GAO report: For-profit college recruiters encourage fraud by students seeking aid

Recruiters at U.S. for-profit colleges lied to entice students and encouraged them to commit fraud to qualify for aid, a report by the Government Accountability Office found.
Recruiters at all 15 colleges studied by the GAO, Congress’s investigational arm, misled potential students about the costs, duration and quality of their programs, according to a report obtained by Bloomberg News that was to be made public last week. The 30-page report said recruiters at four of the colleges encouraged fraud on loan applications, without identifying the institutions.
GAO investigators posed as prospective students to investigate practices in the education industry, which received at least $4 billion in U.S. grants and $20 billion in Department of Education loans last year, the report said.
“College representatives exaggerated undercover applicants’ potential salary after graduation and failed to provide clear information about the college’s program duration, costs or graduation rate,” the report said. “Admissions staff used other deceptive practices, such as pressuring applicants to sign a contract for enrollment before allowing them to speak to a financial advisor about program cost and financing options.”
The GAO probe examined for-profit colleges in Arizona, California, Florida, Illinois, Pennsylvania, Texas and Washington, D.C. Both privately held and publicly traded education companies were included.
“Clearly this is a wake-up call for schools to be more vigilant in training their employees, not just training but following up,” said Harris Miller, president and CEO of the Career College Association, a Washington, D.C.-based industry group. •