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Scenario 1

x

Admissions representative did not provide the graduation rate when directly asked, but said it is “very high.” The college’s Web site also did not provide the graduation rate.

x

Admissions officer was vague about graduation rate. She told undercover applicant that the last class had 16 people graduate, but did not say how many started.

x

Admissions representative told our prospective undercover applicant that student loans were not like car loans because “no one will come after you if you don’t pay.” In reality, students who cannot pay their loans face fees, may damage their credit, have difficulty taking out future loans, and in most cases, bankruptcy law prohibits a student borrower from discharging a student loan.

Scenario 2

x

Financial aid representative suggested to the undercover applicant that he not report $250,000 in savings reported on the FAFSA. The representative told the applicant to come back once the fraudulent financial information changes had been processed.

x

This change would not have made the undercover applicant eligible for grants because his income would have been too high, but it would have made him eligible for loans subsidized by the government.

College information and degree sought

6

DC – less than 2-year, Privately owned

Certificate – Cosmetology, Barber

7

FL - 2-year, privately owned

Associate’s Degree – Radiologic Therapy

86%

92%

78%

Students receiving Pell Grantsa

Students receiving federal loansa

74%

74%

Scenario 2

x

Admissions representative told our undercover applicant that barbers can earn $150,000 to $250,000 a year, though that would be extremely unusual. The BLS reports that 90 percent of barbers make less than $43,000 a year. In Washington, D.C., 90 percent of barbers make less than $17,000 per year. He said, “The money you can make, the potential is astronomical.”

Scenario 1

x

Admissions representative told the undercover applicant that the college was accredited by “an agency affiliated with the government,” but did not specifically name the accrediting body.

x

Admissions representative told the undercover applicant that all graduates get jobs. He stated that the president of the college would employee students in his local salons if they did not find work elsewhere.

Graduation ratea

Encouragement of fraud, and engagement in deceptive, or otherwise questionable behavior

Not reported

Page 22

GAO-10-948T

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