US Names Apollo Group, Corinthian, Kaplan In For-Profit Probe
04 Août 2010 - 5:23PM
Dow Jones News
Colleges operated by Apollo Group Inc. (APOL), Corinthian
Colleges Inc. (COCO) and Washington Post Co.'s (WPO) Kaplan Higher
Education unit were among the schools the U.S. Government
Accountability Office found provided "deceptive and otherwise
questionable information" to agents who posed as prospective
students in an undercover investigation of for-profit student
recruitment tactics.
Gregory Kutz, managing director of forensic audits and special
investigations at the GAO, produced details of the report at a
hearing of the Senate Health, Education, Labor and Pensions
Committee Wednesday. A version of the report, excluding school
names, was released Tuesday.
Representatives from four non-publicly traded schools also
encouraged applicants to falsify information on federal financial
aid application forms, recommending they commit fraud so the
students, and ultimately the schools, could receive more federal
aid dollars. Many for-profit schools derive upwards of 80% of
revenue from federal loans and grants.
The publicly traded schools, meanwhile, misrepresented
graduates' potential income and job placement rates and provided
misleading information on tuition and fees.
Shares of Corinthian Colleges were recently trading down 2.3% to
$8.54 after hitting a 52-week low of $8.26, while Apollo was up
0.3% to $44.96. Washington Post's stock was down 0.7% to
$425.22.
-By Melissa Korn, Dow Jones Newswires; 212-416-2271;
melissa.korn@dowjones.com
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