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SPEAKER 1: When a committee led by Iowa Democratic Senator, Tom Harkin, concluded its two-year investigation of 30 for-profit colleges in July, three Minnesota schools made its list. Investigators briefly cited complaints of aggressive or misleading recruiting tactics by two of them-- Capella University and Walden University. The committee couldn't get to every school. And Twin Cities-based Globe University and the Minnesota School of Business did not make its list.

But MPR News interviews with former Globe/MSB employees and students indicate the company has engaged in deceptive, high pressure recruiting practices similar to those uncovered in the report. The allegations paint the picture of schools that target students eligible for subsidized loans and grants, but who have low prospects for academic success. They raise questions about whether students at those schools and the taxpayers who subsidize them are getting good value for their money. Alex Friedrich reports.

ALEX FRIEDRICH: Globe University and the Minnesota School of Business are a testament to recent growth in the for-profit education business. Though they first opened their doors more than a century ago, in just the last decade, Globe and MSB have added 18 of their 20 campuses in Minnesota, Wisconsin, and South Dakota. Now, some of them are located in commercial areas such as here in the IDS Center in downtown Minneapolis.

The schools are part of a closely held family business owned and operated by the family of Terry and Kathryn Myhre, who records show have residences in Stillwater and in Naples, Florida. The Myhre family bought Globe in 1972 and the Minnesota School of Business in 1988. Combined, the schools enroll more than 10,000 students studying in fields such as health care, technology, and business.

The tuition and fees vary by program. A federal website lists them at more than $15,000 a year. Now taxpayers subsidize much of that bill through government-funded financial aid. According to state data, in the 2010-2011 school year, the schools brought in more than $125 million through federal, state, and private grants and loans to students.

SPEAKER 2: Thinking about a career in business? A business management degree from Globe University and Minnesota School of Business will equip you with the knowledge and leadership skills.

ALEX FRIEDRICH: The schools advertise heavily on TV and online. The ads offer no guarantees for a degree or a job, but they suggest an opportunity to get ahead in a promising field. Former recruiters and staff for Globe and the Minnesota School of Business say the ads tend to attract a desperate, low-income clientele who are in for a hard often misleading sales pitch once they make contact. It's a process the recruiters say they've come forward to expose.

Globe and MSB may look better than many schools in the Harkin report in areas such as student loan defaults and reliance on federal money for revenue. But some of the allegations of bad recruitment behavior such as harassing phone calls, emotional manipulation, and misleading language read as if they came straight out of the reports on the largest, most aggressive national for-profits.

For more than a year, Jason Jensen was a Globe/MSB admissions representative. He says he was fired in 2011 for not making his recruitment goals. He and the other former staffers who spoke to MPR News describe a fine print culture in which important details were obscured behind emotionally manipulative sales pitches.

JASON JENSEN: I've fed off of their own shame, their own disgust that they had with their own lives.

ALEX FRIEDRICH: Jensen and other former recruiters say they knew most of the people they enrolled probably wouldn't graduate. Such students showed little academic aptitude, they said, didn't understand college, or needed prodding and handholding throughout the enrollment process. But more students, Jensen says, meant more financial aid revenue for the schools, regardless of whether students finish their degrees.

To some for-profit education critics, that dynamic echoes the subprime mortgage crisis. Aggressive marketing convinces consumers to take on huge debt. And with the help of government subsidies, make an expensive purchase they can't afford. They default on their loans and wind up without the asset they were striving for.

In the end, taxpayers get stuck directly or indirectly with much of the bill. But Globe executives say they give people a shot at an education who normally might not have the chance. These executives say recruiters have to follow scripted presentations to ensure they treat students fairly and give them accurate information. And Globe and MSB officials insist the schools don't allow predatory behavior. Thomas Kosel is the schools' director of government relations.

THOMAS KOSEL: I think that our policies are opposed to those things. I think that if any people that came to you and told you those things happened or that they did them were unethical and not part of our policy.

ALEX FRIEDRICH: Jensen and others say the pressure to enroll new students was intense. When someone responded to an ad, he would call multiple times a day to keep him on the hook. The frequency, he says, bordered on harassment.

JASON JENSEN: We just slam them with phone calls, with emails because I had to hit a certain quota of students every quarter to keep my job.

ALEX FRIEDRICH: Jensen says he was expected to enroll a dozen or more students a term, though quotas varied according to the season. Globe Chief Operating Officer Jeanne Herrmann says recruiters do receive what she calls goals, and that their jobs could depend on meeting them.

JEANNE HERRMANN: The job is to enroll students. So after we have worked with them to help them move towards performance in their role, if they're not performing, then yes, they can be terminated.

ALEX FRIEDRICH: Once recruiters had prospects on the phone, they would read out a questionnaire as part of a scripted presentation. The idea was to learn what the students wanted out of life. Then recruiters would present a Globe education as the key to achieving those dreams.

SPEAKER 3: I am a single mother to three children. I knew I had to find a way to support them. And I did not just want a job, I wanted a career. So I enrolled in the paralegal program.

ALEX FRIEDRICH: But the questions could also dredge up people's frustrations say with a dead-end job or trouble providing for a family. Former recruiter Hannah Von Bank says recruiters were told to exploit those feelings.

HANNAH VON BANK: You're supposed to find the pain that's driving them to go back to school and use that to get them to enroll.

ALEX FRIEDRICH: Globe officials originally told MPR News they didn't know whether recruiters used phrases like "find their pain." They later said in a written statement that the words were no longer acceptable. Not according to Von Bank. She said managers were still using the expression when she worked at MSB's Lakeville campus from mid-May to late July.

The former recruiters say they weren't straightforward with students. For example, they avoided detailed discussions of cost. Recruiters said they held off cost questions and distracted students with other subjects. But Jensen said recruiters quoted the highest amount of financial aid possible, even if they weren't sure how much the students would qualify for.

Former employees say the schools also exaggerated job placement statistics and starting salaries. They did that by including Globe/MSB students who were working while going to school. Such students were already employed when they graduated, so the schools counted them as "placed." One recruiter says they quoted the higher salaries of experienced working students as if they were in the reach of an entry-level worker.

So how do Globe/MSB students stack up against their peers in the classroom? Well, it's hard to say definitively. Federal graduation data looks only at first-time, full-time undergraduate students. That is students who have never taken classes somewhere else.

In the case of Globe/MSB campuses in the Twin Cities, that means that 90% of the students aren't counted when calculating graduation rates. And most of those Globe and MSB campuses are too new to show up in the federal data. The sliver of data that is available shows only a quarter to half of first-time undergrads leave with a degree.

Former employees and students say few students understood the demands of college. Many were in their late 20s or early 30s with families or schedules that offered little time for schoolwork. Jensen says most of the people he recruited were unemployed or working at a dead-end job. People like that couldn't normally afford college on their own. But one former online recruiter who spoke to MPR News on the condition that his name not be used says his colleagues didn't care.

SPEAKER 4: We were really focusing on recruiting the bottom-of-the-barrel type students, the ones that rarely had the means. Essentially, if you have a heartbeat and you can sign your name, you qualify for Stafford loans.

ALEX FRIEDRICH: Federal Stafford student loans and Federal Pell Grants are two key ways for profit colleges make their money, critics say. This year, for example, a low-income freshman or sophomore could get up to $11,000 in Pell Grants and Stafford loans to go to college. The more of those kinds of students a college enrolls, the more financial aid money comes in.

One former student recalled studying full time toward an associate's degree in business. He left the school after a couple of quarters of full-time study with nothing to show for his $12,000. But he was lucky. His father had paid more than half the cost out of his own pocket.

The student only had about $5,000 in loans to pay off, about half the average for Globe/MSB students who take out loans. Jensen, one of the recruiters, says that made poor students hot prospects, even if recruiters figured they'd never graduate.

JASON JENSEN: So when we knew we had the single mothers with maybe two or three kids were making minimum wage or not even employed at all, those were the ones that as the rep were excited about because we knew they were going to get a ton of money.

ALEX FRIEDRICH: Four instructors told MPR such a recruiting strategy led to the enrollment of unprepared students. They described students who couldn't grasp the math and English concepts necessary for college. And Heidi Weber, a former Globe/MSB teacher and dean, says the school allowed low performers into mainstream classes.

HEIDI WEBER: There were students that weren't even at a high school, weren't even at maybe a middle school reading level that were being placed in courses like anatomy, and physiology, pharmacology. And as a teacher before I was a dean, that's tough. It's tough to teach those students. Because no matter how much tutoring you do, they're so far behind.

ALEX FRIEDRICH: Weber and another former dean have filed whistleblower lawsuits against Globe and Minnesota School of Business saying the school is engaged in misleading practices. Their suits are being litigated. Globe's Herrmann says students must meet minimum academic requirements to enroll. If they score poorly on a placement test, they take remedial classes and get lots of support.

Globe officials will also point out that their graduation rates aren't worse than many public colleges. And they're even better than some. But because graduation rates don't include students who transfer out to other schools, public colleges don't get credit for considerable numbers of students who move on to earn their degrees elsewhere. If you factor in those transfers, community and technical colleges do a noticeably better job than for-profits at fulfilling their mission.

Globe's Herrmann says Globe and MSB are designed to teach students career skills, not transfer them to other schools. But several former students and staff say misunderstandings about transferability of credits were rampant. A former recruiter says many admissions reps knew a lot of schools typically didn't accept Globe and MSB credits, but wouldn't tell that to students.

Herrmann says students sign a statement indicating they understand credits may not transfer. And she says recruiters aren't supposed to promise that other schools will accept their credits. And yet, some students and faculty say they heard recruiters make those promises. Former student, Nick Gerhart, says that before enrolling, he asked admissions reps whether schools would accept his Globe and MSB credits if he ended up transferring.

NICK GERHART: We were told that they would transfer, no problem. They weren't telling the complete story.

ALEX FRIEDRICH: When he transferred out after two quarters, he says the community college he transferred to accepted none of his credits. Globe's Herrmann says the schools give out accurate information. She says supervisors monitor recruiters to make sure they don't wander from official scripted presentations.

The schools even send in secret shoppers who pose as prospective students to see whether recruiters are sticking to their scripts. Globe Provost Dave Metzen, former head of the Minnesota Office of Higher Education, says recruiters are well trained.

DAVE METZEN: Now, if they go rogue, it's not being accepted by anyone in this organization.

ALEX FRIEDRICH: But the recruiters MPR spoke to say their supervisors were part of the problem. They generally look the other way when recruiters engage in unethical behavior. Former recruiter, Von Bank, recalls supervisors suggesting tactics.

HANNAH VON BANK: People would say, well, you know, off the record, this is what I did when I was an admissions representative. That gave me a lot of success. But this is off the record.

ALEX FRIEDRICH: Jensen recalls telling an indecisive prospective student to explore her interests at a community college first and then to return to Globe when she knew what she wanted.

JASON JENSEN: And then when I hung up, my supervisor came up and said, because he was right next to me. He's like, what was that? And I was like, yeah, she has no idea what she wants to do, and she can't figure it out. He's like, well, that's your job. You're supposed to tell her what she's supposed to take.

ALEX FRIEDRICH: Because Globe/MSB is a privately held company, it's hard to determine what effect hardball recruiting and high dropout rates have on the bottom line. But higher education policy professor, Kevin Kinser, of the State University of New York at Albany says such tactics are part of the business model at a lot of for-profit colleges. They may find it more profitable to recruit new students, he says, than to spend money on existing students who have little chance of success.

KEVIN KINSER: So if a student graduates or a student drops out, it doesn't matter as long as you have another student that can replace them, preferably two or three.

ALEX FRIEDRICH: That revolving door for students is what for-profit critics such as Senator Harkin call "churn." But Globe's Kosel said in a written statement that the schools quote "do not, in any way, practice churn." Alex Friedrich, Minnesota Public Radio News.