IT Career JumpStart

Aug 9 2010   1:08PM GMT

Fraud and Deceptive Marketing in Higher Ed

Ed Tittel Ed Tittel Profile: Ed Tittel

Heard an interesting story on NPR last week while driving in the car. It’s entitled “For-Profit Colleges Encouraged Fraud, Used Deceptive Marketing, GAO Reports.” The meat of the story comes from results of undercover investigators that the Government Accountability Office (GAO) sent into 15 for-profit colleges all around the US. They went with hidden video cameras, and presented their findings to the Senate Health, Education, Labor and Pensions Committee on August 4, 2010.

Cover page from GAO report

Cover page from GAO report

Here’s an interesting and somewhat chilling quote from that NPR story:

Some recruiters, caught on hidden cameras, openly urged applicants to lie on the federal form use to obtain student aid. One student was urged not to report $250,000 in assets because it was “none of the government’s business.” Other would-be students asked to speak to a financial aid counselor, but were told they’d have to sign an admissions form first. In some cases, applicants practically begged to get a full accounting of the likely costs, but were told they’d have to sign on the dotted line first.

While our slow economy has led many people back to school to bolster their employability, there’s an increasing tendency for higher-ed recruiters (including at not-for-profit institutions, as well as the for-profit ones that were the focus of this story) to talk prospective students into assuming sizable debts that the work for which degrees might qualify them does not always allow them to repay. The various practices cited in the preceding quote are illegal, so the NPR story urges stronger enforcement of existing laws, despite calls from student advocates to close down schools that seek government aid as a way to stay afloat, or that encourage students to take on debt that they cannot easily repay after graduation.

Anybody who’s considering school as a ticket to work should weigh the costs of education carefully against the resulting income likely to be earned after graduation. Any time that debt cannot be serviced by a reasonable portion of resulting income (generally, no more than 10-15%) it’s time to step back and question the costs and re-examine the benefits.

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