For-profit Colleges Being Scrutinized by the Office of the Attorney General

For-profit Colleges Being Scrutinized by the Office of the Attorney General

5/22/2011

The recruitment and student loan practices at a number of for-profit colleges in Massachusetts are being investigated by the state’s Attorney General Martha Coakley. This move is the latest in a string of legal inquiries into the industry.

The Washington Post Co., which runs one of the biggest chains of for-profit colleges, said yesterday that it has received an inquiry on May 3 from the office of Coakley for information on its Kaplan Career Institute campus in Boston.

A second company, the Corinthian Colleges Inc., revealed that it also received a similar request from the office of Coakley on April 29 about two of its local schools, namely, the Everest Institute campuses in Chelsea and Brighton.

The inquiry comes in the midst of heavy criticisms against for-profit chains for allegedly burdening students with student loan debts while failing to sufficiently prepare them for jobs in their chosen fields.

US Department of Education data show that graduates of proprietary colleges have higher delinquency and default rates on their student loans compared with those that graduated from traditional non-profit and public schools.

Investigators, posing as potential students, were sent by the US General Accounting Office to visit for-profit schools that depend on federal student loans for as much as 90% of their income. The GAO revealed that all 15 schools it visited misled or made questionable declarations about the cost of education, how much the potential student would earn after graduation, and other issues.

The investigation being undertaken by the office of Coakley appears to partly focus on recruitment.

Corinthian revealed that Coakley requested documents and information about its recruiters and enrollment methods, including its student loan default and graduation rates, as well as any analyses its schools have on the ability of their students to repay their loans.

WRITTEN BY:

blakeh@wellsdrew.com