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A U.S. Senator is taking steps to advise high school students regarding the risks of pursuing post-secondary education at for-profit schools. In a press release, U.S. Senator Dick Durbin (D-IL) announced that he had urged high school principals across Illinois to ensure that their students are receiving honest and accurate information about their higher education options, and that they are aware of the risks associated with the for-profit college industry. Durbin stated that he wrote the principals to call their attention to the “often irresistible lure of for-profit colleges,” many of which are facing increased scrutiny from federal and state regulators for a variety of abuses including fraudulent marketing and recruiting practices, falsifying job placement rates, and predatory lending practices. Durbin asked the principals to make their students aware of all of their options for accessible, affordable higher education, including programs at community college and other not-for-profit institutions.In the letter to principals, Durbin wrote in part, "Students can hardly ride a CTA bus, watch their favorite prime-time sitcom, or surf the internet without being bombarded by attention-grabbing advertisements from for-profit colleges offering a hassle-free enrollment process, federal financial assistance, flexible schedules and a promised path to high-paying jobs and a better life. But too often it doesn't work out that way."
The Senator's letter drew a stern response from one of the nation's largest for-profit providers of post-secondary education, Devry, Inc., which is based in Durbin's home state of Illinois.  Devry stated in its own public statement that it had successfully educated tens of thousands of students in Illinois, including a number who participated in a program that allows high school students to earn associate's degree credits while still enrolled in high school. 

 
 
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The Huffington Post reports that one of the nation's largest for-profit education companies is attempting to rally opposition to federal regulations  proposed by the Obama administration by offering students free pizza slices.  According to the report by the Huff Post's David Halperin, the Art Institute of Fort Lauderdale, one of the schools run by Education Management Corporation (EDMC),  posted on its Facebook page that students should "Stop by the library all week between 12-1 and 5-6 to sign in to SaveStudentChoice and enjoy a free slice of Pizza.  Takes 5 minutes."  SaveStudentChoice is a for-profit school industry-backed  website aimed at opposing the Obama Administration's proposed federal regulations that would, among other requirements, condition a college's continued eligibility for federal student aid on the institution's  ability to meet targets for gainful employment among its graduates.  The for-profit school industry is attempting to inundate the U.S. Department of Education with complaints about the regulations before they are scheduled to take effect in late 2014.  
Offering freebies to students at for-profit schools in exchange for help with lobbying or an address or phone number of someone that a school can recruit for enrollment is a practice that regularly occurs at for-profit schools, where aggressive efforts to sell programs to adults and problems with graduating students finding employment often can arise.  


 
 
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Federal authorities have charged a Connecticut man with selling fake diplomas in an elaborate scheme involving fake  school websites, fake accrediting entities and fake diplomas.  According to the United States Attorney's Office in Connecticut that has filed the charges, the man collected more than $5 million from individuals in connection with the diploma mill scheme. 
The man faces up to 20 years in prison and a $250,000 fine if convicted.  The charges were reported by NBC Connecticut.

 
 
In an editorial, The New York Times has criticized efforts by the for-profit college industry to weaken new proposed federal regulations while urging the Obama Administration to enact even tougher standards aimed at reining in the predatory practices at many colleges and trade schools that have sent millions of adults into heavy debt with minimal job prospects.  In its editorial, The Times wrote: "The for-profit college industry is pressuring the Obama administration to water down proposed new rules that would deny federal student aid to career training programs that saddle students with crippling debt while giving them useless credentials. That’s a potent threat from the government, given that for-profit schools can get as much as 90 percent of their revenue from federal student aid programs. But it doesn’t go far enough. The administration should actually strengthen the rules to put the worst actors in this industry under tighter scrutiny. The proposed rules require career training programs to meet two reasonable standards to remain eligible for federal aid. The estimated annual loan payment of the typical graduate should not exceed 20 percent of discretionary earnings, or 8 percent of total annual earnings. And the default rate for former students should not exceed 30 percent. The overall approach is sound. But the percentage of people who are actually paying down their loans should also be taken into account to make sure that students are earning enough money to meet their responsibilities. If the repayment rate is left out of the picture, schools might escape sanctions by putting students in temporary forbearance programs that push loan defaults into the future. The for-profit industry is fighting hard against even the more limited proposed rules, and it is lobbying Congress to stop them. It claims that the new federal requirements would limit educational opportunity, particularly for poor minority students who might not qualify for traditional private or public colleges. The facts, however, show that for-profit schools often hurt the poor by luring them into questionable programs that cost considerably more than comparable courses of study at community colleges. According to federal data, graduates of two-year, for-profit career training programs average a loan debt of $23,590. By contrast, most community-college graduates owe nothing.The Department of Education recently reported that, of the thousands of for-profit programs it analyzed, an astonishing 72 percent produced graduates who, on average, earned less than a high school dropout who worked full time. This means that the most debt-ridden students are unlikely to earn enough to ever repay their loans. While students at for-profit colleges are 13 percent of the total higher education enrollment, they account for nearly half of all student loan defaults.The department’s analysis, which covered both for-profit and nonprofit career programs, found that 98 percent of the students enrolled in the lowest-performing programs are in for-profit schools. And among the certificate programs most commonly found to be substandard are the ones that typically advertise on buses and subways in cities all over the country, targeting less sophisticated audiences; these include programs that claim to train cosmetologists, medical assistants, paralegals and other fields. For the sake of poor students and their families all over the country, the Obama administration needs to issue strong rules that will push substandard programs to improve and force predatory schools out of business."
 
 
A coalition of attorneys general from more than 30 states are engaged in a coordinated effort to investigate and crack down on predatory practices within the for-profit school industry.  As reported by the Pew Charitable Trust's news service, leaders in 32 states, working under the leadership of Kentucky Attorney General Jack Conway, are investigating complaints against for-profit colleges and trade schools.  One reason for the effort, according to the report, is the sheer volume of taxpayer dollars going to support the for-profit school industry, which routinely receives as much as 90 percent of its revenue from federal and state student loan programs.  
The Pew report chronicles the experience of an Iraq war veteran, Murray Hastie, who was initially turned down by two colleges upon his return from two tours of duty.  According to Pew, Hastie then came upon DeVry University, a for-profit school that sent a representative to his home the day after he filled out an online information request.  Hastie decided to enroll in a "biomedical informatics" program at a DeVry campus in New Jersey, after being informed that the costs of the program would be covered by GI benefits, according to Pew.   But Hastie's experience thereafter was troubling.  As described in the Pew report:  "Three semesters into the program, Hastie was struggling. He was being taught to write computer code, not preparing to work in a research lab, which is what he had been told he would be doing. Meanwhile, he was increasingly worried about his mounting debt. By the time he decided to cut his losses and move back home, Hastie had racked up more than $90,000 in student loans—with no degree to show for it."
 
 
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The U.S. Department of Justice has joined a lawsuit against the for-profit Stevens-Henager College that alleges that the school paid recruiters bonuses and incentive compensation in violation of federal law.  The lawsuit, pending in federal court in Idaho, was filed by two former employees of the college who are pursuing the claims under a federal whistleblower law.  The employees and the Justice Department accuse Stevens-Henager College and two affiliated schools, CollegeAmerica and California College of San Diego, of additional improprieties, including faculty members lacking minimum qualifications required by its accrediting body and officials falsifying student records.   The lawsuit was disclosed by the Huffington Post.  According to the 99-page Complaint filed in federal district court, the defendant schools have received more than $660 million in federal student aid since 2002.  One of the alleged violations of federal law detailed in the lawsuit  is a practice in which  the schools "pay bonuses, commissions, and other forms of incentive compensation to employees in the admissions departments based directly and indirectly on the number of students that these employees enroll."  The defendant schools deny any wrongdoing in the lawsuit, which is pending. Incentive compensation in enrollment  has been a recurring problem at for-profit colleges.  The federal whistleblower law provides an opportunity for employees and students who are witnesses to fraud to be rewarded financially for their reporting of such practices.  If you wish to share a concern about improper practices at another college or trade school with an attorney, you may send an e-mail to contact@collegewatchdogs.net, or complete this form.  

 
 
A detailed report by the Baltimore Sun chronicles how student loan debt incurred at substandard trade schools can plague students long after the end of programs that provided them with little benefit.  The report tells the story of Janice Peete-Bey who still faces loan obligations relating to a trade school program that she enrolled in 25 years ago.  Ms. Peete-Bey has already paid more than $13,500 on a loan that was originally $5,600, with some of the payments coming in the form of wage garnishments and tax refund seizures.  According to the Sun, the school that Ms. Peete-Bey attended has long since closed, with its CEO having plead guilty to fraud for concealment of the school's drop-out rate in order to keep federal student aid to the school flowing. 
 
 
The Huffington Post has reported that the president and CEO of a non-profit entity supporting teacher education is also now serving on the board of Corinthian Colleges, one of the nation's foremost for-profit education companies.   David Halperin of the Huff Post reports that Sharon Robinson, the head of the American Association of Colleges for Teacher Education, also is a board member of Corinthian Colleges.  Robinson's non-profit aim to advocate for strong professional teacher education.  According to the Huff Post report, Robinson's total compensation for serving as a board member of Corinthian Colleges could range up to $160,000 per year.  Halperin's report states, "Santa Ana, Calif.-based Corinthian now faces a major lawsuit, filed last summer, from California attorney general Kamala Harris, who has charged that the company has engaged in 'false and predatory advertising, intentional misrepresentations to students, securities fraud and unlawful use of military seals in advertisements.' In January, Corinthian disclosed that it had received a request for documents and information regarding its recruiting and business practices by a group of another thirteen state attorneys general (Arkansas, Arizona, Connecticut, Idaho, Iowa, Kentucky, Missouri, Nebraska, North Carolina, Oregon, Tennessee, Washington and Pennsylvania)."
 
 
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Massachusetts attorney general Martha Coakley has filed a lawsuit against one of the nation's largest for-profit education companies, Corinthian Colleges, alleging that the company uses deceptive marketing and loan techniques to enroll students and increase profits. In Massachusetts, Corinthian operates two branches of its Everest Institute.  As described in the Boston Globe, the AG's lawsuit filed in state court in Massachusetts accuses the for-profit education giant of luring students with misleading promises of employment and pay into education programs that leave them heavily in debt.  In an interview with the newspaper, Coakley said, "The only ones who are doing well in this appear to be the [company's] investors." A Corinthian spokesman told the paper that Coakley was ignoring substantial positive evidence about the student success  at the company's two Massachusetts campuses. In a statement, Corinthian said in part, “The Massachusetts Attorney General’s Office disregards substantial, independent evidence that our two schools in Massachusetts have a strong record of offering students a quality education and treating them honestly and fairly.”