October 11, 2013

Discredited For-Profit College Operator Still Part of APSCU Trade Group


The Association of Private Sector Colleges and Universities, or APSCU, is the Washington, DC-based lobbying group for America’s for-profit colleges. APSCU has opposed a wide range of reasonable efforts by the Obama Administration and Members of Congress to hold bad actors in its industry accountable for waste, fraud, and abuse with the roughly $32 billion a year in federal tax dollars they receive. APSCU and its many aggressive lobbyists and lawyers appear to take the position that its members are entitled to this taxpayer money, without strings, in perpetuity, despite the overwhelming evidence that many for-profit colleges have deceived their students and left them much poorer than when they enrolled.

Now, a look at information on APSCU’s website and that of one of its member institutions demonstrates how little APSCU cares about appearances, let alone the welfare of students. Arthur Benjamin, a former for-profit college CEO whose institution was caught committing egregious fraud on his watch, remains affiliated with APSCU through another for-profit college.

APSCU has been marked by extreme loyalty to its members, keeping companies on its membership roster even after they have been exposed for engaging in outrageous offenses against students and taxpayers.

Take Corinthian Colleges, one of the largest for-profit college companies, long one of the most irresponsible actors in the field. Yesterday, California’s attorney general, Kamala Harris, sued Corinthian for  “false and predatory advertising, intentional misrepresentations to students, securities fraud and unlawful use of military seals in advertisements.” Corinthian purportedly lied about its graduates’ job placement rates, among other things, to prospective students, investors, and accrediting agencies. Five years ago, the company paid $6.6 million to settle similar claims by the California AG.

Corinthian, which gets about 90 percent of its revenue from taxpayer money, is the subject of numerous student and staff complaints, and is under investigation by at least five other attorneys general, the Consumer Financial Protection Bureau, and the Securities and Exchange Commission. Two-thirds of Corinthian’s associate degree students, at Everest, Heald and WyoTech colleges, drop out; three-quarters of former students can’t pay down their loans, and 36 percent default within three years, the highest rate of all publicly-traded college businesses. Yet Corinthian remains a cornerstone member of APSCU, as does Career Education Corporation, another for-profit monster that in August agreed to pay $10 million to settle charges with New York’s Attorney General, Eric Schneiderman, that the company misrepresented its graduates’ job placement rates.

In August, APSCU finally did drop a member company from its rolls upon its adjudication as a bad actor — but in that case, as part of its settlement of fraud charges with the Justice Department, the company, ATI Career Training Center, agreed to cease to exist. It seems the only bad ASPCU member is a dead APSCU member.

The Justice Department charged that ATI, which had campuses in Florida and Texas and offered programs in fields including health care, information technology, and car repair, engaged in systematic fraud against students and taxpayers. According to the lawsuits, ATI, driven to sign up students and cash their federal financial aid checks, looked for recruits in homeless shelters and strip clubs, falsely promising jobs with big salaries. ATI signed up non-English speakers for classes conducted in English. An ATI staffer said, “the ATI culture…was to recruit anyone with a pulse.”

The lawsuits allege that ATI falsely told students who had previously dropped out that their current federal loans would be forgiven if they re-enrolled, but ATI in fact had no intention of paying off such debt. ATI falsified student transcripts and attendance records. It deceived Texas officials monitoring the school’s job placement rates by making up false jobs and false employers; inducing a worker at a trailer manufacturer to falsely tell authorities that ATI graduates worked there; creating fake business cards for students that the school couldn’t place; counting business administration graduates as placed in their field if they worked as cashiers; and employing graduates for a single day past graduation at ATI itself and then counting them as placed.

About $236 million dollars in federal student aid has gone to ATI since 2005.

Much of ATI’s blatant misconduct had been directly exposed in the media for years before the Justice Department put the company out of business, but APSCU did not remove ATI from membership.  And, in a way, it still hasn’t.

It turns out the spirit of ATI lives on within APSCU. Because the man who was CEO of ATI during the period when most of these misdeeds occurred, Arthur Benjamin, remains vice chair of the three-member board of directors of another APSCU member, American Institute.  That company is based in White Plains, New York, and runs health, beauty, and technical training programs in Florida, Connecticut, and New Jersey. According to Benjamin’s LinkedIn profile, he has been vice chair of the American Institute board since February 2008 and “he was one of its founders and a partner in its forerunners Fox Institute, School of Health, and American Institute of Massage Therapy.” All of which suggests that Benjamin is not only a board member but has a significant financial stake in American Institute.

ATI’s current interim CEO, Michael Gries, told a reporter that all of the alleged misconduct at ATI happened under Benjamin’s term as CEO from 2005 to 2011.

Benjamin, of Delray Beach, Florida, and Dallas, Texas, is, according to his website, an “Internationally Recognized Educator, Corporate Leader, Philanthropist and Animal Rights Activist.”  He “has been dedicating himself to investing his time, energy and finances into companies and projects that make a difference in the lives of people and their pets—including education and animal rights activism…. Arthur lives each and every day as his last one, believing fully in George Bernard Shaw’s quote, ‘my life belongs to the whole community and that as long as I live it is my privilege to do for it whatever I can.’”

Benjamin has indeed been a constant presence on the charity party scene, as well as other glamorous events, posing with leaders and celebrities from George Bush and Bill Clinton to Ashton Kutcher, Brande Roderick, and Flo Rida. Benjamin also used some of his earnings to make campaign contributions to politicians, including Rep. Virginia Foxx (R-NC), Rep, John Kline (D-MN), Rep. Alcee Hastings (D-FL), and Mitt Romney, all of whom have taken strong stands to support the for-profit college industry. Benjamin also gave to Barack Obama, John McCain, Hillary Clinton, Harry Reid, and many others. Since ATI was receiving 90 percent or more of its revenue from federal tax dollars, all of us were helping to finance Arthur Benjamin’s nights on the town and financial and political largesse. (Benjamin also has been accused by multiple complainants of serious personal misconduct, charges he has denied, contested with mixed success, and sometimes settled.)

During the period he was ATI’s CEO, through 2011, Arthur Benjamin served on the board of directors of APSCU, which was then called the Career College Association. And despite the unbelievable discredit that exposure of the ATI affair has brought upon Benjamin and his capacity to run an honest for-profit college, he is still part of APSCU.

Unless Benjamin has some extraordinary explanation for why he was not responsible for the rampant fraud that occurred on his watch at ATI, then so long as American Institute is a member of APSCU, and Arthur Benjamin is a board member of the American Institute, APSCU cannot claim to be a credible participant in debates on higher education.

APSCU stopped responding to my queries some time ago, but I will reach out to them and to Arthur Benjamin to see what they have to say.

This article also appears on Huffington Post