For Profit Schools Under Investigation For Fraud
The United States Government Accountability Office or rather the [GAO] has been issuing reports about For-Profit Colleges since 2009, when the office started investigating allegations that were being brought to light against the colleges for predatory recruiting tactics. In 2010, the [GAO] released a report about their findings of fifteen different For-Profit Colleges, with the main emphasis on the fact that found affirmation that the colleges were using deceptive sales practices to boost their enrollment of students who would bring in Federal Aid.
2010 GAO Report
The lack of education and value of the degrees students left for-profit colleges with, caught the attention of the United States Senate in 2010. The GAO opened an investigation into how the $24 Billion in federal funding was being spent.
During the enquiry, the [GAO] found that four out of the fifteen cases had campus officials, “encouraging applicants to commit fraud”, where the school officials would then “lie about or misrepresent their programs” as found during an undercover investigation by government officials. According to the GAO report, Westech College, MedVance Institute, Westwood College, and Anthem College all made, “deceptive or otherwise questionable statements”, during which they made fraudulent suggestions.
Other findings of the GAO Report:
- Pressuring prospective students to enroll on the spot without considering costs or alternative education paths
- Providing prospective students with knowingly false information including enrollment rates, student graduation rates, the nature of the school's accreditation, salary and employment prospects and duration and cost of the program itself
- Encouraging students to submit false information to obtain federal funding to attend the college
These findings are even more startling given the student costs and outcomes:
- 54% of students at for-profit colleges leave without a degree or certificate
- The total cost for associate degrees and certifications at these for-profit colleges on average cost 4x as much as comparable degrees and certifications at community colleges
- One in five students from for-profit colleges default on their loans within 3 years of beginning repayment
2012 Senate HELP Report
Soon after the 2010 GAO report, Tom Harkin's followed with the 2012 Senate HELP Report conducted over 2 years into the for-profit college industry. The report found:
- 15 of the largest for-profit colleges received a staggering 86% of their revenue directly from federal aid programs
- Only 17% of the budget at the 15 largest schools was spent on academic instruction with nearly 23% spent on recruitment. This is in gross contrast to not-for-profit schools which spent less than 1% of their budgets on marketing
- The schools mislead, deceived and lied to service members about their military benefits, claiming their full education would be paid for
2014 Gainful Employment Regulations
The GAO Report and 2012 Senate HELP Report lead to a series of government lawsuits and actions against the for-profit colleges examined in the reports. In October 2014, the Department of Education attempted to correct many of the deceptive practices by instituting a set of standards called the Gainful Employment Regulations. This requires all schools to track the debt and employment of their graduates to ensure they are meeting federal guidelines.
This requires that a graduate is never left with a monthly loan payment higher than 20% of their discretionary income or 8% of their total earnings. The schools that do not adhere to this risk losing all federal funding.
Colleges are evaluated on a yearly basis and if the loan payments of their graduates exceeds 30% of discretionary income or 12% of earnings, are labeled as failing. If a for-profit college fails consecutively for 2 years, they are then ineligible for aid.
This has proven to significant for these schools as many are now attempting to move to the non-profit status to stay afloat.
2015 Students Before Profits Act
The Students Before Profits Act was introduced in September 2015 by Senators Elizabeth Warren of Massachusetts, Chris Murphy of Connecticut, and Dick Durbin of Illinois. The goal of the bill is to protect students from the school's deceptive practices and lack of emphasis on academic education. This is done by:
- Ensuring students have access to accurate information
- Increasing civil penalties on institutions and executive officers found guilty of misrepresenting the cost of the college, graduation rates, employment statistics or default rates
- Strengthening regulation and oversight, specifically on oversight of default rate manipulations
A significant part of the bill is that executives and owners of these for-profit colleges are now responsible for financial losses associated with Title IV funds. The Department of Education is able to investigate claims against groups upon discharge of borrowers' student loans.
For-Profit Schools Sanctioned by the Government
The schools below have either been shut down due to their misleading and deceptive practices or were part of the GAO 2010 investigation. Although there is a common thread among for-profit colleges over stating employment rates, graduation rates and understating tuition and debt costs, we have outlined the issues facing each individual school below.
Career Education Corporation is the parent company of AIU and CTU. CEC was found by the GAO to have deceptive recruiting tactics, misrepresentation of job placement rates, and high rates of student loan default and student withdrawal.
Both colleges have since shut down following the August 2013 settlement with the New York Attorney General in the amount of $10.25 Million. American InterContinental University loan forgiveness and Colorado Technical University loan forgiveness are now available due to the misleading practices and inflated job placement statistics.
These two schools were not found to be at fault after the GAO investigation. However, graduates of both schools are eligible for assistance with their student loans.
American Military University loan forgiveness and American Public University loan forgiveness are currently taking applicants. If you attended either school, inquire with us today.
Anthem College filed for Chapter 11 and shut their doors in 2014 due to their graduates being unable to find employment opportunities to pay for their high debt loads. Due to these findings, former students and graduates are now eligible for student loan forgiveness and student loan discharge.
In 2016 Antonelli college was stripped of its accreditation for their Practical Nursing program, one of their most popular. If you were enrolled in their Nursing program, or any another programs at the college, you may be eligible for Antonelli student loan forgiveness or student loan discharge.
Argosy University, a brand of Education Management Corporation, was found to have questionable financial aid practices and high withdrawal rates. The parent corporation was forced to pay $3.3 Million in restitution and fines for deceptive marketing practices. More information on Argosy University student loan forgiveness or student loan discharge available here.
The GAO found Ashford University had questionable recruiting practices, low spending on academic instruction and no job placement services. The parent company, Bridgeport Education, was forced to pay $7.25 Million in 2014 to settle claims that they lied or mislead Iowa students to coerce them into enrolling into online courses. They are still under investigation by numerous state attorney general's at this time.
If you attended Ashford, you may be eligible for Ashford University student loan forgiveness or student loan discharge.
Briarcliffe College has been in how water with the Department of Education for some time and recently announced it has closed enrollment to new students and will be closing it's doors for good in 2018. Many students are now scrambling to figure out what to do with their degree from a soon to be closed school and how to manage their debt.
Graduates and past students may be entitled to Briarcliffe College student loan forgiveness and student loan discharge. It is advised that you call now for more information.
Brooks College Student Loan Forgiveness
Brooks college was forced to close its doors for good due to its unethical and misleading practices documented over many years. To assist with the high student debt amounts graduates and former students were left with, for a limited time, Brooks College student loan forgiveness is being offered along with Brooks College student loan discharge.
Brown Mackie Student Loan Forgiveness
Another for-profit college that has been forced to close its doors due to their unethical practices is Brown Mackie College and its Institutions. If you were made promises by the school that weren't kept, you may be entitled to Brown Mackie Student Loan Forgiveness or student loan discharge.
Capella University has was found to have extremely high withdrawal rate, spending an unusually high percentage of it's annual budget on marketing and not returning funds granted on behalf of their students who withdrew from their classes.
If you were enrolled at the college, you may be eligible for Capella University loan forgiveness or loan discharge.
Career Point College has shut its doors completely due to decreasing enrollment and misleading practices to get potential students to enroll. Many people are left scrambling with debt from the school and few answered. If you attended Career Point at any time, you may be entitled to Career Point student loan forgiveness, or Career Point student loan discharge.
Carrington College often promises to be the starting point for health care careers however, most of the graduates see it as the starting point for high student loan debt and monthly payments upon graduation. For those that have attended the school at any time you may be eligible for Carrington College student loan forgiveness or loan discharge.
Although, the GAO report found that Chancellor University spent an above-average amount per student on instruction it closed its doors in August 2013. Due to this, you may not need to pay back all your loans from the university. Find out today if you qualify for Chancellor University student loan forgiveness.
Collins College is another for-profit school that has closed its doors after the GAO report and industry-wide investigation. There are now programs in place to assist the graduates and attendees with Collins College student loan forgiveness.
Everest College was a brand of Corinthian Colleges, Inc which had one of the highest withdrawal rates of all, this lead to a Chapter 11 filing and closing its doors in May 2015 leaving many students .
These two schools permanently closed their doors after filing for bankruptcy. This is a common theme we are seeing amongst many of these colleges which leaves their graduates and attendees confused and concerned about their loans. However, they may be able to get assistance through Globe University student loan forgiveness.
This private, for-profit, Christian University has been in hot water for many years now due to it's job placement promises and failure to deliver on it's guarantee of job training. This is why programs are in place to help graduates and attendees, namely Grand Canyon University student loan forgiveness and student loan discharge.
A newer school that has announced it's decision to close it's doors is Harrington College. Qualify for Harrington College student loan forgiveness today.
Henley-Putnam was found to employ seven recruiters, four staff members for student services and not a single person for career services.
ITT Technical Institute announced it was closing in September 2016. This was a shock for many, especially the thousands who once attended the college. ITT Technical Institute loan forgiveness is now available.
There are various complaints from those who attended Kaplan University and many for good reason. This is why those who went to the school for any duration may now be eligible for Kaplan University student loan forgiveness or student loan discharge.
The University of Phoenix has managed to stay afloat despite the numerous investigations and complaints from it's past students. However, all hope is not lost for those who did not receive what they believed they were paying for. Now available, University of Phoenix student loan forgiveness and student loan discharge.
Westwood College closed it's doors in 2016 due to the investigations into the schools practices. Those who attended Westwood and graduated from the school may be entitled to Westwood College student loan forgiveness.
The majority of for-profit colleges provided false information about their accreditation, graduation rates, prospective job opportunities and associated salaries, as well as the duration and cost of the programs. All of the schools also used hard sell and marketing tactics in order to enroll students, even if they were under-qualified.
If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, contact StudentLoanFAQ's and speak to one of our advisors about student loan forgiveness. You may qualify to consolidate or even wipe out your remaining student loans.