Complaints in Iowa grow with expansion of for-profit colleges

Complaints to two state agencies about for-profit colleges have risen dramatically in recent years, enough so that it's become a top priority for the Iowa Attorney General's Office.

Many of the student complaints involve billing practices or student loan issues, according to data from the Attorney General's Office and the Iowa College Student Aid Commission. A majority of the complaints come from students in the schools' online programs.

“It's one of the areas that we've identified as a priority because of the amount of money involved with these student loans,” Bill Brauch, director of the Consumer Protection Division of the Iowa Attorney General's Office, said. “We have concerns about practices of some of these entities.”

Since 2008, 129 written complaints have been filed with the Attorney General's Office regarding for-profit schools, training academies or correspondence courses, and the complaints more than doubled from 2010 to 2011. Since 2009, when a new tracking system was launched at Iowa College Aid, that office has received 242 complaints about for-profit institutions, with complaints growing by more than 300 percent from 2009 to 2010. To compare, Iowa College Aid received five complaints about community colleges in that span, and nine complaints about private non-profit colleges.

The most frequent concerns are about a school's management of financial aid, bills owned to the schools by students who withdraw, concerns about poor customer service and misleading information about what a program would prepare students for, state officials said.

Officials with one large for-profit university that has six Iowa campuses, including one in Cedar Rapids, said they work to meet the needs of their growing number of students, and they try to quickly resolve concerns that arise. It's an educational model that works for thousands of students, said Susan Spivey, president of Kaplan University's Cedar Rapids campus.

“We don't have anything to hide. We do a good job,” she said. “If someone has a problem, we want to fix that.”

Kaplan's Cedar Rapids campus has 600 students, but the university as a whole serves 50,000 students nationwide, especially online, Spivey said. The 28 complaints the Iowa attorney general received about Kaplan since 2008 seems like a small number compared to the large population served, she said. The for-profit industry also has been put under a spotlight in recent years, Spivey said, which likely led to more complaints.

Kaplan student Tammy Dame of Marion said she likes the small class sizes and the accelerated nursing program option, adding Kaplan's Cedar Rapids campus feels like a small family. The 42-year-old is studying for an associate nursing degree and she previously earned her LPN from Kaplan.

“I've had a really good experience,” she said.

Student's dispute

At the opposite end of the spectrum is Keith Morgan of North Liberty. It took more than a year for Morgan to settle a dispute with ITT Technical Institute's online program about $313 in charges the school said he owed for classes Morgan says he never registered for or attended. Morgan, 52, filed a complaint with the Attorney General's Office in 2011.

Morgan took online classes in the criminal justice program in the spring of 2010, but told ITT officials he was transferring to another school at the end of that term. He notified them and had his federal student loans switched to the other school, he said. But it took months of phone calls, letters and emails, and some help from Sen. Tom Harkin's office, before ITT said he was no longer responsible for the charges and released his academic transcript, he said.

He was working 40 hours a week as a night security guard during that time and helping his wife, who was sick with cancer, with an at-home day care. They were getting calls nearly every day from collection agencies about the $313. Morgan still hasn't gotten back on the education track after the transcript delay.

“This whole thing drug out for a year and there was just no reason for it,” he said. “I do want to finish my degree, but I'm tired of dealing with everything I had to deal with.”

Growth industry

Private for-profit institutions are the fastest growing part of the U.S. higher education market, according to a February report by Harvard researchers. For-profit enrollment increased from 0.2 percent to 9.1 percent of the total enrollment in degree-granting schools from 1970 to 2009. The researchers also found that for-profits educate a larger fraction of minority, disadvantaged and older students and do a better job retaining them in their first year, but have higher student debt burdens and loan default rates and higher unemployment rates.

Some government officials worry about those trends, and about the large amount of federal student loan money flowing to the schools. Harkin, D-Iowa, has led a charge to improve oversight of for-profit schools, which Harkin says are more expensive, and often have high-pressure recruitment but poor student support.

The Iowa Attorney General's Office recently released a consumer advisory about for-profit education, warning consumers to investigate tuition and fees, a school's accreditation and graduation rate information before considering enrollment.

Ashford University was the subject of the most complaints to the Iowa Attorney General's Office since 2008, at 53. Ashford has a small campus in Clinton and a much larger online presence. Officials with Bridgepoint Education, which owns Ashford, declined to comment for this story.

Debbie Rutledge, 46, filed multiple complaints with Ashford during her time as an online student and filed a complaint with the attorney general this year. Most were related to financial aid, specifically about the time it took Ashford to release to her the money that goes to students once college costs are covered.

“They would argue with you that it wasn't yours, that it was theirs until they let you have it,” she said.

Rutledge graduated with honors last weekend with a degree in health care administration and a minor in psychology. She chose Ashford after a recruiter came to her home in Bettendorf, selling her on the online program, but said after she enrolled she had trouble getting answers to her questions and concerns. Now she owes nearly $60,000 in student loans, and she wonders if it was worth it.

“It's frustrating,” she said. “What I paid and what I did doesn't match what I got.” There is an investigation under way by the Iowa Attorney General of Bridgepoint for possible violations of the state's Consumer Fraud Act.

Iowa also is cooperating with a number of other states to share information about for-profit college practices and complaints, Brauch said.