ABC News Investigates For-Profit Education Again: Recruiters Caught Offering Bad Advice

Nov. 12, 2010— -- As a former Criminal Justice professor for the for-profit Remington College in Houston, Larry Stewart said he was shocked when he discovered several convicted felons in his criminal justice classes.

"My very first class, I had a husband and wife who, he had done 13 years at the Texas Department of Corrections for a home invasion, robbery," he said. "And his wife had done three years for trafficking drugs across state lines."

According to Stewart, the felons in his class told him that recruiters for the school said they could work in law enforcement.

"I said, 'And you want to do what?'" he said. "They said, 'Well, we want to go into criminal justice.' And I said, 'You can never get a job in criminal justice.' And they said, 'Well, the recruiters said that we can.'"

It isn't the first time recruiters for for-profit schools have been accused of misleading people. ABC News conducted an investigation in August that exposed recruiters from the country's biggest for-profit college, University of Phoenix, for giving incorrect advice to prospective education majors.

In that investigation, we sent in one of our producers undercover who asked about becoming a teacher in New York State. The recruiter told him a degree from the University of Phoenix would enable him to take the state certification exams and become a certified teacher in New York. This was not true. The recruiter also encouraged the ABC News producer to take out the maximum amount of financial aid allowable, including interest-bearing student loans -- even if it was more than he needed.

Experts say students who have attended for-profit schools are defaulting on their federal student loans at an alarming rate, which, they add, may contribute to the next big financial crisis.

After speaking with Stewart, ABC News conducted another undercover investigation recently, this time at Remington College. We sent in a prospective student with a felony conviction, undercover, to talk to a recruiter about enrolling in the college's criminal justice program.

Student: "I have -- a felony from 2005."

Recruiter: "OK, 2005, OK. And what is it?"

Student: "Theft"

Recruiter: "We will definitely work with you, especially when you know it up front. And that helps us a lot. When we know your history and your situation up front. We know exactly what, you know, kind of a target area you wanna be in -- sheriff's department, corrections."

The recruiter also told our undercover student that he couldn't be a cop, but there were a variety of opportunities in law enforcement for people with felony convictions.

Remington College Recruiter Caught Giving False Information

Recruiter: "Sheriff's, corrections, jailers -- we put everybody in all those places all the time ... even border patrol, if you ever thought about it. Because, see, that's something else that you could do that's still in the realm of criminal justice."

Despite the recruiter's assurances, that's actually not true for the state of Texas. According to the Texas Department of Public Safety, a person with a felony conviction cannot work for any sheriff's department, or as a corrections officer in the state of Texas, and generally that's the case for border patrol positions as well.

A spokesman for Remington told ABC News that before students enroll in their criminal justice program, they must sign a document acknowledging that they may not be able to work in law enforcement with a criminal record.

This particular recruiter at Remington made her misleading statements just months after Harris Miller, a spokesman for the Association of Private Sector Colleges and Universities, admitted that for-profit schools need to clean up their act.

When asked why he thought the for-profit industry was in the hot seat, Miller said at the time, "We're under fire for a couple of reasons. One reason is we're making mistakes."

He added, "our schools and my board of directors is committed to making changes...we have a zero tolerance policy. That means once in a while you have to take an employee and take him out in the back and shoot him -- not literally -- but you have to dismiss employees."

ABC News first talked to Miller in August after the initial investigation, when he promised to improve the for-profit industry's recruiting standards. But despite his assurances, ABC News found that Remington wasn't the only for-profit college whose recruiters were still trying to sell misleading information to prospective students.

DeVry College Recruiter Touts Overblown Success Rate

At DeVry College of New York, ABC News sent a producer undercover to speak with one of the school's recruiters about becoming a certified teacher in New York through its program.

Recruiter: "Last year, 88 percent of our graduates were actually workin' in their field within six months of graduation, OK? So, when we go through it later, you know, we'll show you the breakdown by, you know, degree and by program and everything like that, so you can kinda understand what, you know, where the number's coming from. But, I mean, 88 percent in, you know, 2009 -- I guess, dependin' on where you come from. But with the economy and everything, you know, most people look at that as--"

Producer: "That's pretty good."

Recruiter: "--a pretty good rate."

But the recruiter's claims were grossly misleading. Based on DeVry's numbers, many of the graduates the recruiter was referring to had jobs to begin with that DeVry was taking credit for.

A spokeswoman for the DeVry College of New York sent a statement sent to ABC News via email in response to our investigation of the college's numbers, saying, "We make no apologies for counting these employed students in our employment statistics and disclose this fact openly in our print collateral, web site and admissions materials. We have been consistently reporting our employment statistics in a similar fashion for over 30 years. Many, if not most institutions of higher education also treat these employed students as part of their employed population."

Click HERE to read a letter to ABC News from DeVry College of New York.

In a statement to ABC News about the issues with for-profit colleges, Sen. Tom Harkin, D-Iowa, the chairman of the Senate Committee on Health, Education, Labor and Pensions, said:

"Each aspect of for-profit colleges' relationships with their students that I've investigated so far often features misrepresentation or manipulation -- it appears job placement claims are no different. Misleading students and the American public about job placement rates is yet another example of for-profit colleges putting their shareholders before their students. Just as a lender shouldn't mislead an American into a mortgage they can't afford, an institution of higher education should not lead a prospective student into loan debt with misleading promises of post-graduation job prospects."

When we spoke with him in August, Miller attempted to explain what happened with recruiters at other for-profit colleges.

"In some cases...for whatever reason, because of poor training, because of rogue employees or because they're getting the wrong message from above -- whatever the reason, somebody is doing things wrong too widespread and we're going to change that," he told ABC News.

Some critics of for-profit schools believe the industry is out to enroll students because it means big money for them. An enormous, publically-traded industry, for-profit colleges received $24 billion in federal funds in 2009 and had an enrollment of 1.4 million students, according to the Government Accountability Office. Tuition for some is more than $20,000 per school year.

"Every institution of higher education has to bring in more money than goes out, otherwise the school'll close down," Miller said in his interview after our initial investigation. "Your tax status has nothing to do with whether you're Harvard University...or whether you're a 'tax-status: for-profit' institution."

Miller added that despite aggressive recruiting methods, money is not the biggest goal of these for-profit institutions.

"It can't be profit first, because if you're not turning out a quality student, you're not gonna be able to continue in business -- because students have choices," he said. "They don't have to go to one of our institutions. They can choose to go to a state college if they have relatively open enrollment. They can choose to go to a community college. So unless we can show quality outcomes systematically, there's no way these schools will be able to continue to operate."

After ABC News' first investigation into the University of Phoenix, it seems as though some improvements have been made at that particular for-profit institution. University of Phoenix president Bill Pepicello told ABC News that the college has stopped compensating its recruiters based on the number of students they enroll.

University of Phoenix Changed Recruiting Policy After First ABC News Investigation

Upon learning of the change, ABC News again, twice, sent in an undercover producer to speak with a University of Phoenix recruiter to ask about getting a teaching certificate in New York through the school's program. This time, the recruiter did not offer any misleading advice.

Recruiter: "If you live in the state of New York, we can't enroll for education for you because the New York requirement for education is totally different than what we can enroll for."

Despite the change at University of Phoenix, Remington's former Criminal Justice professor, Larry Stewart, said he remains skeptical of the for-profit college industry because it makes so much money.

"They're more concerned about the bottom line. What is the bottom figure on this student," he said. "They look at, 'How much money did we make this term or this quarter?'"

Click HERE to read 2009 employment data submitted to ABC News from DeVry College of New York.

ABC News' Lauren Effron contributed to this report