Friday, January 28, 2011

Efforts to Stop the Practice of Recruiting for Commission in Private Universities

See all posts on for-profit education.
See all posts on for-profit college recruiting.

Efforts to Stop the Practice of Recruiting for Commission in Private Universities

This guest post is contributed by Mark Davies, he writes on the topic of Masters Degree Online. He welcomes your comments at his email id:

Education has become more of a commodity these days than the essential right that it should be; what with exorbitantly high tuition fees and the rising overall cost of education, students end up paying through their nose for the rest of their lives if they sign on for a college degree. What’s worse in recent times is that private, for-profit colleges have taken to hiring people to recruit students for their courses; it’s a commission-based business which leads to a payment once a student enrolls based on their recommendations and marketing.

This alarming trend is surprising in one way because we’ve seen how hard it is to get admission into a decent college. So the news that private colleges are looking to reel in students by hiring commissioned agents to sweet-talk them raises red flags for more reasons than one. For one, it opens up the possibility of corruption in the world of education where degrees are sold to the highest bidder and where standards are not maintained; and for another, it allows colleges to fleece students and charge them much more than normal by preying on their desperation to earn a degree.

In August 2010, the Government Accountability Office reported that several for-profit institutions adopted deceptive recruiting practices which included providing misleading information about costs and potential future earnings and urging students to provide falsified information on financial aid applications. The revelations were part of an undercover investigation into the recruiting practices of colleges by investigators posing as prospective students. It was found that most institutions engage in deceptive practices and some even in downright fraud.
Students sign up thinking they’re investing in an education for their future; instead, they’re forced to pay much more than normal, they’re conned into providing false information on their applications for financial assistance, they’re given false promises of jobs with high salaries when they graduate, and they’re coerced into taking out student loans even though they have money saved up. Recruiters even go so far as to tell the students that “no one repays educational loans and that your lender will not come after you if you fail to pay up.”

Most recently, the parent company of the University of Phoenix paid up nearly $80 million to settle charges with the US Department of Education that it had violated a federal ban to reimburse recruiters based on the number of students they recruited. Also, in 2007, Corinthian Schools settled for $6.5 million with the California Attorney General’s office for using false information on job salary and placement to lure students to sign up with them.

According to the US Public Interest Research Group and the US Student Association, there is enough evidence to prove that the career education sector relies on high pressure sales tactics to recruit students; what’s worse is that these recruiters also coerce these students with false information to take out loans to pay for programs that offer them little by way of return and only serve to saddle them with lifelong debt. This group is pushing for regulations that would protect students from these unscrupulous practices.

Accordingly, new program integrity rules have been introduced to maintain the quality of federal financial aid programs and protect students enrolled in vocational courses. The US Department of Education is hoping to curb these deceptive practices by looking into and rectifying loopholes in regulations that allow schools to pay recruiters based on the number of students they recruit and the amount the students have borrowed.

Even though federal law prohibits schools from offering financial incentives or commissions to recruiters, educational institutions still persist with this practice; and unless strict measures are taken to curb these practices, students from minorities and low income families will be the ones who bear the brunt of them and be saddled with debt for a lifetime just because they aspired to gain an education.

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