For-profit colleges engage in aggressive recruitment of students regardless of qualifications.
For-profit colleges receive approximately 25% of all federal student aid — which by some estimates, results in over 80% of their revenues. Yet students at such schools default on student loans at alarming rates. On average, for-profit institutions only graduate 38% of their students, who in turn default on their student loan debt at much higher rates than students who attended public or private nonprofit schools.
Although for-profit colleges and career centers enroll roughly 10% of all higher education students, they account for approximately 50% of all federal student loan defaults. In such situations, students do not get the education they need to improve their chances of obtaining employment, and taxpayers are forced to foot the bill for students’ defaulted loans.
Some for-profit colleges pay their employees to recruit students, whether qualified or not.
One cause of these grim statistics is aggressive recruitment of students through tactics that ignore prospective students’ qualifications and chances of academic success. One such tactic that was outlawed by Congress 20 years ago is incentive pay to employees based on the number of new students they recruit and enroll. Such incentive pay encourages recruiters to engage in overly-aggressive tactics to enroll students, regardless of the students’ qualifications and ability to be successful.
Unfortunately, such illegal incentive compensation schemes continue to plague the system. Whistleblowers help put an end to these unlawful practices.
For-profit colleges have a powerful incentive to recruit students by any means necessary.
When more students mean more financial aid money, for-profit colleges are tempted to compete for the students by any means. Whistleblowers play a vital rule in uncovering fraud in college recruitment and bringing that fraud to light.
How Waters Kraus & Paul can help whistleblowers
With a national presence and in-depth experience fighting fraud against the government, Waters Kraus & Paul, LLP, provides aggressive representation of whistleblowers in qui tam actions and related complaints. The firm currently represents whistleblowers seeking to recover funds on behalf of the federal and state governments in a variety of cases, which may involve defendants such as large pharmaceutical companies, government contractors, school district contractors, and hospice and nursing home care providers.
To learn more about qui tam representation at Waters Kraus & Paul, or to have one of our attorneys review your potential case, email us or call 800.226.9880.