Skip to comments.Scandal at The Washington Post: Fraud, Lobbying & Insider Trading
Posted on 03/09/2012 7:32:11 AM PST by Qbert
In the summer of 2010, business columnist for The Washington Post Steven Pearlstein lifted the veil on the little-known company operating procedure that involves an incestuous relationship between his own employer, and the scandal-plagued, for-profit university known as Kaplan.1 In his column, Pearlstein made the argument that while personnel in the newsroom may have nothing to do with Kaplan, they most certainly have benefited from its financial success.
So what is it about Kaplan that has been so beneficial to Post employees? Aside from being one of the largest for-profit colleges in the country, Kaplan is not only a subsidiary of The Washington Post, up until recently it has been the single most profitable aspect of the company. In 2009, the year prior to the Pearlstein article, Kaplan accounted for 58% of the Posts revenue and generated the bulk of company profits, while newspaper and magazine publishingin other words, journalismaccounted for a mere 19% of revenue and operated in the red.2 In 2010, Barrons estimated that the value of The Washington Post company was roughly $8.5 billion, and that Kaplan represented about $5 billion.3 So it was no surprise when Pearlstein stated that Kaplan has provided the handsome profits that have helped to cover this newspapers operating losses.
With a financial resumé like that, and status as the cash cow keeping the Post afloat, why wouldnt CEO Don Graham be singing the praises of Kaplan University? Perhaps because there is a longstanding history of allegations of fraudulent practices, with hundreds of millions of dollars of profits diverted to Kaplan executives.
Worse, the university... [Snip] has a dropout rate of nearly 70%, and those who do graduate earn well below the national average for college graduatesoutcomes not exactly befitting of a money-making juggernaut and its supposedly ethical parent company.
(Excerpt) Read more at aim.org ...
Kaplan University (”KU”) is the “doing business as” (DBA) name of the Iowa College Acquisition Corporation, a company that owns and operates for-profit colleges. It is owned by Kaplan, Inc., a subsidiary of the Washington Post Company.
Kaplan University is predominantly a distance learning institution of higher education that is regionally accredited by the Higher Learning Commission and is a member of the North Central Association of Colleges and Schools (NCA). Kaplan University was named in honor of Stanley H. Kaplan, who founded Kaplan Test Prep.
In 2010 Kaplan and other for-profit education companies came under scrutiny from the U.S. Congress due to concerns that the industry leaves too many students with heavy debts, and with credentials that are of little help finding jobs.
In 2010 Florida’s Attorney General opened an investigation of Kaplan and four other for-profit universities for allegedly making misrepresentations to students about several matters, including financial aid. The federal Education Department released data in August 2010 demonstrating that only 28% of former Kaplan students were paying anything off the principal of their student loans. The remainder were paying only interest on their loans, were behind in payments, or in default. For comparison, the federal data show that 56% of students from non-profit colleges in the United States are paying off principal from their loans, thus at twice the rate of Kaplan students.
Kaplan University was one of 15 for-profit colleges cited by the Government Accountability Office (GAO) for deceptive or questionable statements that were made to undercover investigators posing as applicants.
In 2008 three former academic officers at Kaplan University filed wide-ranging federal False Claims Act lawsuits accusing the university of defrauding the United States government out of more than $4 billion. The lawsuits alleged that Kaplan enrolled unqualified students, inflated their grades so they could stay enrolled, and falsified documents to obtain accreditation for certain academic programs. The three suits were consolidated and filed in the U.S. District Court in Tampa, Florida in March 2008.
Whistleblower Exposes Educational Fraud at Washington Post Owned Kaplan College
Whistleblower David Goodstein former Director of Education for the Kaplan owned CHI Institute in Broomall, PA was intimately involved in 2006 when an investigation by the State of Pennsylvania into the Medical Surgical Technician program began. When it was suggested by management he bribe local hospital CFOs with $5,000 or $10,000 dollar gifts to find extern sites for our students he pointed out that to hospitals charging $125 for an aspirin $5k or $10k wasnt very much money. Perhaps a better solution was to just tell the truth. Kaplan decided he didnt really grasp the gravity of the situation and the next day they escorted him out the door with my carton of personal belongings.
Students, mostly young minority women, signed up for an $18,000, 50 week program of study to become a Medical Surgical Technician. It was an intense four term program that trained students to assist in the operating room during surgical procedures. The required fourth term was 500 hours as an extern in a bona-fide hospital operating room environment. After completing the program the students could sit for a national certification exam and then likely find employment at excellent salaries in hospitals and out-patient surgical centers. Over 90% of the students in the program applied for federal Title IV loans to finance the cost of tuition and these loans, through private lenders, were guaranteed by the federal government. Many students needed to obtained co-signers to qualify for the loans and had intended to repay the loans when gainfully employed in their chosen field after graduation.
After completing the first three terms students were told that there were no extern sites available and to go home and wait until the school called them. They went home and waited, weeks, months, years and some are still waiting. In the meanwhile their student loans for the first three courses became due after six months and they were saddled with debts of more than $13,000 and nothing to show for it but a bunch of non-transferable credits that are worthless. Most are not able or willing to repay the loans and have defaulted. These defaulted loans have been or will be repaid by the Education Department with tax dollars paid by you and me. Kaplan, however, gets to keep every cent of the tuition charged whether the students finish the program or not. attend.
WashingtonPostGate. I’m sure Woodward and Bernstein will be right on top of this.
For all who have been victimized by Kaplan University, let me say, you are not alone. Kaplan will use very curious methodology to either get one to pay unjustified balances, or they will avoid you at all cost for refunds. At any rate it is against the very laws set in place by the federal government. What Kaplan will not tell you is that 10% of their finds must come from students, while 90% comes from the FED by the means of student loans (sub, un-sub), and grants. Kaplan compensates the 10% by essentially stealing monies from students, so that there is an appearance of always being in the black with the FED, as they appear to maintain federal regulations.
Kaplan has made astronomical amounts of money from their educational venture by raising not only tuition, but technology fees. Let us do some math...
If a conventional college has 2-3 credit hour classes and charged $220.00/ credit hour, and Kaplan has 5-6 credit hour classes at the current rate of $320.00/ credit hour..... well this is dollar signs, over charges to the FED, students, and a stunning growth of “business” not so much education.
Let us further discuss trying to transfer credits, of the exact same “Kaplan” degree.... people it is not going to happen. It is the equvilant to trying to spend the paso in the U.S. Kaplan misleads the wide-eyed student as they exploit their family need, hectic schedule, want and need for advancement (which is a basic human want and desire), and on-line convince that many schools now offer— this is also what makes Kaplan blend into the mix.
IMHO...the scam of higher education is the next huge mutli-trillion dollar financial scandal...and the FEDS and business knew that 3 years ago when they made these debts impossible to discharge in bankruptcy.
I wonder if any legal eagles here would know if there is liability by university’s under the RICO statutes?
Good work, kcvl. Kaplan stinks to high heaven.
They tried every trick to get me to enroll several years ago. They are very aggressive after I told them that I wasn’t interested in their scheme. They hire used car salesmen and former collection agents to go after people. They have no shame.
They were regionally accredited, which I don’t understand how they pulled that off.
My wife, a disabled vet, takes online classes (legal studies) at Kaplan. We’ve had no problems...yet...Thanks for the heads-up.
One never knows where the vermin will show up these days.
Had the same pressure phone calls to sign up for financial aid. Told them No Thanks but they keep sending emails and phone cons telling us to send in the overdue paperwork. May be something this. On the other hand, the professor is very knowledgeable and professional; if anyone drops out of this class it will be due to the difficulty of the overwhelming workload!
[Snip] Worse, the university... [Snip] has a dropout rate of nearly 70%, and those who do graduate earn well below the national average for college graduatesoutcomes not exactly befitting of a money-making juggernaut and its supposedly ethical parent company.
Maybe the Washington Post could get their advertisers and reporters together to be friends and 'talk'... parties and such... might bring in some extra cash.
Or even better, sell the 'take' on a story. Without marking it as a paid ad... A front page story that doesn't look like an ad should bring in a pretty penny. Rich corrupt elite liberals will love that one...
Or just shill for one political party in exchange for insider information. So many ways to sell out... so many ways to be creepy. What to do, what to do...
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