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Florida Attorney General's Office now investigating eight for-profit colleges

TAMPA — The Florida Attorney General's Office has added three schools to its statewide investigation of student recruiting at for-profit colleges.

All three schools — Keiser University, Concorde Career Colleges and Sanford-Brown Institute — have campuses in Tampa.

Each faces allegations of "misrepresentations regarding financial aid" or "unfair/deceptive practices regarding recruitment, enrollment, placement, etc.," according to the Attorney General's Office.

Any school violating Florida's consumer protection laws could be fined up to $10,000 per violation, or up to $15,000 if the victim is disabled or a senior citizen.

The state last month said it had opened civil investigations of five other schools: the University of Phoenix, Everest University and Argosy University, all with students in Pinellas or Hillsborough, plus Kaplan and the MedVance Institute.

So far, investigators have subpoenaed records at the schools. In a disclosure to stockholders, Sanford-Brown's parent company said the state demanded details "about a broad spectrum of business practices" since Jan. 1, 2007.

"Our focus will remain on meeting the needs of students and employers by providing innovative, student-focused education and services in a variety of fields that can help prepare students not just for a job but also for a meaningful career," said Jeff Leshay, a senior vice president at Career Education Corp., Sanford-Brown's parent company.

The Attorney General's Office said the schools were being investigated because of complaints and information from an August report from the U.S. Government Accountability Office, which sent undercover investigators into 15 for-profit schools nationwide.

On those visits, the GAO's investigators encountered high-pressure sales tactics, lies and sketchy promises about salaries they could make upon graduation. Some recruiters would not let prospects talk to financial aid counselors until after they had enrolled. Some urged students to lie on applications for federal financial aid.

But in a written statement, Keiser counsel Mac Stipanovich noted that Keiser was not among the schools the GAO visited. Although the Attorney General's Office said it had received 13 complaints about Keiser, Stipanovich said the state has a total of 21 complaints going back to 2003, none significant enough to "warrant such an investigation."

During those seven years, about 90,000 students attended Keiser, Stipanovich said. Two of the 21 complaints were in error, he said. None came from the Tampa Bay area.

"Any complaints that Keiser has been made aware of have been resolved," Stipanovich said. "Keiser University is cooperating fully and expects the matter to be brought to a satisfactory conclusion soon."

A state summary of complaints showed none against Concorde, which has 409 students in Tampa. Nor was Concorde on the list of schools visited by the GAO. Asked why it was being investigated when it did not appear in the GAO's report and had no complaints, the Attorney General's Office said, "Concorde is being investigated for the same reason as all the others are."

"We intend to cooperate with the Attorney General's Office to bring this to a successful conclusion," said Harry Dotson, Concorde's vice president of compliance and regulatory affairs.

"We do not condone that type of behavior in any way, shape or form," Dotson said. "We work diligently every day to ensure that our folks and our schools provide a quality educational experience to our students so that upon graduation they have an opportunity to gain entry-level positions in the career field for which they've been trained."

Florida's investigations come at a time of nationwide scrutiny of for-profit schools. Critics say they pressure poor students into taking out huge student loans for programs often offered through community colleges at lower costs.

The GAO has found that students who attended for-profit colleges were more likely to default on their student loans, potentially ruining their credit and sticking taxpayers with the bill.

And graduation rates are low, critics say.

In 2008, 22 percent of the first-time, full-time bachelor's degree students at for-profit colleges overall graduate within six years, according to the private, nonprofit Education Trust. At public colleges and universities, the graduation rate is 55 percent.

In August, a Senate hearing highlighted the GAO's investigation, complete with snippets of undercover video.

In one, a MedVance Institute recruiter in Florida told a prospect not to worry about student loans: "It's not like a car note, where if you don't pay they're gonna come after you." (Yes, federal officials say, we do.)

At stake is billions of dollars in federal student aid — $20 billion in loans last year, plus another $4 billion in Pell grants for low-income students. That's about a quarter of all federal aid to college students.

In Florida, for-profit schools also receive state money from students with Bright Futures scholarships. Last year, for-profits received $2.7 million through Bright Futures, with more than $571,000 going to the eight schools under investigation.

The U.S. Education Department has proposed what's known as the "gainful employment rule" to cut off federal aid to for-profit colleges whose graduates cannot earn enough to repay their loans.

But industry advocates say they serve many low-income students who have not succeeded at or cannot go to public institutions of higher learning.

The gainful employment rule would significantly restrict access to "quality programs that currently benefit hundreds of thousands of students," Leshay said. "These are programs that focus on job training and job creation. These programs should be supported, not eliminated."

.FAST FACTS

Unhappy students

Complaints about for-profit colleges received by the Florida Attorney General's Office as of Nov. 15

Everest University56

Kaplan52

University of Phoenix20

Keiser University 13

Argosy University8

Sanford-Brown Institute4

MedVance Institute3

Concorde Career Colleges 0

Florida Attorney General's Office now investigating eight for-profit colleges 11/27/10 [Last modified: Monday, November 29, 2010 11:48am]

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