Thursday, August 5, 2010

Report: For-profit Colleges Misled Students

Posted By on Thu, Aug 5, 2010 at 12:00 PM

For-profit college recruiters lied about costs and pressured students to sign up for courses, according to a new Congressional investigation.

Government investigators targeted several for-profit colleges, including the University of Phoenix—with more than 200 locations, including Boise—as well as Kaplan College, Everest College and Argosy University. Inspectors went undercover as students and were told by recruiters that students needed to sign up for courses before they could get information on financial-aid. Investigators also told a U.S. Senate hearing that recruiters were offered trips, paid time-off and gift cards as incentives to sign up students. Recruiters who didn't get results were "harassed and threatened" by supervisors, according to Joshua Pruyn, a former recruiter for Alta College in Denver.

"There is no conspiracy to defraud," countered Trace Urdan, analyst with Signal Hill Capital, an investment banking firm specializing in education. "There is no evidence to support the notion that the offenders are habitual bad actors or that these situations are commonplace," said Urdan.

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