For-profit colleges accused of pumping up job stats, replacing dropouts with new recruits

For-profit colleges hit again in Senate hearings

A career adviser at a large for-profit college, testifying Thursday before a Senate committee, said her employer used “tricks and sleight of hand” to exaggerate job placement statistics given to prospective students.

The latest in a series of hearings scrutinizing for-profit higher education also produced the most intense partisan finger-pointing to date and new data claiming many schools are a revolving door of dropouts and new recruits.

Kathleen Bittel, who works in career services for Education Management Corp.’s Art Institutes, told the Senate Committee on Health, Education, Labor and Pensions she was instructed how to manipulate data to falsely show graduates were “gainfully employed” in their area of training.

In a statement, Pittsburgh-based EDMC said in-house and outside investigations found no support for Bittel’s claims of undue pressure on career advisers. The company said it has multiple checks in place to ensure accurate data.

Bittel, however, testified that employees were expected to convince graduates that they were using skills gained from courses like graphic design and residential planning in jobs as waiters, payroll clerks and gas station attendants.

She said her complaints led to no disciplinary action, and she is on a leave of absence she requested.

Schools are not required to report job placement rates to the government, but some accreditors require it. Federal law requires colleges to disclose the information to current or prospective students who ask, and schools use it in marketing material.

For-profit colleges are under increased scrutiny. The industry is fighting an Education Department proposal that would cut off aid to vocational programs with high student debt levels and poor loan repayment rates, and a recent undercover government investigation found misleading recruiting tactics.

Also Thursday, Democratic Sen. Tom Harkin of Iowa released a report compiled from data he requested from for-profit schools. It found that of 57 percent of students who entered the 16 schools between July 2008 and June 2009 had already left, and that the schools have lost nearly 2 million students in the last three years.

To keep up or grow enrollment, schools are recruiting new students at a faster clip than previously thought, the report contends. Fourteen of the 16 schools analyzed recruited more new students than their entire starting enrollment in 2008-09, it said. Yet their net enrollment only increased by 22 percent, suggesting heavy churn.

The Association of Private Sector Colleges and Universities, formerly the Career College Association, said the report’s conclusions are inconsistent with Education Department data and accreditation requirements schools meet.

Harkin’s report also showed federal dollars accounted for between 85 percent and 93 percent of the revenues at the schools.

By law, federal student loans and aid must not account for more than 90 percent of a school’s revenue. The data in the new report includes federal dollars that go to military veterans and service members through the GI Bill and other sources, committee staff said — money that is exempt from that rule.

Some Democratic lawmakers have discussed doing away with the exemption.

Harkin said for-profit colleges have made the federal government “their free money spigot.” Students at for-profit schools face the possibility of graduation and the probability of debt without a diploma, he said.

The committee’s ranking Republican, Sen. Michael Enzi of Wyoming, denounced the hearings, saying they single out one sector of higher education in a vacuum, are intent on “tearing these schools down” and don’t serve students’ interests.

Enzi then walked out, saying, “I’ll leave you to go ahead and beat up on the for-profit schools.”

Harkin promised legislative changes governing the sector next year.