Durbin: Government Reports Widespread Abuses in For-Profit College Recruiting

WASHINGTON, D.C.–(ENEWSPF)–August 4, 2010.  U.S. Senator Dick Durbin (D-IL) responded to a Government Accountability Office (GAO) report which found widespread abuses in for-profit college recruiting.

“The GAO report’s findings are significant and suggest a widespread pattern of fraud and abuse. It calls into question the for-profit sector’s assertions that it is the victim of a few bad actors.  The GAO visited 15 for-profit colleges and at every single college found recruiters misleading students, providing incorrect information, engaging in aggressive sales tactics, or even encouraging students to commit fraud.

“This is bad for students and bad for taxpayers.   Congress needs to take a hard look at whether current regulations are strong enough to prevent these tactics.

“We should also take a serious look at whether federal financial aid dollars that are meant to provide students a chance at an education should be spent on billboards, television commercials, ads on the sides of buses, and heavy-handed recruiting.  Some for-profit colleges are spending a quarter of their revenues on marketing and recruiting, and up to 90% of those revenues are derived from federal funding.”

As part of its study, the GAO sent undercover applicants to 15 for-profit colleges, some of which received 89-90% of their revenue from federal student aid, including two schools in Illinois – Argosy University and the College of Office Technology.  They found that 4 colleges encouraged fraudulent practices and that all 15 made deceptive or otherwise questionable statements about such things as potential salaries and graduation rates in the course of recruiting students.

Over the course of the study, four undercover applicants were encouraged by college personnel to falsify their financial aid forms to qualify for federal aid.  At 6 of the 15 colleges, staff pressured applicants to enroll before allowing them to speak to a financial aid adviser. Other recruiters made false claims about potential salaries, program duration, cost, and graduation rates.  Federal regulations require colleges to provide accurate information about those factors to potential students.

Earlier today, Durbin joined with Senator Jim Webb (D-VA), Senator Tom Harkin (D-IA) and others in sending letter to Secretary Gates and Secretary Shinseki asking questions about the federal investment in for-profit colleges in light of reports that some for-profit colleges have been aggressively targeting military personnel and veterans.  On June 21, Durbin joined with other lawmakers in asking the GAO to assess the quality of for-profit institutions, as well as how much of their revenue is comprised of Federal student aid and other Federal funding sources.