Feds Find Fraud Widespread Among For-Profit Colleges

For-Profit College Fraud is Old News

A 2010 Government Accountability Office investigation of for-profit colleges found that all 15 for-profit colleges investigated made deceptive or questionable statements to applicants exaggerating the potential salary for graduates, giving false or misleading information about a program’s length or costs, pressuring applicants to sign enrollment agreements without allowing discussion with a financial advisor and making repeated recruitment phone calls. See For-Profit Colleges, Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices, GAO, Aug. 4, 2010 available at http://www.gao.gov/new.items/d10948t.pdf.

From www.newsnet5.com

Students rely on statements made by school representatives when they decide to pay, and often borrow, significant money to enroll in expensive programs at for-profit colleges. Students reasonably expect, based on promises made by the schools, that they will receive a valuable education, develop marketable skills, and will find employment in their chosen field when they complete the program. Yet reports and government investigations reveal that the reality for many students at for-profit colleges falls far short of the promises made to them. Students are frequently left with significant student loan debt after having received little if any educational benefit.

For-Profit Colleges Accused of Fraud

The New York Times reports that hundreds of private for-profit schools that have failed government regulations or been accused of violating laws continue to rake in billions of dollars of government monies. The schools accused of cheating students include beauty schools, nursing programs, criminal justice programs and criminal justice programs, to name a few. For-Profit Colleges Accused of Fraud Still Receive U.S. Funds, NYT, Oct. 12, 2015.

For-Profit College Fraud

Misrepresenting the Academic Program

Students and government investigators identify a host of deceptive schemes committed by for-profit colleges aimed at duping students to enroll in their schools. Allegations include that schools lie about their accreditation and about the transferability of credits. Students rely on these misrepresentations, mistakenly believing that credits earned at the for-profit school will be transferable to other post-secondary colleges, only to find out that the credits are not transferable.

Other cases involve claims that schools employ unqualified instructors to teach courses, despite promises that all teachers are properly qualified.

In some instances, students allege that for-profit colleges lie about the cost of their programs, grossly understating the cost and length of their programs, but then leading students to apply for loans that are far in excess of the cost estimate provided by the school.

In yet other cases, schools have been accused of lying about graduation rates to lure students into high cost programs that provide dubious benefits.

False Promises of Employment

Many of these claims center on allegations that the schools deceptively market their programs by promising prospective students that they would be well qualified for professional careers in their chosen field upon completing the program. For example, the Times reported that Alta Colleges engaged in “deceptive, unfair and abusive practices in marketing and selling” a $75,000 three-year degree in criminal justice by promising students that they would be “primed for careers as police officers, sheriffs, corrections officers and FBI agents”, yet according to a lawsuit against Alta, only 3.8 percent of graduates found professional law enforcement positions. Alta has denied the lawsuits allegations.

Corinthian Colleges was found to have falsified job placement statistics in 947 instances.

Some schools have been accused of using “harassing sales tactics” by misleading students with false information about their programs and job placement. Kaplan Career Institute I Massachusetts reportedly paid approximately $1.4 million after this type of claim was leveled against them by state prosecutors.

The Times reports that recent claims, lawsuits or investigations have been focused on all of the following private for-profit schools:

  • Everest College
  • University of Phoenix
  • Kaplan Career Institute in Massachusetts
  • Kaplan Higher Education
  • ITT Tech
  • Alta Colleges

Many government and private claims have sought relief for students who were harmed by the deceptive or fraudulent conduct of for-profit colleges. The relief that is available to affected students can vary, depending on many factors, including: the harm suffered by the student, the actions of the school, and the type of loans obtained by the student.

Contact our experienced consumer attorneys for more information about investigations and claims against For-Profit Colleges and to discuss what relief maybe available to you.