For-Profit Colleges Recruit At Homeless Shelters, Raising Questions Of Exploitation

For-Profit Colleges Recruit At Homeless Shelters, Raising Questions Of Exploitation

For-profit colleges are hitting up homeless shelters for potential students in a practice some are calling nefarious.

According to Bloomberg Businessweek, for-profit college recruiters are aggressively targeting the homeless, promising them better lives and selling educations they may not be equipped for -- due to lack of resources and higher rates of mental illness -- and loans they can't afford. Marisol Lugo is one example:

One homeless woman whom [University of Phoenix recruiter Byron] Thompson steered to Phoenix was Marisol Lugo. Lugo ran away from her Chicago home at age 12, became a heroin addict, and lived on the streets for 22 years, eating out of restaurant trash bins and sleeping in parks and abandoned cars. After detox, she moved in 2008 to Transitional Housing, obtained a high school equivalency degree, and got to know Thompson. "He gave me wonderful words of encouragement," says Lugo.

With federal grants and loans covering the $10,000-plus annual tuition, she began pursuing a two-year business degree online at Phoenix last August. She soon ran into academic difficulties, failing a course in critical thinking. "Sometimes, having used so much drugs, I have trouble retaining information," says Lugo, who now has her own apartment and a maintenance job at the shelter. According to Phoenix, she left the school in November. She says she is still registered and there is a payment dispute.

Some schools, however, deny they they are specifically going after the underprivileged:

"We don't exclusively target the homeless," says Ziad Fadel, CEO of Drake, which also sends recruiters to welfare and employment agencies. "We are in a community that is low-income and happens to have a lot of people on welfare."

And others argue the tactic can be beneficial. Brenda Torchia, a former crack cocaine addict with a handful of prison terms on her record, enrolled in ECPI College of Technology in Virginia. With the help of federal loans, grants and scholarships, she's making her way through school and says the college is "very, very supportive" of her.

However, Businessweek's inquiry into the recruiting practices of Drake College for Business has spurred an investigation by the Accrediting Council for Independent Colleges & Universities. If it turns out the school is in the wrong, their federal aid eligibility could be reversed.

What do you think? Are these colleges crossing a line?

UPDATE: According to a spokesman from the University of Phoenix, Byron Thompson is no longer employed by the college.

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