August 26, 2019 | From Daily Caller
Onetime employees of the University of Phoenix say the for-profit company conducted a potentially multi-billion dollar fraud on taxpayers by deliberately submitting false records to the federal government to enroll unqualified students and cash in on federal student loans.
Few single companies have the potential impact on the federal budget as the University of Phoenix (UOP). Attendees owed $36 billion in student loans, according to a 2015 Brookings Institute study. Only 28% of UOP borrowers have “paid at least one dollar of the principal balance on their federal loans within three years of leaving school,” according to the Department of Education (DOE) in 2017.
In legal documents and in interviews with the Daily Caller News Foundation, current and former employees described a corporate culture where “enrollment counselors” toil in call center-like environments. They said they were pressured to get anyone they could — including non-high school grads, who are generally supposed to be ineligible — to sign up for college, netting federal grants for the students and federal student loans that lined the company’s bottom line.
Some students are homeless and seemed unaware that they were being enrolled in college by salesmen, while others were aware of what they were doing but had no desire to actually be college students, the current and former employees said.
UOP is a for-profit college owned by Apollo Global Management, a private equity firm whose chairman, Leon Black, was close with Jeffrey Epstein, according to Bloomberg.
At its peak in 2010, the online school had 470,800 students, according to Dahn Shaulis, an education expert who compiled the figures from investor disclosures. Only 15% of UOP students actually graduate within six years, according to DOE data.
Seventy-five percent of black students who attended for-profit college but did not complete it defaulted on their student loans, the Center for American Progress found. . . .
‘They say: If you’ve got a pulse and a Pell, you’re in’
In a lawsuit that settled in April, a former UOP enrollment counselor in Ohio, Arthur Green, described techniques he says the school uses.
The school allegedly targets impoverished people, some of whom express little desire to get an education, and encourages them to sign up for the college, which has no testing or admissions criteria, Green said. UOP sometimes emphasized that people would receive a laptop if they signed up.
As part of Green’s case, numerous enrollment counselors said they were pressured to admit and secure loans for students who didn’t have a high school degree or GED by submitting applications that said they did. The company previously acknowledged as part of another lawsuit that it performs no verification, but merely records whatever answer applicants put on a form.
“People wonder, how does one college get 500,000 students? What is the secret sauce?” Green told the DCNF. “And it’s simple: No GED, no problem. They say: If you’ve got a pulse and a Pell, you’re in,” he said, referring to eligibility to receive the federal Pell Grant.
The Department of Education paid UOP $1.2 billion in Pell Grants alone between 2009 and 2015, according to USAspending.gov.
Green’s lawsuit says UOP monitors employees’ emails, punishes whistleblowers and falsifies documents in its relentless pursuit of federal student loan cash.
“In April 2011, UOP learned by monitoring emails that [Green] was considering ‘blowing the whistle’ on UOP’s illegal activities relative to their knowing enrollment of and falsification of loan documents for individuals that did not qualify for financial aid,” it says.
“Within hours, UOP ordered every employee of UOP to ‘power down’ their computers ‘for routine maintenance,’” it continues. “When the employees were allowed to return to their computers, various evidence of UOP’s intentional violation had been removed.”
Waiting for a check
So-called students have learned to turn college loans into cash, with education sometimes simply an afterthought, UOP employees told the DCNF.
The biggest appeal for many is the Pell Grant from the federal government, they said. As a grant rather than a loan, it goes straight to the student in the form of a check that does not have to be paid back.
Pell Grants amount up to approximately $9,500 for freshmen and $5,000 per year after that. Meanwhile, the school also collects subsidized federal loans in the student’s name — loans that they are obligated to repay, but which at UOP are often defaulted on at a loss to taxpayers. . . .
The money arrives after five weeks, and at UOP, students take a single class at a time, five weeks each. Their first class is about how to take online classes, and the second one is a remedial class about how to use a computer.
“So you just take an online class that about how to take online classes and then you’ll get $5,000. And if you know basic English, you can hang on and get another $5,000. All the students will request the maximum loans and our paperwork is set up that way, so they’re super happy,” said a current enrollment counselor who spoke on condition of anonymity to protect her job, and who the DCNF will refer to as Jane.
Attendance is mandatory to get student loans, but UOP simply requires students to post any response to an online message board twice a week, Jane said. She said respondents’ academic work often appears to be sent from cellphones and uses texting jargon. . . .
The money is disbursed twice a year, and “some of them keep going until they get the second disbursement,” Jane said. “They’re not actually taking college seriously or even hardly thinking about it. They’re attending so they can get $4,000 to $5,000 of financial aid and buy a car and do whatever they want to do.” . . .
“UOP does no cross-checking of HS diplomas or GEDs, zero. You don’t need proof. There are communities of people who know that and go to UOP for that reason … to pick up a financial aid check,” she said.
Enrollment counselor Travis Edward Wills of Perry, Ohio, said in a court document as part of Green’s lawsuit: “Students often requested enrollment more than one time and often spoke to different enrollment counselors.”
Green denied one student for having no GED. Two weeks later, the same student told Wills he had a GED, and he was admitted, according to Green’s lawsuit.
Enrollment counselors subtly guide students to write what they need to on the form, according to Jane. . . .
Green’s lawsuit says UOP managers “train their enrollment counselors and students to falsify the loan applications of students who do not qualify.” The lawsuit names students whose applications managers allegedly told counselors to falsify or look the other way while students did so. Green’s manager Dwane Newsome, the lawsuit claims, told Green he was in “no position to turn away students.”
While Green has agreed not to speak about the case, the DCNF interviewed him before he entered into that agreement. Green told the DCNF these students are unlikely to benefit from UOP’s curriculum. . . .
[The University of Phoenix has hidden] behind rhetoric around compassion and identity politics to shield itself from criticism of practices that have enriched it at the expense of taxpayers, he said. “You’re going to work under the guise of helping people. What if Enron could have said it was helping people?”
“You hear it all the time: They’re a first-generation college student, they need a special hand. Well, they’re not going to classes and they’re likely going to default on their student loans,” Green said. . . .
A federal judge slammed the Department of Education (DOE) in July 2016 [during the Obama Administration] for ignoring evidence that UOP admits students without GEDs.
(Excerpted from Daily Caller, article by Luke Rosiak.)
[Many American families struggle to pay for college for their hard-working, qualified students. With the massive waste in government programs (and the awards of student aid to non-citizen students–many illegal), it isn’t any wonder that college costs are sky high, and a pocket of middle class and upper middle-class students simply cannot afford it today. Pray for changes in the college funding and costing processes. Pray for our universities–many exporting far-left values at the expense of taxpayers.]