GAO revises its report critical of practices at for-profit schools

By Nick Anderson
Washington Post Staff Writer
Tuesday, December 7, 2010; 8:44 PM

The Government Accountability Office has revised portions of a report it released last summer on recruiting practices in for-profit higher education, softening several examples from an undercover investigation but standing by its central finding that colleges had encouraged fraud and misled potential applicants.

The revisions have come as the Obama administration and senior Democratic lawmakers are pushing for tougher regulation of the industry. A Republican senator said the revisions called into question some of the conclusions in the report.

The original report, issued Aug. 4 in testimony to the Senate Committee on Health, Education, Labor and Pensions, examined recruiting practices at 15 for-profit colleges, including campuses operated by the Apollo Group, Corinthian Colleges and The Washington Post Co.'s Kaplan unit.

Undercover GAO investigators posed as prospective students in encounters with college representatives that were captured in audio and video recordings. The GAO is a nonpartisan investigative arm of Congress.

Its widely reported findings were a major political setback for the industry, and executives apologized for incidents that put their schools in an embarrassing light. Industry critics said the report buttressed their case as they pushed for a new rule requiring that for-profit colleges demonstrate that their courses lead to "gainful employment" for their students or lose access to lucrative federal student aid programs.

The share prices for several for-profit education companies fell sharply after the report's release, and the industry has since mounted an aggressive lobbying and advertising campaign portraying administration efforts to impose new regulations as a threat to educational access for students underserved by traditional colleges.

Key passages altered

The revised report, posted Nov. 30 on the GAO Web site, changed some key passages. In one anecdote cited as an example of deceptive marketing, the GAO originally reported: "Undercover applicant was told that he could earn up to $100 an hour as a massage therapist. While this may be possible, according to the [Bureau of Labor Statistics] 90 percent of all massage therapists in California make less than $34 per hour."

The revised version states: "While one school representative indicated to the undercover applicant that he could earn up to $30 an hour as a massage therapist, another representative told the applicant that the school's massage instructors and directors can earn $150-$200 an hour. While this may be possible, according to the BLS, 90 percent of all massage therapists in California make less than $34 per hour."

In another example, the report originally stated that a college representative "told the undercover applicant that by the time the college would be required by [the] Education [Department] to verify any information about the applicant, the applicant would have already graduated from the 7-month program."

The revised version states that "the undercover applicant suggested" that possibility and the "representative acknowledged this was true."

There were several other significant edits to the examples detailed in the report.

GAO spokesman Chuck Young wrote in an e-mail that the office issues revisions when "additional information comes to light and provides additional context to our already published work." Of the roughly 1,000 reports issued in the last fiscal year, about 12 received later revisions, he said. He added that the office reviewed more than 80 hours of audio from the investigation before it released the revision on the for-profit college report.

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