Florida investigating 5 for-profit colleges

AP News
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Posted: Oct 22, 2010 6:58 PM
Florida investigating 5 for-profit colleges

Florida is investigating five private, for-profit colleges to determine if they've engaged in unfair or deceptive practices in recruitment and other areas, the state attorney general's office said Friday.

The office is also looking into whether the colleges misled students about financial aid.

Ryan Wiggins, a spokeswoman for Attorney General Bill McCollum, confirmed Friday his office was conducting a civil investigation.

Wiggins said the investigation began in response to consumer complaints and a federal report that accused some for-profit schools of encouraging fraud and engaging in deceptive marketing practices.

"It's all in its infancy right now," Wiggins said. She said officials are unsure how long the civil investigation will take.

According to McCollum's office, the colleges being examined are Kaplan Inc. of Alpharetta, Ga.; University of Phoenix Inc. of Arizona; Argosy University of Florida Inc.; Everest College, a subsidiary of Corinthian Colleges Inc. of Santa Ana, Calif., and Medvance Institute Inc., of Miami.

Most of the schools, which all have branches in Florida, say they plan to cooperate.

Jacquelyn P. Muller, spokeswoman for Pittsburgh, Pa.-based Education Management Corp., Argosy's parent, said the company has not been formally notified of the investigation but is prepared to provide any information required.

"The EDMC Code of Business Ethics and Conduct makes it clear to all employees that failure to comply with all federal and state regulations is not tolerated," she said in a statement.

The Government Accountability Office, an arm of Congress, reported in August that its investigation of 15 schools nationwide found four colleges encouraged fraudulent practices and that all made deceptive or otherwise questionable statements to undercover applicants about such matters as costs and graduation rates.

The report doesn't identify the colleges visited but says two were in Florida.

At a privately owned two-year Florida school offering a radiologic therapy degree, the report said, a financial aid representative suggested the undercover applicant should fraudulently remove $250,000 from a savings account because having that much money on hand would have prevented the applicant from qualifying for a government-subsidized loan.

An admissions representative at the same school refused to tell the applicant what its graduation rate was except to say "very high," according to the report.

The other Florida school is described as a two-year college owned by a publicly traded company. The report said an admissions representative falsely claimed the school was accredited by the same agency that accredits Harvard University and the University of Florida.

The report said the undercover applicant, who was interested in a criminal justice degree, was not allowed to speak to a financial aid official before enrolling and had to sign an agreement saying she would pay $50 a month while enrolled. The report said representatives used hard-sell marketing techniques and scolded the applicant for not wanting to take out loans.