ABC News Investigates For-Profit Education: Recruiters at the University of Phoenix

Despite her assurances, the recruiter's claim was not true. Even with successful completion of the required certification testing, a degree from the University of Phoenix does not guarantee a teaching certificate in either of those states.

When we confronted Dr. William Pepicello, president of the University of Phoenix, about the recruiter's false promise, he said it was "indefensible."

"It's wrong. Can we do better? Absolutely. Do we train our people to give that kind of misadvice? Absolutely not. And we can do better, we will do better, you know, we already have some initiatives that we talked about that we're putting in place because at the end of the day, we have to get it right."

But this was not the first time that the university's recruiting practices have come under scrutiny. In December 2009, after two former employees came forward and accused the university of violating federal financial aid regulations with its recruiting practices, without admitting wrongdoing the school agreed to pay $67.5 million to resolve the accusations. The two whistleblowers received $19 million in the settlement.

When asked if the 2009 settlement was a sign that "we got caught," Pepicello disagreed.

"No, I wouldn't say it's proof that we got caught. I mean, it's certainly proof that we weren't doing as well as we could. We could do better," he said.

Recruiter Tells Student to Borrow to the Max

The recruiter also told our undercover producer he could take out as much as $35,000 in federal financial aid to pay for school. She also said that there might even be some money left over after tuition was paid.

Recruiter: I tell students to take out the max and whatever you don't need or you don't use then use it [for whatever]. But it's easier to take out more than you need and send back the excess versus you didn't take out enough.

Producer: What are the kinds of things though? I mean in terms of like that I could use it for? I mean, what if I just...because you're going to have to have money to walk around.

Recruiter: They don't care. Right. They don't. They just tell you use it for educational purposes.

Producer: And they don't ...They don't what?

Recruiter: No one follows up. No one says, What happened to this money? You received a check for $562, where did you spend it?

Producer: It's your business.

The university president said that there was no excuse for a recruiter to push someone to borrow to the max.

'It's absolutely indefensible. It is not the way that I intend to run this university," Pepicello said.

For-Profit Universities Contributing to Financial Crisis?

Experts say recruiters who are misleading students may only be the tip of the iceberg. Students who have attended for-profit schools are defaulting on their loans at an alarming rate, which experts say may be contributing to the next big financial crisis.

At the University of Phoenix's headquarters, the loan repayment rate was 44 percent, according to data from 2009 provided by the Department of Education; students at their Nellis Air Force location had a repayment rate of 36 percent. At the headquarters of Brown Mackie College, another for-profit school, the repayment rate was 27 percent.

Harris Miller, who heads the for-profit industry's lobby group, told Chris Cuomo that default rates at for profit schools are comparable to other schools which service similar student populations.

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