Suze Orman teaching personal finance class — at the University of Phoenix

If you were teaching a course on how to manage personal finances, one of the best pieces of advice you could give is to avoid attending a for-profit college, The Huffington Post reports. A series of government and media investigations have exposed that signing up with a for-profit college could well be one of the worst financial decisions a person could make in his or her entire life. Many of these schools offer a toxic mix of ultra-expensive tuition, low-quality classes, high dropout rates, and poor job placement. As a result, they often leave students — single parents, veterans, immigrants, and others struggling to earn a living — without jobs and deep in debt from the loans they’ve taken out. For-profit colleges have 13 percent of U.S. college students, but an astonishing 47 percent of student loan defaults. So why is Suze Orman — who calls herself  “undeniably America’s most recognized expert on personal finance” — teaching an online personal finance course at the University of Phoenix, the biggest of these controversial for-profit colleges?

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ED rulemaking includes input on controversial ‘gainful employment’ rules

The Obama administration has seen legal setbacks in its push for gainful employment rules.

The U.S. Department of Education (ED) will kick off a new round of public hearings on the oft-discussed “gainful employment” regulations, which the for-profit college industry has successfully fought in ongoing legal battles.

ED announced April 15 that it would launch a series of rulemaking proceedings covering a number of higher education issues, including the rules pushed by the Obama administration that would have prevented career-training programs, mainly at for-profit colleges – many with expansive online programs — from leaving students with unaffordable debt and limited employment options.

The rules were first proposed by the administration in 2009 after growing evidence and congressional inquiries showed that as the for-profit college sector grew – bolstered by the easy access of web-based courses – completion rates remained dismally low at some schools and students proved unprepared for the workforce.…Read More

House cracks down on for-profit recruiters targeting GI Bill benefits

Veterans advocacy groups lobbied lawmakers on Capitol Hill this spring.

The U.S. House of Representatives responded to military veterans’ scathing criticism of for-profit colleges last week and passed legislation that will prevent schools that accept GI Bill benefits from paying commission to recruiters.

House members passed the bill Sept. 11, four months after veterans advocates took to Capitol Hill to testify about for-profit colleges targeting service members with generous government educational benefits, many times to the detriment of the prospective students, who are recruited into schools or programs not suited to their educational needs.

The legislation drew support from Republicans and Democrats, who passed the bill and curbed for-profit schools’ incentive to push for former service members – a well-documented and controversial practice that has been at the center of several government reports since 2009.…Read More

Online colleges ‘wage war’ with student aid fraudsters

The University of Phoenix has identified more than 800 fraud rings.

Online programs at some colleges have stopped accepting student applications from states known as hotbeds for fraud rings that sign up students for courses, receive student loan payments, and disappear from the virtual classroom.

And some schools have created teams tasked with weeding out potential fraudsters who take millions in federally backed student loans every year, taking advantage of the relative anonymity of online classes.

Higher-education administrators from across the country gathered Jan. 27 for the annual Presidents’ Forum at the U.S. Chamber of Commerce in Washington, D.C., where student aid fraud was discussed after the U.S. Department of Education (ED) warned colleges of the prevalence of fraud in a Dear Colleague letter released last fall.…Read More

University of Phoenix founder John Sperling sells $59 million in stock as shares soar

In the six weeks since the Obama administration issued weaker-than-expected rules governing student debt at for-profit colleges, the University of Phoenix’s founder and executive board chairman has cashed out more than $59 million of the school’s parent company’s stock, according to filings with the Securities and Exchange Commission, reports the Huffington Post. The company’s share prices on Wall Street have climbed to the highest levels in more than six months…

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For-profit colleges face more scrutiny in new report

Enrollment at for-profit colleges has climbed to 1.8 million in recent years.
Enrollment at for-profit colleges has climbed to 1.8 million in recent years.

A government report released Aug. 4 details “fraudulent” practices among recruiters for some for-profit colleges, and public criticism of the popular institutions has mounted as recent statistics show that at least one for-profit university received $1 billion in federal Pell Grants during the 2009-10 academic year.

Investigators from the Government Accountability Office (GAO) posed as college students and found that four out of 15 institutions they examined “encouraged fraudulent practices” to secure federal student loans, and representatives from all 15 colleges “made deceptive or otherwise questionable statements” to the undercover students, according to a report published on the GAO’s web site.

The extensive report is the latest in a string of negative publicity for for-profit schools, which include industry giants such as the University of Phoenix, Kaplan University, and DeVry University.…Read More