CNN did a special report on for-profit colleges and the risk students face of getting into deep debt with questionable degrees. A former Westwood student was profiled for the story. The reporter also examined the findings of a recent Senate investigation report which exposed systematic deceptive recruiting practices at several for-profit colleges.
Here’s an excerpt:
Dane Lockman saw a commercial advertising Westwood College while watching late-night television. The then-29-year-old single father, with a budding interest in web design, decided he would be the first in his immediate family to attend college. By October 2006, he was enrolled in the for-profit institution to complete a bachelor’s degree in graphic design. To pay for school, he took out $40,000 in private and government loans.
We’re sure that sounds familiar to many of you. Click here to read the entire CNN story.
As so many of you know, and as a Senate investigation recently confirmed, many for-profit colleges are roping in students with deceptive marketing and aggressive sales tactics, providing substandard training, and leaving students deep in debt they can’t pay back. Efforts are underway to try and change that.
The Department of Education recently proposed a rule that would require for-profit schools to prove students are getting jobs that make it possible for them to pay off their loans. The proposed “gainful employment” rule is a good start, but many student advocates don’t think it goes far enough. Not surprisingly, the for-profit college lobbyists are trying to weaken the rules.
Here’s where you come in. You can go to this website to make sure your voice is heard. The site, operated by a non-profit student advocacy organization called The Institute for College Access and Success, has a form that makes it easy for you to send in your comments. Public comments are being accepted until September 9th, so time is running short. Click here if you’d like to send in your comment.
You can also submit your comments at www.regulations.gov.
Westwood College makes changes after deception findings Bloomberg News
Posted: 08/14/2010 01:00:00 AM MDT
Education Secretary Arne Duncan will step up oversight of federal student financial-aid programs after an undercover government investigation found deceptive marketing practices at 15 for-profit colleges.
Duncan vowed to expand the Education Department’s enforcement staff, conduct undercover probes and increase the number of program reviews, according to a letter to Sen. Tom Harkin, D-Iowa, that was obtained by Bloomberg News.
Denver-based Westwood College will begin paying admissions officials a fixed salary Aug. 21, part of a series of reforms adopted shortly after the investigation’s airing last week. Industry giant Apollo Group Inc.’s University of Phoenix already announced plans to do away with using admissions targets in paying recruiters.
The Education Department will hire more than 60 investigators and increase the number of program reviews by 50 percent after the inquiry by the Government Accountability Office, Duncan said in the letter, which was confirmed by the department.
“The unethical and potentially illegal practices uncovered by GAO are unacceptable,” Duncan said.
The Education Department’s inspector general will review the GAO’s findings and could refer individuals for criminal prosecution, Duncan’s letter said.
On August 11, we filed two new class actions against Westwood College on behalf of students. Many of you contacted us and asked how we were going to proceed following the clause construction award issued in the class arbitration. We appreciate your patience. This is the next step.
Contreras v. Westwood Apex, et al. was filed in the Superior Court of the State of California in San Bernardino County on behalf of current and former California-based students. Bernal v. Burnett, et al. was filed in the United States District Court for the District of Colorado on behalf of current and former Westwood students nationwide.*
More than 700 of you have contacted us and spoken out about Westwood’s deceptive practices and the disastrous impact they’ve had on your lives and families. Over 50 former Westwood employees have reached out and confirmed your complaints. Your strength and determination to right the wrongs to which you’ve been subjected, and to ensure that others don’t suffer the same harm are inspiring. We don’t just see these as cases, but as a cause to advance your claims and remedy the injustices which have damaged you all. And judging by the evidence and testimony concerning Westwood’s fraudulent practices presented by the federal government, a former Westwood employee, and Westwood’s own accrediting agency at last week’s Senate HELP Committee Hearing, we’ve only scratched the surface. We’re determined to fight for your day in court and to have a judge hear your case.
(Undercover video from 15-School GAO Investigation)
Both class actions allege deceptive practices concerning: tuition, fees and costs, financial aid, quality of education, accreditation, transferability of credits, expected salaries, and job placement statistics and opportunities. In both cases, we’re seeking full refunds for students and injunctions against Westwood’s continued use of deceptive practices. As always, we’ll keep you informed as the cases move forward.
If you’d like to read the class action complaints and exhibits, you can download them here:
If you have any questions, please don’t hesitate to contact us.
Attorney Jonathan Cohen
* The Colorado class action does not include California-based students or Texas or Wisconsin-based online students because separate class actions are pending in California, Texas and Wisconsin on behalf of these students.
Most importantly, YOUR experiences are going to be heard! Joshua Pruyn, a former Westwood College admissions representative, will testify before the Senate about what he witnessed as an employee of Alta Colleges and Westwood College. Joshua is the only witness who actually worked in the recruiting center of a for-profit college, so his testimony will be invaluable. You may recognize Joshua’s name from the expose by ABC World News in August 2009. Joshua bravely spoke out about his experiences to ABC correspondent Brian Rooney and has continued to be a strong advocate for students by revealing the inner workings of Westwood’s recruiting tactics.
This is the second in a series of hearings that will take place. The first hearing — titled “Emerging Risk? An Overview of the Federal Investment in For-Profit Education” — was held on June 24, 2010. That hearing included testimony by hedge fund manager Steve Eisman, who stated, “Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive as the subprime mortgage industry. I was wrong. The for-profit education industry has proven equal to the task.” Testimony like Eisman’s led to a vow by a contingent of senators to crack down on “bad actors” in the field.
As we’ve discussed before, these hearings are largely attributed to the work of Senator Tom Harkin of Iowa. Sen. Harkin, the chairman of the Senate HELP Committee, has taken a vocal stance about the improprieties and potentially devastating consequences of aggressive recruiting by for-profit colleges. If you live in Iowa and wish to share your story with Sen. Harkin or just express your thoughts on his efforts to protect students, you can contact him here. If you live anywhere else, you can locate your senators’ contact information here. It’s extremely important to share your stories and tell them how you think they should vote if any new legislation is presented to regulate for-profit colleges. Now more than ever, senators are going to be listening to your stories.
The hearings will be live-streamed on the HELP Committee’s website, so tune in at 10:00 a.m. EST if you’d like to watch.
We have an update on the class arbitration filed with the American Arbitration Association in May 2009. On July 16, 2010, Arbitrator William Baker denied our Motion for Clause Construction, which means he determined that the language in the arbitration agreement, which you had no ability to negotiate, permits individual arbitration only. The arbitrator’s decision was based upon a recent ruling by the United States Supreme Court in the case of Stolt-Nielsen, which resolved a dispute between two sophisticated businesses as to whether an arbitration agreement permitted class arbitration.According to the arbitrator, the absence of any direct reference to class arbitration means there was no agreement for students to arbitrate as a class.
Arbitrator Baker’s decision was not based on Westwood proving or disproving anything. It was purely procedural and did not address the allegations of deceptive practices and violations of Colorado lending laws or determine they were unfounded or lacked merit. We believe that applying Stolt-Nielsen to a dispute between consumers, like students, and a major corporation, like Westwood, is unfair and wrong.
Nevertheless, we see the arbitrator’s decision as a positive one, aside from the fact that it delayed the ultimate resolution of students’ claims. Now that students are freed from continuing in arbitration, they can and will proceed to litigate their claims in a variety of forums, including district courts across the country. We assure you that the fight will continue, and we will not rest until Westwood is held accountable for its conduct.
In the meantime, the other class actions we filed against Westwood in federal and state courts in Texas and Wisconsin are being vigorously prosecuted. Both cases are based upon Westwood offering online programs in violation of state law. For students who did not attend online programs in these two states, a new plan of action will be revealed soon.
If you have questions, please do not hesitate to contact us.
We thought you’d like to hear about someone who is trying to help students facing problems at for-profit colleges.
Senator Tom Harkin
Senator Tom Harkin of Iowa is becoming a champion for students who’ve voiced concerns about their experiences at for-profit colleges. The Senator wrote an editorial for the LA Times cautioning that the scenario students are facing is painfully similar to the recent mortgage meltdown. Harkin is Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee and launched the first in a series of hearings last month to investigate the for-profit college industry. In his editorial, Senator Harkin quotes one of the witnesses who testified, Wall Street money manager Steve Eisman, who predicted the sub-prime mortgage collapse:
Wall Street money manager Steven Eisman told the committee that many for-profit colleges are “marketing machines masquerading as universities.” Their rapid growth is driven by easy access to federal student loans, guaranteed by the government. “The government, the students and the taxpayer bear all the risk,” Eisman testified, “and the for-profit industry reaps all the rewards.”
Senator Harkin goes on to point out just how great those rewards are proving to be for executives at for-profit schools:
The president of the largest for-profit college is paid nearly 14 times the compensation of the president of Harvard University.
Meanwhile, he writes students are often left in an even worse financial position with little recourse:
Subprime borrowers were able to walk away from their homes and, therefore, their debt. But it is a different story for millions of students who take out loans to attend for-profit colleges. Under the law, people cannot discharge student debt in bankruptcy; so if they can’t pay it off, it will continue to accrue compounded interest indefinitely.
Click here to read more from Senator Harkin’s editorial.
Be sure to continue speaking out and sharing your story. People are beginning to listen.
Robert Shireman, Nicole Mayer, Dr. Julianne Malveaux
Hi everyone,
I’m Attorney Nicole Mayer. I’ve been working on your case with Jillian Estes since the beginning. This weekend, I was a panelist at an important education conference in Chicago hosted by the Rainbow Push Coalition. I had the opportunity to discuss your concerns about student loans and for-profit schools with some wonderful people. Among them were the Deputy Undersecretary of the Department of Education Robert Shireman and President of Bennettt College Dr. Julianne Malveaux. (see picture)
It was inspiring to see so many people stand up and advocate for students. After listening to everyone speak and talking with other panelists, I really believe that big changes are coming. Part of this can be seen by the rules released by the Department of Education today which are designed to protect students from aggressive and misleading recruiting practices.
There is still a very important rule up for discussion, the one that requires schools to show that their graduates achieve “gainful employment.” The for-profit schools are lobbying hard against this, so everyone who wants to see a change will need to be active. So, keep telling your stories. We will make a difference. I will keep you posted on what you can do to help make sure that rule is passed in a way that protects students.
Congratulations go out to Attorney Jillian Estes, who many of you know well on this website.She is, of course, the attorney who has been your lead advocate in the suit against Westwood College.And now, Jillian is also a new mom.Jillian and her husband, Sean, are proud to announce the birth of their first child, a 10 pound, 3 ounce baby boy!Mom and son are doing well.Jillian will be a little busy at home for a while, but she’ll continue to read your e-mails and monitor progress in the case. Meanwhile, the rest of our legal team will continue to work hard on your behalf and keep you updated on developments. Please join us in wishing the Estes family congratulations.
A couple of very important pieces of information have been announced this week that raise concerns for students regarding the status of Westwood College. Both of these updates are tremendously important for current students of Westwood and for former students who are ready to continue sharing their experiences. The most important thing to remember while reading these updates is that you ARE being heard! So keep speaking up, keep telling your stories and you will keep making a difference!
