The For-Profit College Scandal Should Teach Us a Career Planning Lesson

With extensive career planning and placement programs, the for-profit college industry holds significant market share in the higher education industry. According to the United States Government Accountability Office (GAO), nearly two million students attend for-profit colleges, pursuing bachelor's and associate's degrees in disciplines that range from cosmetology to nursing and engineering. In 2009, for-profit colleges received more than $20 billion in federal loans and grants. These are powerful institutions that students, the government, and employers have trusted with a significant portion of our society's future.

Knowing this information, you can imagine the outrage and shock that accompanied today's GAO report that implicated 15 for-profit colleges in deceptive recruiting & career planning practices. Of the 15 colleges tested, four institutions were guilty of fraud in their aggressive and misleading marketing techniques.

As part of the GAO's undercover investigation, four agents posed as prospective students and met with admissions staff for financial aid, tuition, and career planning information. The test revealed the following questionable marketing practices:

• One for-profit college encouraged an applicant to hide $250,000 worth of assets on a federal financial aid application.


• According to The New York Times, another college encouraged a student to lie about dependents on a financial aid application.


• Admissions representatives misrepresented tuition costs, quoting the price of classes for nine months instead of one full year.


• Students were provided with false career planning advice. For example, one program mentioned that barbers could earn up to $250,000 annually. According to the Bureau of Labor Statistics, 90 percent of barbers earn $43,000 per year.


• One admissions representative undermined the financial burden of student loans, implying that defaulters cannot be held accountable for missed payments.


• Admissions representatives engaged in aggressive marketing strategies, pressuring the undercover agents to sign contracts even if they weren't ready to make a decision.

Although the names of the 15 for-profit colleges remain confidential, the surveyed programs were in a number of disciplines, offering both associate's and bachelor's degrees in subjects ranging from business to cosmetology.

This information coincides with an education record. According to the Bureau of Labor Statistics, 70 percent of high school graduates from the class of 2009 were enrolled in a two-year or four-year program when surveyed in October '09 -- the highest number in United States history. While this is a figure worth celebrating, it is also a can of worms that our society should open: how many of these students are making informed decisions when choosing a program to attend? How many of these students will position themselves to guarantee a return on investment, and how many will drown in debt upon graduation, falling victim to aggressive marketing practices, false career planning advice, and unrealistic expectations about career prospects?

Whether or not students have fair access to objective information, they are still responsible for the costs and consequences of their education and career planning strategy. We have to make adult decisions with real consequences at a very young age, regardless of whether or not we are mature enough to plan our careers.

As a society, as parents, as teachers, and as students, it is important that we rethink the concept of higher education in the United States. If you're not investing a substantial sum of money, you are investing a substantial amount of time, so be an educated consumer when shopping for a college. Just as you would compare the economic implications of buying a car, you should compare the economic implications of your degree, college, and program. In addition to looking at rankings, prestige, and marketing materials -- regardless of whether you are looking at a nonprofit or for-profit college -- weigh the economic and educational return on investment. Does the school inflate its entry level and mid-career wage information? Can you access third-party information about student loan default rates? Can you research perspectives and reviews from recent graduates?

Be an educated consumer who shops with a skeptical and careful eye. In a world of class action lawsuits, legal safeguards, and public policy, you still bear the burden for the decisions that you make -- regardless of whether a bad decision is actually your fault. You are your future's most valuable asset, so position yourself to stand strong.

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