Thursday, February 11, 2016

Report: Bogus 'Obama Mom' grants lure students into debt

For-profit schools are using President Obama's name and misleading online pitches to lure poor students into dangerous student debt, according to a piece by the nonprofit ProPublica. The Inquirer's Susan Snyder reported on similar problems in May.

Report: Bogus ‘Obama Mom’ grants lure students into debt


Back in May, my Inquirer colleague Susan Snyder reported about how loans for for-profit colleges were leaving some students with crushing debt and little hopes of paying it off.  (You can read her story, "For-profit colleges leave many students in debt," by clicking here.)

Today, the investigative journalists at the nonprofit ProPublica expanded on that story with a piece about for-profit schools that are using misleading online pitches and President Obama's name to lure poor students into dangerous debt.

You can read ProPublica's story, "Bogus ‘Obama Mom’ Grants Lure Students," by clicking here.

It begins with an anecdote about an Ohio woman's encounter with one such distressing and deceptive pitch:

After being laid off from her job as a high school teacher in Dayton, Ohio, Nicole Massey decided to go back to college. For months, she scoured the Web for ways to fund her tuition, while supporting her 10-year-old son, Tyler. So when ads turned up in Massey's inbox claiming that President Barack Obama had created special college grants and scholarships for single mothers, her hopes soared.

"You see his picture," Massey said, "so I clicked on it." The link took her to a new window, where she was asked to enter her name, age and other information about the degree she wanted. The site then produced a list of schools that lined up with Massey's choices.

Almost immediately, recruiters from for-profit colleges, including the University of Phoenix, Kaplan University, Grand Canyon University and a couple of local schools, bombarded Massey with e-mails and calls.

"That's when I would bring up the thing, 'What about the Obama loans? What about the money for the single moms in the stimulus?'" she said. "And they would say, 'Well, we'll call you back with more information about that.'"

They never did -- and little wonder: "There is no such thing as an Obama grant for moms," said Robert Shireman, who until early this month was deputy undersecretary at the U.S. Department of Education. "Moms are eligible for federal financial aid generally -- Pell Grants, student loans and other aid -- but nothing specific to moms or single moms." Nevertheless, the Obama mom ads have become "ubiquitous," he said.

Read the rest here.

Coincidentally, the U.S. Department of Education just issued proposed new rules meant to help protect students who borrow to attent for-profit career colleges.  Click here to read them.


Inquirer Business Columnist
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About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

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