For-profit colleges face closure because of fraudulent recruiting practices

Westwood College's flagship campus has been placed on probation and its three Texas campuses face losing their state licenses following a federal investigation that uncovered recruiting abuses at Westwood and several other for-profit colleges.

The Accrediting Commission of Career Schools and Colleges, a national accreditor, put the flagship campus—Westwood College-Denver North—on probation last Thursday, citing the institution's recruiting practices as well as its failure to meet the commission's benchmarks for graduation and job placement.

In a separate action, the Texas Workforce Commission, a state oversight body, notified Westwood's Dallas, Fort Worth, and Houston South campuses that it will revoke their licenses to operate in the state. The campuses have until mid-September to appeal the decision. Roughly 1,500 of Westwood's 17,000 students attend its three Texas campuses, and 800 attend the Denver-North campus, a college spokesman said. Alta Colleges Inc., which is headquartered in Denver, is Westwood's parent company.

In a letter sent to faculty and staff members last week, George A. Burnett, the system's president and chief executive, said Westwood disagreed with the Texas commission's steps, but was "working diligently with them" and remained "confident" that the Texas campuses' licenses would be renewed. He also expressed confidence that the Denver campus would regain its full accreditation when it is reviewed again in November.

The actions against Westwood are the latest fallout from a recent report by the Government Accountability Office that chronicled widespread deception, and even outright fraud, in recruiting by for-profit colleges. At Westwood's Dallas campus, an admission representative went so far as to tell an investigator posing as a student not to report $250,000 in savings so he could qualify for federal student aid. Recruiters also gave the fake students misleading or incomplete information about programs' cost and graduation rates, the work-force commission says.

The commission says those actions violated Texas law, which bars recruiters from advising prospective students about financial aid and requires them to provide students with a schedule of tuition, fees, and other charges prior to enrollment. The agency has also accused Westwood of failing to report lawsuits involving the college, also a violation of state law.

Alta Colleges Inc. and Westwood, have been the subject of a string of lawsuits by former students and employees, including several filed by the Florida-based law firm James, Hoyer, Newcomer, Smiljanich & Yanchunis. The latest lawsuits accuse the colleges of training their recruiters to systematically misrepresent not only the cost of attending, but also job prospects for graduates and the nature of the colleges' accreditation.

Westwood, which, along with Alta, has filed a defamation case against the firm, has called the allegations "opportunistic," and promised to disprove them "in the appropriate forum." Last month, after the GAO report was released, the college announced that it would eliminate incentive pay for its recruiters and tighten its admissions standards to enroll students who are more academically prepared.

By Kelly Field, Chronicle of Higher Education, September 9, 2010