Rutgers University’s Graduate Business School committed “gross fraud” through a bogus job plan designed to boost its grades, according to two recent lawsuits. The lawsuits sparked a debate about the value and price of higher education.
The federal lawsuits, one a class action and the other a whistleblower litigation, allege the New Jersey business school concocted the hoax to get top marks with publications such as US News & World Postponement.
According to the complaints, the school created a fake employment agency and fake jobs for graduates. The university used $400,000 in endowment funds to provide “kickbacks” to the employment agency, the lawsuits allege, then boasted on its website, “86.10% graduates of the full-time program are employed”.
The lawsuits tell a different story.
“In 2018, the very first year of the program, Rutgers was suddenly propelled into, among other things, the premier business school in the Northeast region of the United States.
“Rutgers violated the New Jersey Consumer Fraud Act by engaging in an impermissible business practice.”
Rutgers did not respond to questions from InsideSources, but released a statement.
“We will say unequivocally, however, that we take seriously our obligation to accurately report data and other information to ranking and reporting agencies. Rutgers Business School strictly follows the MBA Career Services & Employer Alliance guidelines for submitting MBA statistics and also follows appropriate guidelines for submitting undergraduate statistics,” the university said.
Matthew A. Luber, a partner at McOmber, McOmber & Luber in Marlton, New Jersey, says Rutgers conspired to restore its image. “They used a temp agency to fabricate jobs for the specific purpose of getting a higher rating,” Luber said.
Luber says the second lawsuit against Rutgers was filed on behalf of Deidre White, a Rutgers human resources manager who objected to the scheme and was penalized.
“The retaliation was so prolonged and severe that the plaintiff’s health physically deteriorated,” the lawsuit said. “But there is an even more sinister reason for the conduct of the defendants.”
Higher education is “big business and the formula for getting accolades and benefits is simple – more students paying higher tuition means more benefits, higher salaries and more accolades for administrators” .
In its 2022 rankings, US News & World Report ranked Rutgers Graduate Business School as the 45th best in the nation. “Students at Rutgers Business School gain real-world experience through internships, counseling, mentorship and case study competitions,” the magazine reported.
Full-time tuition at Rutgers Graduate Business School is “$28,397 per year (in-state); full-time: $49,298 per year (out-of-state); part-time: $1,184 per credit (in-state); part-time: $2,054 per credit (out-of-state),” according to Rutgers.
Luber argues that many institutions justify high tuition fees with “misleading data regarding post-graduation employment opportunities, hiring rates, and salaries. And, he thinks, fraudulent reviews are prevalent: “It’s not the kind of problem that’s unique to Rutgers. We think it’s systemic.
He is not alone. Advocates of alternative forms of education like apprenticeship programs, vocational colleges and tech schools say there is a built-in bias to promote four-year colleges and public schools rather than just looking at data.
“We just want to be treated fairly,” said Jason Altmire, president and CEO of Arlington, Va., Career Education Colleges and Universities, which represents for-profit career colleges. He notes that their completion rates — the percentage of students who earn their degrees or certifications — are above the community college average. And yet, the Biden administration is considering rules to limit the Pell Grant funding available to vocational college students.
Critics of President Barack Obama’s ‘everyone should go to college’ approach point to the ‘Varsity Blues’ scandal in which at least 53 people were indicted in a bribery scheme to fraudulently admit students unqualified in four-year colleges.
This is all part of a larger conversation aimed at getting more high school graduates to attend traditional four-year institutions. Some guidance counselors are now wondering if a teenager or a family should go into deep debt to pay for college.
The total amount of outstanding student loans was $1.58 trillion in 2021, increasing by about $14 billion between the second and third quarters, according to the New York Federal Reserve. About a third of all American students now carry college debt. Average student debt hit an all-time high of $38,792 in 2020.
A new survey reveals that many have buyer’s remorse.
“Sixty-three percent of people regret taking out a student loan,” according to a new survey from Givling, a group that helps those struggling with student debt.
The survey of 1,600 student borrowers across the United States found that about half had been repaying student loans for 10 years. About a quarter have about $70,000 in student debt. Twenty-seven percent of respondents said the return on investment does not justify the debt.
“The student debt crisis has jumped 144% over the past decade, forcing 45 million Americans to take on more than $1.5 trillion in loans,” said Laurie Farros, president of Givling.
Several financial advisers say they are concerned that young workers are heavily in debt.
“Careful monitoring of debt service with starting salaries is imperative,” said Anthony Ogorek, an adviser in Buffalo, New York. He thinks the debt should be tied to post-graduate starting salaries. Typically, Ogorek says college debt should be around 15% of a monthly income.
“I would rather my clients not take out any student loans or parental loans for their undergraduate education,” said Melissa B. Brennan, counselor in Plano, Texas. “There are too many ways to make a bachelor’s degree more affordable, and families need to keep their eyes on the prize: financially independent children.”