For-Profit Colleges Cheat Students and Get Away With It

Diana Medina's prospects seemed bright. She graduated with honors from Pahokee High School in Palm Beach County and earned a graduate degree in health science education from the University of Florida. But then, after she put her career on hold to raise a child, she entered the tricky world of for-profit education.

In November 2009, looking for a leg up in getting hired, she searched Google for a place that could give her advanced training with flexible hours. She found MedVance, a trade school that teaches health-care skills such as x-ray technology and medical billing. And that's where her education hit the skids.

Critics say the school, which is based in Baltimore and has Florida campuses from Port St. Lucie to Miami, deceptively lured students into expensive educational programs that ultimately proved worthless.

Barmak Nassirian: Calls for-profit education "a parasitic industry."
Barmak Nassirian: Calls for-profit education "a parasitic industry."

An admissions rep, who turned out to be little more than a pushy salesperson, steered Medina toward the Medical Office Administration program even though she said she wanted to study pharmacy. It cost around $12,000. The rep told her she'd be able to get a starting salary of $50,000 or more after graduating.

"I was duped," Medina says. "The program was not worth $12,000. The teachers were not really teaching. It's like the students were running the classroom. It wasn't a learning environment."

After a two-year investigation, the Florida Office of the Attorney General recently agreed not to pursue charges against MedVance if the firm provided $600,000 in scholarships and free retraining to scores of students. Similar probes into other for-profit institutions of higher learning — Kaplan University, Everest Institute, the University of Phoenix, and Argosy University — are still open, with no sign of a resolution. If the MedVance settlement is a sign of what's to come for those investigations, the state's for-profit schools will get off with the deal of the century.

Across the country and in Florida, for-profit schools have been around for decades. Unlike traditional universities, they aren't responsible to the state board of regents or nonprofit overseers. They are inspected but in some cases have as much in common with a huge car lot as Harvard University.

One key to the business is student aid. To these schools, every American is worth around $117,000. That's the total amount each person is eligible for in government financial aid. Under federal regulations, for-profit schools are required to collect 10 percent of all tuition in cash; the rest can be financial aid. The industry makes roughly $30 billion a year off American taxpayers under this arrangement.

To get in on the gravy train, for-profit schools need accreditation only from some supposedly neutral body. But Congress neglected to indicate who should do that accrediting, resulting in a system loaded with charlatans. Some agencies are little more than rubber-stamp factories.

"It never occurred to [Congress] that [accreditation] would get corrupted," says Barmak Nassirian, a former official with the American Association of Collegiate Registrars and Admissions Officers. "This is basically a parasitic industry that is preying upon not just some of the most vulnerable members of our society but [those] who are actually attempting to better themselves."

For-profit schools have been the target of increasing scrutiny, if little corrective action. In August 2010, an official from the U.S. Government Accountability Office testified before Congress about investigations into 15 schools. The agency had sent in undercover applicants and reviewed finances. The results were maddening.

"Admissions or financial aid representatives at all 15 for-profit colleges provided our undercover applicants with deceptive or otherwise questionable statements," GAO Managing Director Gregory Kutz testified. "These... included information about the colleges' accreditation, graduation rates, and its students' prospective employment and salary qualifications."

The agency also discovered that for-profit institutions had greatly inflated costs. "We found that tuition in 14 out of 15 cases, regardless of degree, was more expensive at the for-profit college than at the closest public colleges," Kutz testified.

A couple of months later, then-Florida Attorney General Bill McCollum announced that his office would launch its own investigation. Plenty of people came forward to tell their stories.

"Hypocritical and disgusting" is the way Mark Stegall, a senior admissions adviser for a Kaplan University branch in Orlando, described his work environment, according to thousands of pages of records from the investigation, obtained by New Times. Supervisors told reps to pick a famous university in the student's home state and claim that Kaplan's accreditation was as good or better. Stegall would tell students they couldn't even discuss money until they committed to enrolling and then would break down a $63,000 tuition into cost per credit hour so it didn't sound so high. "We would go into stories... about how it would change your life and where would you be living if you had that kind of money... That was the disgusting part of the job," Stegall said. Poor students were especially good targets.

"If [the applicants] were already well-off, I may as well end the call, [because] they wouldn't qualify for financial aid, and as soon as they saw how much it was going to cost them for an online degree, they would be smart enough not to do it," Stegall said.

According to other statements from the attorney general's record, after the MedVance admissions "interview," students were sent to a financial aid department. Lying was encouraged. One student recalled an adviser named Kiki telling her to list three extra family members as financial dependents on her federal loan application so she could qualify for more money.

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My Voice Nation Help

I work for a for-profit university, and believe me, this article barely scratches the surface. 


I disagree that all for profit schools cheat students. I work and take classes in a for profit school. As an employee, we do try to help the students succeed in classes and employment. There are tons of resources that the school provides to help students find jobs during schooling and after. I do not lie to students, I tell them what they need to know and inform them the program will take time and they will need to work at it (same thing if they want to find a job, they have to work at it by sending resumes out, networking, etc). As a student, the classes are hard - I have to spend 20+ hours on schoolwork each week for two classes. In addition, all of the professors I had were great and knew their field well. Most of the classes have seminars and the students really experience and listen to the professor's specialty. The professors need to be highly qualified to teach with a doctorate and years of experience. They do no just pass the students, I have to work hard to get good grades. I have attended a few of our graduation ceremonies and they are extremely inspirational. I have seen many of my students walk across the stage and I know they worked hard to get the degree. Many of them had challenges that I tried my best to help them out and I am always amazed at their achievement.


I want to know why the DC fed court judge blocked the legislation which would keep these crooks from using fed student loan programs to pay tuition for bogus programs. I went to a community college in another state many years ago and they were blocked from the fed programs for several years because of a high number of loan defaults among their graduates. The education we got was good but we were in a depressed area reeling from a recession. As things got better the loans were reinstated. So why can't they do this to for-profit schools? Eligibility to participate in the fed student loan program should correlate to placement rates - real placement in the carreers they trained for.


 @imazoogal2 Thanks for the comment. We didn't quite make it clear enough that what the federal judge blocked was a rule that would stop federal aid to schools that had more than a certain percentage of students struggling to pay back their loans. The judge's argument is that the percentage limits were arbitrary.