David Adams will never forget August 4, 2010. The US Government Accountability Office released a report indicting the practices of for-profit education companies like Kaplan. Its title alone set off a bomb in the industry: “FOR-PROFIT COLLEGES: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices.”
With one report, Adams’s entire career shifted.
Those findings were the kickoff of a two-year investigation of for-profit colleges. At the end of it, Senator Tom Harkin (D-IA), then the chair of the US Senate Committee on Health, Education, Labor, and Pensions, released a statement that said, “In this report, you will find overwhelming documentation of exorbitant tuition, aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and pocketed as profit, and regulatory evasion and manipulation.”
Though the 2010 report did not directly name Kaplan, it alleged that college officials in Kaplan’s industry misrepresented costs, embellished job placement rates, and instructed applicants to lie about their family’s income. A follow-up report released in 2012 alleged that taxpayers spent $32 billion in one year on companies that operate for-profit colleges. Between 1998 and 2008, enrollment in for-profit colleges tripled to about 2.4 billion students.
Follow-up media coverage named Kaplan alongside other educational systems within the for-profit industry. Like any education provider, Kaplan must cultivate trust to retain current students and attract new ones. Being named alongside fraudulent companies damaged its ability to do so.
Today, Kaplan works with more than one million students, and that number wasn’t much lower during the Senate investigation; the organization had a lot at stake.
The 2010 report was a bombshell, but it wasn’t totally unexpected. The company—and the entire industry—knew for-profit education was under the Obama administration’s microscope. That’s why Kaplan hired Adams out of the Illinois attorney general’s office in 2008 to join the organization as a deputy general counsel. Adams had spent his career prosecuting large-scale corporate fraud, governmental fraud, and consumer fraud, and he jumped at the chance to help solidify Kaplan’s internal compliance department.
With the for-profit higher education model under attack, Adams found himself in the middle of a war being fought on several fronts. “We had to work quickly to keep Kaplan compliant as regulations increased while also fighting a constant public relations battle,” he says. Adams worked to increase transparency and convey that Kaplan strives to operate ethically in a troubled industry.
Adams helped build a team of skilled legal and compliance professionals who spend their time advising the business and defending the company. “We have a rapid response team that acts quickly when concerns arise,” he says, adding that internal lawyers stay in proactive communication with industry regulators.
In fall 2015, Kaplan restructured itself and split into three groups: Kaplan Higher and Professional Education, Kaplan International, and Kaplan Test Prep. Adams took over as the general counsel of Kaplan Higher and Professional Education after serving in the same role for Kaplan, Inc.
Transparency is critical to success, especially for an education provider. While other industry companies hunker down and remain silent during conflict, Adams takes the opposite approach. It’s a philosophy he learned during his time in the attorney general’s office.
“If the government comes calling, the best response is often to take a cooperative approach,” he explains. “If you’re afraid to help regulators learn about your practices, it may be that you’re doing something wrong.” If a student files a complaint against Kaplan, regulators know how to find Adams for a response.
Adams was one part of Kaplan’s holistic response to government investigation, and their investment has more than paid off. Kaplan had continued to grow even as speculation whirls around the for-profit education industry.
In 2015, several federal and state agencies took action against Corinthian College after finding that the company misled students about job placement rates, advertising placement as high as 85 percent for programs that hadn’t placed any students. The federal government fined Corinthian $30 million, forcing the company to shutter all physical locations.
Soon after, the US Consumer Financial Protection Bureau’s student loan ombudsman, Rohit Chopra, pledged ongoing action and accountability.
Today, Kaplan spends time demonstrating a student’s return on investment and creating clear outcomes and disclosures on recruitment and enrollment literature.
“If the government comes calling, the best response is often to take a cooperative approach.”
Kaplan celebrates seventy-eight years in business this year and recently reported approximately $2.5 billion in annual revenue. The organization employs more than 19,000 people and operates in more than thirty countries. Kaplan Higher and Professional Education has tens of thousands of students in university- and professional-education programs.
As for-profit higher education organizations continue to navigate their way through a relatively new regulatory environment, Adams remains committed to transparency, demonstrating students’ return on investment, and defending Kaplan.
“It’s a high-pressure, high-stress environment, and there’s a lot on the line,” he says. “But if we do our jobs right, we can avoid the issues that plague the industry and continue to be a leader in the education sector.”