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For-profit colleges often leave Oregon students with debt, worthless credits

TRIBUNE PHOTO: JIM CLARK - Anna Z.,here in front of the Beaverton campus of defunct Anthem College, is $30,000 in debt with few transferable college credits to show for it. Fantasia Spruill admits right up front that she’s never been the best of students.

She dropped out her junior year at Parkrose High School, when she was 16. Her father had a stroke, her mother went to prison. For awhile, Spruill and her 14-year-old sister were homeless.

But Spruill is smart, and she knows it. “A superstar,” according to a local guidance counselor who helps low-income students get into college. At 17, Spruill, hoping short-term to become a medical assistant, and long-term an obstetrician, was accepted into for-profit Heald College in downtown Portland.

PORTLAND TRIBUNEToday, Spruill, 24, works two retail jobs, has no college degree or certificate, and owes more than $20,000 in student loans. The credits she earned at Heald, which closed, are practically worthless.

Anna Z. calls herself a dreamer. When Anna was a child, the Tigard High School graduate’s parents came to Oregon from Mexico illegally. But Anna has lived here the minimum five years to qualify for a renewable reprieve from deportation, which makes her one of the group labeled “DREAMers” by President Barack Obama.

Anna’s personal dream, to become the first in her family to attend college, led her to enroll at Everest College in Tigard and then Anthem College in Beaverton. Today, Anna works as a hotel receptionist while attending Portland Community College. But she and her family wasted much of their hard-earned savings at the two for-profit colleges.

TRIBUNE PHOTO: JIM CLARK - Sara Brassfield attended the Art Institute of Portland and has over $100,000 in loans to pay back. Brassfield now works as an advertising sales rep.Sara Brassfield says she was suckered, and like Spruill and Anna Z., she accepts that she bears some responsibility for her fate. However, like Spruill and Anna Z., she had no one in her family to help her make college decisions. The Art Institute recruiters were just so far ahead of her, Brassfield says. It was as if they could read her mind.

Brassfield owes $110,000 on her series of federal and private loans arranged by Art Institute of Portland, a local for-profit college in the Pearl District that is part of a national chain. She says she’s one course shy of a design degree from Art Institute, but her loans have run out and she can’t come up with the $3,000-$4,000 it will take to finish her course work.

Spruill, Anna Z. and Brassfield all believe they were victims of fraud, at worst, and at the least, deceived. What none of them know is that there is a state commission charged with overseeing and regulating Oregon’s for-profit private colleges. Administrators at the Oregon Higher Education Coordinating Commission (HECC) say they are the “go to” agency for complaints against for-profit colleges, and will respond to complaints with investigations.

But when the Tribune asked Juan Baez-Arevalo, director of post-secondary education for the commission, how many complaints and investigations there have been, Baez-Arevalo replied, “Not that many, to be honest with you. Virtually none.”

Given the number of students posting online and signing petitions about their bad experiences at for-profit schools in Oregon, that hardly seems possible.

“They’re either not getting to us or they’re not wanting to file a complaint,” Baez-Arevalo says.

Perhaps the problem is that nobody knows about the commission’s investigative authority. Even local college counselors contacted by the Tribune were unaware of the commission’s oversight role.

Federal creatures, federal problem

Trouble has been brewing for years at for-profit schools. For-profits in Oregon range from small, family-run schools teaching truck driving and hairstyling to national chain schools such as Heald, Everest, Anthem and Art Institute. Many online schools are also run for profit. In 2012, the U.S. Senate released a report detailing the fraud and predatory tactics practiced nationwide by for-profits — especially the chains.

The news, according to multiple sources, is that despite attempts by the federal government to address the worst of the abuses, Oregon students continue to have their futures derailed. For-profit colleges here are focusing on low-income young men and women from families in which nobody has ever gone to college. The colleges assault these prospective students with unrealistic sales pitches, and leave them with massive student debt. Only a small percentage of the students end up with degrees or certificates.

The federal government can do only so much, says David Halperin, a Washington, D.C. attorney and author of “Stealing America’s Future: How For-Profit Colleges Scam Taxpayers and Ruin Students’ Lives.” The states have to play a role, Halperin says, but they aren’t playing it effectively.

“The thing is, these entities that are being investigated or overseen by states are almost entirely creatures of federal policy,” Halperin says. For-profits depend on federal grants and financial aid for about 90 percent of their revenue. The colleges have been set up specifically to take advantage of federal funds available to help low-income students and veterans attend college. And those colleges do business in states where little-known entities such as the Oregon Higher Education Coordinating Commission are responsible for their continuing oversight.

“It’s as if the Mafia was funded by the federal government and left to everyone else to figure out what they’re doing wrong,” Halperin says.

Too many enticements

Fantasia Spruill still doesn’t understand how she was able to qualify for all the federal student loans she received five years ago at Heald College. She was underage, and had no responsible adult to sign the papers. Some of the loans were federal, some were private loans arranged by the college, and all of it seemed like life support at the time.

TRIBUNE PHOTO: JIM CLARK - Single mother Fantasia Spruill, shown here with her daughter TaiLia, attended Heald College to obtain a medical assistant degree. The school closed and left her with $20,000 of debt.“They helped me just do this, do that paperwork, sign here,” Spruill says. “I’m 17, I’ve never been to college. I dropped out of high school.” So she signed the loan documents.

Spruill and her younger sister were living out of one duffel bag. She wanted to earn a medical assistant certificate as quickly as possible so she could start making money. Later, she planned to transfer the credits to another college and continue her medical education.

The financial aid, she was told, would cover her school costs and there would be an extra $1,500 each quarter she and her sister could live on. Hard to refuse when you’re a homeless 17-year-old.

Spruill doesn’t deny she made bad choices. Before attending Heald she had started taking classes at Portland Community College while working retail part-time. She missed classes. She became pregnant. She is vague about precisely what she was involved in but admits to doing “very bad things.” Heald came along with the promise of a faster path to completion, and money for living expenses.

Now, at the Barnes and Noble coffee shop at Clackamas Town Center, she sinks her head on folded arms, partly in reaction to being asked to summarize the bad choices she has made, but also in reaction to the day ahead of her — a 10 p.m. to 7 a.m. shift stocking shelves at the Northeast Portland Nike store followed by an 11 a.m. to 8 p.m. shift at the downtown Portland Apple store. She hopes to start again at PCC in the fall.

Recently, Spruill tried to buy a car and learned her credit score was terrible because of the $20,000 in student loans from Heald that have been turned over to a collection agency. She was told she’d have to pay a higher interest rate on the loan for the car she eventually purchased.

When she needed her school transcript from Heald in order to apply to Portland State University, she was told she would have to pay $1,500 to get it — money she still owed to the defunct school. She was able to get the transcript paying about half.

The debt and bad credit, Spruill says, will haunt her for years.

“It’s heartbreaking that they did this to so many people who didn’t understand,” she says.

Heald closed its Portland campus in April as part of the dismantling (and subsequent bankruptcy) of parent company Corinthian Colleges ordered by the U.S. Department of Education. Spruill is one of thousands of students nationwide whose lives were turned upside down by Corinthian. She attended Heald for a year and a half in 2009 and 2010, earning more than 50 credits. But she has been told by an adviser at Portland Community College that only 14 of those credits will transfer to other schools.

Even after receiving some debt relief on her Corinthian loans, Spruill still has $20,000 to repay and $1,500 owed directly to Heald.

But what most offends her is that Heald recruiters told her their school had the proper accreditation so that her credits would transfer to other schools.

“It was never true,” she says.

Easy prey

The most vivid lesson Anna Z. learned at Everest and Anthem Colleges was that those with the most vivid dreams make the easiest prey, she says. Tears start to form in the 20-year-old Anna’s eyes as she describes her attempt to realize that most classic of American dreams — a child of immigrants going to college and lifting her family into the middle class — turning into a new American nightmare, with hard-earned family money wasted.

Out of Tigard High School, Anna enrolled in for-profit Everest. Everest recruiters, she says, assured her she would qualify for low-income federal student loans as long as she put down $500 of her own money. Two weeks into classes, she was told that because she was not a citizen, her loans had been turned down. If she wanted to continue her classes, she and her parents would have to raise $5,000 in less than a week.

Everest was sold last year to a controversial nonprofit student loan guarantee corporation. Administrators there did not reply to Tribune requests for comment.

Instead, Anna left Everest and tried a term at Portland Community College. But then a friend told her about another for-profit school that offered a shorter path to a medical assistant certificate than PCC, which was requiring her to take basic math and English classes in addition to courses such as medical terminology. Anthem, she says, promised she’d only have to take classes related to the skills she’d need as a medical assistant, and in eight months she’d be ready to earn $15 an hour.

“What these colleges are doing, they’re getting the young ones just out of high school who just want to get it done,” Anna says. “I just wanted to get it done. I didn’t care how much money I was going to be paying.”

Also, Anna says, Anthem told her just what Everest had told her — that she’d qualify for federal aid. Two months into classes at Anthem she was told, again, that there was no financial aid for DREAMers. She’d already paid the school $2,000. Officials said they’d arrange a private loan for $13,000 that would get her through the eight months needed for the medical assistant degree. She agreed again.

Anna says her entire family pitched in so she could pay the monthly $600 fee and continue at Anthem last year. She would become their access to the American dream.

Anna returned to Anthem after winter break last year and saw her teachers crying in their classrooms. They told her the school might be closing. The following Monday, she arrived to find Anthem empty and was told some of her credits would transfer to other schools and some would not, but that she would still have to pay off her private loans. If she wanted to transfer to Concorde Career College, another for-profit school that was taking on Anthem students, she would have to take out a new private loan.

Concorde recruiters started calling her twice a day. Their message was the same one she had already fallen for twice: “If you don’t have a career your family is not going to have a good life,” Anna says. “I feel like my family came to the States to have a good life, so someone telling me if I don’t make the effort ... they know the button to push.”

Eventually Anna’s Anthem loan was discharged with help from the state of Oregon's HECC. She is enrolled at Portland Community College, taking online the English and math classes the school says she needs to complete, as she works at a hotel. She still gets daily calls from for-profit recruiters.

PCC is costing Anna $800 a term, and she’s aware that if she had simply attended the community college all along, she might have her two-year medical assistant certificate by now. She might be heading to a university. She’s thinking she’d like to become a teacher.

She’s certain of one lesson she will pass on to her students.

“If a student of mine will ask me, ‘Ms. Anna, I want to go to Everest,’ I would say, ‘No, stay away.’ I told a friend right out of high school, ‘Look, you want to go to school, go to a real school. Those (Everest and Anthem) are not real schools.”

Inflated figures, crushing debt

Sara Brassfield finds it curious that when she applied to Art Institute of Portland six years ago she wasn’t asked to first produce a portfolio of her artwork. Recruiters didn’t require a copy of her academic record. She was told that 80 percent of enrolling students would graduate from the three-year program and about 90 percent would be employed in their field, she says.

Today?

“I’ve got nothing except for $110,000 worth of debt and a bunch of shame. I really should have known better,” Brassfield says.

At the time, Brassfield, who suffers from migraines, was unemployed after moving to Portland from South Dakota. She visited Art Institute’s Pearl District campus and signed up before she walked out the door. The $110,000 she owes is the result of 26 federal and private loans arranged by the school, she says.

Art Institute of Portland is one of more than 100 for-profit schools owned by Pittsburgh-based Education Management Corporation. In 2011, the U.S. Department of Justice filed a suit against the corporation, claiming that the $11 billion in state and federal financial aid provided Art Institute students had been fraudulently obtained. The schools, according to the still-pending suit, violated the federal False Claims Act by paying recruiters commissions based on how many students they signed up.

Art Institute has also come under fire nationally for inflating its job placement figures by counting graduates working at minimum wage retail jobs as employed in their chosen fields, according to attorney/author Halperin. Brassfield and others say the instruction and facilities provided at Art Institute of Portland are well below industry standards.

According to Halperin, Brassfield’s debt is not unusual at Art Institute schools. The chain had fine teachers and high-quality programs until private equity investor Goldman Sachs purchased 41 percent of Education Management in 2006.

“They destroyed the school,” Halperin says.

Brassfield, who works at a printing company, admits she was an on again/off again student at Art Institute of Portland. She took two years off when her mother died and her own health problems worsened. She says she is one class short of graduation, but she has maxed out on the federal financial aid she can receive. This means she can’t get financial aid to attend any other school.

Tribune questions about Art Institute of Portland were referred to Education Management’s national headquarters. In an email response to issues raised by Brassfield, EDMC refused to discuss the Justice Department lawsuit, the cascade of student complaints or Brassfield’s situation.

Education Management wrote: “We go to great lengths to help students understand what they are signing up for when they attend our schools, including costs of education ... The Art Institute’s system of schools has more than 200,000 graduates who are making an impact in the communities where they live and work.”

The email noted that Art Institute graduates were working at some of Portland’s most prestigious firms, including Weiden & Kennedy.

Today Brassfield, 34, is hoping to raise the money to finish off her degree, even as she says she will never be able to pay back her loans. Seated at a back table of a coffee shop near the Moda Center, her eyes tearing up, she explains that a collection agency has contacted the estate of her dead grandfather back in South Dakota, hoping to collect the financial aid money she owes.

The Internet is full of websites where hundreds of ex-Art Institute students complain about the debt they claim they were duped into amassing at the schools, and the poor education they say they received. Brassfield is a member of one online community of ex-Art Institute students who are refusing to pay their loans, and who offer testimonials about how they say they were defrauded (The Art Institute Debt Collective). Dozens of Oregon Art Institute students have signed petitions asking for debt relief.

“We cannot all pay,” Brassfield says. “What’s going to happen? Is there going to be debtors’ prison?”


Tug of war between community colleges and for-profits

Jane Larson, a student success coach at Portland Community College, makes no secret of her disdain for local for-profit colleges.

Forget the huge student debt for-profit students often get saddled with, or the courses they take that aren’t accepted for credit at other colleges. It’s the recruiting tactics that most upset Larson.

A few years ago, Larson says, she was working as a student adviser and teaching writing at a Clark College satellite campus in a Vancouver mall. Her students were enrolled in a GED program. For the most part they were young, hopeful and unsophisticated.

The Clark College classrooms were set at one end of a hallway, Larson recalls. At the other end of the mall’s hallway there was a small for-profit computer training school. Each morning, according to Larson, her students would head to her classrooms, only to find the hallway blocked by computer school staff making their pitches to the students, which was, basically, forget Clark College and enroll in their private computer training instead.

“I had to go and retrieve my students every morning,” Larson says. “It was so slick.”

The computer school recruiters called themselves advisers, according to Larson. They would ask the students where they were headed. The students would reply that they were going to the community college to earn their GEDs. To which the recruiters would respond, according to Larson,

“ ‘You can do this and be done in two weeks and become a computer programmer.’ It was horrible.”

But Larson’s story doesn’t end there. “My second experience (with the computer school) was watching the hallway fill up with people who had gone there,” she says. One morning her students arrived to find chains on the doors of the for-profit computer school, and dozens of computer school students milling around.

At Portland Community College, Larson teaches a career education class. As a class project she set up a speakerphone and called a local for-profit massage school, asking for information just so her students could hear what a hard sales pitch sounds like. Then she had the class track how many times a recruiter for the massage school called the number back. Recruiters called the classroom phone, uninvited, 22 times in the next seven days.

That sort of hard-sell recruiting is still occurring, says David Halperin, an attorney and author of “Stealing America’s Future: How For-Profit Colleges Scam Taxpayers and Ruin Students’ Lives.”

Government attempts to curb recruiting abuses at for-profit colleges have had “mixed results,” Halperin says. Paying recruiters based on how many students they enroll is no longer common. But the type of repeated calling Larson’s class experienced is still the norm. Recruiters, he says, still convey a false sense of urgency — warning prospective students there’s not much space left in a class, for instance — and try to pressure vulnerable students into snap decisions.

PCC’s Larson says she’s noticed that the for-profit callers often don’t call themselves recruiters, and she resents it.

“Personally I’m offended they use the title ‘adviser,’” she says. “They’re selling. They’re getting you to sign. You have to sign before you leave the office.”


Considering a for-profit college? Be wary

On average, associate degree programs at for-profit colleges cost four times as much as comparable degrees at community colleges, according to the National Association for College Admission Counseling. Shorter-term certificate programs average four and a half times the cost of similar programs at community colleges. NACA recommends:

• If a school is pressuring you to enroll, beware. A reputable school will allow time for you to weigh options, read the fine print and talk to a school counselor, financial aid adviser or someone else you trust.

• Job placement numbers from for-profit schools may be deceptive or inflated. Do not rely on the claims of school representatives. Look at local job postings online and talk to potential employers to assess the job market in your field.

• Before enrolling at a for-profit college, check with a local community college to see whether credits from the for-profit will be accepted should you decide to transfer.

• Many for-profit colleges fail to make the necessary investments in student support services. Ask to talk with a student support specialist and for a tour of the school library, tutorial labs and training facilities.

• Ask to speak to some recent graduates who are working in your chosen field.

For detailed information about individual for-profit schools:

www.nces.ed.gov/collegenavigator


PKorn@portlandtribune.com

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