Attorneys General in 10 States Mount Joint Investigation Into For-Profit Colleges

May 04, 2011

Attorneys general from 10 states have begun a coordinated investigation into allegations of deceptive marketing and other consumer-fraud concerns at for-profit colleges, an effort that will be likely to touch on "a lot of the major players" in the industry, the leader of the effort, Jack Conway of Kentucky, confirmed in an interview with The Chronicle on Wednesday.

The broad inquiry, first reported by The Huffington Post, is "still in its nascent stage," said Mr. Conway, who had previously disclosed that his office was investigating at least a half-dozen for-profit colleges in Kentucky.

States like his, Florida, Iowa, and Illinois, which have begun their own investigations and have acknowledged being part of the coalition, will continue to pursue their individual investigations. But under the multistate arrangement, attorneys general from those states and others will share what they find and perhaps work jointly on investigations against companies with operations in several jurisdictions and perhaps on joint lawsuits against them.

The group might also develop a code of conduct for the colleges to follow, or possibly require the colleges to pay into a fund that would be used to reimburse students who were victims of false promises about colleges' job-placement records or misinformation about the accreditation status of college programs.

The attorneys general are well positioned to pursue such efforts, Mr. Conway noted, because they're chief enforcers of states' consumer-protection laws. Under those and other statutes, he said, "you can get to some hefty penalties."

Geoff Greenwood, a spokesman for Iowa's attorney general, Tom Miller, said the arrangement will "facilitate the sharing of information" among the attorneys general.

Along with the attorneys general of Kentucky, Florida, Illinois, and Iowa, the "working group" on for-profit colleges also includes Oregon's John Kroger, a spokesman there confirmed Wednesday. A spokesman for New Mexico's attorney general, Gary K. King, said he had not decided whether to join but was "definitely interested" in the investigation.

The identities of the other members could not be immediately confirmed Wednesday; Mr. Conway, a Democrat, said the group includes Democrats and Republicans.

Mr. Conway said the working group is not now coordinating its efforts with any federal law-enforcement agencies and is separate from the regulatory and enforcement efforts of the U.S. Department of Education.

Members of the group have, however, made connections with the investigative staffs of two key Democrats in the U.S. Senate, Tom Harkin of Iowa and Richard Durbin of Illinois. During the annual meeting of the National Association of Attorneys General, held in Washington in March, members of the group and Senate staffers discussed "ways we could work together in the future," Mr. Conway said. Senators Harkin and Durbin have each held a series of hearings focused on potential abuses of student-aid funds by for-profit colleges.

The actions of the attorneys general have also, not surprisingly, caught the attention of the for-profit college industry. In response to the several investigations now under way, several of the companies and the Association of Private Sector Colleges and Universities have been approaching Mr. Conway and others, seeking ways to to pre-empt legal action.

Mr. Conway noted that the industry was "well represented" at the association's meeting in March, in some cases by lobbyists and lawyers who were themselves former attorneys general. Among them were Grant Woods, the former Arizona attorney general who now works for the Apollo Group's University of Phoenix, and Andrew Ketterer, the former attorney general of Maine, whose client he did not identify.

"We're getting requests for meetings," said Mr. Conway. "There is a lobby front that is expanding day by day."

Derek Quizon contributed to this article.