Kaplan Suspends Enrollment at Campuses Where Federal Investigators Found Recruiting Abuses
Days after recruiting abuses at two of its campuses were highlighted at a Congressional hearing, Kaplan Inc. has taken the unusual step of suspending enrollment of new students at both. Melissa Mack, a Kaplan spokeswoman, confirmed that the suspensions had been put into effect at the Kaplan College campuses in Pembroke Pines, Fla., and Riverside, Calif.
The Florida campus is where undercover government investigators posing as applicants encountered admissions officers who lied about the college's accreditation and admissions-test proctors who coached the investigators on the answers. The investigators also encountered recruiters who scolded and mocked them for being hesitant to take out government-subsidized loans to pay the tuition. Scenes from those encounters were videotaped and played at a U.S. Senate hearing earlier this week.
Ms. Mack said the company had begun an investigation there and at Riverside, where recruiting abuses were also documented by investigators from the Government Accountability Office. Those actions "are contrary to our standards and values in every way," said Ms. Mack, in an e-mailed statement. "They are simply unacceptable." She said the company "will do every thing we can to ensure that such incidents are not repeated anywhere at our 75 campuses or among our 16,000 higher-education employees."
Top executives from Kaplan and its parent, the Washington Post Company, issued a joint statement earlier this week saying they were "sickened" by the findings in the GAO report. Kaplan has been accused of questionable conduct before. Four pending lawsuits by former Kaplan employees raise allegations similar to some of the GAO's findings. Ms. Mack said that the company takes all charges of wrongdoing seriously but that its investigation had found those accusations to be "without merit."
News of the suspensions came as the Washington Post Company announced on Friday its latest earnings figures, which show how important its higher-education business is to its bottom line. Higher-education revenues for the first six months of 2010 increased by 29 percent, to nearly $918-million, compared with the same period a year ago. The online and campus-based programs of the degree-granting Kaplan University and its various Kaplan colleges enrolled more than 112,000 students as of June 30, an increase of 18 percent over the previous year.
Higher-education revenues, more than 80 percent of which come via federal grants and subsidized student loans, accounted for nearly 40 percent of the Washington Post Company's $2.34-billion in revenues for the six-month period. And the higher-education division's $212-million in operating income accounted for nearly 80 percent of the company's overall operating income for the period. (The company's flagship property, The Washington Post newspaper, lost about $28-million during the same period.)
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