For-Profit Colleges Only a Con Man Could Love

Barbarians in the Ivory Tower

Worse, the classes themselves had less content than a political soundbite. "When I saw what they were passing off as college, I was appalled and mortified," Bittel says. "I'm a fabulous salesman if I believe in my product. But I was blown out of the water. I couldn't sell it anymore."

On the sales floor, she would soon go from golden child to problem student. Managers threatened to fire her. She protested that she'd excelled at EDMC's other barometers, like leadership, calls made and conversations engaged. None of that mattered, they told her.

"Those are just put in there because the law says we're not allowed to pay you directly," she recalls her boss saying. "We don't look at those. Those don't really matter. The only thing that matters is how many bodies you bring in."

Barmak Nassirian, former official with the American Association of Collegiate Registrars and Admissions Officers: “Overadvertise, oversell, overcharge, and underdeliver. They found a system where the pitch goes to one guy and the bill to someone else.”
Courtesy Barmak Nassirian
Barmak Nassirian, former official with the American Association of Collegiate Registrars and Admissions Officers: “Overadvertise, oversell, overcharge, and underdeliver. They found a system where the pitch goes to one guy and the bill to someone else.”
Iraq-war veteran Chris Pantzke ran up $26,000 in debt and burned through an additional $65,000 of his GI Bill benefits with almost nothing to show for it at the Art Institute of Pittsburgh.
Courtesy Chris Pantzke
Iraq-war veteran Chris Pantzke ran up $26,000 in debt and burned through an additional $65,000 of his GI Bill benefits with almost nothing to show for it at the Art Institute of Pittsburgh.

Bittel wasn't the only worker feeling the pressure. A man she carpooled with would cry on the way home.

"If you weren't unscrupulous, you struggled," she says. "Half the people I worked with, their previous job was in the mortgage industry. They targeted people in that industry. ... They were the ones that did the best because they were so unscrupulous."

She eventually transferred to EDMC's career-placement department, where the same deceit wore a different outfit.

She was supposed to help Art Institute grads find jobs. But the school was churning out students with abysmal portfolios — if they had portfolios at all.

She was also supposed to generate stats on how many of them found employment in their fields. The numbers were used to not only sell future students, but by accreditors in maintaining a program's standing. So EDMC, she says, was prepared to rig these stats by any means necessary.

Bittel's boss liked to say that "every student is place-able. It's all a matter of technique." This "technique," she says, involved convincing people to sign affidavits saying they were employed in their field. She witnessed cases where someone with a degree in video game design was counted as working in his field because he sold video games at Toys "R" Us. She was told to convince a Starbucks clerk that making the menu sign each day was using her graphics-design degree.

Once, Bittel saw a co-worker lying on a form about a graduate's salary. The same employee showed her how to doctor emails so that students' replies favored the Art Institute. Both times she reported the scams to her boss. But instead of being fired, the coworker soon received EDMC's North Star Award for exceptional performance.

EDMC is hardly alone in its transgressions. Two years ago, the feds conducted a sting on for-profit colleges, with investigators masquerading as prospective students. They tested the sales practices of 15 schools. Four encouraged outright fraud. They were all found to be deceptive.

Congress Sees No Evil

In the age of austerity, you'd think Congress would be anxious to root out waste, especially after allowing mortgage fraud to decimate the economy. But money talks loud enough to make any congressman hard-of-hearing. So despite a 20-year history of fraud and failure, for-profit colleges appear as bulletproof as ever.

Washington's been aware of the racket since Democratic U.S. Senator Sam Nunn of Georgia held high-profile hearings in 1992, demonstrating how for-profits were recruiting students from welfare offices, housing projects and homeless shelters — anything to get bodies through the door. They were subsequently barred by from paying salespeople based on enrollment.

It would take just a decade for Washington to eviscerate these protections. In 2002, President George W. Bush created a series of loopholes and announced that violators would no longer be punished.

Then Bush and Republican Congressman John Boehner of Ohio opened the door even wider, working to repeal a rule that required schools to educate at least 50 percent of their students on-campus. It gave birth to an online gold rush, with for-profits flooding the internet. Last year, 6 million students enrolled.

The industry had discovered the value of paying protection money to Congress. It spent $16 million on lobbying last year alone, buying a dream team of former officials that include former Missouri Democratic House Majority Leader Dick Gephardt and no fewer than 14 former congressmen.

"I didn't know when I got into the issue of for-profit schools that it was the best way for me to have a reunion with every member of congress as they parade through the door, all representing these schools," says Illinois Democratic U.S. Senator Dick Durbin, who's held hearings investigating for-profits. "There is so much money on the table they can afford to hire everybody."

Needless to say, Durbin hasn't gotten far with his probe. He's found some support among fellow Democrats, but not a single Republican bothered to attend his hearings.

"I don't want to hear their sermons from the mount about wasting federal money when they won't even take a look at these obscenely subsidized for-profit schools," he says. "If they were talking about food stamps, they would cut people off in a second for this level of fraud. This is a wasteful expenditure of hard-earned consumer dollars to some of the wealthiest people in America, and that has to come to an end."

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