Alen Janisch aka CRI, Retreats to Personal Bankruptcy

For those of you who are not familiar with Court Reporting Institute, Inc. aka CRI, then I suggest the CRI saga website. CRI was basically Alen Janisch adorned with the vestiges and protections afforded by corporate form. Mr. Janisch operated under the guise of CRI, which masqueraded as a educational institution when in reality it was a vehicle for defrauding students, in essence a Venus fly trap, as detailed in the numerous complaints which were sent to the Workforce Training and Education Coordinating Board, a veritable roach motel where only 6% of the students escaped aka graduated and only 1% of those were actually working in the court reporting field.

After 18 years, the Washington State Workforce Board refused to renew CRI/Janisch's license to teach court reporting, then CRI/Janisch was the subject of a distinctly unfavorable article in the Seattle Times and students left in droves. Janisch/CRI closed its "stores" and then when it became clear that its pursuers would not stop...well, pursuing, CRI declared bankruptcy. At the first bankruptcy hearing Janisch declared that CRI had no assets. Hmmm, it turned out that Janisch had withdrawn almost a million dollars out of "CRI" immediately prior to its "fiscal" demise as he admitted in his deposition. The Bankruptcy Trustee promptly filed a lawsuit against Mr. Janisch himself and then moved for summary judgment, to force him to return the money and now, possibly to evade that obligation, he has declared "personal" bankruptcy. Actually CRI/Janisch owes a lot of money.

In his personal bankruptcy filing Janisch states he has around $10,000 in assets and around $10 million in liabilities. Actually, these are debts that CRI incurred. Mr. Janisch's 2837 listed creditors, parallel, surprise, CRI's and include approximately 2800 students who attended his ... enterprise. Ironic when you are seeking to discharge obligations students might have AGAINST YOU. One would think that you SHOULD OWE the students. Guess he listed all those students since 13 of them are suing him and the bankruptcy automatic stay will stop that civil action. Perhaps he was expecting, and rightfully so, those other 2782 to sue him as well. After all, he still owes them money or an education. He took the former and never gave the latter.

For-Profit Education is Just Like Any Other Business?

There has been some controversy over University of Irvine at California and Capella University's agreement that Capella will pay UCI $500 for each student that transfers to Capella University...a marketing fee, consulting fee, cost reimbursement fee, fee split, bounty, kickback, depending on what how you feel about such arrangements. UCI is a public, non-profit institution and Capella is a for-profit private university.

I got into a vigorous discussion/debate with another "blogger" as to how this situation should be treated in an online encyclopedia. That person felt that because the US Department of Education's declared that such an agreement was legal, it was therefore ethical, as if its legality precluded any inquiry into its morality. I pointed out, that credit card companies can legally charge 20% interest rates to their customers, and banks can legally charge $35.00 for overdrafts, and mortgage companies can legally offer home financing with ARMs loans which contain time bomb rates which ultimately explode on the unsuspecting users. The legality of these practices have not precluded or eclipsed discussions on their morality.

When I pointed out, that, as the article cited, there are those who view such an arrangement as making the student a commodity, an object to be traded upon and profited from. This person cheerfully replied that if the agreement treated students as a commodity that was what they are. Students were recruited to attend certain schools, both non-profit and profit, to pay tuition and spend money. Thus they were a "source of production and income." Well, I do not agree with such a statement and see it as one of the biggest problems with for-profit education. They see students as merely commodities and nothing else.

I feel such practices as a school paying another school to refer it students as a conflict of interest and is not ethical. I do not see students as commodities but as consumers of a very valuable and special service, to wit, education. Education is not your ordinary consumable product, like a car, or a sofa. My opinion is that access to education is on a par with access to medical care and legal services. There is a duty that is owed to a patient by a doctor and duty that is owed to client by a lawyer and a duty that is owed to a student by an adviser or school. I feel that they are morally equivalent. Of course money enters into the equation and there are conflicts of interest in the law and medical fields but it is frowned upon and when they are discovered they are news and controversial unlike what might happen in any other "business" where there is no particular duty owed to the "consumer". Education, like health care and legal services is a quality of life issue. It is the key to economic advancement which contributes much to the prosperity of society. When students are treated as "marks" or commodities or persons to profit from, I don't believe that's ethical. Offering kickbacks, marketing fees, referrals or whatever you want call them, has a great potential to obscure the true role of advisers which is to advise the student for the student's sake, not for how much money or profit can be made from them. The practice raises the distinct possibility that students are getting advice which is more dependent on how much money can be gained from them rather that what is truly in their best interest.

My "antagonist" was not completely deterred and stated that paying a school is merely a marketing fee and is a good business practice. Now if Capella was running some other kind of business, maybe it paying another school to refer students to it, would not be controversial, however, they are running a school which is funded by money from the federal government aka the tax payers, so they are going to suffer more scrutiny than a car lot dealership and rightly so. A good business practice for Mercedes Benz is not not necessarily a good business practice for a school!

And that's the problem, many of these for-profit schools are just businesses spewing out diplomas, certificates and degrees like so many cars and interested only in profit with no regard for the desires of the customer. Moreover, they are profiting not only at the expense of the student but at the expense of society and the federal government which underwrites their forays into designer education.

So I Called Herzing Myself

So, I called Herzing College as it was suggested "I" do. I had never called a for-profit school before and it was a very interesting experience. Not unlike calling a car lot or a health club, but more on that later. The deal that the person I spoke to you told me, after checking with the project manager, was that this school has "made a deal with Crown" (aka John Wabel) to accept all of Crown's students; credits. He also pointed out that I would "have a hard time" finding any school to accept Crown's credits, a fact that I was already well aware of. The deal is, as I was told, was that the discount -- wherein Herzing would lower its tuition to that of Crown's and provide free textbooks and software, was only available if the student started this "fall" semester.

Herzing College is not the first for-profit school to accept Crown's credits. University of Phoenix has accepted them for some time. However, many students were induced to go to Crown by misrepresentations made by Crown College admission representatives that there credits would transfer to schools such as public University of Washington and other schools which cost considerably less than Herzing or University of Phoenix. So the fact that Herzing will take their credits, though fortuitous, does not undue the fraud that visited upon them.

Herzing College Responds

An anonymous post was posted in response to a blog article presumably from somebody at Herzing College and I wanted to respond to it. The author of the newspaper article referred to in the "anonymous" post did not ascribe any malicious intent to Herzing, as far as I read. She did report that a current Crown student who presumably contacted Herzing was concerned that all her credits would not be accepted, and more importantly that the school would cost more money than Crown College. As I understand it, the reporter did attempt to contact the school and did not receive a response. The publisher of the blog article also attempted to contact the school and was unsuccessful. The publisher of the blog article did speak with a person who had contacted Herzing College and the person that person spoke to was reluctant to talk to her about specifics concerning Herzing's accepting Crown students.

It is therefore possible that Herzing College initially did decide to accept all credits for which a "C" or better had been earned, reduce the amount of tuition it was charging and offer complimentary software and books to the students who are currently enrolled in Crown and this "offer" was not prompted by the publishing of the second Tacoma News Tribune article and, consequently Herzing never "changed" its position. It is just that nobody was able to ascertain Herzing's position though valid attempts were made to do so.

The author of the blog article, well me, did suspect that Herzing College "changed,", "clarified," "redefined," its position because of the second article. I also suspected, and still do, that their decision to accept Crown College students is not totally altruistic and that their motivations partly revolve around generating name recognition for the school and an influx of revenue, aka students. That in and of itself is not necessarily nefarious and there may be few purely altruistic decisions any commercial enterprise makes. I believe that Herzing's decision to accept all the credits of Crown's College's students' and offer them such favorable terms is puzzling in light of the checkered history of Crown College. I do not believe that this "opportunity" is being extended to non-current Crown College students who have already graduated or quit. Thus, this offer could be a loss leader and they hope to entice former Crown College students to attend there school on terms more profitable to them. Those students will still not be made "whole" as many had hopes of continuing their education at non-profit public universities which cost a good deal less than the likes of the few known schools willing to accept Crown College credits for transfer, including Herzing College.

This blog is about for profit education and what I personally feel is the inherent conflict of interest in any institution that is resolved to provide an education AND make a profit doing it. Many for profit schools, including many of the bigger "players" have been routinely accused of, sued for, and/or settled allegations accusing them of misrepresenting their accreditation, placement rates, facilities, licenses, faculty, transferability of their credits in order to induce prospective students to enroll and stay enrolled so they are able to profit from the revenue derived from them.

However, I have not been able to locate any such allegation, complaint or lawsuit about Herzing College. They are also one of the few for-profit education schools who have are regionally accredited so, they will theoretically not suffer from the "transfer of credit" blues. If they are a purely a white knight, the are to be commended.

Herzing Will Now Accept All Crown College Credits From Current Students

In an earlier Tacoma News Tribune Article, a student stranded by Crown College's loss of accreditation lamented that, despite John Wabel's assurances, Herzing College would only take a portion of her credits and that it cost more than Crown College. Thus, she would have to attend Herzing College for two more years before she received her Bachelor's degree and borrow more money.

It appears, that in response to that article, Herzing has "reversed" course and now, as reported in a follow-up Tacoma News Tribune story, Herzing states that it will accept all the credits of Crown College students currently stranded by Crown College's closure as long as they are earned a "C" or better which is standard practice for transfer. Also, Herzing will charge them reduced tuition and give them complimentary software and books.

Hmmmm, it would appear that Herzing changed (or clarified) its position not out of some kind of everyman, altruistic concern for the academically shipwrecked students but out of perhaps embarrassment at the previous story which appeared to contradict the first reports that they would take all the credits. They are after all a for-profit institution so unfortunately, their motives are suspect. This is an opportunity for them get an influx of students and some name recognition. It also displays the power of the media. Had the Tacoma News Tribune not published the story of the Crown College student whose credits were not going all be accepted and the higher tuition, would Herzing College have changed their position? Somehow I do not think so.

However, the end result will be that the last batch of Crown College students will be the most fortunate inasmuch as they will end up with a credits and degrees from a regionally accredited institution making them truly transferable to most institutions. Something none of the previous 17 years of Crown College students had despite the fact that many admission representatives told them that. Ironic, that they are saved by Crown College's demise! Truly ironic.

Crown College Key Employees Investigated for Financial Aid Fraud

As the Seattle Times reported, federal investigators suspect several Crown College employees of financial aid fraud, conspiracy to defraud and bank fraud. The Department of Education, Office of Inspector General served a search warrant on Crown College and seized records, a lot of records as the returned search warrant details. Apparently, some clever Crown employees, when they suspected that Crown College was going to close, applied for federal loans and grants though they were not and had no intention of attending classes. They figured that once Crown closed the loans would be discharged under Department of Education rules governing school closures and they would retain the funds thus unjustifiably enriching themselves. Unfortunately, Crown did not close when they thought it would, so they dummied up documents giving the appearance that they were attending the school.

Well considering how these employees excel in contriving documents and lying to prospective students, (Read the Declaration of Adrienne Rocco, a former admissions representative and her complaint to the ACCSCT) this was easy enough for them to do. Especially since many of them lack a moral compass, traits that made them quite valuable to school whose profits were premised on lies. There are a few honest employees at the school, as misplaced as they are, and one of them reported the fraud to the HECB which reported it to the Department of Education.

Mr. Wabel informed the Seattle Times that he was unaware of the investigation and declared that the perpetrators were innocent. It seems that Mr. Wabel, as is his habit, was looking the other way, or perhaps behind his back (as he is in the above picture of a Crown College employee get together). However, the affidavit filed in support of the search warrant strongly implies that Mr. Wabel was indeed aware of the investigation, notwithstanding his statement to the contrary. Moreover, the affidavit cites a kaleidoscope of evidence pointing to the potential culpability of all the Crown College administrators named in the search warrant which include Sheila Mullineaux, the director of the school, Jesy McMullin, the senior admissions representative (who allegedly lied about the transferability of Crown credits to several former Crown students), Misty Lee, the financial director and Jennifer Byers, the business manager.

Mr. Wabel is quoted as saying that the employees listed in the warrant "are good at what they do." Would that be lying and stealing? The fact that some of the most trusted, and senior administrators at Crown might endeavor to defraud the federal government simply because they felt that they could get away with it, shows you how casually they could defraud the very students who depended on them for guidance and truth. It might well be why they rose so high in the organization. Mr. Wabel has to be proud of his employee selection process!

BCTI Former Owners Trying to Appease the Masses?

This article in the Oregonian talks about how BCTI's owners have tried to cooperate with authorities in paying back sums owed and signing off on their insurer paying 9 million to the class action plaintiffs and allowing the plaintiffs to go after another 50 odd millions. The interesting part of this article is the Declaration of former BCTI career consultant Lonna Walden. She details the way BCTI operated and the many "stoogents" they signed up:

"During the time I was at BCTI, I enrolled people who were disabled, people who were poor, people who just got out of prison, Level 3 sex offenders, domestic violence victims, people that were simply less fortunate where life had been a rough road for them including individuals from the Department of Social and Health Services (“DSHS”) and Behavioral Health Rehabilitation (“BHR”). For example, Perry Bulkley had a severe head injury and was disabled. I asked Mona Lawrence upon his enrollment where we could possibly place him upon graduation. She said that she had a place called “Morningside” that hired people with disabilities. Since I left BCTI, I have seen Perry standing aimlessly on street corners in the Lacey area." Decl., page 3, para. 8. Her declaration shows that BCTI was geared to enroll whatever students it could enroll with no regard to educating them whatsoever. This, of course, completely contradicts, the protestations of innocence of BCTI's owners, Tom Jonez (pictured in his new job running a Christian ministry) and Morrie Pigott. Ironically enough, Jonez and Pigott met at a Christian youth ministry in the 1970s according to the Tacoma News Tribune article by Dave Wickert.

It certainly makes one wonder what kind of Christianity they were practicing! Of course, they are adamant that they did nothing wrong, that the enrollment contracts specifically emphasized that they did not promise any student a job. Again, the reliance on the written contract which somehow nullified all the verbal cajoling and promises of jobs!

John Wabel, Humanitarian to Students ... In His Dreams!

After recovering from laughing so hard at the quote "not a dry eye in the building" in the Seattle Times article referring to the state of Crown College's shuttered employees I was confronted with the Tacoma News Tribune article which quotes John Wabel (pictured with Randi Jones, Director of Education, left, and unknown employee) stating that "That is the only thing that mattered to us then, and it's all that matters now," referring to his efforts to assist students in jumping from the wrecked ship that is Crown College. Strange that he is attempting to help the students now, when he could have provided them much more assistance in not lying to them when they first had the misfortune of crossing the "virtual" threshold of his school and getting their "virtual" education. Instead he and his admission representatives lied about the accreditation of the school and the transferability of their credits. Ironically enough, Mr. Wabel was quoted in a Seattle Times article: "Crown College owner John Wabel remains adamant that Crown credits transfer in many cases." However, if the credits transfer "in many cases" he wouldn't have to be scouring the nation to find a school that accepts them now, so far locating only an obscure online school in Wisconsin which apparently will not take all the credits.

Mr. Wabel laments that his school was closed by the ACCSCT as opposed to the ACCSCT trying to help him place more students in jobs. Mr. Wabel does not identify how the ACCSCT was supposed to assist his school. However, this a continuation of Mr. Wabel's attempt to shift the blame for his own shortcomings. Now its the accreditation's agency's fault that the education that his students pay so dearly for, is inadequate. When he was sued successfully it was the plaintiff's fault. In fact, he is quoted in the article as calling her a liar:

"It did not happen," Wabel said. "We are not wrong, and it sets a precedent for the entire industry. Anybody can make up a story, but what is in writing?"

Well I guess its sets a precedent for the part of the industry -- and for-profit education is indeed an industry -- that lies to its prospective students, which is, well most of the industry. The for-profit education industry is notorious for having admission representatives tell ever increasing fibs about key aspects of the school which are disavowed by the contract. These students who tend to be trusting and somewhat naive, tend to trust the admission representatives who they assume are there to assist them.

John Wabel's Fantasy Land - More on Crown College Closure

Reading Crown College’s press release regarding its closure is hilarious as it speaks of “being removed from the ACCSCT’s list of accrediting schools” in terms most clinical. It's as if losing its accreditation was a coincidental occurrence devoid of any negative connotation attached to Crown College itself. It was if they left the accreditation on the top of their car as they drove off and it fell off, just a happenstance, an unfortunate accident. According to article today in the Tacoma News Tribune, the revocation of Crown's College accreditation by the ACCSCT was the result of Crown's failure to place enough (70%) of the students in the fields they were training for. Thus, one could reasonably conclude that Crown's curriculum, facilities and/or faculty were inferior. Or, it could also be their reputation was such that employers were reluctant to hire their graduates.

The "management" of Crown, attribute their loss of accreditation to the supposed "turmoil" in education and Crown’s lack of nimbleness and finances. It is hard to understand how "turmoil" in education or nimbleness is relevant to their inability to place 70% of their graduates in the jobs they are paying Crown to train them to fill. However, the lack of finance might well be at fault, inasmuch as not enough money is going into the process of education vis a vis promoting or inducing students to attend. The amount of money charged, $17,000 a year for a truncated, quickie education program should pay enough for a good education considering how much less community colleges charge. Perhaps that money was not being properly utilized? More likely that money was obviously not being properly utilized! It was going into John Wabel's and Sheila Mullineaux's collective pockets instead of to a sound system that worked. The fabled Cloudroom that Mr. Wabel totes as so innovative has never worked right according to many of the students I have spoken to.

Crown College Loses ACCSCT Accreditation!

Finally, it has happened, Crown College's accrediting agency the ACCSCT could not ignore the antics and misadventures of John Wabel and Sheila Mullineaux (both pictured) and their merry gang of deceitful thieves who have been running a reverse Robin Hood scam, stealing from the poor and giving to the rich, mainly themselves. They have systematically instructed their admission representatives to lie to students about the transferability of their credits since at least 1998. About 50 victims of this fraud have come forth and the testimony of ten of them was instrumental to the jury finding that Crown College had violated the Consumer Protection Act in early 2006. It takes a "special" person to blatantly lie repeatedly to poor students who are attempting to improve their economical standing. A letter from the ACCSCT dated July 31, 2007, that it has revoked Crown College's accreditation. Unfortunately, many of the students that they swindled will not get their day in court or any other recompense. One of the reasons that Crown College was able to get away with their little charade was because they fell into a regulatory crack. Since they granted degrees the were not under the auspices of the WorkForce Board. Since they had been operating in Washington state for some time accredited by an agency recognized by the Department of Eduction, to wit, the ACCSCT they were exempt from the HEC Board. By virtue of the ACCSCT pulling their accreditation, they have lost that exemption. If they "reopen" they will have to apply to the HEC Board for approval. Hard to see how they will merit such approval and if they do, the HEC Board will certainly by a more stringent master than the ACCSCT and will not put up for their deceptive practices.

Hmmm, does that mean that regulation works, well eventually maybe and helped out by other factors, mainly a trio of successful lawsuits and the resulting mass of bad publicity. The ACCSCT has had Crown College on probation more times than Alan Sandler had bad dates. In fact, they were on probation when they were first sued back in January of 2006. A Pierce County jury found that they had violated the Washington State Consumer Protection Act and the judge awarded a $6,000 judgment and $77,000 in attorney fees. They settled another lawsuit for $87,000. Those lawsuits shined a decidedly unflattering light on the school. According to an article in the Puget Sound Business Journal, this may well be the final demise of a school which was built on not too subtle lies and deception.

There is an article in the Seattle Times about Crown College closing. I thought I might die from lack of oxygen, it being very difficult to breath while laughing. "Not a dry eye in the building." Who knew that crooks could cry, well apparently when it comes to be separated from their money. I wonder how many dry eyes are among their many student victims. Sheila Mullineux talks about how they are the Little Engine That Could School which is apparently the party line. In reality, they are a school that has generated money based completely on lies and they have lied with astounding impunity and a disregard for reality that is astonishing in its scope. They have probably built up such an immunity to truth such that their tongues might break out in sores if they spoke it! John Wabel denials that Crown's admission representatives lied to prospective students ratchets up in direct proportion to the evidence they they did. At the Gonzalez trial, one of the jury members told me that Mr. Wabel was his own worst enemy and he continues to be. In a Tacoma News Tribune they claim they will do some restructuring and reopen. Perhaps they mean the installation of truth monitors...

Approximately 50, and counting, former students have come forward and told attorneys or news media that they have been told by Crown College admission representatives that Crown College's credits would transfer to regionally accredited schools. Crown lost one lawsuit and settled two. There are two more pending lawsuits right now. Dale Pryor v. Killebrew/Dalton, Inc., John Wabel and Sheila Mullineux, Pierce County Case No. 07 2 060885 and Roberta Swigert and Janelle Page v. Killebrew/Dalton, Inc. and John Wabel, also in Pierce County Superior Court. In the second lawsuit, the plaintiffs have schedule a motion for default as the defendants have not filed an answer.

Corinthian Colleges Settles California Lawsuit

One of the largest players in the lucrative "business" of for-profit education, Corinthian Colleges, has settled a lawsuit with the California Attorney General's Office. The hits just keep on coming apparently, leaving one wondering if there are any for-profit schools which are not attempting to cheat their students or marks. Corinthian will pay $6.5 million to settle a lawsuit "alleging" that the chain engaged in deceptive business practices by lying about their job placement record. This is an extremely common practice among for-profit schools, along with lying about accreditation or the transferability of credits, ala Crown College or Florida Metropolitan University. For-profit education's business model favors the bottom line at the expense of the students and thus is fatally flawed. There is a press release from the California Attorney General's Office which includes a copy of the complaint and the final judgment. There are so many instances of students being fleeced by these schools that one might wonder if any of these schools are legitimate. When you have the leaders in the for profit industry admitting that they are lying about their capabilities, then can the others be far behind? The for profit education industry is very much like the health club industry according to this article about American Intercontinental University.

For-Profit Education Regulation Failure

This article in the New York Times, illustrates how easy it is for black opps entrepreneurs such as Robert A. Berger, to weave their way through the blind spots between the for-profit regulatory triad which consists of state, federal and accreditors. There are many businessmen who see for-profit education as a way to make profits with no regard for the welfare of students or the quality of education. This is interesting in light of what is going on in California and the tug of war between the for-profits and consumer advocates over how much regulation is proper. Obviously, after reading this article you would be left with the thought that there wasn't enough regulation or the regulating bodies need to do a better job communicating with each other. The Department of Education can disqualify a school from receiving aid which is of course the lifeblood of these schools, however, it cannot close them, it leaves that to the states. A particularly pernicious operator can exploit the system and this man was quite willing to do that, even requesting financial aid in the name of other schools when his school no longer qualified.

This story also shows how difficult it is close a for-profit school down, ten years in this case, even with the regulation that we do have and even with the outlandish acts of the perpetrator of this fraud. Dozens of students swindled and the only recourse they have is to sue the school. In this case, not even the state can get several millions of dollars from the school or its operator so what there is not much chance of students getting their money back. These illustrates how a for-profit school is still one of the surest scams available.

Regulation Should Trump Profits

For-Profit Education, like all enterprises centered on profit abhor regulation and love to scream that the marketplace should be the arbiter of all. If some companies operate on the margin and some consumers get swindled, its unfortunate, pitiful but a necessary consequence of the success of others who benefit from a "usually efficient" system unfettered by regulation. In other words, free enterprise, with the emphasis on the free, and the resulting profits, are more important that the victims of those businesses who abuse the unfettered marketplace. Regulation may curb profits as it protects consumers. There is always a balancing act between the two, consumer protection should always trump regulation especially in a field which is not a luxury and is so important to the success and well being of any member of society, such as education. That is the crux of the issue the legislation is wrestling with in California and I trust that the right side will win out. Profits are useless if they come at the expense of consumers.

California Regulation of For-Profits and Why National Accreditation Does Not Stop Fraud

Per a Inside Higher Education article, California's Governator characterized the statute and regulations that created Bureau for Private Postsecondary and Vocational Education, which regulates for-profit vocational post-secondary schools, “fundamentally flawed,” in a message vetoing an extension of it. This will leave the state's for-profit, career, technical and vocational school industry unregulated if the legislation is not replaced by July 1, 2007. Actually the statute worked rather well until it was amended in 1997 by a Republican legislature in response to complaints from for-profit schools as explained by a 2000 article San Francisco Weekly which details the the history of regulation of for-profit trade schools in California. It is a must read for anybody wondering about how California vocational school regulation came to this somber state. The article details how California went, from its haven as a diploma mill in the early 1980s, to the passage of the Maxine Waters School Reform and Student Protection Act in 1989, which created the Council for Private and Postsecondary Education and which cleaned up the for-profit education. That act expired in 1997 and Governor Pete Wilson vetoed an extension of it. Then of course, the for-profit vocational schools lobbied to eviscerate it and the Republican legislature gave the for-profit industry its wish and diluted the protections in the original legislation not to mention reducing the contributions schools had to make to a tuition reimbursement fund. Thus here were are now..

The bill being argued before the California legislature would exempt institutions regionally accredited by the Western Association of Schools and Colleges, or WASC, from the state’s private college oversight system, which has always focused on unaccredited, or nationally accredited for-profit colleges. This is not new, the old law also exempted WASC. However, nationally accredited schools want the same exemption arguing that their accreditation is just as good as regional accreditation and is recognized by the Department of Education.

This is an argument these schools have been circulating for some time now, just like water in the toilet before it hits the drain. The schools who have a history of deceiving students are nationally schools, Crown College (Tacoma), Court Reporting Institute, Florida Metropolitan University, Brooks College, Bryman College and these are just the ones that come readily to mind. Did their accreditors do anything to stop them from deceiving students? That would be negative. Court Reporting Institute (CRI) was shut down by the Washington state licensing agency and finally filed for bankruptcy protection while the Accrediting Council for Independent Colleges and Schools (ACICS) did nothing and that isn't the first time this has happened. The Department of Education and New York State regulators shut down two ACICS accredited schools while ACICS stood idly by. If California is going to exempt nationally accredited career, technical and vocational schools from its regulatory scheme, why bother having regulations at all?

National accreditors have shown precious little inclination to regulate the schools they accredit. Accrediting isn't regulation I guess. I watched while educators and students sent extremely serious complaints to the ACCSCT about Crown College and yet they continued to deceive students and offer a sub par education. ACICS ignored the problems with CRI as the state finally shut them down. These accreditors time appears to be taken up more with lobbying for their schools and against regulating them.

Western Career College Sued, Another For-Profit Education Fraud?

Reading the story it certainly has the blueprint of the prototypical for-profit career school scam. Twenty students who graduated from the ultra-sound program are now suing the school for fraud and misrepresentation claiming they were lured into enrollment with misrepresentations about the quality of placement, accreditation, facilities, teaching, internships, whatever they deem necessary to enroll students. Once the student enrolls they find that the promises were illusionary. When the fraud is well prepared, the student does not discover the fraud until they have expended valuable time and money. Watching the KCRA3 broadcast of the story is even scarier as these students claim that they were thrust into ultrasound internships with insufficient training or supervision and that doctors were depending on their accurate diagnosis, a diagnosis they felt unsure about.

Schools that end up in the inquisitive scope of the news media tend to react in two ways. They get on camera or on print and answer the allegations, generally denying them, sometimes with distinct disdain like John Wabel of Crown College did. Others, simply do not comment to the media, like Alen Janish and Mike Girgus of CRI. In this case, the president of the school takes the Crown College avenue, steadfastly defending the school despite the fact that three-quarters of the graduating class is suing them.

In response to the allegation that the students who were interning at the hospital felt that they did not have the training to render competent ultra sound diagnosis, the president states that it is not unusual that a trainee would feel unsure in that position. The president also admitted that the school lacked the proper accreditation a fact that was disclosed in writing to students. However, admission representatives and staff assured the students that the school would get accreditation. That is a standard fraudulent practice by for-profit trade schools and was used by Crown College. Students signed a vague statement that stated that their was no guarantee that the credits would transfer. However, the language was designed to leave the students thinking the credits would transfer in most cases when that was exactly the opposite and Crown College staff knew this. This nebulous statement coupled with admission representatives assuring the students that the credits would transfer completed the fraud.

Many fraudulent schools employ this tactic. We don't have the proper accreditation and/or licensing and/or authorization but we will get it soon, not to worry, by the time you enroll/graduate everything will be in order. He also admitted that some of the students did not get the proper health screening. It will be interesting to see how this shakes out. Reading the plaintiff's attorney's press release certainly makes the school look like the classic for-profit education con.

Ironically, Western Career College is one of only five regionally accredited vocational/trade schools in California. So I can't pound on national accreditation because of their fraud. However, several for-profit schools which are nationally accredited have resorted to fraud, most notably University of Phoenix.

For-Profits Want Their Credits Accepted By Regionals To Increase Profits, Not For Concern For Their Students.

Since 2001 nationally accredited schools, which are overwhelmingly, for-profit, career, technical and vocational, have had the Transfer of Credit Blues as detailed in the Chronical of Higher Education and have been working to make it more difficult for regionally accredited schools to reject their credits, if not compel them to accept them. This last failure to accomplish this feat has to be frustrating. As I have stated before, they are fundamental reasons why nationally accredited schools which are trade, technical, career and vocational schools are fundamentally different from regionally accredited schools, which are academic. One of the nationals' biggest arguments is that the Department of Education recognizes both accreditations as a reason why regionally accredited schools should accept their credits. This is a bogus argument however, the Department of Education does not set educational standards, the accrediting agencies do, so the fact that the Department recognizes an accrediting agency does not mean that they are all equal in requirements and quality.

One of the reasons that nationally accredited schools have fought so hard to make it hard for regionals to reject their credits, is not because of any concern for their students. If their credits were transferable, this would enhance the value of their schools aka their businesses and investment.

In an article in Inside Higher Education, Elise Scanlon, executive director of the Accrediting Commission of Career Schools and Colleges of Technology and Mark Pelesh, executive vice president for legislative and regulatory affairs at Corinthian Colleges, Inc. "both acknowledged, as has been clear in the for-profit sector’s push for new rules or laws on transfer of credit, that part of the reason the issue is so important to commercial colleges is because of what the perceived discrimination says to students and others about their institutions."

Many of for-profit students have complained about the fact the their credits do not transfer to traditional universities and some have sued. Ironically enough, Nancy Broff, general counsel for the Career College Association (CCA), which represents for-profit schools once said: "Students often don't know if their credits will transfer until after switching schools. Most students and parents are unaware of the pitfalls they may encounter if they switch from a career college to a traditional four-year institution." Obviously if the nationally accredited schools are petitioning the government to have them "regulate" acceptance of their credits by regionals, they know there is a problem. Strange how many of their students are not informed of this, huh?

In other words, the real problem, is that many nationally accredited schools purposely don't tell their students of the transfer of credit problem before they enroll! Some go further, and lie and state that the credits transfer, though they know they don't, e.g. Crown College and Florida Metropolitan University.

For-Profit's Lose Out On Transfer of Credits Clause - Money Can't Buy Everything

Well the Senate has revealed the Higher Education Renewal Act and after a cruel feint, that almost gave this blogger a restless night, the for-profit education industry and their campaign contributions have failed to bend reality to their liking again. Despite the fact, that it was included in an earlier draft, there will be no provision mandating that traditional academic universities not solely take into account accreditation when considering whether or not to accept credits from for-profit nationally accredited schools which are overwhelmingly career, technical and vocational in nature. Now that's a mouthful but in essence, as we stated before, for-profit, nationally accredited schools have wanted legislation that dictates that regionally accredited schools cannot reject their transfer credits just because they come, well, from nationally accredited schools.

Now nationally accredited, for-profit schools have been screaming that they are being discriminated against when regionally accredited schools consider the accreditation of nationally accredited schools when making a determination whether or not to accept credits transfered from those schools. Ironically enough, though for-profit schools trumpet the virtues of the free enterprise system, they have sought recourse in the regulatory process, at least as concerns righting this perceived wrong. They have appeared to be on the precipice of such a victory several times, especially with a Republican Congress quite sympathetic to their "plight". However, the Republicans didn't have enough time to pass their version of the Higher Education Act renewal which would have included this language.

When that Congress was replaced by a Democrat one, the Senator of Education, Margret Spelling (pictured) and her Commission on the Future of Higher Education set about to rewrite the accrediting rules to include this provision. What was interesting about this committee that was appointed to rewrite the accrediting rules is the fact that it was overly weighted with representatives of the for-profit education industry while no members of the research and liberal universities who would most be affected by this clause were on the committee. It was as if the Department of Education was trying ensure the outcome by the selection of the persons on the rule making committee. Even with things weighted toward a "positive outcome, the vote to include the transfer of credit provision still failed. As "Inside Higher Education" reported, the person who voted against the provision was then "urged" to resign her seat on the rules committee. That would have resulted in the transfer of credit passage passing.

Well Congress watched Ms. Spelling's attempt to circumvent Congress's jurisdiction build in a series of rule making meetings on accreditation and sent several signals of its discontent, including, a letter from several members of Congress, a letter to Spelling from Lamar Alexander, a republican senator and former secretary of education, protestations from the states, finally in its proposed passage of the higher education act Congress has prohibited the Secretary of Education would prohibit the Education Department from changing federal regulations on colleges’ transfer of credit policies. In fact, Spellings conceded that Congress had trumped her and that her department would not issue new regulations.

For-profits have contributed much money toward getting this provision passed, alas, to no end and that would appear to be one of the reasons that Republicans and the Republican Secretary of Education has pursued this transfer of credit legislation and then rule change. The Department of Education is filled with refugees from for-profit education and the House Committee governing Education was headed by two republican representatives who took a great deal of contributions from for-profit education. Well, money can't buy you everything.

Political Landscape Shifts Toward Student's Welfare

Well good news hails from the Senate as concerns student loans and the welfare of the student itself. Don’t want to be partisan but interesting how now that Democrats are in charge, students instead of lenders are now getting favorable legislation. There is a bill which has been introduced in the house which would trim subsidies for student lenders (not sure why they even needed them to begin with) and use that money to give the students a break. True Capitalists seem to not be able to resist “capitalizing” on any consumer especially the most vulnerable. When Republicans were in charge the welfare of the student lenders was paramount, now that Democrats are in charge things have reversed themselves. In fact, now that the media has gotten hold of the student loan conflict of interest story and run across a crowded field with it as if it were some lady’s undergarments, even the Republicans are pro-student and even challenging the Democrats for not being pro-student enough as detailed in an news article in Inside Higher Education titled "The Competition to Aid Students."

Who can forget James Boehner, despite the fact that he would love his past to slip past minds flummoxed by the lightening speed of the internet. However Source Watch reveals his campaign contribution pedigree and who can forget his Patrick Henry like proclamation, delivered to the Consumer Bankers Association: "Know that I have all of you in my two trusted hands. I've got enough rabbits up my sleeve to be able to get where we need to", still resonates. The internet is like that, its a virtual, resounding terminal echo.

Ironic isn't it, how roaches and other creatures who do their best in dimness totally change when an errant spotlight suddenly finds them. Now that the public is aware of blatant conflicts of interest in the student loan industry and also within the Department of Education, Republicans who were previously only beholden to their capitalist constituents can no longer justify such positions. Campus Progress has taken note of the change of direction without forgetting the "way we were" when Republicans ran things. They list how Republicans voted and the contributions they received not that long ago.

Why Profit Doesn't Necessarily Mean Quality

I recently met with someone and he asked me how a school such as CRI could be successful despite the fact that it had so many unhappy (and indebted) customers. Many feel that the foundation of capitalism is that in a competitive market, the producer of the better product will succeed. There is one glaring exception to this rule however:

There are always confidence men, luring consumers into purchasing inferior or illegitimate products and profiting from the unsophisticated persons who succumb to the fraud. These persons make money precisely because their products are inferior! They don't spend as much money on creating or refining the product and a lot on "marketing" it.

Cases of fraud are embedded in every institution, profit and non-profit, however, non-profit universities have little reason to defraud students. They don't need the student's money, they are funded by the state and endowments which is why they are much more selective. It's not to say that non-profit education is completely free from fraud, however, taken as a whole they are less modified to defraud than for-profit is.

BCTI Students get $9 Mil in Insurance Settlement.

As those who have been paying attention to the state of "vocational" education in Washington state the David Wickert of the Tacoma News Tribune who has reported extensively on BCTI reported that an insurance company for BCTI has agreed to pay $9 million dollars to settle some of the claims of fraud. It's very fortunate that BCTI had insurance for this .... sort of thing. I'm thinking it might be a great idea for the Washington State Workforce Training and Education Board to make it mandatory that these schools carry insurance for fraud. I'm thinking the premiums might be high in light of this settlement, but the price to students was extremely high. Now it's true that each school does pay into a tuition reimbursement fund but this insurance would supplement that. Ironically enough, if more students from Computer Reporting Institute ("CRI") had made successful complaints -- the Seattle Times article stated that only "a dozen" did -- the Tuition Reimbursement Fund might have been exhausted, another reason to have schools take out fraud insurance.

Some of the students from CRI are going to lobby the legislature to post the rules and statute of limitations (1 year from the time you leave the school) for filing a Workforce complaint against a vocational school for tuition refund in a public and central location at each school. Had this legislation been in place, many more students might have made complaints and there is a possibility that the tuition refund kitty would have been overdrawn.

How Alen Janisch and CRI Profited from Not Educating!

You almost have to hand it to Alen Janisch, the director of CRI, congratulate him even. Mike Girgus too, CRI's Director of Education now that's a misnomer for you. Court Reporting Institute (CRI) may be dwarfed by BCTI in the breadth of its fraud but certainly not its persistence and complexity! Here is one of the complaints that finally got the Washington State Workforce Training and Education Board (Workforce Board) to not renew CRI's license to operate. The headings of her complaint read like the for-profit education fraud play book:

1. CRI provided false information regarding their graduation rate, placement rate, and the time it would take students to graduate.

2. CRI gave false information about the skills necessary to become a court reporter, and the costs to be incurred both as a part of the school and upon graduation.

3. CRI continually misled students regarding accreditation standards the school followed, and additionally misled accreditation agency representatives regarding the type of education that was being taught at the school.

4. CRI advertised courses and instruction that were not actually offered, or taught these courses at a level where a student could not potentially learn them at a professional level.

5. CRI consistently employed students as teachers or self-taught classes to a degree not supported by the National Court Reporters Association (NCRA) standards body, of which CRI was initially a member when I began attending and whose standards level CRI consistently claimed to be teaching at, even after losing their accreditation.

6. CRI courses were run by unqualified staff or by staff members who rotated through class at a rate that is unacceptable among any educational standards.

7. Despite a lack of real learning or educational progress, CRI continually moved students ahead to the next level of instruction, yet without teaching the skills necessary to graduate.

8. CRI completely changed the theoretical foundation of their entire educational approach to court reporting in about 1999, but offered no retraining to students taught under the old method, and provided no method for these students -- including myself -- to succeed.

9. Critical components of an education for court reporting -medical and legal terminology - were taught inadequately and unprofessionally.

10. Instruction on Computer Aided Transcription (CAT) software was completely inadequate, despite being a key and vital daily tool used in any court reporter position.

11. CRI misrepresented the basic typing class instruction and training provide by their school.

Sound familiar? It should, this is a problem with many of the fraudulent for-profit education institutions out there. Deceiving students as to the nature of their accreditation, the quality of the instruction, the instructors and the equipment. It could be Crown College and BCTI all over again. They used fellow students as instructors and most of these were not even in attendance. Instead the students were left to teach themselves on shoddy equipment including Walkman tapes. However, when it became time for more financial aid everybody was promoted to the next class in order to make sure that new money was received.

There was a history of complaints at CRI dating back to 1999 however, CRI managed to stay in business until 2005. One of these former students is not going away though, more on her crusade to get some legislative action and possibly have criminal charges filed.

Politicos and The Business of Higher Education

The predation of the huge lending corporate institutions upon young, naive students merely attempting to secure entry to even the basement of the American Dream is indeed pathetic. No less pathetic is the role of their "enablers", the many politicians who will walk lockstep with any entity that contributes to their campaigns; regardless of who these entities profit from or how they do it. "Campaign contributions" is the biggest and most transparent oxymoron in the English language. A campaign contribution is a bribe already. In return for these "contributions", politicians, offer legislative assistance in direct relation to the the portion of the riches that are transferred to them.

John Boehner, who we blogged about earlier, is easily one of the fattest ticks feeding on the twin dogs of student lenders and for-profit schools. In reality, that is a faulty analogy because a tick is a parasite. The situation here is a symbiotic relationship. A more apt analogy would be the feeder fish and sharks. The politicians are the feeder fish gleaning bits of food from the shark's teeth. The amount of money that a lender such as Sally Mae pulls in from the legislation that a John Boehner is able to enact or stop from being enacted is considerable smaller than its one hundred thousand or so contribution to his campaign.

However, Mr. Boehner and the many student lenders and for-profit education he assists, in return for their campaign contributions, are ticks on the students who end up paying higher interest on educational loans and attend for-profit schools based on fraudulent expectations and end up saddled with debt they cannot pay off; on the taxpayers who must pay for the resulting defaults and for DOE officials who let student loan companies keep $278 million here and there, and for legislation that ends up costing the government more expenses so that the ticks can suck more blood in the form of higher interest rates.

Wretched of the Earth Now Include Student Debtors

Student loan debtors now have less rights that persons who have fallen out of favor with the Internal Revenue Service. Our society has certainly come to naught when this kind of behavior is sanctioned by our own government. Actually, its much more than sanctioned, it was part of the 1997 reauthorization of the Higher Education Act. Provisions in that act made it much easier for the government to collect on defaulted loans and also made them harder to discharge in bankruptcy. A Wall Street Journal article explains the crushing effect of this legislation on students on defaulted loans. These provisions were put into place at the behest of John Boehner, Howard "Buck" Mckeon (pictured), and Senator Mike Enzi according to Student Loan Justice and Sally Mae and many debt collectors have reaped the benefit. Fortunately, the light of the media has exposed the symbiotic relationship between these newfangled robber barons and their corporate Repug enablers. Hopefully the astonishing greed of these lending institutions and the injustice visited about the hapless debtors who stumble into their web will be exposed next.

Bush Administration Stopped Loan Reforms...Irregulation Again!

So we didn't have to have this student loan scandal after all according to the Washington Post. Back in 2001 the Bush Administration killed a proposal to clamp down on the student loan industry. Not particularly surprising since inasmuch as there is no money making endeavor that the Bush Administration can stomach regulating. They prefer irregulation. Mr. Bush entrusts regulation to veterans of the industries that would -- or should be -- regulated which results in irregulation. Think killer whales regulating seals, cheetahs regulating antelope, crocodiles regulating wildebeests, you get the picture. There is something extraordinarily pernicious about this practice so reminiscent of Reagan. It can be far worse than no regulation at all.

In keeping with this theme, the esteemed Theresa S. Shaw (pictured), is "Chief Operating Officer of the Office of Federal Aid." Wow, C00 sounds so like a private industry title wouldn't you think? Well a kind of pubic/private partnership! Not surprising that she spent 20 years at Sally Mae honing her talents until they became suitable to regulating the student loan industry for the DOE. Yep the same Ms. Mae that is the biggest student lender. She brought some of her ilk from Sally Mae and other student loan lenders according to the New York Times and the Herald Tribune Hey networking works so well for private industry, it should do well for public service also! And surely an intimate knowledge of what you're irregulating is helpful. Ms. Shaw and her band of irregulators are now being investigated for conflict of interest as part of the burgeoning student loan scandal. Well, that's ironic, because there are no conflicts of interest in irregulation. Everyone is on the same side!

Another one of DOE irregulators, Sara Martinez Tucker, the under secretary of education, brought the meaning of term irregulation into sharp focus when she decided that Nelnet, a student lender, could keep the $278 million dollars they overcharged the government according to a DOE Inspector General audit. Ms. Tucker, of course has some ties -- actually many ties, think bondage -- to the loan industry and even Nelnet as the New York Times illustrates. Irregulators need to be in touch with the industry they are iregulating. That's what makes them such good irregulators!

In fact, another irregulator, Sally Stroup, an assistant secretary of education, spent much of her formative years in for-profit education which is complete dependent on student loans. Ironically enough she received a memo in August 2003 from the DOE inspector general urging her to curb any "illegal inducements" to lenders. Well, the DOE inspector general obviously doesn't understand irregulation so Ms. Stroup paid the memo little mind. According to the College Journal:

"At least eight top officials in the Education Department during the Bush administration either came from student-loan or related organizations or have taken lucrative jobs in that arena since leaving the agency. Former Education Department staffers say a revolving door between the department and industry has led to lax oversight of federal financial aid."

I'm thinking you are starting to understand how and why irregulators are chosen!
Secretary of Education Spellings asserts its an asset having administrators who have
so much experience in the student loan and other related industries.

Well according to the Washington Post and New York Times, Ms. Shaw will be leaving her post at the rudder of the student loan department having done all the irregulation college students and the nation can stand for now. The following is what she said in an email per the aforementioned Washington Post article:

"The recent attention on our programs and our work only confirms how very important our programs are to the students and families we serve, I am confident that together we established a solid foundation for Federal Student Aid's continued success."

Now that's irregulation and it is indeed a success . . . for the loan industry. But that's the goal of irregulation, benefiting the industry that's being irregulated.

Crown College Lies

Crown College, in Tacoma, Washington, is the biggest reason not to choose for-profit education. Crown College is a vocational, mostly on-line school which holds itself to be an academic institution because it issues issues bachelor and associate degrees as if that's all it needed to do. However, its still just a vocational, "career" school and its credits and degrees generally don't transfer to academic aka "real" schools. It has managed to deceive many customers, oh students, into believing that its degrees and credits do transfer. This has resulted in it being sued three times by eleven different students! Crown settled two of these Lola Jackson v. Killebrew/Dalton, Inc. and Joanne Black v. Killebrew/Dalton, Inc. lawsuits were settled and Crown College lost the Latesha Gonzalez v. Killebrew/Dalton, Inc. case at trial. IF YOU WANT YOUR CREDITS TO TRANSFER TO A REGIONALLY ACCREDITED SCHOOL DON'T GO TO CROWN COLLEGE.

Incidentally, the logo states that they were founded in 1969, well Crown College of Hair Design was founded in 1969. However, that school was purchased 1990 by John Wabel and now bears little resemblance to a beauty school ... actually it might, at least in quality. Mr. Wabel, who despite the fact that he does not possess even a nationally accredited college degree, has come across a fantastic way to make money: having students borrow it from the federal government and then turning it over to him for an online, inferior education. In fact, Mr. Wabel has been providing a sub par education for students for over 10 years now. As far back as 1997, complaints show that Crown College has been misleading students regarding the quality or lack there of its educational programs much like a used car salesman might mislead you about the facts concerning several mechanical occupants of his lot. More importantly, he and his staff have misrepresented (lied) about the nature of their accreditation and the transferability of their credits for the same amount of time. Crown College is accredited by the American Commission of Career Schools and Colleges of Technology (ACCSCT) and is on probation yet again.

A former admissions representative came forward and filed a complaint against Crown College alleging that she was instructed to mislead (lie) and misrepresent (lie) and deceive (lie) prospective students about many pertinent facts including Crown College's accreditation (national accreditation is better than regional accreditation), whether Crown College was being sued (Oh, its not this Crown College that's being sued), whether or not Crown College's credits transfered to other schools (well we educate students all over the nation so our credits are transferable to all schools). Why, why would they lie to prospective students? Well the bottom line. This school is a money making enterprise and let's say they are highly motivated when it comes to generating revenue ... ummm, recruiting students though not as motivated when it comes to educating their students but then education is a mere by-product of making money. It's a great scam, an unlimited supply of money from the federal government. This student is a conduit, a middle man, a funnel, through which loan money flows into the school's bank account. Thus education is not the end, its a means to the end. The end is making money.

For-Profit Education's Admission "Standards"...

Well, they don't have any because they are businesses. If you are running a car dealership and a customer comes in wanting to buy a car and has a driver's license you are going to sell him one! If one comes in vaguely thinking about buying a car you're going to try to sell him (or her) one. If one comes in because he wants to use the bathroom, you're going to try to sell him a car. If they need a loan you will do everything within your power to arrange one. You are not concerned with his driving record or if its the right car for him. The first problem belongs to his insurance agency, the second one to him. That's how businesses operate, that's what they do, they sell things that's the only way they can profit.

Well for-profit educational institutions are like car businesses, and they don't operate much differently. If a student comes in with a GED and wants an education they will sell him one and if he's not sure he wants one from them they will do everything they can to convince him that their education suits him. If ultimately it doesn't suit him that's not their problem.

Ohhh, but for-profit education has a huge advantage over car dealers and other like businesses. They have no worries about customer's credit records, don't need to have a service department and no pesky warranties. The customer always gets the loan regardless of his credit record and the for-profit educational institution always gets their money ... well as long as the customer stays in school. If the customer doesn't like the education and it doesn't end up suiting their needs, well that's too bad, its non-returnable and non-refundable!

Now, under those circumstances, do you really expect for-profit educational institutions to turn customers, ummmm.... students away!!!


Crown College is like that. Students came in wanting an education which they could transfer to a traditional school. What did the admission representatives do, tell them that they could transfer Crown College's credits to a traditional school? Why, because the Crown College makes a profit from each student it enrolls and profit is what concerns them. There has been amble evidence that this is the policy of other for-profit educational institutions. The Chronicle of Higher Education published an article concerning an investigation of Career Education Corporation which revealed that they were very reluctant to turn anyone away. "If you can breathe and walk, you can get into the school," says a professor who wished to remain anonymous."

The Chronicle has talked to credible sources and reviewed documents that strongly suggest that, over the last several years, administrators at the campus here have:

* Regularly admitted students who had not graduated from high school or earned a General Educational Development certificate, and directed many of those students to unaccredited high schools where they could obtain high-school diplomas the very same day.

* Improperly counted as "starts" students who never showed up for class or dropped out before they had completed their first week of courses.

* Encouraged admissions officers to sign up themselves, as well as family members and friends, and counted them as "starts" even if they never actually attended.

* Routinely misled prospective students about the college's classes and programs, as well as about the nature of the institution itself.

University of Phoenix paid a $9 million to the Department of Education to settle charges that it gave admission representatives incentives to enroll students regardless of whether they were academically suited to for the program of study. Moreover, University of Phoenix, still faces a false claims lawsuit which the Supreme Court refused to throw out according to the Los Angeles Times.

A report issued by the department said the company promoted an intense sales culture that rewarded recruiters who encouraged large numbers of students to enroll, even if they were not qualified.

For-profit educational institutions are business regardless of what they might want you to believe and its extremely hard for them not to conduct themselves accordingly. They simply cannot help themselves.

Court Reporting Institute (CRI) and Irregulation!

CRI aka Court Reporting Institute was a corporation incorporated in Washington state which ran four court reporting schools in Seattle, Tacoma, Idaho and San Diego. CRI is is a failure that rivals BCTI and it employed many of BCTI's tactics and some of Crown College. As in the BCTI case, lax oversite by the Washington State Workforce Training and Education Coordinating Board allowed CRI to continue to perpetuate its fraud when perhaps it should have been shut down earlier. Ultimately, the decision by the Workforce Board to revoke its license led to its demise and its entry into the bankruptcy court.

However, in its dealings with CRI, the Workforce Board appeared to be more interested in chiding a beloved but wayward child rather than enforcing the law and addressing the real concerns of students. Time and time again, it brandished its mighty ruler and brought it down softly on the naughty palms of CRI, then offered it a cookie. CRI took the cookie, savored it, appeared mollified then did it all again. According to the Seattle Times CRI was ordered to refund tuition to students in 1999 and 2003 because the Workforce Board found CRI used deceptive practices. Then it did it again. Finally, 2005, the Workforce Board pulled their license. CRI appealed the decision was hit with a lawsuit by its former students. The lawsuit named the sole shareholder of now defunct CRI, Alen Janisch, and also its director, Mike Girgus. Mike Girgus was so good at recruiting students with false promises that Gene Juarez Academy is now utilizing his skills as the supervisor of their recruiters. After adverse publicity from the Seattle Times newspaper article CRI dropped its appeal of the Workforce Board's decision and closed its schools. Here are articles in the Seattle Times, the San Diego Union Tribune and the Idaho Statesman covering the closure.

Subsequently, it declared bankruptcy in Western District of the U.S. Bankruptcy court in Seattle. The former students some of which owe as much as $50,000 in student loans have not given up. They have filed proof of claims in the bankruptcy court and are hoping to get the sole shareholder of the CRI, Alen Janisch, indicted in federal court for frauds they allege he has committed against the Department of Education. They also allege that he has kept thousands of dollars of federal aid that should have been returned to the Department of Education, the lenders or the students.

What's the Difference Between Vocational and Academic Education? Campaign Contributions!

Well obviously there are other differences, most notably quality! Regional accreditation conferred on academic, mainly non-profit institutions is far superior to national accreditation which is generally conferred on vocational, technical and career colleges. However if you put enough money in the pockets of the powers that be -- in this case politicians -- you can bend reality to suit what you think it should be, or more specifically the version that you can profit from. Of course, in the phrase "for-profit education" the inflection is on profit!

Speaking of phrases, remember the phrase, history is written by the victors? Well reality can be written by those who contribute the most (lobbyists) to those who shape it, (politicians). Remember the Bush Administration's Clear Sky's Act which, in a rather Orwellian sense, would produce more pollution. It can be difficult to dodge the subterfuge in the title of some legislature. The key to ascertaining the truth is to examine the what politician is sponsoring it, or better yet, the party sponsoring the sponsor! Well the coal, oil and gas industry sponsored Bush so that indicates that the Clear Skys Initiative, regardless of its title, would help the energy industry and thus not lead to clear skies at all, quite the opposite. Got it now?

So, let's apply that lesson to the bill College Access and Opportunity Act which was sponsored by the Hon. John Boehner who is pictured above. That bill, fortunately, languished at the end of the 109th Congress. However, like any cinematic monstrosity, there will be a sequel. Anyway, let's look past the benign title of the bill and see who sponsors its sponsor John Boehner. According to Campus-Progress Mr. Boehner receives tens of thousands of dollars from the for-profits educational industry (He receives lots of money from banks that make federally guaranteed loans to students too, but that is another blog entry). So considering the sponsorship of the bill, well the dual sponsors, John Boehner and well his sponsors, the for-profit education industry, one has to think this bill might have to do more with for-profit education's access and opportunity rather than anyone else! Hmmm, ironically enough, the bill may be appropriated named! Well, the lesson worked! This bill is a great boon or investment return for the sponsors aka the for profit education industry, an industry worth at least $26 billion and funded mostly by the federal government student aid programs. They win big if it passes.

Let's take one provision, language that would state that no regionally accredited school could reject a nationally accredited school's (most of which are for-profits) credits just because they are nationally accredited schools. We visited this topic briefly in a previous entry. This would mean that regionally accredited schools would have to evaluate every single credit in order to justify its rejection. To fully understand exactly what some of these nationally accredited schools teach, let's look at the schools the ACCSCT (American Commission of Career Schools and Colleges of Technology) accredits.

The ACCSCT is the national accreditor which accredits Crown College and is a major force behind the transfer of credits legislation that would favor the schools it accredits. They are one of the largest national accreditors. According to their Accreditation Standards and the schools they accredit it becomes clear why regionally accredited schools are very reluctant to take nationally accredited schools credits. ACCSCT only accredits schools, as defined in I.A.11 of their Standards of Accreditation, which are "postsecondary institution with trade, occupational, or career-oriented educational objectives" not academic educational objectives! This fact becomes even more clear when one looks at the 802 schools they accredit, only a small percentage of which even offer degrees and a smaller amount still that offer bachelors degrees. Looking at a directory of schools they accredit. They accredit schools that teach massage therapy, refrigeration, helicopter aviation, pet grooming, cosmetology, and culinary arts just too name a few. The majority of the schools they accredit offer diplomas or certificates in trades and are obviously not academically oriented. It is also obvious why a regionally accredited school, academically oriented college or university would not want to accept their credits for transfer. To make these schools evaluate each credit is rather ridiculous. What cosmetology or pet grooming credits are going to transfer to the University of Washington or Yale University and how much money should they have to spend to "evaluate" them????

BCTI, CRI, Bryman and Crown College? Something in the Putrid Sound area? Yes, irregulation!

All in around a year or so, all these schools fell off the tightrope, between profiting and educating, the dilemma faced by all for-profit schools. Well in these cases the tightrope was between deceiving students and deceiving students so blatantly that they get caught! Remember its a business first and a school last. We have already covered Crown, let's look at Business Career Technical Institute aka BCTI, now there is a spectacular failure which is still being unraveled though the school has closed up shop. There is a huge class action lawsuit. BCTI seems to be the scam school of all scam schools and that's saying a lot considering its most worthy competition! BCTI amassed huge sums of money by sucking at the Department of Education and the State of Washington's teats not that either agency seems to care that much.

Bryman College, a component of the Corinthian Group which is one of the largest for-profit education companies, is being sued in Tacoma because the school allegedly misrepresented its medical program.

Regulation or lack thereof is certainly part of the problem here! Let's say that it is a "friendly regulatory market" for for-profit schools. Well its a friendly market for any thing that is for-profit. Regulatory agencies are lax, overworked or unduly influenced, or some combination of both.

Remember the savings and loan debacle and what caused it? The Reagan administration unregulated the S&L industry but continued to insure the deposits. So the S&L's got to gamble with the house's money. That's what we have here. These schools would not exist but for federal and state loans and grants and this situation is even more pernicious because of the victims. BCTI preyed on poor and unsophisticated people who will never escape the yolk of the loans that only BCTI benefited from.

I will quote from an article in the Tacoma News Tribune about BCTI by Dave Wickert of the Tacoma News Tribune:

"Its finances were shaky. Its graduation and job-placement rates were substandard. Its students filed lawsuits and complained.

Regulators saw the warning signs. But the Business Computer Training Institute remained open for years, and taxpayers continued to pay millions of dollars to support a school that hundreds of students say defrauded them.

BCTI, a Gig Harbor-based for-profit vocational school, closed last year amid government investigations and a student lawsuit. But government records show the school had a history of run-ins with regulators stretching back more than 20 years.

In the 1990s, federal officials twice threatened to stop funding BCTI, citing financial problems and high default rates on student loans.

A private accrediting agency doubted the quality of BCTI programs as far back as 2001.

Washington state officials dismissed student complaints similar to those now made by more than 400 students in a lawsuit in Pierce County Superior Court.

In each case, BCTI and its co-presidents, Tom Jonez and Morrie Pigott, evaded serious consequences – sometimes with the help of elected officials."

"These people were pros at skirting the law and skirting the ethics,” said Phil Rockefeller, a former U.S. Department of Education supervisor and now a state senator from Bainbridge Island. He oversaw one federal investigation of BCTI.

Irregulation, yes I made the word up but it should have been in the dictionary! State and federal regulators and accreditors had evidence of the fact that this school was failing financially and educationally, yet they gave it the benefit of the doubt or deferred to pressure from elected officials.

I have some knowledge of the Washington State Training and Education Workforce Board and this is not the first case where they were conned, or lured to sleep or overworked or [insert variable excuse]. The schools they were supposed to police got off, survived and kept receiving taxpayer money. Actually, that's a redundant statement since, survival for these schools is receiving taxpayer money.!

If the these regulators were police, I wouldn't even break a sweat if I saw one of them in the rear view mirror, because they'd let me off with a warning each time. Hmmm, maybe the state patrol and the Workforce Board should switch places...