Wednesday, December 22, 2010

Scandal brewing at Kaplan University

Kaplan University, a subsidiary of the Washington Post, seems to be embroiled in a widening scandal regarding fraudulent enrollment practices and false claims made to the federal government:
Far from an aberration, Castillo's experience typifies the results of a practice known informally inside Kaplan as "guerilla registration": academic advisors have long enrolled students in classes they never take, without their consent and sometimes even after they have sought to withdraw from the university, in order to maximize the company's revenues, according to interviews with former employees.

Managers at Kaplan--the highly profitable educational arm of the Washington Post Co.-- have for years pressured academic advisors to use this method to boost enrollment numbers, the former employees said, offering accounts consistent with dozens of complaints filed by former students with the Florida Attorney General's Office and reviewed by The Huffington Post.
Now, here's the kicker:
Guerilla registration would appear to constitute criminal fraud, said a senior official with the Department of Education, who spoke on condition he not be identified in response to The Huffington Post's description of the practice. The official--who did not confirm the use of the method, but merely characterized its legality-- said it could also trigger criminal penalties under the Federal False Claims Act, which bars the submission of improper claims for government funds.
And this is just a single state, Florida. One has to wonder how far this scandal could extend--to other states? Other for-profit universities?

If anyone wonders why it is that Obama's stimulus didn't work as well as hoped, perhaps the answer is that billions of dollars were diverted from ordinary Americans into the pockets of big corporations working fraudulent scams with the help of lawyers and lobbyists. Something to think about as the year winds down.

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