Congress’s ‘Secret Shopper’

A government report detailing the findings of an undercover investigation of for-profit colleges’ recruiting tactics reveals admissions and financial aid officers engaged in unethical and sometimes illegal practices, all in the interest of persuading students to enroll and obtain federal financial aid.

The report, along with an accompanying video of undercover footage, is the culmination of a three-month effort by the Government Accountability Office, Congress’s investigative wing, to determine whether and to what degree for-profit colleges are engaging in "fraudulent, deceptive or otherwise questionable marketing practices." A copy of the report is available here.

Both the report and the video will be released Wednesday morning at the Senate Health, Education, Labor and Pensions Committee’s second oversight hearing on the for-profit sector, where Gregory D. Kutz, GAO’s managing director of forensic audits and special investigations, is set to testify.

Also scheduled to testify at the hearing are David Hawkins, director of public policy and research for the National Association for College Admission Counseling; Michale McComis, executive director of the Accrediting Commission of Career Schools and Colleges; and Joshua Pruyn, a former admissions worker at Westwood College, part of Alta College, Inc., in Denver. But it is the information revealed in the GAO report — obtained by Inside Higher Ed in advance of the hearing — that, by documenting numerous instances of apparent misbehavior, is likely to drive the Senate’s continued scrutiny of the sector.

Undercover investigators posing as students found that employees at all 15 for-profit colleges visited for the investigations made “deceptive or otherwise questionable statements” to students about accreditation, graduation rates, employment outcomes, program costs or financial aid.

At four institutions visited, admissions or financial aid officials encouraged students to submit fraudulent financial information in order to qualify for federal aid, the GAO says in its report.

Though many similar tactics have been reported in the news media and recounted by former employees like Pruyn, the GAO report and video carry the weight and credibility of a Congressional investigation.

To collect a substantial number of instances of deception and fraud, GAO investigators examined a non-representative selection of for-profit colleges in Arizona, California, Florida, Illinois, Pennsylvania, Texas and Washington, D.C. The colleges selected were intended to represent a variety of educational offerings at institutions of various sizes and corporate structures, and include some that are publicly traded and others that are privately owned. Some institutions were chosen because the Education Department reports that they receive at least 89 percent of their revenues from the Title IV federal student aid programs, while others were chosen based on their location in a state that was among the top 10 recipients of Title IV money.

Because the investigators visited an admittedly specific group of institutions that were already raising red flags for the Title IV program, advocates for for-profit colleges will almost certainly challenge the report’s findings (as they have done in response to many newspaper reports and other investigations), arguing that the GAO cherry-picked institutions where data from the U.S. Department of Education already hinted at potential improprieties, and that the institutions cited represent “bad actors,” not the sector’s norm.

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INSIDE HIGHER ED