Federal Lawsuit Accuses For-Profit Schools of Fraud

Source: Richard Pérez-Peña, New York Times, February 19, 2014

It was the electronic monitor around a student’s ankle that first gave Kelli J. Amaya serious doubts about the Harris School of Business. The young man with the monitor was studying to be a pharmacy technician, and Ms. Amaya, who worked at Harris, a for-profit chain of trade schools, knew that the most widely recognized certification for pharmacy technicians excludes anyone convicted of a felony or even a low-level drug offense. But the student received federal financial aid, and for the school to keep collecting it, he had to remain in the program and complete an internship. So Ms. Amaya said she was told to find him an internship, even if that meant deceiving the employer….

…Her charges are part of a federal lawsuit filed by seven former employees against Harris and its parent company, Premier Education Group, which owns more than two dozen trade schools and community colleges operating under several names in 10 states. The suit contends that while charging more than $10,000 for programs lasting less than a year, school officials routinely misled students about their career prospects, and falsified records to enroll them and keep them enrolled, so that government grant and loan dollars would keep flowing.

Though they vary widely in quality, for-profit schools have drawn scrutiny in recent years for aggressive recruiting, high prices, low graduation rates and heavy borrowing by students who often have poor job prospects afterward. They have been a particular target of overhaul efforts by the Obama administration. Much of the attention has gone to a handful of large, visible national chains, like the University of Phoenix, DeVry University and Corinthian Colleges, that are publicly traded. But like Premier, which had 17,000 students in 2012, most are privately owned and receive far less scrutiny….

…Some of the complaints against Harris, which has eight campuses in New Jersey, Delaware, Pennsylvania and Connecticut, echo those made against other for-profit schools, and were documented in investigations directed by the Government Accountability Office, Senator Tom Harkin, an Iowa Democrat, and others. Those include high-pressure enrollment tactics and misleading promises about job prospects upon graduation….