Education Only a Con Man (or Congressman) Could Love

On the sales floor, she soon would go from golden child to problem student. Managers threatened to fire her. She protested that she'd excelled at EDMC's other barometers, like leadership, calls made, and conversations engaged. None of that mattered, they told her.

"Those are just put in there because the law says we're not allowed to pay you directly," she recalls her boss saying. "We don't look at those. Those don't really matter. The only thing that matters is how many bodies you bring in."

Courtesy of Suzanne Lawrence

According to Suzannne Lawrence, who worked as a recruiter at Argosy University's online division, the pressure to recruit students prompted all sorts of illicit actions, including falsifying documents.

Courtesy of Barmak Nassirian

Barmak Nassirian, former official with the American Association of Collegiate Registrars and Admissions Officers: "Over-advertise, oversell, overcharge, and under-deliver. They found a system where the pitch goes to one guy and the bill to someone else."

Related Content

• Joshua Ruzsa, 19, Identified as Victim of Fatal Fall in Camelback Bee Attack
  October 30, 2012
• Sonoran Long Strange Trip: A Voyage Fueled by Apricots, Pecans, and Scotch
  May 22, 2013
• 10 Things in New York City the Phoenix Food Scene Will Never Have
  May 21, 2013
• Phoenix Gun-Buyback Program Takes in Another 937 Guns
  May 20, 2013
• Daryl Raetz's Body Circled by Nativist Buzzards
  May 20, 2013

More About

• Barmak Nassirian
• Kathleen Bittel
• Todd Nelson
• For-Profit Education
• Distance and Online Education

Bittel wasn't the only worker feeling the pressure. A man she carpooled with would cry on the way home.

"If you weren't unscrupulous, you struggled," she says. "Half the people I worked with, their previous job was in the mortgage industry. They targeted people in that industry . . . They were the ones that did the best, because they were so unscrupulous."

Eventually, she transferred to EDMC's career-placement department, where the same deceit wore a different outfit.

Bittel was supposed to help Art Institute grads find jobs. But the school was churning out students with abysmal portfolios — if they had one at all.

She also was supposed to generate stats on how many of them found employment in their fields. The numbers were used to not only sell future students, but to maintain a program's standings by accreditors. So EDMC, she says, was prepared to rig these stats by any means necessary.

Bittel's boss liked to say that "every student is place-able. It's all a matter of technique." This "technique," she says, involved persuading people to sign affidavits saying they were employed in their field. She witnessed cases in which someone with a degree in video-game design was counted as working in his field because he sold video games at Toys "R" Us. She was told to convince a Starbucks clerk that making the menu sign each day was using her degree in graphic design.

Once, Bittel saw a co-worker lying on a form about a graduate's salary. The same employee showed her how to doctor e-mails so that students' replies favored the Art Institute. Both times, she reported the scams to her boss. But instead of getting fired, the co-worker soon received EDMC's North Star Award for exceptional performance.

EDMC hardly is alone in its transgressions. Two years ago, the feds conducted a sting on for-profit colleges, with investigators masquerading as prospective students. They tested the sales practices of 15 schools. Four encouraged outright fraud. All were found to be deceptive.

In the age of austerity, you'd think Congress would be eager to root out waste, especially after allowing mortgage fraud to decimate the economy. But money talks loud enough to make just about any congressman hard of hearing. So despite a 20-year history of fraud and failure, for-profit colleges appear as bulletproof as ever.

Washington's been aware of the racket since U.S. Senator Sam Nunn (D-Georgia) held high-profile hearings in 1992, demonstrating how for-profits were recruiting students from welfare offices, housing projects, and homeless shelters — anything to get bodies through the door. They subsequently were barred from paying salespeople based on enrollment.

It would take just a decade for Washington to eviscerate such protections. In 2002, President George W. Bush created a series of loopholes and announced that violators no longer would be punished.

Then, Bush and Congressman John Boehner (R-Ohio) opened the door even wider, working to repeal a rule that required schools to educate at least 50 percent of their students on campus. It gave birth to an online gold rush, with for-profits flooding the Internet. Last year, 6 million students enrolled.

The industry had discovered the value of paying protection money to Congress. It spent $16 million on lobbying last year alone, buying a dream team of former officials who include former House Majority Leader Dick Gephardt (D-Missouri) and no fewer than 14 former congressmen.

"I didn't know when I got into the issue of for-profit schools that it was the best way for me to have a reunion with every member of Congress as they parade through the door, all representing these schools," says U.S. Senator Dick Durbin (D-Illinois), who's held hearings investigating for-profits. "There is so much money on the table, they can afford to hire everybody."

Needless to say, Durbin hasn't gotten far with his probe. He's found some support among fellow Democrats, but not a single Republican bothered to attend his hearings.

"I don't want to hear their sermons from the mount about wasting federal money when they won't even take a look at these obscenely subsidized for-profit schools," Durbin says. "If they were talking about food stamps, they would cut people off in a second for this level of fraud. This is a wasteful expenditure of hard-earned consumer dollars to some of the wealthiest people in America, and that has to come to an end."

Congress' shrillest voices on waste refuse to even look at the industry. Despite sitting on the Senate committee examining for-profit fraud, Senator Rand Paul (R-Kentucky) has expressed no curiosity about this money pit. Nor have fellow committee members Senator Lamar Alexander (R-Tennessee) or deficit hawk Senator John McCain (R-Arizona). Not one responded to repeated interview requests for this story.