David has been scammed. I used to work in the college financial aid industry, for what was then the largest government contractor in the field. I processed Pell Grant applications, SARs, defaulted GSLs, etc. I also wrote, all by myself, the entire set of user manuals (like 20 huge binders) for the entire Guaranteed Student Loan program's software system, for the government's satellite offices throughout the nation.

So I think I have some experience and expertise in this area.

Simply put, these schools make their money by taking advantage of naive, undereducated people. Puerto Rico was a huge pool for them, as were the high school seniors of big city school systems (Chicago, New York, etc.). These schools also will claim they are "accredited" (which gives them an air of legitimacy), but they are accredited by organizations that aren't recognized by any legitimate educational authority.

There are a lot of adult education programs out there that are nothing but money factories. They lure in naive people (often poorly educated citizens and new immigrants), entice them with a "free" (or incredibly cheap/affordable) education, get the person to sign some forms for financial aid, completely hiding the fact that the person is actually applying for loans and signing the money over to the school, but keeping all responsibility for repayment of those loans on the shoulders of the student.

A certain dog grooming school in Colorado, a certain cosmetology school in NY, and a certain "learn to drive a tractor/trailer" school were especially guilty. They lured students in, got their money, then provided NO EDUCATION. Oh, there may have been classes, but they were poorly taught, far too few, far too short, and in no way prepared the students for any job whatsoever. Fraud is rampant because there is too little oversight of literally thousands and thousands of fly-by-night schools.

David, your best bet is to contact your state's attorney general's office and find out which government agency deals with student loan fraud (I can't remember, or I'd tell you).

It's a shame when this happens, because the student loses (has to pay for receiving no education, and often defaults, leaving him/her ineligible for further financial aid, hurting their credit rating, etc.), other students lose (because there is no more available aid for them), taxpayers lose (because Congress lets us bail out the programs).