Beware of College Diploma Mills

College debt creates generations of indentured servants

“Diploma mills” claim they can provide a good college education and employment opportunities. They lie.

There was a time in American history that college was a solid investment in one’s future: That’s no longer true. If a student enrolls in a high-priced vocational diploma mill, the cost will not be worth the debt incurred.

The lowest of all “educational” institutions are the “diploma mills.” You’ll see a plethora of these companies’ advertisements during daytime television, most of which include some variance on the message Please apply for our financial aid. We want to give you money. There’s lots of money out there for you. The reality is that the “college” will make money and you’ll be stuck with the bill.

Students enroll in for-profit colleges under bloated promises, often obtaining bogus certificates from unaccredited institutions, take unaccredited classes that aren’t transferable to other schools. Along the way, they rack up tens of thousands in debt, which they often cannot repay.

For-profit school students’ debt, too, is huge. “Among students who earn bachelor’s degrees, the median debt at graduation of students at for-profits is $31,190, compared with $7,960 at public and $17,040 at private nonprofit institutions.” For-profit students make up 43 percent of all federal student loan defaults. Fully 40% of for-profit students default on their loans: one in five default within just three years—double the rates of students at other institutions.

One such institution promised a student that they included a complementary high school diploma. The student, believing s/he obtained a GED, tried to enroll in an AA program in computer science. The admissions counselor informed the student that s/he did not have an accredited high school diploma that met the college district requirements.

Diploma mills’ slick marketing, high pressure marketing, and loan “advisors” imply that their Homeland Security graduates will be eligible for jobs in high-security industries, such as the CIA, FBI, TSA, and the Border Patrol etc. The diploma mill advisors don’t let students know that Border Patrol and TSA positions don’t require a college degree.

The US Government Accountability Office released report about fraudulent and deceptive practices at for-profit (private) US colleges, which states:

Enrollment in for-profit colleges has grown from about 365,000 students to almost 1.8 million in the last several years. These colleges offer degrees and certifications in programs ranging from business administration to cosmetology. In 2009, students at for-profit colleges received more than $4 billion in Pell Grants and more than $20 billion in federal loans provided by the Department of Education (Education).

GAO was asked to (1) conduct undercover testing to determine if for-profit colleges’ representatives engaged in fraudulent, deceptive, or otherwise questionable marketing practices, and (2) compare the tuitions of the for-profit colleges tested with those of other colleges in the same geographic region. GAO investigators posed as prospective students at 15 for-profit colleges in six states and Washington, D.C.

All 15 made deceptive or otherwise questionable statements to undercover applicants. Four undercover applicants were encouraged by college personnel to falsify their financial aid forms to qualify for federal aid.

A student interested in a massage therapy certificate was quoted “a good value at” $14,000. The same certificate from a local community college cost $520.

Among the practices the GAO investigators recorded on hidden cameras:

• In California, a college representative encouraged an undercover applicant to change federal aid forms and falsely increase the number of dependents to qualify for grants.
• In Florida, an undercover applicant was falsely the college was accredited by the same organization that accredits Harvard. She was also told that no one would come after her if she did not pay her loans.
• In D.C., an admissions representative said barbers can earn up to $150,000-$250,000 a year. The Bureau of Labor Statistics reports that 90 percent of barbers make less than $43,000 annually.
• Representatives at four schools repeatedly told the applicants that they could not speak to a financial aid representative until signing enrollment forms and paying a small fee. In one video clip, a supervisor intervenes, questioning whether the applicant is really serious about going to school and improving his job prospects.

The GAO’s findings make it disturbingly clear that abuses … are not limited to a few rogue recruiters Chairman Tom Harkin (D-IA) of Iowa. The evidence points to a problem that is systemic to the for-profit industry.

For-profit schools have defended themselves by saying that the statistics are merely a reflection of their clientele base. Indeed, for-profit schools serve a disproportionate number of low-income students and students of color, many of whom are the first in their families to go to college and who rely on student loans to pay their tuition.

For-profit schools’ recruitment practices continue despite the exorbitant debt students occur despite the high default rates and despite the poor job-placement success rates. According to Education Trust, some for-profit schools have even begun opening their own loan offices to provide loans directly to students. A little money up front is nothing off the backs of for-profit schools; Apollo Group, which runs the University of Phoenix, posted a 43 percent increase in profits in 2009. (Impending regulation has hurt their stocks in 2010.)

These practices are endemic in the “for profit, diploma mill” industry. A better alternative to these scam artists is to intern in an industry that interests you. The medical, scientific, and educational fields, as well as green jobs, are the fastest growing industries. Most community colleges offer solid accreditation that won’t bankrupt you.

Mad Mike’s America wants to help others beware of scams. Have you contacted a diploma mill and experienced high-pressure tactics? Do you know anyone who has been ripped off by a for profit diploma mill posing as a college?

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