US Names Apollo, Corinthian, Kaplan In For-Profit Probe (Wall Street Journal) includes company and the career college association's reactions to the GAO report and Senate hearing:
- Kaplan: "A Kaplan spokesman said in an emailed statement the company had initiated investigations at the two schools named by the GAO "immediately upon learning of the incidents" and has suspended enrollment at its Pembroke Pines, Fla., campus. Investigations at that campus and the Riverside, Calif., campus continue. The spokesman said Kaplan "will take all necessary actions" against employees violating the company's standards and code of conduct."
- University of Phoenix: "An Apollo representative said the company has initiated an internal investigation and it, too, would take "immediate and decisive disciplinary action" if it finds employees in violation of policies meant to protect students."
- Career College Association: "The Career College Association, a trade group, announced late Tuesday in response to the GAO's findings that it would enhance its top-down compliance training programs and institute a "mystery shopper" program immediately in the hopes of heading off some criticism. "Even if the problems cited in the GAO report are limited to a few individuals at a few institutions, we can have zero tolerance for bad behavior," President and Chief Executive Harris Miller said in a statement. "We will continue to add to this 'zero tolerance' program until all such doubts about our sector are removed."
GAO: 15 for-profit colleges used deceptive recruiting tactics (Washington Post) had this reaction from WAPO executives (the Washington Posts owns Kaplan, one of the schools cited in the report):
"In a joint statement, Donald E. Graham, chairman and chief executive of The Washington Post Co., and Andrew S. Rosen, chairman and chief executive of Kaplan Inc., described the tactics revealed in the videotaped interviews as "sickening."
"They violate in every way the principles on which Kaplan is run," they said in a statement posted on The Washington Post Co.'s Web site. "The GAO and the Senate [Health, Education, Labor and Pensions Committee] have done us a favor. We will do everything in our power to eliminate such conduct from Kaplan's education institutions."
WAPO also highlighted the fact that most of the companies investigated were the largest in the industry [representing almost 43% of the 1.8 million students enrolled in for-profits]:
"Many of the largest for-profit entities were named among the 15 sites targeted by GAO investigators: University of Phoenix, with more than 400,000 students; Argosy University, part of the 136,000-student Education Management Corp.; Kaplan College, part of the 119,000-student Kaplan Higher Education operation owned by The Washington Post Co.; and Everest College, part of the 110,000-student Corinthian Colleges."
Lawmakers Focus Ire on Accreditors for Abuses at For-Profit Colleges (Chronicle of Higher Education) noted the failings of oversight and enforcement at the Dept. of Education and accreditation bodies:
"The rest of the hearing focused on assigning blame for the abuses. Pressed by lawmakers, Mr. Kutz faulted the Education Department, saying it has failed in its oversight of the sector. While there are regulations in place to protect students from misleading and aggressive sales, they're not being enforced, he said. "It certainly seemed like a wild, wild West out there," he said, urging government regulators to step up their monitoring of for-profit recruiting and to punish colleges whose employees violate the rules...
As for the accreditation process, here is one exchange that the Chronicle captured:
"Do you think maybe your rigorous standards aren't rigorous enough?" asked Senator Franken, of Minnesota.
"I believe the standards themselves are rigorous," Mr. McComis replied. "In these cases, the schools' compliance with the standards fell short."
Asked by Senator Harkin why the accreditor hadn't found problems at the three institutions, Mr. McComis replied that the accreditation process isn't designed to catch "the sort of fraud the GAO has alleged."
"We don't secret shop," he said. "So in the normal course of an evaluation, I'm not sure we'd find those occurrences."
That answer appeared to infuriate Mr. Harkin, who said it was "apparent to me that we need a hearing on accreditation."
Senator to Review Accreditation of For-Profit Colleges (NY Times) highlighted Harkin's call for a focus on the accreditation process:
"As part of the expanding Congressional scrutiny of for-profit colleges, Senator Tom Harkin announced at a hearing on Wednesday that he plans to examine their accreditation process...Mr. Harkin questioned Michale McComis, executive director of the Accrediting Commission of Career Schools and Colleges, about why his group had found so few violations over the last two years in more than 600 visits to institutions it accredits when the Government Accountability Office found problems at every one it visited."
'Tight' Rules Sought for For-Profit Colleges (USA Today) noted that some lawmakers are seeking a more comprehensive look across all types of higher education institutions:
"Some lawmakers called for an expanded exploration to include practices of traditional non-profit public and private colleges. "The for-profit sector should not be examined in a vacuum," said Sen. Mike Enzi, R-Wyo."
Ironic that on the day of the Senate hearing about misleading recruiting tactics, Career Education filed an 8-K with the SEC that contained the following (from Wall Street Journal, emphasis is mine):
"Career Education said in a filing with the Securities and Exchange Commission Wednesday that the government's recommendations could "materially and adversely affect our business," with proposals regarding recruiter compensation, gainful employment, the definition of a credit hour and liability for making misrepresentative statements having the most potential impact."
For-Profit Colleges Hit with Claims of Fraud, Aggressive Recruiting (Christian Science Monitor) provided details of the testimony of the former recruiter at Westwood College:
"Another witness at the hearing was Joshua Pruyn, who spoke about working as an admissions representative for Alta College Inc. in Denver. He was trained in sales tactics, including interviewing students to find the “pain points” in their lives that could be used to pressure them to enroll, such as worries about being in a dead-end job. Misleading potential students to make enrollment targets was standard practice and was rewarded with incentives such as trips, he said.
Mr. Pruyn quit after nearly 6 months. The final straw, he said, was discovering that students who wanted to withdraw and clearly would eventually dropout (including a military person who was called up for active duty) were pressured to stay enrolled for at least 14 days because after that point, the school could keep federal money that the student had been awarded."