For-profit colleges face more scrutiny in new report

Another video clip shows a Washington, D.C. for-profit admissions official tell an undercover student applicant that he could make $600-$1,000 a day as a barber. The GAO report points out that nine in 10 barbers in Washington, D.C. make less than $19,000 annually, according to the Bureau of Labor Statistics.

The GAO report also details for-profit personnel’s aggressive methods in pursuing potential students. The undercover GAO employees “received numerous, repetitive calls from for-profit colleges attempting to recruit the students when they registered with web sites designed to link for-profit colleges with prospective students,” the report said.

“Once registered, GAO’s prospective students began receiving calls within [five] minutes,” with one undercover prospective student receiving 180 phone calls in one month. Some colleges called as late as 11 p.m., according to the GAO.

The investigators also found that for-profit academic programs were pricier than comparable programs at nearby community colleges.

Officials in the for-profit college industry said institutions should enforce strict recruiting policies, emphasizing that not every for-profit school was investigated by GAO workers.

“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,” said Harris Miller, president of the Career College Association (CCA), an organization that represents for-profit colleges. Miller added that for-profit institutions should have “zero tolerance for bad behavior” among recruiters.

The CCA announced Aug. 4 that the organization’s response to the GAO’s findings would include development of a “sector-wide mystery shopping program to assess the state of practice in recruitment, admissions, financial advising, and other critical compliance areas,” and an expansion of an existing “compliance training program, including an increased focus on compliance from the top down in the organization.”

For-profit institutions deflected criticism last year when Apollo Group Inc.–the University of Phoenix’s parent company–agreed to a $78.5 million settlement after a six-year court battle that started when former university employees filed a lawsuit claiming recruiters were paid based on the number of students they enrolled, a practice that violates federal law.

Apollo Group denied the former plaintiffs’ allegations, dismissing them as disgruntled former employees and claiming the school’s recruiting practices were within federal guidelines.

Arthur Keiser, chancellor of Keiser University, a family-owned chain of 13 campuses across Florida, said many public four-year schools pay recruiters when they enroll international students–a practice not often brought to public attention.

“Incentive-based compensation has been used everywhere,” he said in an interview with eCampus News last December. “And people just don’t understand the circumstances.”