2nd UPDATE: Florida AG Investigating Five For-Profit Schools
October 19 2010 - 7:23PM
Dow Jones News
The Florida Attorney General's office has launched a civil
investigation into five for-profit colleges, including four
publicly traded schools, seeking information on potential
misrepresentations in financial aid, recruitment and other
areas.
The state is looking into allegations at Washington Post Co.'s
(WPO) Kaplan Inc.; Education Management Corp. (EDMC) and certain of
its Argosy schools; certain Corinthian Colleges Inc. (COCO) units;
Apollo Group Inc.'s (APOL) University of Phoenix, and privately
held MedVance Institute.
According to a statement from the attorney general's office, the
probe is seeking information on "alleged misrepresentations
regarding financial aid; alleged unfair/deceptive practices
regarding recruitment, enrollment, accreditation, placement,
graduation rates, etc."
For-profit colleges have been under fire lately for their
aggressive recruiting tactics, with government officials calling
into question the schools' quality of education and high price
tags. The U.S. Senate is conducting a series of hearings on the
issue, while the U.S. Department of Education is set to release a
series of rules this winter that would penalize schools that
graduate students with heavy debt loads and poor job prospects.
Florida received a number of consumer complaints about the
schools, according to Ryan Wiggins, deputy communications director
for the state's attorney general, and a negative report from the
U.S. Government Accountability Office pushed the staff to conduct
its own investigation. That GAO report, issued at an August U.S.
Senate hearing, found that representatives from all 15 for-profit
schools it had visited offered misleading or fraudulent information
to undercover agents posing as prospective students.
Wiggins said the attorney general's office is speaking with
students, though she couldn't provide further details of the probe.
She said she doesn't believe the schools are aware of the
investigation at this time.
Representatives from Kaplan, Apollo and Corinthian said they
hadn't been notified of the investigation. Representatives from
Education Management and MedVance weren't immediately available for
comment.
-By Melissa Korn, Dow Jones Newswires; 212-416-2271;
melissa.korn@dowjones.com
(Rolfe Winkler contributed to this article.)
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