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Kaplan Career Institute and parent company APSCU are facing multiple whistle blower suits, class action suits, and government investigations for alleged fraud. The complainants have stated that Kaplan created students that never existed to rip off the government for millions. The Attorneys General of Florida, Delaware, Massachusetts, and Illinois have all completed investigations into the school and its parent company and the results are not very surprising considering how many such for-profit schools have been running fraudulent scams.
As a result of the investigation launched by the Florida Attorney General, Kaplan decided to settle rather than face the music for its deceptive practices surrounding placement rates, enrollment, recruitment, accreditation, and graduation rates. They decided to waive 2,400 students’ tuition for a total of over $6 million voluntarily and gave up its licence for its dental assistant program.
Undercover federal investigators videotaped multiple instances of Kaplan’s California and Florida recruiting officers making fraudulent claims to prospective students. These statements came in many forms but claims of huge starting salaries upon graduation and that students would not have to pay back their federal student loans were common. Some students were told they would make as much as $100 an hour as massage therapists once they had their certificate.
Whistleblower suits are numerous but four in particular claim students enrolled in the programs did not meet requirements to be qualified and that enrollment counsellors were receiving financial compensation based on the number of students enrolled. If students dropped out of programs they were kept in the system as active students, their grades were manufactured, and the school kept collecting their loan money. One whistleblower found a box of diplomas in an office for these phantom students and when he began to ask too many questions about it, he was fired.
One former employee stated that the company used a training manual for recruiters which told them to specifically target those who would rely on federal financing, had low self esteem, came from abusive backgrounds, were single mothers, those who had been fired or laid off, and those who were incarcerated. They found out later that these students were targeted because they would drop out, the financial aid would be kept, and they wouldn’t actually have to provide them any services.
Promises of a dream life were presented to potential students living in poverty and told that a Kaplan education was going to change their lives forever. Aggressive and deceptive sales tactics and high levels of pressure were placed on students in order to lure them in. Job placement figures, salaries, and internships required to complete programs were grossly misrepresented. Job placements often consisted of minimum wage cashier jobs at Walmart and didn’t legally constitute successful placement. As for internships, many students were stuck in limbo waiting well over a year to find a placement and many never got one at all.
Over 92% of Kaplan’s revenues were derived from federal student aid and other federally funded programs such as those for veterans and military personnel. Pell grants, Stafford loans, GI bills, and other financial aid programs were taken advantage of by the school on a regular basis. The majority of students managing to even graduate from the programs found themselves stuck in minimum wage jobs they could have gotten without attending school and stuck with loans they could never hope to pay back.
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