kaplan University: Preying On 'Pain' And 'Fears' Of Low-Income Students Is Not 'Remotely Deceptive'

"Boiler room" sales tactics at some for-profit colleges have attracted unprecedented government and law enforcement scrutiny over the past two years. But at Kaplan University, owned by the Washington Post Co., marketing techniques such as preying on the "pain" and "fears" of low-income students should come as no surprise, according to the company's lawyers.

There was "nothing remotely deceptive" about the flyers guiding Kaplan recruiters, according to the Washington Post Co.'s defense against a recently dismissed shareholder lawsuit that claimed the company had fraudulent business practices.

"If you can help them uncover their true pain and fear," one flyer stated, "if you get the prospect to think about how tough their situation is right now, if you talk about the life they can't give their family right now because they don't have a degree ... you dramatically increase your chances of enrolling this prospective student."

Responding to allegations, the company's lawyers wrote in their August motion to dismiss, "Plaintiff may think this language unbecoming for an educational institution, but it is not fraudulent." The lawyers also wrote, “It merely encourages admissions advisers to 'ask probing questions to explore student motivation' and to 'keep digging until you uncover their pain, fears and dreams.'" U.S. District Judge Barbara Rothstein dismissed the case on Dec. 23.

As the for-profit college industry has fought back against increased federal government regulation over the past year, the industry's top brass has often argued that its schools serve a noble cause: educating low-income, first-generation college students who have nowhere else to turn. Chief among those spokesmen is Donald Graham, the chairman and chief executive of the Washington Post Co.

"A disaster is shaping up for lower-income students who want a higher education," Graham wrote in an op-ed in the Wall Street Journal last year. "The [administration's] proposed regulations may start with good intentions, but the result will be less access for our nation's most needy students."

But Kaplan and the Washington Post Co. struck a decidedly different tone in a filing defending the company from the investors' class action, essentially acknowledging some of the more controversial tactics and questioning why anyone would object to such a culture.

"Investors would hardly be surprised or disappointed to learn that a 'for-profit' education company would operate like a business," lawyers wrote in response to allegations that Kaplan University had a "corporate culture that transformed supposed admissions advisors into sales persons, potential students into 'leads' and student enrollment into sales."

They went a step further in questioning why investors suing the Washington Post Co. found "something sordid" in Kaplan's use of "football-field sized call centers" and reliance on "telemarketing techniques and sales goals."

"This was neither sordid nor secret," the lawyers wrote. "It is standard practice in the for-profit sector and was well-known to the market for years."

Nearly 30 percent of students at Kaplan schools defaulted on federal loans within three years of graduating or leaving its schools -- one of the highest default rates of any publicly traded college corporation, according to the Department of Education.

Kaplan spokeswoman Melissa Mack wrote in an email that her company disagreed with many of the allegations of the suit's plaintiffs and that "they never even addressed the nature, content and quality of Kaplan's educational offerings, which are very much part of its culture."

"Our motion was very much based on the argument ... that the factual allegations of the complaint were unfounded and that there was nothing false or misleading about any of the company's statements," Mack wrote.

Mack cited an assertion in the Washington Post Co.'s motion last year: "The allegation that it 'mandate[d] ... predatory and deceptive recruitment and enrollment practices' is unsupported, and the isolated abuses alleged are, in any event, immaterial."

The lawsuit against the Washington Post Co. was a class action brought on behalf of shareholders who claimed the company's stock price plummeted once fraudulent business practices were revealed by increased government scrutiny. A federal judge dismissed the case late last month, ruling that plaintiffs failed to establish that Kaplan or the Washington Post Co. "knowingly or recklessly misled the market."

Mack told HuffPost last year that recruiters no longer use such flyers.

See Kaplan University's flyers for recruiters here.

Comments

[lavendersbaskets]

07:01 PM on 05/28/2013

Kaplan University is very predatory and full of hot air. I went there for six month and now I owe a giant federal loan, I didn't get a degree from there and the classes was horrible and cost more then if I would have went to a community college. They said that my financial aid would cover my classes, but they accepted federal loan, after federal and I never saw any money back. I really want to sue the pants off this place because they did play on my fears and made my fears worst after I explained to them that I just had my second child and I wanted to give them a FUTURE!!!! The only future that my kids would have now is that if I die today they would have to take over my loans to the government. How do you run up a 26,000 dollar loan in 2 and a half semester... mine you the semester are only 9 weeks each. Total rip off and that " University" should be shut down!!!

[rybalaw]

10:43 AM on 01/16/2012

The for profit college phenomena is related to the fact that neither your State Universities nor your traditional private colleges have figured out the internet yet as a business model. It is also related to the high amount of people who volunteered for the military after 09/11/2001 and now have G.I. bill benefits and the willingness of some american businessmen to rip these veterans off. What is even more degenerate is that the endowments of both Harvard and Yale have invested in some of these scam companies and that those companies are more than happy to use that in their advertising. I know that one or two of these companies may become a respected private small college someday, but most of these scams will die by the wayside leaving people with useless degrees that they or the federal government paid through the nose for.

[kamact]

09:26 PM on 01/15/2012

This is what happens when the TBTF banksters move in to extract more money,...in this case from the government,....

[monkey moment]

03:13 PM on 01/15/2012

The only real facts this obviously bias article presents is that kaplan is "not fraudulent" and "case dismissed by judge."

[Andman0121]

05:16 PM on 01/15/2012

lol it is fraudulent. Wake up.

[JM Mitchell]

04:15 PM on 02/15/2013

Just because an allegation cannot be proven in a court does not mean the allegation is false. There is a difference between that which is true and that which is true under the authority of a court. Let us take the sad, but well known reality, that people who have murdered another human being are, with shocking frequency, deemed innocent of the allegations against them and their case is dismissed by the judge. Or, let us take a common reality from the insurance and medical industries and think about denied claims - in both industries - where the policy clearly states that coverage is in force for the loss suffered but a court - be it judge or jury - decide that the truth is the claim is not covered by the policy. In these - and countless other cases - a judge dismisses the allegations not because they are false, but because they are legally false. A distinction lost on most people - including monkey moment and fans of said person's comments.

[olitenup]

11:38 AM on 01/15/2012

These scammers have learned well from Wall Street. They are predatory.

[MrMoo]

05:52 PM on 01/16/2012

THESE ARE WALL STREET SCAMMERS. the sbu prime mortgage scammers just moved over to sub prime education

[hjo4]

11:14 AM on 01/15/2012

Mark your calendars and watch Our Missing premiering Wednesday 1/18.

http://tvone.tv/shows/find-our-missing

[elcastle]

09:55 AM on 01/15/2012

All the money which goes form fed to for profit education and is defaulted only benefits those companies, we as a nation are loosing money, students end up without educations and loans .
The best way to take that money and give it to low income students with reasonable conditions and they can attend regular colleges or community colleges. We have to stop thinking that private will solve education problem. It will not. Private schools are there for profit and only rich people can afford to be drained...for us others there need to be strong public education - that should be backbone of everything. And it is not question of left and right - Rahm is destroying public schools for homeless kids in Chicago...it is question right or wrong...Strong and good public schools to educate competent people who will understand what is going on in this country and make a change for good..

[BrendaNYC]

08:25 AM on 01/15/2012

The halcyon days of higher education are over. It's time to pull back the curtain and once and for all mandate transparency. For-profit and not-for-profit institutions are engaged in confusing and expensive marketing practices. We need a massive consumer education program. I natter more about it here: www.HereSheIsBoys.com/2011/10/26/educated-consumers/

[trespanieli]

08:21 AM on 01/15/2012

Because of these hucksters, legitimate colleges and universities are getting into the "online" course business, and are charging students the same tuition as sitting in a live classroom. Does anyone really believe that online is superior to the experience one gets from interpersonal interaction one gets in a classroom?

[midnightarmy]

06:10 PM on 01/16/2012

I went to an online high school and it is not for everyone. You actually have to be very self motivated and know how to study. Consider the facts that I was practically forced to study and my teachers read all my reports. You still have class online it is just the teacher gives the lectures in video or voice chat and you ask in a chat box in real time your questions or concerns and your peers are all in the same chat box. All of my teachers were able to be contacted by phone or email and they had office hours... It is very cool actually...Now in college I have taken at least one online class a semester. Some people rely on the flexibility of these classes. BUT it would not be able to replace taking a regular class because everyone learns differently.

[JM Mitchell]

04:28 PM on 02/15/2013

As an online and classroom teacher, with over 10 years experience, I think that both in-seat and online classes can be of benefit to students. I do believe that certain classes require the traditional in-seat experience, such as those requiring direct hands-on experience. Certainly an EMT or auto mechanic will, at some point, have to touch the real thing in order to actually learn how to apply the theory and science they have learned - whether online or in a classroom setting. Surely neurosurgery is not a subject for an online class - but the science surely could be taught online. That said, some students are not prepared for the difference between online and traditional classes. In traditional classes, the instructor is the center of the learning model and, while students must take personal responsibility for their learning, there is a portion of their learning that occurs simply because the instructor is present to drill it into their heads through traditional curriculum delivery models. In contrast, online courses are student-centered; the instructor is literally not present. As such, the student is solely responsible for their learning experience. Some, and I would argue most, are not up to the task. Not because they lack brain power, but because our academics are becoming weakened by standardized testing, the proliferation of academic accommodations, the general dumbing-down of America, and the advancing of the "blue-ribbon" generation that is rewarded for achieving mediocrity, at best.

[sandratee]

07:27 AM on 01/15/2012

For netflixers... college inc

Let's also talk about how these colleges including traditional private universities sell out students to credit card companies to make a buck. So you have irresponsible 18 year olds who can barely even afford school with high credit line credit cards

Shame that it takes a mainstream news article to bring attention to these issues. It seems as if nothing gets done these days unless the media talks about it

[Chinawanderer]

11:40 PM on 01/14/2012

For-profit education is just one more symptom of a culture that has lost its soul and moral compass.

[Chinawanderer]

11:28 PM on 01/14/2012

For-profit education is just another symptom of a culture losing its soul and moral compass.

[Crystal L Evans]

10:30 PM on 01/14/2012

I graduated from Kaplan in May 2011. I had no problems with them until my last term. I received a letter from them stated that I had approved for full financial aid for the last term. However, I was informed that I owed them over $700 because I did not get the full funding because since it was my last term, I did not take a full load of classes. I graduated with a paralegal certificate for people with a Bachelors degree. I still have yet to find a job. Most jobs call for experience or if anyone is willing to hire you, you have to have secretarial skills because most firms want a legal assistant that can do both paralegal and secretarial work. Something that I am not really good at.

[J R M]

10:19 PM on 01/14/2012

Exploitative - yes, deceptive - no.

[Dana Marie Arnold]

06:45 PM on 01/14/2012

I have a question............Why isn't anyone raising cain and getting upset that this article entitled, "Kaplan University: Preying On 'Pain' And 'Fears' Of Low-Income Students Is Not 'Remotely Deceptive", is featured in the "Black Voices" section??
Is the liberal HP stereotyping the blacks now? You can bet if any other newspaper featured this under the same section all heck would break loose.

[Absolute]

08:22 PM on 01/14/2012

Because most posters here are informed enough and intelligent enough to know that these institutions targeted black students for their predatory practices.

Your post makes absolutely no sense.

[Dana Marie Arnold]

09:38 PM on 01/14/2012

My post makes perfect sense. However, yours does not because of the way you structured your sentence, you made it sound as if black students have "predatory practices".

[elcastle]

09:57 AM on 01/15/2012

Minus one favorite I clicked by accident - absolutely not agreeing with you:-)