San Francisco Weekly August 1, 2012 : Page 10

sfweekly.com WHO DO YOU WANT TO BE TODAY? CALL TO BOOK AN APPOINTMENT TODAY! “I can’t say enough great things about my spa experience at Stages. From beginning to end, I felt pampered and well taken care of.” Predators in the Ivory Tower from p9 educating just one-third of veteran students. Last year, eight of the top 10 educational institutions collecting G.I. Bill benefits were for-profit, taking in a stunning $626 million. “I think sometimes the emphasis is on signing up the student as opposed to whether or not the student is really ready to be suc-cessful at that school,” says Holly Petraeus, an official with the Consumer Financial Protection Bureau and wife of General David Petraeus. “The top 10 recipients of G.I. Bill aid, eight are for-profit schools, and they are very heavily engaged in marketing to the military — quite successfully, frankly.” 415.398.5173 | www.stagessalonspa.com “I loved the products applied and I really felt a difference at the end. I even got a hand and arm massage while my hydrating mask was setting in. “ -Stages Guest Located in the Heart of Union Square: 256 SUTTER STREET, SECOND FLOOR, SAN FRANCISCO, CA 94108 It’s All About the benjAmIns he University of Phoenix will never be confused with Yale. According to one 2010 report, 90 percent of its students fail to graduate within six years. Still, by pure monetary standards, former CEO Todd S. Nelson was a success. Dur-ing his tenure, he tripled revenue for the school’s parent company, the Apollo Group. Enrollment surged to more than 300,000. Unfortunately, he accomplished this the old-fashioned way — by cheating. Since 1992, it’s been illegal to pay recruiters based on how many students they bring through the door. Phoenix did it anyway until two recruiters blew the whistle, initiating a suit that would ultimately cost the school $88.3 million in settlements and fines. Under pressure, Nelson was forced out in 2006, walking away with a generous $18 million severance. Apollo and Phoenix founder John Sperling put a polite spin on the exit, saying only that Nelson was “preoccupied” with stock price to the det-riment of the school’s long-term health. Yet if Nelson’s profit motives were too lusty for Phoenix, they were a match made in corporate heaven for Goldman Sachs. The Wall Street bank had partnered with two private equity firms to buy EDMC. Nelson was hired as the company’s new CEO. Former Maine Gov. John McKernan Jr. — husband of Sen. Olympia Snowe (R-Maine) — was named chairman of the board. Over the next five years, the company’s revenue would nearly triple to $2.8 billion. Last year, Nelson took home $13.1 million in salary and stock. By the standards of for-profit executive pay, he was working on the cheap. Gregory Cappelli, his replacement at the University of Phoenix, received $25 million last year. CEO Robert Silberman of Strayer Education raked in an astounding $41.9 million in 2009. Yet even this pales next to Jonathan Grayer, the former CEO of Kaplan University, who walked away with a $76 mil-lion severance package — courtesy of Kaplan’s parent company, the Washington Post. By comparison, Harvard President Drew Faust collected a meager $875,331 in 2010. Nelson’s bad-boy practices have predict-ably caught up with him. Last year, the Justice Department and attorneys general from five states charged EDMC with fraud for paying recruiters based on the money they gener-ated. Six more states have joined the suit. EDMC claims its sales pay is not just based on bodies enrolled, but such things as business ethics, professionalism, and job knowledge. 3/2/12 6:22 PM FrEE FREE city CITY T YOUR EYES. WORTH EVERYTHING. EXPLORE OUR ACUVUE ® BRAND CONTACT LENS OPTIONS. 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Satisfaction Guarantee for VSP members: If you try a free trial pair of ACUVUE ® Brand Contact and decide they’re not for you, VSP will refund or reinstate your Tel: Lenses 415.772.8282 contact lens fitting fee (up to $60.00). Refund request must be submitted by your VSP doctor within 30 days of your trial start date and before any lens purchase. Offer Fax: 415.772.8222 good on ACUVUE ® Brand trials between 5/1/11 and 12/31/12. Other terms and conditions apply. See vsp.com or ask your VSP doctor for more details. ACUVUE ® , YOUR EYES. WORTH EVERYTHING.™ and SEE WHAT COULD BE ® are trademarks M–F of Johnson & Johnson Vision Care, Inc. 9 to 6 ©Johnson & Johnson Vision Care, Inc., 2012. (Closed 1:30 to 2:30) VSP ® is a registered trademark of Vision Service Plan. Sat. 10 to 4 Kathleen Bittel would beg to differ. She was an EDMC recruiter when Nelson arrived, and readily attests to the change in atmosphere. Over the next three years, the sales staff increased from 950 people to more than 2,600. “Once Goldman Sachs took over and they brought in [Nelson], ev-erything changed,” she says. “Everything became much more cutthroat. It was just more oppressive and very high pressure.… They were watching you constantly.” Like Lawrence, Bittel had studied psy-chology and proved adept at forging bonds. She’d gone back to school in her 40s to sup-port her family of four after her husband got cancer. She understood the difficulties of raising kids, working full time and going to college. At first, she admits to “drinking the Kool-Aid,” believing Argosy’s online program could help people like her. After six months on the job, she was allowed to take Argosy courses for free. That’s when she discovered she’d aided a bait-and-switch. Many of the features she heralded to students were barely functional or didn’t exist. The Worldwide Profession-als Network, where students could find graduate mentors in their field, was noth-ing more than a bulletin board. Promised mp3 downloads of classes also didn’t exist. Worse, the classes themselves had less content than a political soundbite. “When I saw what they were passing off as college, I was appalled and mortified,” Bittel says. “I’m a fabulous salesman if I believe in my product. But I was blown out of the water. I couldn’t sell it anymore.” On the sales floor, she would soon go from golden child to problem student. Managers threatened to fire her. She protested that she’d excelled at EDMC’s other barometers, like leadership, calls made, and conversations engaged. None of that mattered, they told her. “‘Those are just put in there because the law says we’re not allowed to pay you directly,’” she recalls her boss say-ing. “‘We don’t look at those. Those don’t really matter. The only thing that mat-ters is how many bodies you bring in.’” Bittel wasn’t the only worker feeling the pressure. A man she carpooled with would cry on the way home. “If you weren’t unscrupulous, you strug-gled,” she says. “Half the people I worked with, their previous job was in the mortgage industry. They targeted people in that in-dustry.... They were the ones that did the best because they were so unscrupulous.” She eventually transferred to EDMC’s ca-reer placement department, where the same deceit wore a different outfit. She was supposed to help Art Institute grads find jobs. But the school was churning out students with abysmal portfolios — if they had one at all. She was also supposed to generate stats on how many of them found employment in their fields. The numbers were used to not only sell future students, but by ac-creditors in maintaining a program’s stand-ing. So EDMC, she says, was prepared to rig these stats by any means necessary. Bittel’s boss liked to say that “every student is place-able. It’s all a matter of technique.” This “technique,” she says, involved con-vincing people to sign affidavits saying they were employed in their field. She witnessed Weekly SF WEEKLY | Music MUSIC | Eat EAT | FilM FILM | Night+Day NIGHT+DAY | sucka SUCKA | lEttErs LETTERS | coNtENts CONTENTS | eye-carumba-Poster-FINAL-bleeds.indd 1

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