Students are a prized commodity at Florida’s for-profit colleges. Just two dozen can generate a million dollars in tuition by the time they are done.
In their zeal to fill classrooms, some schools do whatever it takes. That can mean deploying strippers as recruiters — according to a federal government complaint against Miami-based FastTrain — lying about job placement rates and using high-pressure, boiler-room sales tactics, including a psychological technique called the “pain funnel,” that can reduce a recruit to tears.
The sales force can also be warm and comforting.
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“The guy was so slick, and I almost felt like he was my friend,” said Rose Grier, who claims she was tricked into taking on debt. “By the time the whole thing was done, I was like calling him by his first name, and we were laughing.”
Across the United States, for-profit colleges have been the target of dozens of government lawsuits and investigations aimed at curbing abuses. The typical complaint is that students — generally “adult learners” — get manipulated by schools that market aggressively and offer the illusory promise of a well-paying new career.
Everything about the sign-up process is quick and easy: The school fills out all the financial paperwork, then collects the loan proceeds directly. For-profit colleges offer convenient schedules and instant admission.
At budget-strapped community colleges, high-demand programs like nursing are at capacity. At Miami Dade College, only 41 percent of nursing applicants are accepted.
But at some for-profit schools, former students have complained they got a poor-quality education, with few or no job prospects. They’re left with tens of thousands of dollars in debt and no way to pay it back.
While other states have attempted to rein in the schools, Florida lawmakers have given the colleges their enthusiastic support. As a result, for-profit colleges have grabbed nearly 18 percent of the Florida market — about 300,000 students — compared to 12 percent nationwide.
The Miami Herald took a year-long look at the industry’s Florida foothold, talking to former students, teachers and recruiters and reviewing thousands of pages of “whistle-blower” lawsuits, sworn testimony, consumer complaints and campaign finance reports. Among the investigation’s findings:
▪ As other states adopted laws cracking down on colleges and their excesses, Florida legislators passed at least 15 laws that fueled the schools’ growth — while pulling in more than $1 million in campaign contributions from those same institutions. The Legislature, over the past six years, gave career colleges access to dollars set aside for veterans, the disabled, the jobless and Florida Prepaid College accounts.
In Washington, the Florida delegation pushed back against Obama administration rules aimed squarely at curbing for-profit college abuses — and took in nearly $400,000 in contributions.
▪ One of the new Florida laws gutted the Florida Board of Nursing’s longtime role as the gatekeeper for new nursing programs.
That bill, passed in 2009, unleashed a flood of new for-profit schools over the next several years, followed by a 15 percentage point decline in Florida’s passage rate on the RN license exam. The national rate dipped, too, but nowhere near as precipitously.
Florida’s current passage rate — 72.6 percent — is second-worst in the nation, ahead of Hawaii.
▪ Some of Florida’s most expensive for-profit nursing schools produce the worst results. The Hollywood campus of Dade Medical College, a for-profit school that charges $47,813 for a two-year nursing degree, has a 13 percent passage rate. It’s one of three Dade Medical campuses currently on state probation because of high student failure rates.
A similar program costs about $9,000 at South Florida’s community colleges. Miami Dade College has a 72 percent passage rate on the nursing exam, known as the NCLEX. Broward College has a 91 percent passage rate.
▪ Because of the high cost of for-profit colleges, and their graduates’ often low scores on licensing tests, student loan default rates have soared. While only 12 percent of U.S college students attend for-profit institutions, they account for 44 percent of all loan defaults.
The nation’s aggregate student loan debt tripled in the past decade to nearly $1.2 trillion and is now higher than credit card debt ($700 billion) and auto loan debt ($955 billion), according to the Federal Reserve Bank of New York.
▪ Florida’s designated watchdog agency, the Commission for Independent Education, is, by design of the Legislature, overseen by a board dominated by executives of the very schools it is supposed to monitor. The commission could not cite a single occasion in its decade and a half in existence when a complaint led to sanctions against a school.
“You literally have the fox guarding the hen house,” said Pauline Abernathy of the Institute of College Access & Success, which advocates nationally for stronger consumer protections and has criticized for-profit schools.
Students at traditional public universities don’t have a commission, but they can appeal to the state board of governors. More importantly, they can transfer to another school, taking accrued credits with them. With few exceptions, for-profit college credits aren’t accepted at traditional schools. Unhappy students can stay where they are or leave and face starting from scratch.
▪ Over the past five years, the office of Attorney General Pam Bondi has fielded thousands of pages of fraud complaints and sworn statements from students, teachers and recruiters at for-profit schools.
The attorney general, recipient of at least $52,500 in career college contributions during that span, conducted a dozen investigations. The office negotiated three settlements in which the schools, including giants Kaplan University and Keiser University, admitted no wrongdoing, agreed not to engage in certain practices, covered the state’s legal fees and offered class retakes to a limited number of students. At Kaplan, 10 students had expressed interest in the free do-overs as of early this year, the attorney general’s office said.
Unlike New York, Iowa and Massachusetts, states that have obtained millions in refunds for students, Bondi has negotiated one small settlement of that type, obtaining $83,000 to be split among 39 students.
A signature on a loan
For-profit colleges have been accused of predatory practices from coast to coast, but Florida students may be particularly vulnerable.
Florida’s demographics include large numbers of immigrants, minorities, single mothers and veterans — all groups targeted by for-profit colleges.
Not all students at for-profit colleges have a bad experience. At for-profit Jersey College, graduates of the Tampa campus have a 91 percent passage rate on the nursing exam. Students at Keiser University, which in 2011 converted to a nonprofit, perform well on professional certification tests. Keiser’s Miami campus has one of the highest passage rates on the nursing test in the state.
But when things do go wrong at for-profit colleges, students’ cries for help are often ignored.
Vicki Plunkett, a former student at ITT Technical Institute’s Fort Lauderdale campus, claims the school forged her signature and took out an unauthorized $4,280 loan in her name that was paid directly to the school.
Plunkett, who was studying criminal justice, said she went to the Florida Department of Education, to her local congressman, to the state attorney’s office, to two police departments and to the FBI. Repeatedly, Plunkett provided photocopies showing that her signature on the disputed loan document is different from how her name appears on all other forms. The middle initial that she always uses is missing.
The efforts got her nowhere. Plunkett, who attended from 2007 to 2010, must pay back the loan.
“It stresses me out constantly,” Plunkett, 38, of Sunrise, said of the debt, now in default and up to nearly $8,000. “I am on anxiety pills because I get really bad anxiety attacks, which I never had before this started.”
Plunkett left ITT and went to another school, but said she recently had to drop out — four classes shy of her degree — because the defaulted ITT loan makes her ineligible for the financial aid she needs to finish.
Nicole Elam, ITT’s spokeswoman, disputed the forgery claim.
Plunkett isn’t the only one accusing ITT of improper practices. One of ITT’s own “mystery shoppers” — hired to pretend to be students and navigate the admissions process — wrote in a report to the school that “my electronic signature was fraudulently placed ... I am absolutely astonished how they are attempting to cheat, lie, and fraudulently mislead individuals.”
That mystery shopper comment and several others were included in a pending lawsuit against ITT by the Consumer Financial Protection Bureau, a recently created federal agency that advocates for consumers.
Another mystery shopper described how she deliberately set out to fail the entrance exam. She said the ITT employee “came back and said I passed just fine, which made no sense to me. I think I only answered one or two of the math questions, so I don’t see how that was possible.”
Still another mystery shopper comment said: “After the long drawn-out application enrollment process, I began to get the impression that this school might be a bit of a scam because I talked to so many different people who all seemed so intent on being my friend while at the same time avoiding my direct questions.”
Elam, whose school has 10 Florida campuses stretching from Hialeah to Pensacola, responded that in the vast majority of cases, “the mystery shopper reports don’t find anything.”
Tampa attorney Jesse Hoyer, who has handled multiple for-profit college “whistle-blower” cases — legal claims brought by employees alleging fraud — said dishonest practices are “systemic” throughout the industry.
“Somebody needs to go to jail, end of story,” Hoyer said. “The level of deceit that’s going on here, the level of fraud that’s going on here, somebody needs to go to jail.”
‘More good than bad’
Curtis Austin, executive director of the Florida Association of Postsecondary Schools and Colleges (FAPSC), said the problems are isolated. FAPSC represents the 1,000-plus campuses of Florida’s “career colleges,” which are mostly run as for-profit institutions.
Austin acknowledged that Florida’s for-profit colleges aren’t perfect, but he said that he has seen “more good than bad” at the 75 schools he has visited.
Austin said the complaints received by the state — which include more than 1,000 to the attorney general’s office — represent a fraction of the students served.
“In the last five years, 500,000 people have completed a diploma or a degree in this state because they went through our system,” Austin said.
Austin’s trade group lobbies on behalf of for-profit colleges in the Legislature. Since 2008, the group has donated more than $530,000 to Florida politicians and both political parties.
“We know that people have to run races, and we want to be able to make sure we can talk to everybody,” Austin said, adding: “We don’t ask for a whole lot.”
In 2002, there were 109,252 students at Florida for-profit schools, a little over one-third of today’s total. A key factor in the explosive growth has been aggressive marketing.
During daytime TV talk shows, commercials advertise for-profit schools as the fast and easy way to land a better-paying job. Internet marketing is everywhere.
At one time, when military veterans in Florida and elsewhere Googled how to use their GI Bill benefits, some ended up at GIBill.com.
“You earned it,” the website told them. “Find the right school for you.”
It was easy to mistake GIBill.com for an official federal Veterans Administration web page, but it was run by QuinStreet Inc., which specializes in getting sales leads for for-profit colleges.
Veterans who used the site to research their educational options were steered exclusively to Quinstreet’s marketing clients, mostly expensive for-profit colleges such as the University of Phoenix and Kaplan University.
Attorneys general offices around the country sued, alleging deceptive advertising. Quinstreet surrendered the website in 2012.
“Targeting veterans to profit from their GI Bill benefits is shameful,” Attorney General Bondi said at the time.
There are also fake “job” websites that invite the unemployed to join the “Local Employment Network” — which then leads to a for-profit college sales recruiter calling.
In December, the federal government accused a Miami-based school, FastTrain, of hiring strippers as “admissions representatives.” The feds said the school “encouraged them to dress provocatively while they recruited young men in neighborhoods to attend FastTrain.”
The unusual accusation, which made headlines around the world, was part of an ongoing whistleblower lawsuit against FastTrain. The school’s campuses closed in 2012 after an FBI raid.
Some schools have formed “partnerships” with homeless shelters or drug-treatment halfway houses to get more sign-ups.
Jamie Casasnovas, of West Palm Beach, said she was at a domestic violence shelter when she decided to go to school, and that the shelter steered her toward a for-profit school. Casasnovas said she wanted to go to a cheaper community college, “but I was told I wasn’t allowed.”
At the West Palm Beach campus of Medvance Institute, the sign-up of one student hit a snag: She didn’t have the $25 application fee.
“I’ll spot you,” the recruiter said, according to testimony the student gave to the Florida attorney general’s office. Student Donesia Best said the recruiter reached into her wallet to pull out the cash, and Best — swayed by what she thought was a kind gesture — signed up on the spot.
Best later discovered that Medvance recruiters with the most sign-ups were rewarded with a free trip to Cancún.
Federal law prohibits recruiters from being financially rewarded for getting sign-ups. The parent company of Medvance, Education Affiliates, said it did not own the school at the time Best enrolled, and that the company “does not provide prohibited incentives, which can include free trips, to our admissions representatives.”
In some cases, schools called allegations from former students or ex-employees old news or “outdated” because they happened several years ago. But the Herald encountered students who remain financially crippled years later. Some current and former for-profit college employees complain that even after past scandals the industry’s behavior remains largely unchanged.
Signing up the ineligible
Some schools have registered felons for medical programs — though a criminal record can disqualify graduates from getting licensed. Florida law says the state “shall refuse to admit a candidate to any examination” if they’ve been convicted of certain crimes, such as fraud or drug abuse. Other convictions can also be a problem, but in those cases the licensing boards can consider students on a case-by-case basis.
Michael Gonzalez, of Cutler Bay, has a battery arrest from a fight he got into when he was 18, but he said Medvance Institute’s Miami campus signed him up for a nursing degree. He said he disclosed his past up front, but the recruiter said his background check came up clean.
Gonzalez said he got into an argument with the school in 2011, two months before graduation. He said it was about his missing a shift in his clinical training. Administrators then used his old arrest as grounds to expel him, he said.
“I went through a big depression,” said Gonzalez, 28, who added he still owes $11,000 for the classes he took. “They shattered my dreams.”
The parent company of Medvance, now renamed Fortis Institute, confirmed that Gonzalez was kicked out of the program because of his arrest. As to why he was admitted initially, Regional Vice President Alex Teitelbaum wrote that “the school relies upon a third party vendor to conduct its background checks and we were unable to determine why Mr. Gonzalez’s previous check did not turn up that same charge. However, we can find no evidence of the claim that he disclosed his arrest to the admissions representative at the time of his initial enrollment.”
Wendy Story, 43, of Jacksonville, said she had a 4.0 GPA in Sanford-Brown Institute’s pharmacy tech program and had been enrolled despite a felony conviction for financial fraud. Story said the school knew about the situation — it had to clear the enrollment with her probation officer. But Story said administrators waited until her graduation day to tell her that she’d likely never be employable.
Story spent her graduation day in tears.
The state pharmacy board denied her license application, and she was left in the awkward position of explaining to friends why she never landed a pharmacy tech job. When the government lending agency Sallie Mae called about her past-due student loans, she had to “relive it all over again,” she said.
Sanford-Brown’s parent company, Career Education Corp., said Story and all students who enrolled received a written disclosure from the school that it “cannot guarantee that graduates will be eligible to work as pharmacy technicians in Florida or any other state.”
In a written statement, company spokesman Mark Spencer said he couldn’t get into the particulars of Story’s case because she hadn’t provided a student-privacy waiver to the Herald, but Spencer said state law became more strict after Story was enrolled, “thereby making her criminal conviction an obstacle to obtaining state licensure.”
Spencer said the school told students about the new law as soon as it passed. But in sworn testimony to the Florida attorney general, Story said the school’s program director told her the law “has nothing to do with you. You would be fine.”
The pain funnel
In July, FAPSC held its annual conference at the Turnberry Isle Miami resort in Aventura. Among the companies that had a vendor booth there: Sandler Sales Institute.
Sandler is a “global training organization” that provides seminars for salespeople in a variety of industries — including real estate, air conditioning systems and eyeglasses. In a January 2015 interview, the then-CEO of its Pompano Beach location, Bernie Cronin, said he saw opportunity in higher education.
“It’s an area that we plan to focus on more in the future, because it’s growing,” Cronin said. “They need butts in the seats. And every semester is a new group.”
Sandler’s Pompano Beach location is an “associate member” of FAPSC. Cronin authored a special “syllabus” to train admissions staff at colleges.
Included in that syllabus: the “pain funnel.”
The goal of the pain funnel, according to one former recruiter at Everest University, is to pressure prospective students by pushing certain emotional buttons — reminding them of how poor they are, and how they can’t financially provide for their family.
Vince Martin, the former Everest employee, said the talk might go like this:
“So how long have you been out of work? Wow, how does that feel? So how are your kids getting along?”
At the “Level 1” stage of the pain funnel technique, the recruiter would ask general questions, Martin said. With each additional level, the questions get deeper and more uncomfortable.
Level 2, for example, asks would-be students how they have tried to improve their lives on their own, and how those efforts fared.
“Level 3 is when we’re really getting down to the nitty-gritty,” Martin said. “There’s only one Level 3 question, and it’s ‘How do you feel about that?’”
“This is where you get people crying,” Martin said. “This is where they talk to you about how they’re embarrassed in front of their kids. This is where they talk to you about Christmas. This is where they talk to you about their rich relatives or friends that are doing so much better than them.”
“And this is where the sale closes.”
Cronin said in January he has provided training to about a dozen schools in the “career college” world, including Everglades University, a small nonprofit school that shares the same ownership as the much-larger Keiser University. At Keiser, Chancellor Arthur Keiser stressed that the Sandler training applied only to Boca Raton-based Everglades, which enrolls about 1,250 students at its main campus.
Within hours after Keiser was asked about the pain funnel, Cronin contacted the Herald and expressed concerns about Sandler Institute’s inclusion in any article, which he feared might cost him a client. Cronin later sent emails stating he was no longer affiliated with Sandler, and that his training “is NOT about sales” and is focused on counseling and advising prospective students.
Like the Apostle Paul
At FastTrain, the school’s sales pitch could take the moral high ground.
Roscoe Morton, 26, and his wife, Shampriel, 23, signed up together and ran up $14,000 in debt in only four months of information technology classes, they said.
Morton said he and his wife are Christians, and that the recruiter at the Jacksonville campus, Michael Grubbs, seized on that.
Grubbs, Morton said, told them he considered them his “spiritual assignment.” He said Grubbs quoted the Bible and mentioned the adversities experienced by one of Jesus’ apostles, Paul.
“He would compare it to our life, and the struggles we were going through,” said Morton, who was unemployed. “And God was trying to bring us something.”
Morton said Grubbs promised they wouldn’t be stuck with any debt.
“I should have got that in writing, which we didn’t,” Morton said. Morton said he realizes now how that prospect might sound unlikely, but at the time he and his wife were in a financial hole and they were “desperate.”
During the sales pitch, Grubbs took out a stack of impressive-looking résumés, Morton said. They listed the work and education histories of people who had bachelor’s and master’s degrees. Grubbs said these were students who were applying to FastTrain. It made him and his wife feel that attending FastTrain was a privilege, Morton said.
They left the school in early 2012, shortly before the FBI raided FastTrain’s campuses, alleging systemic fraud.
Grubbs is one of six FastTrain admissions officers arrested in October, but that hasn’t helped the Mortons. Federal student loans are rarely forgiven, even during bankruptcy proceedings, and even when there are criminal charges against a school.
Grubbs faces charges of conspiracy and theft of government money. The Herald tried unsuccessfully through his lawyer to get his response.
In March, with the couple about a year behind on loan payments, Shampriel Morton set up a gofundme.com page to ask for charitable donations. She text messaged the link to every contact in her cellphone.
“Please help us,” she wrote.
In Lake City, an hour from Gainesville, Rose Grier said she was hustled by a recruiter from Argosy University. At the time, Grier’s husband of nearly 30 years, Bob, was on his deathbed from a rare autoimmune disease. Grier had the emotionally demanding task of being his around-the-clock caregiver — handling body fluids, wound care, everything.
“I felt very vulnerable,” said Grier, 56. “I was under a lot of stress.”
The recruiter, Grier said, preyed on that vulnerability, telling her that a Pell grant — a need-based award that is not a loan — would fully pay for her schooling. Grier had grown to trust the recruiter, whose name was John. John — who called Grier within hours after she clicked on an online ad — showered her with compliments, calling her “smart” and saying she was a good wife to care for her husband the way she did.
Grier said she shared with John the full details of her husband’s medical condition. John knew how the family was overwhelmed by hospital bills.
“I specifically said, ‘I can’t take on loans,’ and [he] said ‘Oh, you won’t be taking on loans,’” Grier said.
Grier said it was a few months after enrolling in 2010 when she received statements in the mail showing she had already tallied nearly $4,000 in loans. Grier was stuck, and loan servicer Sallie Mae would demand payment.
In a statement, Argosy’s parent company, Education Management Corp. (EDMC), said all students receive a financial aid award letter, which they must sign, that lays out the specific amount of loans and grants they’ll receive.
Spokesman Chris Hardman said EDMC officials “go to great lengths to help students understand what they are signing up for when they attend our schools.” EDMC also owns Brown Mackie, a for-profit college that leased the sixth floor of the Miami Herald building before the news media company moved to Doral.
At the Coral Ridge Training School in Fort Lauderdale, at least four students filed separate complaints to the CIE, the state’s watchdog agency, alleging the school took out unauthorized loans in their name.
Students said they were told by the school to disregard any documents that came in the mail, but they opened the envelopes anyway and read them. One student called the loan company and confirmed the debts were real.
The school “electronically applied for loans in our names without our knowledge or signatures,” according to that student’s redacted CIE complaint.
Coral Ridge denied applying for unauthorized loans. The state watchdog panel dismissed the complaints, saying “the school has addressed the issue and has been found not to be in violation” of any rules or laws.
Schools big and small
Much of the criticism of for-profits has focused on schools owned by large corporations or private equity firms. They enroll about three quarters of U.S. students who attend for-profit colleges, according to a 2012 U.S. Senate report. But there are also mom-and-pop colleges, such as beauty schools.
They don’t all do a bad job, said Rick Beasley, executive director of CareerSource South Florida.
Beasley’s agency, funded by federal dollars, provides job training for the unemployed and has placed clients in fields such as computer specialist and auto repair technician. Most of Beasley’s clients choose community college, he said, but a large community college setting “can be kind of daunting” for older students. For-profit colleges offer a more intimate environment, he said, and graduates from good schools land jobs.
However, Beasley himself had trouble with Azure College, which focuses on nursing and other medical careers.
CareerSource canceled a contract with Azure — and Beasley says he made the college pay back more than $200,000 — because of a slew of alleged problems, including the falsification of documents.
“There are a number of good training vendors ... schools that are doing what they’re supposed to do,” Beasley said. “And there are a number of schools like Azure that are really taking advantage of the public, and taking the dollars and putting them into programs that don’t amount to anything.”
At Azure’s main campus in Miami Gardens, 27 percent of nursing graduates in 2014 who took the RN exam passed it. The national passage rate for American-trained students is nearly 82 percent.
At least eight students filed separate complaints to the state alleging improper practices at that campus. One recurring theme: Students with past-due balances were told they would lose all the college credits they had accrued — including those paid in full — unless they took care of their balances quickly.
“They are so money hungry they accept students who cannot speak or write basic English,” one student wrote in a Dec. 2, 2013, complaint. The Commission for Independent Education provided that complaint and others in response to a Herald public records request, but withheld the names of the students.
None of the complaints resulted in action by the CIE.
In an interview, Azure’s CEO, Jhonson Napoleon, acknowledged the CareerSource contract was canceled but said CareerSource was to blame, and that dealing with the agency was “always a headache.” Azure said he returned the $200,000 because the school’s costs came in under budget, not because of any mishandling of the money.
Napoleon said his low RN passage rate is part of the growing pains of a young school. He said Azure College is focused on making its students successful.
“We believe in helping make an impact in society,” Napoleon said.
The fight over past-due accounts wasn’t Napoleon’s only problem. When Azure expanded into the small Central Florida town of Sebring (pop. 10,331), it didn’t go well.
Azure came to Sebring in 2012 with a splash, buying lots of advertising, joining the local chamber of commerce and promising students a nursing education made affordable through Pell grants and federal loans.
However, Azure never had the federal government’s permission to offer financial aid in Sebring. Azure listed its Sebring students as attending the “Miami campus.”
When the U.S. Department of Education discovered what was happening, federal money was cut off from Sebring in August 2014 and students were left with no way to finance their education. Their accumulated, paid-for credits generally don’t transfer to traditional schools.
Napoleon said the implosion in Sebring was an honest mistake, that he had relied on poor advice from a financial consultant. Napoleon said he accommodated students by lowering the nursing program’s price for those who could afford to stay and pay cash.
“I did more than what’s necessary to make the situation right,” he said.
Azure must refund a yet-to-be-determined amount to the federal government.
Azure student Laura Moore, a 48-year-old breast cancer survivor and single mom who had attended Sebring, said she has given up on her dream of becoming a nurse — a dream born of her own chemotherapy treatments.
When Moore’s 10-year-old son kept talking about his mom’s new career, she said she had to break the news to him.
“He goes, ‘Mommy, how can anybody do that to people?’”
After the Herald posted video of Moore’s story online, Napoleon sent his former student a text message threatening to sue her for slander.
“Now our lawyers will be in touch with you soon,” he wrote.
Troubled, then closed
South Florida has recently seen three college chains collapse under the weight of fraud allegations.
Last year, ATI Career Training Center filed for bankruptcy. The Texas-based for-profit chain, which had four South Florida campuses, was done in by two whistle-blower lawsuits by former ATI employees. The lawsuits alleged rampant taxpayer fraud and falsification of documents, including attendance records and grades.
Some of the allegations took place during the 2005-2010 period that ATI was run by Arthur Benjamin, who lives in Delray Beach. Benjamin, a former FAPSC board member, told the Herald that ATI did a good job training students, and that he never witnessed any systemic problems. Benjamin said he saw only “some minor instances” of misconduct, such as a student who was absent from class being marked in attendance.
In October 2014, seven former employees of FastTrain College were arrested, including Alejandro Amor, the former CEO. Amor is charged with one count of conspiracy and multiple counts of theft of government money. Prosecutors say the school improperly admitted roughly 1,300 students who didn’t have a high school diploma — so it could fraudulently collect millions in financial aid dollars.
The former FAPSC board member said he did nothing wrong. Three of the employees, Juan Pena, Juan Arreola, and Luis Arroyo, agreed in December to “cooperate fully” with prosecutors. Pena and Arroyo were sentenced to three months in prison and three months house arrest; Arreola received 18 months in prison.
Attorney Louis Casuso, who represented Arroyo, a former admissions director for the Kendall, Flagler and Fort Lauderdale campuses, said his client is a “decent guy” who got caught up in a job where he was constantly pushed to get more students.
“They would go to the Metrorail stations, and go ‘Hey, you’re working? You want a job?’ and sign them up,” Casuso said. “I hope Miami doesn’t become the capital of these phony colleges, like we have Medicare fraud.”
In June, the U.S. Department of Education ordered Corinthian Colleges, a massive 72,000-student chain, to wind down operations and sell its campuses. Again, the allegation was falsifying records — the government accuses Corinthian of using inflated job placement rates.
Corinthian, which operated Everest University and other schools, denies wrongdoing. When the government took action, Corinthian was the nation’s fourth-largest for-profit chain with 100-plus campuses in 26 states and Canada.
The California-based company received $1.4 billion in Pell grants and federal student loans each year, which represented 85 percent of its revenues. One branch of Corinthian schools — Heald College — was fined $30 million by the U.S. Department of Education this month for lying about job placement rates.
At its peak, Corinthian had 15 Florida campuses, including ones in Pompano Beach, Hialeah, North Miami and Kendall, and based its online operations out of Tampa.
In February of this year, a group of 15 former Corinthian students, including three from Florida, launched a first-of-its-kind “debt strike.” In the past two months, the movement grew to 100 students. They say the for-profit company conned them into a “debt trap” and the U.S. government “let it happen.”
In June 2014, as Corinthian was besieged by widespread fraud accusations, Florida’s industry lobbying group chose Everest’s regional vice president, Chris Tilley, to be its president-elect.
FAPSC stands by that decision.
“I don’t think that Chris has done anything wrong,” said Curtis Austin, the organization’s executive director.
Tilley said Corinthian will present its side of the story when a California attorney general lawsuit goes to trial.
“I think people might be surprised when they see the facts,” Tilley said. “A lot of people have already concluded that Corinthian’s guilty of everything. ... It’s almost like it’s been tried in the media, and it’s done.”
Tilley said he never falsified job placements, and that Corinthian has many success stories.
“We’re not in the business of hurting people,” Tilley said. “That’s not what we do.”
There’s a long list of Florida students with grievances against Corinthian. Peggy Lee Tallyn, a 71-year-old from Wilton Manors, turned to Everest in 2010 for medical coding and billing training after the recession killed her antique business. She said she never received the computer training she was promised. Classes were “a joke,” she said, and teachers would provide students the answers to test questions. Instead of lectures, the class sometimes watched bawdy comedians on Netflix, Tallyn said.
Tallyn graduated but couldn’t find a job, and said she owes $16,000 in loans. She lost her house to foreclosure in February, and called it “frightening” to have the government hounding her over delinquent student loans.
“First, they fund these fraudulent schools,” Tallyn said, sobbing. “And then they come after you like you’re a criminal.”
Sometimes the more expensive the school, the worse the outcome for students.
Former employees of for-profit colleges describe the hard sell employed by schools.
Students pour out their despair to the commission that polices for-profit schools. They get form letters in return.
For profit-colleges lavish money on Florida politicians, who then change the laws to benefit the for-profit colleges
As concerns rise about patient safety, a look at solutions for curbing abuses.
more coverage online
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Higher-Ed Hustle series:
▪ Stories from the students to the employees to what is being done to deal with the issues
▪ Interactive graphics
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▪ Database of 18 months of complaints for schools in South Floirda
▪ Database of industry donations to political parties
▪ Database of 2014 RN license exam passage rates for different schools