April 15, 2020

Scam Websites, Promising COVID-19 Advice, Steer Students to Predatory Colleges

Scam Websites, Promising COVID-19 Advice, Steer Students to Predatory Colleges

This article is the first in a new series, produced by Republic Report and the Project on Predatory Student Lending (part of Harvard Law School’s Legal Services Center) — COVID College Cons.

Steve Gunderson, the Republican ex-congressman who runs CECU, the frequently-dishonest lobbying group of for-profit colleges, emailed his members on Monday, warning that in the COVID-19 environment, with hundreds of millions of new taxpayer dollars going to their industry, “our critics are watching us closely. They hope to find examples of fraud that can be used against the entire sector.”

In a guide Gunderson posted online to advise members on how to spend COVID funds, he urged for-profit and career colleges to act responsibly and in the open: “We know our critics are already accusing the proprietary sector of fraud in the use of such funds. Only full transparency can answer such allegations….”

Gunderson is correct that critics of his industry are concerned. Two weeks ago, I wrote about signs that COVID-related college scams, aimed at Americans desperate for new job training in this uncertain climate, had already begun. Last week, Senator Elizabeth Warren (D-MA) and three colleagues sent a letter to education secretary Betsy DeVos, urging careful scrutiny of the new CARES Act funding to ensure it goes to students and not to for-profit college marketing, recruiting, and CEO salaries. 

Contrary to Gunderson’s claim, few people “hope” to find examples of colleges defrauding or ripping off students. We want students to be protected, and to get real opportunities for educational programs that will improve their financial futures. But if we find such scams, we will spread the word. We can’t let another generation of students — veterans, single mothers, and others — seeking escape from the misery of an economic crisis, have their lives made even worse by falling prey to high-priced, low-quality education programs that leave them buried in debt, their career hopes destroyed.

So here we go.

Scam Websites, Promising COVID-19 Advice, Steer Students to Predatory Colleges

In just a few seconds of googling, we found two websites that promise advice to those seeking online education advice and opportunities in the wake of COVID-19. Both steer students to a cluster of for-profit colleges, or non-profit colleges that sometimes engage in troubling, aggressive recruiting practices similar to for-profits. And one is hawking expensive programs at colleges that are members of Gunderson’s own organization. 

These websites are called “lead generators,” Internet bottom-feeder sites that often use bait and switch tactics: pretending to offer something that struggling Americans want, like jobs, food stamps, or advice for veterans, or purport to rank colleges based on objective information, but actually push visitors to colleges that pay for the privilege — student-hungry colleges that then telephone prospects relentlessly, seeking to convert those “leads” into new enrollees. 

The Best Schools

One website, called The Best Schools, now features a page with an essay entitled, “COVID-19 Files: How to Succeed in Your Newly Online Classes.” The essay includes tips like “Take Notes” and “Don’t Procrastinate.” But also, prominently featured between the headline and the article text, and also at the top of the page, The Best Schools offers a search tool allowing visitors, people seeking guidance on how to pursue higher education, to find schools based on selected degree levels (certificate, AA, BA, MA etc.) and courses of study. That search tool also dominates the site’s homepage, alongside text reading: “You deserve the best. Start your quest for personal happiness and career success. Find your school today.” 

Scam Websites, Promising COVID-19 Advice, Steer Students to Predatory Colleges

If you try the searches on The Best Schools, most yield only, or mostly, (1) for-profit colleges, (2) non-profit colleges that recently underwent questionable conversions to non-profit status, and (3) other schools that recruit aggressively, in the manner of for-profit colleges. The schools in the search results include Purdue Global, Ashford University, Ultimate Medical Academy, Grantham University, Keiser University, Herzing University, Strayer University, Capella University, Walden University, Full Sail University, Southern New Hampshire University, Jerry Falwell Jr.’s Liberty University, and Pat Robertson’s Regent University. The search results provide links directly to the enrollment pages of those schools’ websites.

Some (not all) of those schools’ operators have faced extensive law enforcement investigations or actions for deceiving students and taxpayers.

Purdue Global, when it was called Kaplan University, developed a troubling record of misleading and overcharging students, leaving many graduates and dropouts alike deep in debt and without the career advancement they sought. A 2015 Brookings study that found that 53 percent of Kaplan students graduating in 2009 defaulted on their federal student loans within five years. Kaplan Higher Education, a unit of the company Graham Holdings, still provides numerous services and helps control Purdue Global, despite its formal sale of the school to Indiana’s public Purdue University. Kaplan has faced multiple law enforcement investigations over its college programs and since 2014 has settled cases alleging deception or fraud with the attorneys generals of Florida and Massachusetts and with the U.S. Justice Department.

Ashford University, labelled “a scam… an absolute scam” by Senator Tom Harkin, then chairman of the Senate HELP committee, after a 2011 hearing on the school, has repeatedly been in trouble with law enforcement. In May 2014, Ashford’s parent company, then called Bridgepoint, agreed to pay $7.25 million to settle claims by Iowa’s Attorney General that the company made false statements to prospective students and used high-pressure sales tactics. In 2017, California’s attorney general sued Bridgepoint, alleging Ashford’s recruiters were fueled by a “boiler room” culture that demanded they meet enrollment quotas; the recruiters, in turn, allegedly told prospective students, falsely, that federal financial aid would cover all of their costs. Ashford denies the charges; the case is still pending. Bridgepoint, now called Zovio, also has been under investigation by the U.S. Justice Department, Securities and Exchange Commission, and Consumer Financial Protection Bureau.

Another school recommended by searches on The Best Schools, Grantham University, employed deceptive lead generation sites, including one called Army.com, to take advantage of U.S. veterans and service members, until the Federal Trade Commission shut those sites down

Florida’s Keiser University and the U.S. Justice Department reached an agreement in 2015 under which Keiser, without admitting misconduct, would pay $335,000 to settle a lawsuit under the False Claims Act, charging that the school defrauded taxpayers in the receipt of Department of Education funds. Three years earlier, to resolve a two-year investigation by the office of Florida attorney general Pam Bondi under the state’s Deceptive and Unfair Trade Practices Act, Keiser’s schools agreed, without any admission of guilt, to  offer thousands of former students free job retraining and that its staff would not misrepresent information about the schools to prospective students. Keiser also engineered a conversion to non-profit status that was so sketchy it made the front page of the New York Times.

And Florida’s Full Sail University repeatedly flunked the Department of Education’s gainful employment rule — a measure of whether graduates of a college program earn enough money to be able to pay down their student loans. (At the urging of the for-profit college industry Betsy DeVos cancelled that rule last year.) 

Others of the schools that show up in The Best Schools’ search results have been associated with high prices and mixed, at best, outcomes for students. And all the schools that show up should be concerned, indeed ashamed, about being included on this deceptive website, whether their association is active or passive, especially now that the site is exploiting the COVID-19 crisis to get traffic. 

Why do these for-profit colleges dominate The Best Schools’ search results, rather than public and non-profits that generally offer better educational value? The company’s website insists, “we do not rank any schools or programs on our website based on any type of financial relationship with any school partner…. Schools never receive preferential treatment in our rankings because of financial compensation or advertising partnerships.” But that assurance, if true, appears to be so only for pages that the site formally designates as including school rankings, such as this one listing, “The Best Online Colleges and Universities for 2020,” a list dominated by well-known state universities, such as the University of Minnesota and the University of Arizona.

You’d have to be paying close attention to realize that the search results, which list a number of schools and resemble the ranking pages, without ranking order numbers, are not what The Best Schools considers its “rankings.”  The search results would appear to fall under another statement on the company’s website: “How We Make Money. Every company needs to generate revenue. At TheBestSchools.org, we do this by advertising certain programs on behalf of schools that compensate us for student referrals.” They continue, “When site visitors make school selections using our college or degree finder tool, or when they interact with ads labeled as ‘ad’ or ‘advertising disclosure’ on our website, we may receive compensation from partnered colleges and universities.”

Meaning, the Best Schools gets paid to list schools in its search results. 

The Best Schools promises they are not trying to mislead: “We strive to be as transparent as possible when it comes to separating our advertised and editorial content. The advertising placements through which we receive compensation are unambiguously identified with terms like ‘ad’ or ‘advertising disclosure.’” Following recent efforts by the Federal Trade Commission to crack down on deceptive for-profit college lead generation sites, and deceptive advertisements by the schools themselves, more lead generation sites have offered these kinds of disclosures. (And at least one company recently nailed by the FTC, Perdoceo, seem to be advertising less on these sites than before). But, for some websites, including The Best Schools, the potential for consumer confusion remains strong.

If a visitor goes to The Best Schools, she immediately finds a search bar. If she does a search, she ends up with a list of for-profit colleges. Are those “the best schools”? No. Could she have been led to believe they are? Definitely.  Even if she read the disclosures page, the promise that ads are clearly labelled is belied by the school listings, which don’t include an ad label. There is a tiny box on the side of search results pages that says “AD,” but nearby is text reading, “Our team is serious about matching you with accredited online colleges that fit you best.” And the promise that the site does not base “rankings” based on payments to the company is also misleading, because the average reader may not realize there’s a difference between what the site calls “rankings” and what they call “school selections using our college or degree finder tool.” 

The Best Schools, by the way, trumpets on its site that it is a member of two giant education umbrella organizations with thousands of mainstream members: the American Council on Education and the National Association for College Admission Counseling. 

Online Schools Center

A second website, “Online Schools Center,” offers a page entitled, “How Online Learning Helps Combat COVID-19 Outbreak.” It, too, provides insights including: “Refusing to tap distance learning capabilities could bring the academic world to a standstill” and “Panicking and dwelling in negative thoughts are counterproductive to the efforts of the community and the academes, sabotaging the very purpose of the decision to switch to e-Learning.” 

Like The Best Schools, the Online Schools Center COVID-19 page, and its homepage, have a centrally-located search bar. Each search yields just one outcome, linked to school enrollment webpages, and again, the choices are for-profit schools or others that aggressively recruit: Purdue Global if you search for criminal justice or health sciences degrees; Strayer for business or information technology; Grantham for “engineering management”; Walden for education; Liberty University for military studies or journalism.

Online Schools Center also features rankings pages with titles like “30 Easiest Online Associate Degree Programs” and “Top 20 Online Schools for Bachelor of Political Science Degree Programs.”  Some of those pages feature at the top a list of “Recommended Schools,” with a tiny box nearby saying “AD,” and the supposedly recommended schools come from the same list of for-profits and other aggressive recruiting schools. Below those lists of schools, if you scroll way down, is what is apparently the actual list of “top” schools, including better value schools like the University of Massachusetts.

Online Schools Center has a page describing the “methodology” it uses to create its program rankings — a mix of “program criteria,” “ancillary services,” and “school criteria.” I can’t find anyplace on that page where it clarifies that the for-profit schools listed at the top of many rankings pages are not part of these rankings but rather are paid advertisements. Many visitors to the site would likely be confused and assume the paid school listings are ones the site ranks highest. 

Online Schools Center has not responded to my request for comment.  Nor has The Best Schools. (If they end up changing language or features on their sites, note: We made copies.) 

Time to End the Scams

That brings us back to Steve Gunderson, the industry lobbyist who Monday urged his for-profit and career school members to be transparent and avoid fraud-like behavior. At least two of the schools promoted on one of these troubling COVID-19 lead generation pages — Keiser University and Herzing University — are long-time members of Gunderson’s organization, CECU.  Keiser’s “chancellor and CEO,” Arthur Keiser, is a board member and former board chair of CECU.

Other schools — including Purdue Global (when it was called Kaplan) and Ashford — were previously members but left after CECU (formerly called APSCU) and the industry failed to stop the Obama administration from creating new protections for students and taxpayers. Even after leaving, schools including Ashford have continued to collaborate with CECU. CECU never spoke out against the deceptive practices of those schools while they were still members, or after, and it hasn’t denounced deceptive lead generation sites that have been members

If Gunderson and others in the for-profit college industry want additional support from Congress in the pandemic crisis, it is at long last time for them to stop mouthing platitudes and truly clean up the industry’s act.  Stop using deceptive ads and scam lead generation sites. Stop engaging in coercive recruiting that targets the pain and shame of struggling Americans. Stop enrolling students in programs you know are not strong enough to let them succeed. Stop overcharging. Stop spending so much on advertising, boiler room recruiting operations, and executive salaries, and start spending more on teachers and instruction. Take seriously grading, evaluation, and feedback. Show that private sector schools can genuinely be at the cutting edge of instruction and innovation, finding genuine distance education solutions that can actually help people train for new careers in a new world.

And if you believe you already are a quality career school, stop lobbying to prevent reasonable accountability rules — like the Obama-era gainful employment and borrower defense rules, and the 90-10 rule reform bill — that help weed out the worst-acting schools. Otherwise all you are doing is helping bad actors making a quick buck, or a billion bucks, while they continue to ruin students’ lives and fleece U.S. taxpayers — and you are further tarnishing the reputation of your entire sector.

Steve Gunderson is right about one thing. We will be watching you closely.