NPR logo

For-Profit Colleges Encouraged Fraud, Used Deceptive Marketing, GAO Reports

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
For-Profit Colleges Encouraged Fraud, Used Deceptive Marketing, GAO Reports

Must Reads

For-Profit Colleges Encouraged Fraud, Used Deceptive Marketing, GAO Reports

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


The for-profit education industry has been exploding in size - doubling over the past decade and soaking up billions in federal student aid. Well, today a Senate committee heard evidence that some for-profits encourage students to lie so they'll qualify for those government dollars. NPR's Larry Abramson reports.

LARRY ABRAMSON: The tactics revealed in a federal investigation sound like they come from the annals of the used car industry. The Government Accountability Office sent people posing as applicants into for-profit college recruiting offices. Using hidden cameras, the would-be students captured recruiters leaning on them to sign an admissions form.

One pretend student asked to speak with a financial aid officer at ATI Career Training Center in Texas. The student practically begged the recruiter to give him some idea of how much he'll owe before signing up to pay $38,000 in tuition.

Unidentified Man: Yeah, I was kind of hoping your financial people could say, all right, here's your total loans and how much your payments are.

Unidentified Woman: Yeah, they're going to be able to do that when you get back there, but they're really not going to be able to sit down and go over everything with you if you're not willing to reserve your seat, 'cause there's...

ABRAMSON: She keeps pushing him to sign the enrollment form. One recruiter even brought his director out of a back room to tighten the screws. While some of the ploys illustrated are merely slimy, others are probably illegal.

Greg Kutz, who conducted the investigation for the Government Accountability Office, says some would-be students were told not to report financial assets on their application for federal aid.

Mr. GREG KUTZ (Government Accountability Office): Other students were told to add bogus dependents to their federal aid form. One representative held up three fingers and told us specifically to add three bogus dependents to our federal aid form.

ABRAMSON: Kutz is referring some of the evidence for possible prosecution. For nearly two decades, it's been illegal to offer cash awards for boosting enrollment. But another witness at the hearing described a hothouse high-pressure atmosphere on his sales floor. Joshua Pruyn was a sales rep for Alta College in Denver, where he says bells would ring each time a student signed up.

Mr. JOSHUA PRUYN (Sales Representative, Alta College): Each representative had a quota of two students to enroll per week. Individual enrollments could mean paid time off or gift cards. And a successful year earned the top representatives an all-expenses-paid trip to Cancun.

ABRAMSON: The GAO did find that some schools did give out accurate information some of the time, telling students, for example, it's not possible to guarantee earnings after graduation. But of 15 schools investigators visited, all gave some questionable or deceptive advice.

The career college industry has sometimes claimed in the past that reports of abusive recruiting are the excesses of a few rogue individuals. But, today, Harris Miller of the Career College Association said he could not defend what he saw in those tapes.

Mr. HARRIS MILLER (Career College Association): There was no doubt that the government itself - federal government, the state government and the accrediting bodies, which in turn are approved by the federal government, are going to have to get more aggressive.

ABRAMSON: The Government Accountability Office says there's no clear need for new regulation or legislation since many of the practices revealed today are illegal or clearly against accrediting guidelines.

One lawmaker said the same spotlight should be trained on non-profit institutions. Republican Senator Richard Burr of North Carolina said in his state students at many for-profit schools are more likely to graduate with a degree than those at non-profit colleges.

Senator RICHARD BURR (Republican, North Carolina): So I share this with my colleagues to let them know, the label of for-profit or the label for non-profit has no specific impact on graduation rates.

ABRAMSON: The reason Congress is so concerned is that these schools depend heavily on federal money for their revenue. For-profit students are also more likely to borrow more than they can repay, leaving taxpayers on the hook.

The Department of Education is considering tighter regulations on for-profits. But these videos seem to indicate the existing roles are not being enforced.

Larry Abramson, NPR News, Washington.

Copyright © 2010 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.