March 18, 2022

McDonald’s Steers Employees To Troubled For-Profit College

McDonald's Steers Employees To Troubled For-Profit College

Since 2014, McDonalds and Colorado Technical University have had a partnership that involves the hamburger giant steering its employees to the online school, where they can pursue degrees in fields ranging from business to health care to information technology. The web page of McDonald’s Archways to Opportunities program announces “100% TUITION COVERED” at CTU, and CTU Facebook advertisements tell McDonald’s employees they “may be eligible to pursue your degree and pay $0-out-of-pocket” at the school.

What these messages don’t tell McDonald’s workers is that Colorado Tech is not a prestigious research university like CalTech or Georgia Tech. It’s a for-profit college, owned by Illinois-based Perdoceo Education Corp., a company that has been in serious trouble with federal and state law enforcement agencies for deceptive recruiting and other predatory practices. While some students may benefit from CTU programs, CTU’s abusive practices have left many other students — single mothers, veterans, recent immigrants, and others seeking better futures — with overwhelming debt and without the career advancement they sought.

The messages to McDonald’s workers also don’t make clear that fine print language might make it difficult for them to finish school debt-free, or that barely one out of five CTU students graduate within eight years of enrolling.

McDonald's Steers Employees To Troubled For-Profit College

McDonald’s tells its employees they may obtain a CTU “Commitment Grant” that, combined with “maximizing Archways to Opportunity tuition assistance,”  “covers 100% of eligible students’ online tuition, including eBooks and student fees, at CTU helping you to pursue your educational goals without the need for student loans.” But the terms and conditions for getting and keeping a Commitment Grant seem complicated, onerous, and risky — students may not receive any government student aid, they must remain employed at McDonald’s, the grants only apply to specified programs, CTU or McDonalds may terminate the grants at any time, two “unsuccessful grades” may end eligibility, and more.

McDonald’s doesn’t tell employees that CTU’s operator, Perdoceo (previously called Career Education Corp.), in 2019 entered into a $494 million settlement with 48  state attorneys general, plus the District of Columbia over allegations that the company engaged in widespread deceptive practices against students. Or that later that same year, the company agreed to pay $30 million to settle charges brought by the Federal Trade Commission that its schools have recruited students through deceptive third-party lead generation operations. Or that recent CTU employees have told media outlets USA Today and Capitol Forum, as well as Republic Report and federal investigators, that company recruiters continue to feel pressure to make misleading sales pitches and to enroll low-income people into programs that aren’t strong enough to help them succeed. Or that the U.S. Department of Education late last year asked Perdoceo to provide information and retain records regarding student recruiting, marketing, financial aid practices, and more — a sign of a pending investigation. (Perdoceo recently claimed to investors that it was actually a routine request.)

Shouldn’t McDonald’s be telling its workers these kinds of concerning information about CTU’s operator before encouraging them to enroll?

I’ve reported in the past about how deceptive third-party lead generators have pretended to offer jobs at McDonald’s with the actual aim of steering people to recruiters for predatory colleges. But this story is about McDonald’s not being spoofed but actually being complicit in its own workers being ripped off and buried in debt by high-priced, low-quality education programs.

I’ve also reported before about how a wide range of big employers — from Home Depot to Delta Airlines to the FBI — have offered education benefits that largely consist of dubious discounts to attend overpriced for-profit schools, including Perdoceo’s schools, that have faced investigations by and major settlements with federal and state law enforcement agencies. It’s a shame that these arrangements persist. In this case, either McDonald’s has not done its basic due diligence to meet its responsibility to avoid steering workers into bad educational choices, or else it could possibly be something worse: That McDonald’s is getting a sales commission from CTU for these referrals.

At the same time, if any money is actually coming from McDonald’s to CTU to pay employee tuition, it could be extremely helpful to CTU in meeting its obligation under the federal “90-10 rule” that it obtain at least ten percent of its revenue from sources other than federal student aid. Perdoceo’s schools have struggled to meet that requirement — which is aimed at protecting students from schools where no one would pay their own money — and have pursued a range of shady tricks to meet it.

McDonald’s did not respond to a request for comment. Perdoceo has not responded to my questions for years.