US Names Apollo Group, Corinthian, Kaplan In For-Profit Probe

Colleges operated by Apollo Group Inc. (APOL), Corinthian Colleges Inc. (COCO) and Washington Post Co.'s (WPO) Kaplan Higher Education unit were among the schools the U.S. Government Accountability Office found provided "deceptive and otherwise questionable information" to agents who posed as prospective students in an undercover investigation of for-profit student recruitment tactics.

Gregory Kutz, managing director of forensic audits and special investigations at the GAO, produced details of the report at a hearing of the Senate Health, Education, Labor and Pensions Committee Wednesday. A version of the report, excluding school names, was released Tuesday.

Representatives from four non-publicly traded schools also encouraged applicants to falsify information on federal financial aid application forms, recommending they commit fraud so the students, and ultimately the schools, could receive more federal aid dollars. Many for-profit schools derive upwards of 80% of revenue from federal loans and grants.

The publicly traded schools, meanwhile, misrepresented graduates' potential income and job placement rates and provided misleading information on tuition and fees.

Shares of Corinthian Colleges were recently trading down 2.3% to $8.54 after hitting a 52-week low of $8.26, while Apollo was up 0.3% to $44.96. Washington Post's stock was down 0.7% to $425.22.

-By Melissa Korn, Dow Jones Newswires; 212-416-2271; melissa.korn@dowjones.com

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