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For-Profit Schools: Deception and Fraud Revealed

The release today of the results of a damning federal investigation on for-profit schools reminded me of an experience my sister had last year.

When my sister got laid off from her teaching position, she decided that she needed to pick up some skills that would make it easier to find a job outside of education. She had seen ads on television for a for-profit school that looked like it could give her those skills quickly and cheaply.

When she called to inquire about the programs, including prices, she was told she'd need to visit the school for any information. The operator urged her to stop by that day.

When my sister visited the for-profit school, a recruiter ushered her into an office, shut the door and began applying high pressure tactics to get her to sign a contract. The woman intimidated my sister, whose only desire at this point was to get the hell out of there. She finally fled the building after excusing herself to go to the bathroom.

My sister's experience mirrors some of the findings in the new Government Accountability Office's report on for-profit college abuses. The report documented many instances of deceptive marketing, high-pressure sales tactics and even fraud.

Undercover agents, who visited 15 for-profit schools, found that "all 15 of them made deceptive or otherwise questionable statements" to the agents posing as prospective students.

Four of the 15 schools encouraged fraud by urging the undercover applicants to falsify their federal financial aid applications. Nine schools did not provide graduation rates. And it's no wonder since grad rates at for-profit schools are notoriously low.

Naming Names

These aren't just mom-and-pop players who got exposed in this investigation. At a Senate hearing today, a federal official said that the Apollo Group, Corinthian Colleges and the Washington Post's Kaplan Higher Education were among the for-profit schools that the GAO investigated.

More hearings on for-profit college abuses are expected to be held this fall and the Obama administration has proposed rules that would restrict federal financial aid -- the life blood of these schools -- for bad apples.

Until the industry is cleaned up -- if it ever is -- I'd stay away from these schools. You can start by avoiding any school that advertises on television.

Lynn O'Shaughnessy is the author of The College Solution and she also write a college blog for CBSMoneyWatch.com.

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