Scare Tactics: Are School Recruiters Misleading You?
For-Profit Colleges Target Students, Leave Many In Debt
Government agencies and representatives recently uncovered deceptive tactics and ill-advised practices used at many for-profit colleges across the nation to draw in and target low-income students.
On The Radar
For-profit colleges appeal to students within the under-privileged and minority brackets for years. Many of these college students are seeing federal funding dollars flash before them as each student enrolls.
Huffington Post in an article by Chris Kirkham published Feb. 8, 2011 titled “For-Profit College Recruiters Taught To Use ‘Pain,’ ‘Fear,’ Internal Documents Show,” students of for-profit schools make up less than 15 percent of the college enrollment nationwide, but they account for ¼ of student aid recipients.
The U.S. Government Accountability Office sent undercover investigators to 15 different for-profit colleges to see how recruiters were appealing and enrolling students. What they found was shocking to some. Four for-profit colleges encouraged fraudulent practices by encouraging students to falsify financial aid forms to qualify for federal aid, and all 15 institutions made deceptive and questionable statements to the investigators.
A document by the Vatterott Educational Centers Inc. shows tactics used by its recruiters: “We serve the UN-der world: un-employed , underpaid, unsatisfied, unskilled, unprepared, unsupported, unmotivated, unhappy, underserved!”
These institutions have been under the microscope for quite some time. Government officials began questioning the recruiting methods and promises of degrees that theses institutions have boasted.
According to the National Public Radio in an article published May 12, 2011 titled “For-Profit Colleges: Targeting People Who Can’t Pay,” many students drop out before graduating, and others can’t find jobs that will allow them to pay off the federal loans after they have graduated.
Sen. Richard J. Durbin (D-ILL) expressed his concerns for students drawn into for-profit institutions in an article published by the L.A. Times on Feb. 6, 2011 by Walter Hamilton titled “For-Profit Colleges Face Federal Crackdown.”
“We’re seeing too many examples where students go deeply into debt and either end up with no diploma or a worthless diploma,” Durbin said.
Fear, Pain and Hope
People may question how students get trapped in these salesman-like tactics. It is simple. In addition to knowing their target student audience is low-income, recruiters also appeal to emotional needs and distresses of potential students.
Until just recently, schools were paying its recruiters for each individual who signed up as an incentive compensation. This practice was banned in 1992, but the Bush administration made changes in 2002 that left loopholes for these institutions. Now companies are getting around the ban and paying its recruiters per individual. Currently the Obama administration is trying to get rid of the loopholes.
Kirkham explains that for-profit institutions are using these high-pressure techniques to increase the enrollment numbers, ultimately leading to an increase in federal student aid dollars as well.
One document obtained by the Senate Committee shows what ITT Technical Institute was promoting to its recruiters: Remind them of what things will be like if they don’t continue forward and earn their degree…Poke the pain a bit, and remind them who else is depending on them.”
Kaplan University gave its recruiters a document that stated: “Keep digging until you uncover their pain, fears and dreams…Get their emotions and you will create the urgency!”
In the last decade the enrollment has tripled to over 1.8 million students according to Hamilton. So what is being done about this increasing problem of questionable promises and tactics?
The U.S. Department of Education has been working on regulations and rules to try and focus the attention to student success instead of how much federal money the student brings in.
According to Melissa Korn in her article titled “Some Relief, But For-Profit Colleges Still Face Challenges” published by the Wall Street Journal on June 9, 2011, the U.S. Department of Education is requiring for-profit institutions to improve its admissions standards and loan repayment rates or the program could lose its eligibility for financial aid.
As a result, for-profit colleges have seen falling enrollment rates as it tightens its standards to comply with federal regulations.
“The industry is going to have to shift focus,” Jeff Silber, an analyst at BMO Capital Markets said to Hamilton. “That means slower growth and less profitability [to ensure student success].”