GAO softens for-profit college report

For-profit college recruiters lied about potential earnings and deceived applicants about loans, charged undercover investigators in a Government Accountability Office report released Aug. 4.  Now the GAO has changed key passages, reports the Washington Post. All the changes make the for-profit recruiters look better.

For example, the original report charged a recruiter with telling the investigator that some graduates in architectural and civil drafting earn $120,000 to $130,000 a year. The GAO notes that 90 percent of drafters earn less than $70,000. In the revision, the recruiter adds that in the current economic climate, starting pay is only $13 to $14 an hour, $15 an hour if a graduate is “lucky.”

In another case, the original report said a recruiter had inflated salaries for massage therapists. The revision admits the recruiter gave an accurate figure, but added that the school’s massage instructors make much more.

The original report charged a recruiter had told the investigator that he’d finish the seven-month course before the details on the loan application would be checked by the Education Department. That suggestion came from the investigator, the revised report says. The recruiter merely agreed.

Undercover GAO investigators posed as prospective students in encounters with college representatives that were captured in audio and video recordings. The GAO is a nonpartisan investigative arm of Congress.

Its widely reported findings were a major political setback for the industry, and executives apologized for incidents that put their schools in an embarrassing light. Industry critics said the report buttressed their case as they pushed for a new rule requiring that for-profit colleges demonstrate that their courses lead to “gainful employment” for their students or lose access to lucrative federal student aid programs.

Democrat Sen. Tom Harkin, chair of the Health, Education, Labor and Pensions committee, used the GAO report to lambaste for-profit higher education in hearings on regulating the industry. While the GAO stands by its initial conclusion — some for-profit recruiters provide misleading information and encourage loan fraud — Republican Sen. Mike Enzi, the ranking Republican on the committee, wants the GAO to explain the changes. He wrote in a letter Tuesday to Gene L. Dodaro, the acting head of the GAO, that the “substantial” revisions raise “a number of troubling questions” and “undermine many of the allegations” in the GAO report.

Under attack in the Senate and facing tougher regulation of student loans, for-profit higher education companies have seen stock prices fall sharply. Both Apollo Group, which owns the University of Phoenix, and Kaplan have adopted new policies to screen out less-motivated students, who are unlikely to complete a program and earn enough to pay back their loans. Expecting enrollment declines, both companies are laying off employees.

Who will investigate the GAO? asks Jonathan Robe on the College Affordability blog.

Now I know that nobody is perfect and therefore the need for revision doesn’t necessarily imply malfeasance on the part of the GAO, but when you’re doing an investigation purporting to show misleading advertising and even fraud, the first rule of thumb is that you do all that you can to avoid committing the same error you accuse others of committing.

In an unbiased evaluation, would all the errors go one way?

POSTED BY Joanne Jacobs ON December 9, 2010

Comments & Trackbacks (4) | Post a Comment


The answer to your question is “yes.” What the GAO did is not an evaluation, but an audit. The auditor furnishes a copy of the draft audit to the subject, whose job it is to marshal all the evidence that the audit was too harsh. No auditee ever criticizes the auditor for being too generous. So whatever corrections are made will inevitably soften the findings.

For those of us who read audits as part of our job, the dynamic between the GAO and the proprietaries is pretty typical. What’s unusual in this case is not that mistakes were made, but that the GAO rolled out its findings at the draft stage. So a process that usually takes place behind the scenes has been thrust on-stage.

Stephen Burd

Biased, no. Sloppy yes. It’s unfortunate that the GAO has given fodder to those who are being paid huge sums to try and discredit the report. As I say in this blog post, the investigation uncovered extremely troubling practices at a variety of for-profit schools and the revisions don’t change that at all.

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