Bitter lessons for trade school graduates

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by BYRON HARRIS

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WFAA

Posted on October 29, 2010 at 10:05 PM

Updated Wednesday, Dec 15 at 12:55 PM

NEWS 8 INVESTIGATES

NORTH RICHLAND HILLS — Tens of millions of dollars of government money is going to career colleges run by ATI of North Richland Hills.

A year-long News 8 investigation finds that ATI recruiters have targeted the homeless and felons as students, tapping into government loans and grants, and misleading both the students and the government.

"I actually believed what they told me, and it was a lie," said Julian Lockhart, who was standing in front of The Bridge homeless shelter in downtown Dallas. That's where he was living when ATI recruited him to be a student in its welding program at the Maple Avenue campus.

To Lockhart, the prospect of $15 an hour as a welder seemed like a chance to change his life. But now he says he and 10 other homeless students recruited by ATI meant nothing more than money to the for-profit school, which has 16 campuses in Texas, Oklahoma, New Mexico and Florida.

Lockhart and his friends had no permanent address and no credit. But each was eligible for federal grants and loans of $10,000 to $23,000.

"They just had recruiters come to the shelter," Lockhart said. "They told us that if we was to enroll in their school they would find us a job." 

All he had to do was sign some papers. Lockhart knew he was obligating himself to debt, but the upside was too big.

"It was something that wasn't right going on... they just told me they would handle the paperwork," Lockhart said.

Criminal record? No problem

Robyn Todd spent 17 years of his life in an Alaska prison before he was recruited by ATI in Dallas.

Just before he was finally released, a computer search led him to the school's Maple Avenue campus.

A quiet, articulate man, Todd is nobody's fool. He knew he would have trouble getting a job with a criminal record, but his recruiter and instructors from ATI repeatedly told him he'd get a job right away.

Todd and others found that their eagerness to overcome their pasts made them vulnerable to a cleverly designed sales pitch.

Joanna Thompson had a felony conviction on her record, and was uneasy that she'd be employable as a dental assistant. Her ATI recruiter assured her there would be no problem.

"She told me yes," Thompson said. "That's not a problem."

Only now, with more than $10,000 in federal loans, does Thompson know that to be employed as a dental assistant she'd likely have to be licensed, and that licensing with a felony would be improbable, if not impossible.

A former ATI employee said the sales pitch was deceptive from the beginning. "We're guaranteeing you a job," he said. "That's what the model was."

Rarely is anyone turned down for admission to ATI, according to former employees.  But an ATI sales manual obtained by News 8 outlines a "consultative selling technique" that led prospects to believe they'd been "selected" for admission.

Employees said they were trained in meetings how to push prospects to an emotional breaking point. "It is important to find out the situations where the potential student has failed," said another former employee. The internal jargon for the process was to make prospects 'feel the pain.'"

Employees said their phone conversations with prospects were taped and then reviewed with managers who emphasized techniques to make potential students feel vulnerable.

$100 bonus for crying

In face-to-face sales presentations, "the whole purpose was to make them cry," said a former ATI  sales rep, "so that they would understand if they walk out that door they would really have no options but to try and better themselves."

Salesmen (ATI calls them "admissions representatives") could actually earn cash by making prospects cry, employees said. Managers would check on face-to-face interviews to note the progress. If they saw a recruit in tears, "They (the salesmen) would be rewarded with a $100 bonus, time off, something like that," said a former sales representative.

To get prospects in the door, ATI saturates daytime TV with commercials. In a YouTube video, ATI founder Arthur Benjamin praises ATI's job placement rate.

"Ninety percent of the people get jobs there were trained to do within a short period of time," Benjamin said.

But the real number is much lower.

State records show 70 percent of ATI's North Texas graduates got jobs in the most recent reporting period. But there's evidence to question those numbers.

Former employees say the school forged student signatures on job placement records.

"When they graduate, they would sign off on all kinds of paperwork," said a former ATI employee. "Then you would take a clean version of their signature, make copies of it, and then paste it into documents to say they were placed."

At times, former employees say, school officials would even print phony business cards, indicating students had started their own companies.  The counterfeit cards would use a business name with the student's name and phone number in it.

ATI declined to be interviewed for this story. In a reply to written questions, the school said, "Any instance of forgery would be met with our 'zero-tolerance policy.'"

News 8 obtained records that indicate otherwise, however.

Career colleges file job placement records with the Texas Workforce Commission. ATI's state filings are larded with questionable job placements.

Among them:

  • Six graduates of ATI's HVAC program, who allegedly were hired at an address in South Dallas which traces to a house and not an air conditioning firm.
     
  • Five ATI welders who, the school claims, went to work at Paradise Landscaping. The owner of that business said no hires were made.
     
  • Eight electronics technicians who allegedly got jobs with Pyle Security and Widgeon Technology. The owners of those firms say just one person was hired.

Revolving door

State records show ATI has high dropout rates, like many other for-profit schools.

"When I started, there were 40 people in my class," said Robyn Todd, the welding student from Alaska. "It ended up with about 12."

Federal regulations require students to attend class for the first few days of a semester for federal loans to start flowing. But many students don't even last the first week.

So, former employees say they sometimes paid homeless people to impersonate the real students for the first few days of class. The homeless people would be paid out of the recruiter's own pocket, employees said.

ATI wrote to News 8 that it:

  • "...is rigorously committed to doing the right thing"
     
  • "...only recruits prospective students in educational environments," and
     
  • "...does not recruit ex-convicts."

None of the former students we've interviewed have any prospect of paying back their student loans.  ATI said 84 percent of all its students' tuition comes from federal grants and loans.

E-mail bharris@wfaa.com

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