The Senate Committee on Health, Labor, Education and Pensions is holding hearings today on recruitment practices at for-profit colleges and universities. It follows an Obama Administration proposal to regulate federal aid to for-profit schools.
For-profit schools, such as University of Phoenix and Devry University, have grown quickly in the last decade, relying on distance learning and serving, in many cases, students who are currently in the work force.
The federal government is turning its attention to these institutions as complaints mount. A recent General Accountability Office (GAO) report was sharply critical of recruiting practices at some for-profit colleges, saying some recruiters lie and urge aid applicants to commit fraud. In recent months ConsumerAffairs.com has received a number of complaints about the issues the committee is addressing.
Jodi of Brigham City, Utah, said she applied to the University of Phoenix in May of 2009 and was told to apply for financial aid. Jodi wanted to avoid getting buried in debt and was hoping to receive a generous Pell Grant to help with the school's $8,000 tuition.
As classes were about to begin, Jodi said the recruiter called and told her that, based on her score, she would probably qualify for aid, and to go ahead and begin classes, even though nothing had been determined.
"I asked her what would happen if I didn't get aid, and she replied again that things looked really good for me and to go ahead and start because the first block was taken care of," Jodi told ConsumerAffairs.com.
Surprise!
Once she started classes, Jodi said she learned that her Pell Grant only amounted to $1200 and the rest would have to be covered in student loans. When she attempted to drop out, Jodi says she was told there would be a big financial penalty. She said she also learned that the loan money had already been disbursed, without her permission.
"First of all, when a person applies for credit, they should not be forced to accept the highest amount offered," Jodi said. "I told Janet (the recruiter) during the week of June 8 that if I didn't get a lot in Pell that I couldn't accept the loan. She said my aid would be fine. They should not be allowing anyone to begin classes at their school without the student seeing what aid they can get."
At today's hearing, ranking member Sen. Michael Enzi (R-WY) urged continued scrutiny of student recruitment tactics at for-profit universities, but warned that an objective examination of misleading recruiting practices must take into account the full spectrum of higher education institutions.
"We are going to hear details of aggressive and inappropriate recruiting practices at for-profit universities," Enzi said. "Use of pressure tactics, deceitful marketing and outright lies to mislead students has absolutely no place in education. It is crystal clear that some programs at for-profit schools are misleading students and possibly defrauding taxpayers out of millions of dollars in student aid funds. However, in focusing only on for-profits, we are not being objective, and we are ignoring the bigger picture of what is happening across all of higher education."
