For-profit colleges accused of widespread systemic fraud

Inside Higher Ed reports:

Leaders in for-profit higher education have historically tried to deflect criticism of the institutions by pointing to a few misbehaving "bad actors" who aggressively recruit unqualified students, keep them enrolled for as long as possible while burying them in debt and, if students stick it out long enough, award them worthless degrees.
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But the events of last week -- most notably the findings of the Government Accountability Office's undercover investigation of recruiting at for-profit colleges that included inducements to commit fraud at four institutions, and the highly critical Senate hearing at which the findings were aired -- challenged the validity of that argument and put advocates of the sector on the defensive in a way that they have not been for years. The developments emboldened critics, saying that the week's events prove what they've been saying about the systemic nature of the sector's problems.

With the GAO's findings suggesting that evidence of for-profit recruiters encouraging students to commit fraud was fairly widespread and that questionable or misleading practices were identified at all 15 for-profit colleges that investigators visited, “the world changed this week,” said Terry W. Hartle, senior vice president of government and public affairs at the American Council on Education. “There should be no doubt that the world of federal student aid policy changed this week," certainly for for-profit colleges but perhaps for nonprofit institutions, too.



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