[Congressional Record Volume 161, Number 164 (Wednesday, November 4, 2015)]
[Senate]
[Pages S7758-S7769]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2016--MOTION TO PROCEED--
Continued
The PRESIDING OFFICER. The Senator from Kansas.
Mr. MORAN. Mr. President, I ask unanimous consent to address the
Senate as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Waters of the United States Rule
Mr. MORAN. Mr. President, this week has been devoted legislatively to
discussing and considering legislation affecting an EPA regulation
called waters of the United States. It is one more example of executive
overreach by an increasingly unaccountable Federal agency.
I want to speak about our efforts here on the Senate floor this week
and again encourage my colleagues to continue their efforts to make
certain this overreach is responded to by Congress. The courts have
spoken, but we want to make certain we do our job.
One of the criticisms I hear regularly from people who support this
regulation is this: Don't you care about water quality? Don't you care
about clean water? I absolutely think it is important to protect our
Nation's waterways. If you are a Kansan, water is life, water is the
future of your community. Water matters greatly. We are not against
clean water.
Agriculture producers--which dominate in my State--across Kansas are
strongly opposed to this regulation, but they are certainly not opposed
to the efforts to keep our water supply safe and clean. Most Kansas
farmers and ranchers hope to pass their land and their farming
operations on to their kids and grandkids. It serves their interests to
preserve the land and water to which their family farms are tethered.
It is not the Washington lobbyists and the environmental radicals who
are telling Americans ``If you oppose this regulation, you are opposed
to clean water.'' That is what they say. Kansans care greatly and
particularly farmers and landowners who want their children to enjoy
their farm or ranch in the future care greatly about clean water.
It is EPA's abusive regulatory path, characterized by fines,
penalties, and potential civil lawsuits against landowners, that gives
us major cause for concern. The Federal Government should not dictate
to citizens how they manage their private lands.
I believe there are better ways to promote water quality than with
threats of severe fines, penalties, or even jail time. One of the ways
we see this effort take place is through the Department of
Agriculture's Natural Resource Conservation Service. NRCS promotes soil
and water health not by mandates and threats from Washington but
through collaborative, voluntary approaches that encourage conservation
through incentives and on-the-ground technical assistance for those
landowners.
Unlike the EPA, which seems to view agriculture producers as
untrustworthy partners who must be forced into caring for the land,
NRSC and the USDA Farm Service Agency efforts are successful in large
part because they operate under the recognition that farmers and
ranchers are devoted stewards to their land.
Policies such as the Grassroots Source Water Protection Program and
the Environmental Quality Incentives Program are examples of voluntary
approaches that incentivize innovation, provide technical assistance,
and more broadly promote clean water through localized, cooperative
efforts. Compare those approaches to what we are debating here on the
floor today and earlier this week--an overly broad, overly complex,
overly ambitious regulation drafted by an agency that has shown a
complete unwillingness to listen to or work with landowners.
This regulation is pretty straightforward. If it is water, EPA has
the authority to regulate it unless it decides it doesn't want to.
Again, what this regulation basically says is that if it is water, EPA
has the authority to regulate it unless EPA decides it doesn't want to
do it.
First, EPA declares that all ``tributaries'' are waters of the United
States. Tributaries are defined as anything with a bed, banks, or an
ordinary high-water mark, regardless of the frequency or duration of
the water flow. This kind of definition is so broad and all-
encompassing that the EPA can assert jurisdiction over streams and
ditches that may flow only for a few hours following a rainstorm.
This regulation also controls waters that are ``adjacent'' to any
water that is under EPA's jurisdiction, including 100-year-old
floodplains. And if somehow water could still escape the EPA's long
shadow, its broad definition, they came up with yet one more way to
regulate it. The regulation states that if waters aren't adjacent or
are not tributaries, they can still regulate if there is ``significant
nexus'' between the waters EPA wants to regulate and navigable or
interstate water. What that means is that every drop of rain can be
regulated because every drop of rain always ends up in a body of water
that is navigable. All EPA has to do is establish some connection
between the two, and they have granted themselves the authority to
regulate the waters.
With its significant civil fines and criminal penalties for those not
in compliance, we can see why so many Americans are concerned.
Last year, EPA went on a public relations campaign of sorts to
convince stakeholders and to convince people across the country that
they only meant to ``clarify,'' not expand, the
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regulation. Instead of lecturing, the EPA should have listened to the
overwhelming feedback they received from constituents, including many
who attended a meeting in Kansas City. The EPA should have scrapped the
rule and started over.
Now we have learned that not only did the EPA ignore the outcry of
the American people, but they also disregarded the technical experts at
the Army Corps of Engineers who described the rule as ``not reflective
of the Corps' experience or expertise.'' Again, the Corps is the agency
that the EPA is to work with to develop rules. They are the experts,
and they say this rule is not reflective of the Corps' experience or
expertise. The Corps says it is not accurate. The Corps says it is not
supported by science or law. The Corps says it is inconsistent with the
Supreme Court's decision. And the Corps says it is regulatory
overreach.
It is obvious that the regulation exceeds the EPA's legal authority
under the Clean Water Act. It is equally obvious that the EPA intended
to run roughshod over anyone who disagreed.
The waters of the United States regulation is, in short, a
breathtaking abuse of power, and it is something Congress needs to
address.
For too long, Congress has looked the other way when this Executive
or any other occupant of the White House exceeds their congressionally
mandated legal authorities. Republicans perhaps look the other way when
there is a Republican President and Democrats look the other way when
there is a Democratic President. The reality is that Congress needs to
play its constitutional role in determining what the law is and prevent
the abuse that comes from a White House that exceeds that legislative
authority day after day.
The EPA's regulations ignore two Supreme Court opinions. It ignores a
time-honored understanding of what the law does and does not permit in
the way of regulation, as evidenced by numerous legislative attempts
rejected by Congress to amend the Clean Water Act that the Obama
administration now does by regulatory action. It ignores the serious
repercussions for farmers and ranchers, electric cooperatives that
provide electricity to my State, the oil and gas industry that provides
jobs across Kansans, the homebuilders that provide homes for Kansans,
and many other small business owners in our State and across the
country. And it ignores the concerns voiced by so many more, including
State and local officials across Kansas and our Nation.
At the end of the day, if the goal is to promote clean water and
responsible land management, there is a much more effective method to
do so, as evidenced by the voluntary cooperative efforts within USDA
that respect private property rights, incentivize conservation rather
than criminalize landowners, and don't threaten to do irreparable harm
to our country and to the jobs Kansans so desperately need.
I urge my colleagues to block this regulation and to force the EPA
and the Army Corps of Engineers to work with State and local officials
and those affected by the regulation in protecting real waters of the
United States. We must protect those waters. We should do it much
differently than the Environmental Protection Agency proposes.
I yield the floor.
The PRESIDING OFFICER. The Senator from Texas.
Crude Oil Export Ban
Mr. CORNYN. Mr. President, about a month ago the White House
announced that it has reached a deal with 11 other countries along the
Pacific Rim--known as the Trans-Pacific Partnership. This is a major
trade agreement that followed on the approval of trade promotion
authority by the Congress.
As we might expect, President Obama has been quick to tout his
credentials as a pro-trade President, and I think so far, so good. In
fact, though, you might say he is so pro-trade that he has
significantly not only sought to open up the U.S. economy but also the
Iranian economy, releasing billions of dollars to a hostile regime by
negotiating a deal to ease sanctions against them and potentially
releasing as much as 1 million barrels of crude oil by Iran onto the
world markets. I think it has been well documented that I oppose that
deal.
I do find the President's position is perplexing at minimum or
hypocritical at worst. It is hypocritical that despite his self-
proclaimed pro-trade stance, he refuses to do something that should be
a no-brainer when it comes to any proponent of free trade: opening up
foreign markets to the things we make and produce here, like lifting
the antiquated ban on exporting crude oil.
By refusing to revise this outdated policy, the President continues
to contribute to the flatline of our economy and to deny our potential
as an energy powerhouse. And, I might add, at the same time, by not
acting to lift this export ban, the President continues to deny our
allies the energy they need for their economic security and to improve
their national security.
Next month will mark 40 years since the United States put into place
a ban on the export of crude oil. For those who might not be familiar
with the history, let me offer a little bit of background.
The crude oil export ban was put in place decades ago as a precaution
to protect the United States from disruptions to global supply of oil
in the 1970s, at a time when we were importing the majority of the oil
and gas that we consumed here in the United States. But, fortunately,
the world looks a lot different than it did back in the 1970s. For
example, in 1970, world production was roughly 48 million barrels of
oil a day. In 2015 that number has doubled to 100 million barrels of
oil a day, and the United States alone is producing about 9.4 million
barrels of oil a day.
As recently as 2008, 76 percent of Americans believed that the world
was somehow running out of oil. Thanks to the remarkable shale
revolution, we have come a long way in helping the geopolitical energy
landscape turn in our favor here in the United States and have reduced
our dependency on imported energy from other parts of the country.
I should mention that it is because of the commonsense policies of
States such as Texas, Pennsylvania, Ohio, and North Dakota that we have
been able to take advantage of the incredible new technology in this
field that goes along with horizontal drilling and fracking to produce
a supply of oil and gas that we never would have dreamed of a few short
years ago. These developments have been nothing short of revolutionary.
We have recently seen an uptick in oil imports in the United States,
primarily because overseas energy producers are discounting their crude
to be able to take advantage of the U.S. market. The downward trend for
the past several years of imports of oil showed that the United States
is importing less than it historically has. Why? Because we are
producing more here, so we are less reliant. I think most people would
think that would be a good thing.
Our country doesn't need to bar our domestically produced energy from
reaching the global market. We should do away with this antiquated
policy and, in so doing, help kick start the U.S. economy in the
process. First, let me talk about what this would do to help our
economy. Lifting the ban would mean real job creation right here in
this country. These are not minimum wage jobs. These are well-paying
jobs. It is easy to think that lifting the ban would only provide a
limited benefit to those who work in the domestic energy sector, but
that is actually not the case.
Domestic energy production involves many different sectors, from
construction to shipping to technology companies. By allowing our
country to export more crude, the United States has the potential to
create many, many jobs here in the United States at a time when we need
more jobs--not only in the domestic energy sector but deep in the
supply chain as well.
One study estimated that for every new production job, it translates
into three additional jobs in the supply chain and another six in the
broader economy. It is estimated that in my home State of Texas alone,
more than 40,000 jobs could be created in the coming years simply by
lifting the ban and making available to producers the global benchmark
price known as the Brent price. Several studies have suggested that
hundreds of thousands of jobs in multiple sectors throughout the
country could be created in the coming years if the crude export ban is
lifted.
By the way, I should mention this--because this is probably on
everybody's mind: What is this going to do to the price of gasoline?
Study after study has
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documented that gasoline prices are going to remain either where they
are now or go lower should the ban be lifted. By the way, the Energy
Secretary of the Obama administration, Dr. Moniz, agrees with that. It
is plain old supply and demand, if you think about it.
Lifting the crude oil ban export would strengthen our economy and
could actually save Americans money at the pump. But doing away with
this outdated, protectionist policy also gives us the opportunity to
promote stronger relationships with our friends and allies around the
world. For example, our NATO allies and other nations in Europe rightly
question why the United States doesn't lift this ban, which would help
them achieve a source of energy that they need, instead of having to
depend on countries such as Russia that use it as an instrument of
coercion and intimidation.
Today, many of our allies in Europe rely not only on Russia but on
Iran for their energy needs. Wouldn't it be so much better if we were
able to enter into contracts to sell our energy to our friends and
allies to help prop them up and provide them another source of energy,
rather than leave them dependent on countries such as Russia that want
to use it as an instrument of intimidation. Because of these countries'
dependence on our adversaries for their basic needs such as heating,
electricity, and fuel, this represents a real vulnerability, not just
for them but for us as well because we are part of the North Atlantic
Treaty Organization.
As our world becomes more interconnected, we need to take a more
long-term strategic view. That means considering the implications of
our energy policies for our own national security. By lifting this ban,
the United States can offer to help our friends diversify their energy
supplies and enhance their energy security and help reduce the revenue
that these rogue states take in for nefarious purposes--such as Iran,
the No. 1 sponsor of state terrorism.
Lifting the crude oil ban represents a rare opportunity to do two
things vital for our country: to strengthen our economy and to promote
a safer, more stable world for our allies and partners and ultimately
for us.
Last month, in a strong bipartisan vote, the House of Representatives
voted to overturn this ban. Now it is time for the Senate to do the
same. Unfortunately, the White House has already sent a signal that
were we to pass such a bill to lift the ban, the President might decide
to veto this pro-trade legislation. I wish to point out to the White
House and to anybody else who is listening that time and again the
President has relied on Republicans in this Chamber to advance his pro-
trade agenda. The reason we have done it is because we agree that a
pro-trade agenda is good for our economy and good for our security.
Soon we will have an opportunity to read the full text of the Trans-
Pacific Partnership Agreement that I mentioned earlier. Pro-trade
Republicans in this Chamber, myself included, have voted to equip
Congress with a powerful mechanism with which to consider trade
agreements such as the Trans-Pacific Partnership Agreement or trade
promotion authority. Trade promotion authority, or TPA, which passed
with strong Republican support and only 13 Democratic votes in the
Senate, does not guarantee that the President's agreement will pass
this Senate or this Congress--far from it. I am going to use all of the
tools that we have provided for in the trade promotion authority
legislation to make sure this proposed deal, the Trans-Pacific
Partnership, gets the kind of careful scrutiny it deserves.
We know the President, with not much time left in his administration,
is looking for a legacy accomplishment. But this President's
inconsistency with respect to free trade gives me great pause. I have
to say that he can't take my support for granted or, I believe, the
support of others in this Chamber for the Trans-Pacific Partnership,
particularly if he acts so inconsistently on other free trade measures
such as lifting the crude oil export ban.
Moving forward, I hope the President will learn to work with those of
us in Congress who have traditionally supported free trade in every
respect. If he were truly the pro-trade President he claims to be, his
administration would prioritize lifting the crude oil export ban with
the same ferocity with which it supports the Trans-Pacific Partnership.
I yield the floor.
The PRESIDING OFFICER (Mr. Gardner). The Senator from Wyoming.
Waters of the United States Rule
Mr. ENZI. Mr. President, I applaud my colleague for what he just
said, and I want to also applaud the colleagues who today took a stand
against the regulatory onslaught and overreach being waged by the
Environmental Protection Agency. In promulgating the waters of the
United States rule, or WOTUS, the EPA and the Army Corps of Engineers
have teamed up to promulgate one of the most expansive Federal power
grabs across the Nation.
Recently, I spoke to this body about the threat that the growth and
expansion of Federal regulations pose to this country's economic well-
being. The growth of Federal regulation and bureaucracy is a menacing
threat to this country's security and success. What America needs now
is a smaller, less burdensome regulatory framework that will permit our
Nation's economy to thrive. With the $18 trillion of debt, we can only
afford policies that will serve as a catalyst for economic growth.
This waters of the United States rule is a prime example of a Federal
agency coming up with regulations that do the precisely opposite. In
the early 1970s, Congress passed the Clean Water Act and charged the
EPA with protecting our Nation's navigable waters from pollutants. It
has worked. Since then, the EPA and the Corps have been working to ever
expand the definition and scope of ``navigable water,'' this time
stretching the meaning all the way to the limits of common sense.
With the waters of the United States rule, the administration has
once again demonstrated a willingness to advance its own goal at any
cost. Under this expansive new rule, the EPA may implement substantial
additional permitting and regulatory requirements under the Clean Water
Act without any thought to the employees who will lose their jobs, to
the businesses or industries this rule will cripple.
As the U.S. Chamber of Commerce said earlier this week in a letter to
this body, business owners and their employees in all sectors of the
economy would be affected by the regulatory uncertainty of this rule,
which is ``certain to chill the development and expansion of large and
small projects across the country.''
Again, this is not the kind of regulation America can afford. The
waters of the United States rule is so expansive that it would redefine
the jurisdiction of bodies of water under Federal control all the way
down to, for example, all water located within 100 feet of other
jurisdictional water. This is my favorite: The rule further includes
all waters located within 1,500 feet of any other jurisdictional water,
if it also is in the 100-year flood plain.
I don't know about you, Mr. President, but I won't stand for giving
any Federal agency--much less the EPA--five football fields worth of
leeway to enforce any rules or regulations.
As chairman of the Budget Committee, I seldom hear any agency talking
about having enough resources. The EPA is not an exception. They can't
take care of what they already do, and now they want to bite off every
body of water in the United States. There is a lot of water that can be
cleaned up. There is a lot of water that has been cleaned up. You
always start with what is worse. I always tell people that Jesse James
robbed banks because that is where the money was. You start where the
most pollution is, not where the least pollution is.
States already know best what makes their waters navigable, and they
don't need a Federal rule like waters of the United States to constrain
them. This is particularly true for the Western States, where water is
a rare and protected source and is respected accordingly. In Idaho, a
State which historically relied on streams to support its timber
industry, lawmakers consider a stream navigable if it will float timber
in excess of 6 inches of diameter or if it is capable of being
navigated by oar. Six inches--that is not a very big log. If the State
of Idaho protects streams small enough to float logs that size, they
don't need a rule like WOTUS to further constrict what is considered
navigable.
At some point, the overregulation by the EPA and this administration
has to
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be stopped. Today we had an opportunity to do just that. By passing the
resolution of disapproval, we have sent a message to the President, his
administration, and all of its bureaucrats. Earlier this week, the body
missed a keen opportunity to pass my friend Senator John Barrasso's
bill to roll back this regulation. His bill would have sent the EPA and
the Corps back to the drawing board to develop a new rule. It would
have told them how to do it. It would have required them to conduct a
thorough economic analysis and consult with States, consult with local
governments, and consult with small businesses. Congress made a mistake
in 1972 when it passed the Clean Water Act and left too much up to the
EPA to define. We had a chance to fix that error with Senator
Barrasso's bill.
This rule allows the EPA to regulate any body of water that has a
significant nexus to navigable water. Unfortunately, the rule leaves
the definition of ``significant nexus'' open to the EPA's
interpretation.
Here is something that fascinates me. If you contest, guess who gets
to make the ruling in the case. The EPA does. Guess how they are going
to rule. As anyone from Wyoming would attest, never has a Federal
bureaucrat missed an opportunity to make life a little more complicated
for the folks out West. I can't possibly think of why I would give the
EPA an opportunity to do so here.
The Clean Water Act recognizes States as having primary
responsibility for land and water resources within their boundaries.
That is a responsibility taken very seriously in places like my home
State of Wyoming, where so many farmers, ranchers, and small business
owners rely on water for their livelihood. In Wyoming, folks know that
you have to take care of the land or the land will never take care of
you. You won't find better stewards for land and water anywhere, so if
the folks in Wyoming tell you a rule governing the use of water is no
good, you can take that to the bank.
As the State's Governor Matt Mead said, this rule was bad from the
start. In his words:
The EPA failed to properly consult with states or consider
states' concerns. The rule unlawfully seeks to expand federal
jurisdiction over water, undercuts state primacy and burdens
landowners and water users in the West.
Wyoming has joined 30 other States in suing the EPA and the Corps of
Engineers to block this rule. If over 60 percent of the States in this
Nation are spending time and money to ask the courts to block this
rule, then this resolution should pass with flying colors. In fact, if
the 2 Senators from each of the 31 States that are suing were to vote
for either the resolution before or this resolution, the previous one
would have passed cloture. This one didn't require cloture. So in
passing this joint resolution of disapproval, our actions appropriately
reflected what our States are telling us to do: Stop this rule.
Two Federal courts have already recognized the fallacy of this rule
and issued stays to prevent it from being enforced. Those courts have
recognized what we should all recognize: the massive scope of this rule
and the potential damage it could cause.
Wyoming was lucky in that it got some relief from a U.S. district
court judge before the rule could be enforced in late August. In that
ruling by which the court stayed the rule's enforcement, the court
said:
The rule asserts jurisdiction over waters that are remote
and intermittent. No evidence actually points to how these
intermittent and remote wetlands have any nexus to navigable-
in-fact water.
I couldn't have said it better.
What the EPA is doing is more out of control than protection. It is
an overreach, it is power, and they can't afford it. For the sake of
farmers, ranchers, manufacturers, and small businesses and their
employees, it is time to stop this outrageous regulation.
I thank the majority leader, Senator Barrasso, and Senator Ernst for
recognizing how important it is to fight this bad EPA rule and bring
legislation to the floor to push back.
I urge my colleagues in the House to pass this resolution of
disapproval so that we can send a clear message to the President that
this Congress will not continue to accept ill-thought-out, ever-
expansive, unendingly complicated regulations from this administration,
ones that the courts have already ruled on three times.
I thank the Presiding Officer.
I yield the floor.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Mr. President, I ask unanimous consent to enter into a
colloquy with Senators Carper, Warren, Murphy, Blumenthal, Schatz, and
Brown for up to 1 hour.
The PRESIDING OFFICER. Without objection, it is so ordered.
For-Profit Colleges
Mr. DURBIN. Mr. President, today I come to the Senate floor to
discuss the issue of for-profit colleges. One may wonder how a Member
of the U.S. Senate takes up an issue. This came to my attention when a
young woman in Chicago, IL, contacted our office and told her story.
She was a conscientious young woman who wanted a college education,
and, having graduated high school, she shopped around on the Internet
and found the degree she wanted. It was a degree in law enforcement
offered by Westwood College. Westwood is a for-profit college based in
Colorado.
She enrolled in Westwood, and 5 years later--5 years of classes
later--she got her diploma in law enforcement from Westwood. She took
it to every law enforcement agency in the Chicagoland area, and they
said: Young lady, this is not a real college; this is one of those for-
profit Westwood colleges. We don't recognize your degree.
When she went to another place, she got the same reaction, and then
she realized she had wasted 5 years of her life on a worthless diploma.
But that is not the worst part. She incurred a student loan debt of
$80,000 and she couldn't get a job. She moved back into her parents'
basement. Her dad came out of retirement to help her pay off this loan,
and she is going to take years to do it. She has postponed buying a
car, getting her own apartment, or even considering marriage or a
family. This was one personal tragedy that opened my mind.
I used to drive out on the Kennedy Expressway and see Westwood
College signs on these large, tall buildings and think, wow, this must
be some college. Well, it turned out that it was part of a network of
for-profit colleges and universities that I have been researching and
speaking about ever since.
When I started 5 years ago, it was a different industry than it is
today. Too many people like this young lady ended up with empty
promises, deep debt, and worthless diplomas from for-profit colleges
and universities.
Westwood isn't the only one. The biggest for-profit college is the
University of Phoenix. DeVry University, based out of Chicago, IL, is
the second largest. Kaplan--which used to own or was owned by the
Washington Post, depending on your point of view--ITT Tech, and Le
Cordon Bleu are names young people know right off the bat because they
are inundated with advertising from for-profit schools. They and their
parents think these are real schools. They think: It is worth my time.
It is worth the debt to me and my family to pursue a degree.
Five years ago, this industry was in its heyday. Enrollment and
profits were sky high. They were a favorite of Wall Street investors.
Between 1998 and 2008, enrollment at for-profit colleges exploded by
225 percent. By 2010, total enrollment in these for-profit schools
reached 2.4 million.
When the former chairman of the HELP Committee, Senator Tom Harkin of
Iowa, released a report on the industry in 2012, they had grown to take
an incredible share--$32 billion in Federal taxpayer dollars, 25
percent of all the Federal aid to education. Despite the fact that they
had 10 percent of the students, they were taking 25 percent of the
Federal aid at that point. Why? They are so expensive. The tuition is
so much higher than public colleges and universities or even many
private colleges.
Meanwhile, more than half the students who enrolled in for-profit
colleges left without a degree within 4 months and found themselves in
student loan default. Five years ago, 10 percent of the students
accounted for 47 percent of the student loan defaults. How can it be
that 47 percent of the students who can't pay back their student loans
went to for-profit colleges? It costs so much and the degrees are
worthless.
John Murphy is a cofounder of the University of Phoenix. This was the
mother ship of them all during the
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great for-profit college movement. Here is what he said in the Deseret
News National:
They are not educators and they're looking to manipulate
this model to make money. There is nothing wrong with making
money, but I think anyone making money in an educational
activity has a higher standard of accountability.
John Murphy, a cofounder of the University of Phoenix, is right. He
explained that they started off as a serious venture to educate
students, but they soon became a company listed on Wall Street chasing
stock prices, tapping into the open spigot of Federal loans, which Mr.
Murphy calls the juice of the for-profit college industry. He went on
to say:
Phoenix was the one that got it rolling, and then all the
other for-profits followed them in.
I will yield at this point to my colleague from Hawaii. I thank
Senator Schatz for joining me in this colloquy.
Mr. SCHATZ. Mr. President, I thank the assistant Democratic leader
for his leadership on this issue and for his willingness to educate
colleagues and educate the public and to push the DOE to take much
needed action in this area.
What is happening with some for-profit colleges is truly a national
scandal, and it is a scandal for two reasons: First, students are being
hurt, and second, we are wasting tens of billions of dollars. The
numbers speak for themselves. Almost 2 million students are enrolled in
for-profit colleges, and they have collectively taken on $200 billion
in debt to attend, but they often leave with little to show for it.
More than half drop out within a few months, and in some programs less
than 5 percent of their students ever graduate. For those who leave
without a degree, repaying loans is a struggle. Students at for-profit
colleges default on student loans at double the rate of students at
not-for-profit colleges.
People may be surprised to learn that these substandard programs are
financed almost entirely by the Federal Government, and the amount is
totally staggering. In total, for-profits receive over $32 billion a
year in Federal financial aid--over 20 percent of the total aid--yet
they serve only 12 percent of the students.
There are several for-profit companies that each take in more than $1
billion a year in Federal aid and graduate less than 10 percent of
their students. Think about that. They take in more than $1 billion in
Federal taxpayer money and they graduate less than 10 percent of their
students. These companies include the Apollo Group, DeVry, ITT, Kaplan,
and Education Management Corporation.
Not only are the educational metrics awful, but many of these for-
profit colleges are also under investigation for fraud and deception.
Essentially, they have been lying to students and to State and Federal
agencies to cover up how bad their record is. Even while prosecutors go
after these schools for fraud, they remain accredited and continue to
rake in Federal funds. Here are a few examples:
Education Management Corporation, EMC, faces charges of fraud and
deception brought by prosecutors in 13 States and the Department of
Justice and faces a lawsuit to recover $11 billion in Federal and State
funds. Yet EMC is still accredited and still receives $1.25 billion
from the U.S. DOE. So the Department of Justice is trying to recover
$11 billion at the same time that the Department of Education gives
them $1.25 billion.
ITT Educational Services is being investigated and sued by 19 States,
the SEC, CFPB, and the DOJ. It is also under scrutiny from U.S. DOE for
failure to meet financial responsibility standards. Yet they are still
accredited, and last year they received just under $600 million.
Another 152 schools are under investigation by a working group of 37
State attorneys general. They too are still accredited. Collectively,
they received $8 billion in Federal financial aid last year.
What do all of these schools have in common? They are accredited.
Accreditation is the key to the castle for accessing this spigot of
Federal financial aid. It is supposed to signify that a program
provides a quality education for its students. Too often, however, the
accreditation means nearly nothing.
The GAO released a study on accreditation last year, and its findings
are shocking. Over a 4-year period, the GAO found that accreditors
sanctioned only 8 percent of the institutions they oversee and revoked
accreditation for just 1 percent. Even more troubling, GAO found there
was no correlation between accreditor sanctions and educational
quality. In other words, schools with bad student outcomes were no more
likely to be sanctioned by their accreditor than schools with good
student outcomes.
Our accreditation system is broken. According to the Higher Education
Act, accreditation agencies are supposed to be ``reliable authorities
as to the quality of education or training offered'' by institutions of
higher education.
That is the reason for making accreditation a core criterion for
receiving Federal funds. How are we following the law when
accreditation reviews find that 99 percent--basically, everybody--99
percent of institutions are providing an education of value? How can we
say with a straight face that accreditors are acting as reliable
authorities on educational quality?
The problem here is money. Incentives are lined up against being
critical and against setting high standards. The problem can be traced
to the funding and governance of the accrediting agencies. First,
accrediting agencies are funded by the same institutions they accredit.
Colleges pay an initial fee to become accredited and annual dues after
that. They pay for site visits and other services.
Second, accrediting agencies are run and overseen by the institutions
they accredit. The member institutions elect their own academics and
administrators to serve on the board of the accreditation agency.
It is not hard to see how the incentives are misaligned here. We have
created a dysfunctional, if not corrupt, ecosystem in which it is far
too easy to become and remain accredited. This system is eerily similar
to the one that enabled credit rating agencies to pump out inflated
asset ratings, which contributed to the worst financial crisis of our
time. Like credit rating agencies, accreditors have a financial
interest to churn out accreditations.
The DOE has the authority to improve accreditation. There are a lot
of things that Senator Durbin and others, Senator Murphy, and I are
working on in terms of changing the Higher Education Act and working in
the appropriations context, but U.S. DOE has authority that it is
beginning to use but needs to use more of in the accreditation space.
It can and must do more to ensure that accreditors are actually looking
at academic quality and holding schools to high standards. For the sake
of students and taxpayers, the DOE must make this a top priority.
I thank the assistant Democratic leader for his leadership on this
issue.
I yield the floor.
Mr. DURBIN. Mr. President, I hope the Senator from Hawaii can stay
for just a moment.
If a student is about to graduate from high school, looking for a
college, and goes online and types in the word ``college'' or
``university,'' watch what happens. The page is flooded. The University
of Phoenix, DeVry, Kaplan--all of these different schools are flooding
the page saying: Come to our school. How does a student know if it is
good or not? The only yardstick that can be used is, well, do they
receive Federal Pell grants for their students? Do their students
receive Federal loans? The answer, when it comes to for-profit schools,
is yes.
Senator Schatz has put his finger on the problem. They accredit
themselves. They decide among themselves who will stay in business.
Guess what. They all stay in business.
So the unsuspecting student goes to a worthless, for-profit school,
gets a worthless diploma, goes deep in debt, and thinks, I thought this
was a good school. How can I get a Federal Pell grant to this school
and get a worthless diploma?
The Department of Education is not doing its job. Congress is not
doing its job. We have to enforce these standards.
Corinthian was one of the giants. Corinthian went bankrupt. They
measured how many students came out of Corinthian and got a job. The
numbers were pretty encouraging. The Huffington Post writer started
following
[[Page S7763]]
the students that got the jobs. Do you know what Corinthian was doing?
They were giving $2,000 to employers to hire their graduates for 1
month so they could report to the Federal Government that their
graduates all have jobs. When they were caught with it, they went
bankrupt.
Do my colleagues know what we ended up losing, what the Federal
taxpayers lost? It could be billions. Who ended up on the hook? The
students. The students ended up with the debt, and the taxpayers ended
up as losers. Corinthian should never have been accredited.
Mr. SCHATZ. Mr. President, there are two problems here. Normally,
when something is a waste of taxpayer money, it is not usually also
harmful to individuals across the country, but this is a double whammy.
This is harming students, causing them to collectively incur tens of
billions of dollars' worth of debt, and it is a waste of money, so this
really is a double whammy.
I will make this final point: The Obama administration has done the
right thing in terms of going after malfeasance in this space, but they
are split among their executive agencies. We have the Department of
Justice who understands the fraud and deception. We even have parts of
the U.S. DOE that understands what is going on, yet they have been slow
on the uptake in terms of using the authority under the statute to make
the accreditation process a little more reliable when it comes to
students. I think that is one of the key things that we are going to be
able to accomplish in the next couple of years. The U.S. DOE has to
understand that there are separate accrediting agencies, but under the
higher education statute, U.S. DOE has the authority to make sure that
no institution that is providing a low-quality education and no
institution that is engaging in fraud and deception ought to avail
themselves of tens of billions of dollars in Federal financing.
Mr. DURBIN. I thank the Senator from Hawaii.
Last week, the senior Senator from Arizona came to the floor and said
it was Durbin's speeches that brought down Corinthian. Correction: What
brought down Corinthian was its own malfeasance. They were under
investigation by 20 different attorneys general for fraud and
deception. They were also under investigation by the Securities and
Exchange Commission, the Department of Education, and the Department of
Justice. It was their malfeasance that brought them down, as Senator
Schatz has indicated. The victims: Students and taxpayers.
For purposes of this colloquy, I wish to yield to my colleague from
Delaware, Senator Carper.
Mr. CARPER. Mr. President, I want to thank the Senator for inviting
us to come to the floor this afternoon and have this conversation. It
is great to be with our colleague from Hawaii as well.
Senator Durbin and I came to the House of Representatives together in
1982. I had been a State treasurer and before that I was a naval flight
officer. I was a P-3 aircraft mission commander. I served three tours
in Southeast Asia. In 1968, the P-3 four-engine aircrafts were on 12-
hour surveillance flights tracking Soviet nuclear submarines all over
the world. We flew a lot of missions off the coast of Vietnam and
Cambodia, low-level missions tracking infiltration. That is what I did
on three tours over there.
I came back from overseas after the last tour, 5 years, and moved
from California where my station was home ported, where my squad was
home ported during the war, and I ended up moving across the country. I
found Delaware on the map, drove my Volkswagen across the country, and
enrolled in business school.
I signed up with the GI Bill. I remember the first check I got was
$250. I was thrilled. I used that money to help pay my expenses, and I
signed up with a Reserve P-3 aircraft squadron up at the naval air
station north of Philly and started flying the same aircraft and a new
squadron. I did that for another 18 years and then retired as a Navy
captain.
As Senator and as a Governor for 8 years and as commander in chief of
the Delaware National Guard--they have a special spot in my heart. A
couple of months ago, a delegation with the Governor were sending off
the 300 men and women from the Delaware National Guard to eventually
end up in Afghanistan. I suspect they are there by this time. I said to
the men and women and their families as they were preparing to leave--I
told them about my GI Bill and how grateful I was to have it for my
generation. I talked to them about their GI Bill. I said: When you come
home, if you have 3 years of service during your time in Afghanistan,
here is what you are going to get. If you go to Delaware State
University, University of Delaware, Delaware Tech Community College,
you go for free--tuition, free; books, free; fees, tutoring, free. Plus
you get a $1,500 a month housing allowance. People said: Wow. And I
said: If the GI doesn't use it--the Delaware National Guardsman--if you
guys don't use it when you come home, your spouse can use it. If your
spouse doesn't use it, your dependent children can use it. It is the
most incredible GI bill benefit ever. My generation, we got $250 a
month. I am happy for the folks today who serve in Afghanistan and in
Iraq for the benefit they receive.
It has not only been a great benefit for the veterans and their
families, it puts in the words of--I think it is Polly Petraeus who
works at the Consumer Financial Protection Bureau. Polly said that what
the GI bill does is it also puts a silver bull's-eye on the veterans
because they come back and what happens is a lot of colleges and
universities and training schools want to help those GIs and their
spouses and maybe their kids go to school. Some of them are for-profits
and some of them are non-profits; some of them are public colleges and
universities. Some of them do a great job. Some of the for-profits even
do a great job. But some of them--and the Senator from Illinois has
mentioned some of them here today--do not. They spend more money on
trying to recruit people to come to their schools than they actually
spend educating them. They are preparing them for careers, allegedly,
for what there are no jobs. Senator Durbin mentioned what Corinthian
has done to place people in work opportunities for a month or so just
so it will look like people are being gainfully employed.
There is a lot of money to be made by these for-profit colleges and
universities, and for the ones that aren't the white hats but the black
hats, what is happening to the GIs and, frankly, to taxpayers is
shameful. It is just shameful.
I want to say around maybe 1992, maybe the early 1990s, maybe on this
floor, the Senate debated whether or not there should be some way to
harness market forces to ensure that--whether it is people using Pell
grants or other Federal aid programs, or maybe the GI bill--they could
somehow harness market forces to ensure that taxpayer money going to
people going to college was being well used. Initially, when the
Congress adopted something called the 85-15 rule, the idea was that for
at least 15 percent of the students in the school, if they were
receiving Federal assistance, 85 percent of those students would have
to be coming on nonFederal money. That seemed to make sense, so for a
while, that worked pretty well.
Then the rule was changed to the 90-10 rule so that at least 10
percent of the revenues had to come from nonFederal sources. The idea
was to use market forces to ensure that the quality of the diploma was
actually worthwhile at the school.
Then, we had this new GI bill. We have spent, I think--and the
Senator from Illinois probably knows better than me, but I think we
have spent today close to $50 billion on the Iraq-Afghanistan GI bill,
close to $50 billion. It probably dwarfs whatever we spent for folks
coming back from the Vietnam war.
Some of the smart for-profit colleges figured out a loophole, though,
and what they figured out is the law, when it was first adopted, didn't
really focus on the GI bill because it wasn't all that robust, and the
90-10 rule--85-15 and 90-10--focused on things that did not include the
GI bill. So when veterans go to college and the GI bill helped to pay
for their tuition, or for that of their spouses or their children, that
does not count toward the 90 percent.
So as a result, what we have is a loophole that allows a college or
university, a private college or university, to realize as much as 100
percent of their revenues from the Federal Government--100 percent.
There is nothing
[[Page S7764]]
about market forces; 10 percent, 15 percent of your students have to
come by nonFederal means. All of them are there on the Federal
Government's dole.
Among the people who pushed for the 85-15 rule, I think, were Bob
Dole and Phil Gramm, and they said a long time ago that we ought to
have something like the 90-10 rule. A couple of years before that, the
guy that Senator Durbin will remember named William Bennet--remember
him, the Secretary of Education--here is what he called for-profit
trade schools. Here is what he called them in 1987. He said:
Diploma mills, designed to trick the poor and to take on
Federally-backed debt, milk them for their loan money and
then wash them out or graduate them, ill-prepared to enter
the job market and pay off their loans.
That is what he called them. As I said earlier, there are some for-
profits that do a good job, but there are a bunch that don't. That was
the case in 1987 and, unfortunately, it is the case today.
I just want to say we--you have, I have, Tom Harkin in past years--
have continuously drawn this to the attention of our colleagues and
anybody who wants to listen this issue. This needs to be fixed. It
needs to be fixed.
I thank Senator Durbin for working so hard and letting me help him a
little bit on this stuff. I think we are starting to break
through. Some of the folks who are the worst actors in this business
are starting to fold, and that is a good thing.
Mr. DURBIN. I want to thank Senator Carper.
Let me show the Senator briefly what has happened to the enrollment
of for-profit colleges and universities as people have come to realize
they are wasting their time, and many times their GI bill benefits,
debt, and ending up with a diploma that doesn't take them anywhere.
Look at the University of Phoenix--this is the mother ship that
launched this industry--peak enrollment was nearly 500,000 in 2010. Now
it is 227,000, a nearly 50-percent loss.
ITT, which advertises constantly, had enrollment in 2010 of 88,000,
and now they are down to 53,000. Career Education Corporation enrolled
41,000 students in 2014 compared to 118,000 in 2010--a 65-percent
decrease. Education Management Corporation is down 25 percent. DeVry
has declined in enrollment. What is happening here?
I talked to some of the people from some of these for-profit
colleges. Parents and families are finally realizing that this is a
waste of time and money. It is time for taxpayers to realize the same
thing. I overhear my colleagues--conservative colleagues--preaching to
me about the miracle of free markets. We are talking about the most
heavily subsidized industry in America, accounting for over 40 percent
of the student loan defaults with 10 percent of the students enrolled.
I thank the Senator from Delaware for coming, and I yield to the
Senator from Massachusetts, Ms. Warren.
Ms. WARREN. I thank the Presiding Officer and thank Senator Durbin
for calling us together to discuss this important issue.
Our higher education system is broken. Right now a student borrows
money to go to college, and the college gets paid in full regardless of
whether the college provides a decent education. In fact, Federal loan
money is so easy to come by that a new business model of for-profit
colleges has sprung up, spending more money on advertising to attract
students than actually teaching them anything.
Consider three numbers--10, 20, 40. Just over 10 percent of all
college students attend a for-profit college. Yet they take in about 20
percent of all Federal student aid and they account for about 40
percent of all student loan defaults. Many for-profit colleges target
young vets and single moms for programs that promise the Moon but end
up delivering nothing more than heartache.
I have met with student veterans at terrific public colleges and
universities across Massachusetts, such as UMass Lowell and Bunker Hill
Community College. These schools are working hard to reach vets and to
help them get a first-rate education through their Office of Veterans
Service and other resources. It is an exciting story, but time after
time the for-profit colleges got there first, so young vets show up
already tens of thousands of dollars in debt and without a single
credit that will transfer to a decent public college. This makes me
sick. These for-profit schools are stealing more than money. They are
stealing the hard work and dreams of some of our finest young people.
There are 347 colleges in the United States in which the majority of
the students have defaulted or failed to begin paying down their loans.
Of these colleges, 85 percent are for-profit. Even with those huge
default rates keep raking in the Federal loan dollars and paying out
millions of dollars in dividends to their shareholders. These 294 for-
profits are sucking down $2.2 billion in Federal assistance and leaving
the majority of their students unable to repay their loans.
The business model of for-profit colleges challenges the conventional
wisdom that a college degree is always a smart investment. A recent
study found that the average salary increase of for-profit graduates
isn't even enough to cover the costs of attending a typical for-profit
institution. The research is clear: attendance at a typical for-profit
college is simply not worth the cost. It is a bad return on investment.
For-profit colleges know this, but too often the potential students
don't. Instead of taking the tough steps necessary to improve the value
of the education they offer, most of these for-profit institutions have
simply ramped up their marketing operations--and some just flatout
break the law--to keep the gravy train going. These colleges have
engaged in fraud in order to swindle more and more students and suck
down more and more Federal funds.
Corinthian College is a prime example. At its peak, Corinthian was
the Nation's largest for-profit chain, with 120 campuses enrolling over
100,000 students. It was massive. Corinthian built its business model
to scoop up Federal financial aid by any means necessary--including
fraud. Corinthian was trying to rope students in by using false and
misleading information and then saddling them with debt that would be
impossible to repay.
Federal policymakers had concerns about Corinthian's conduct for
years and had the tools to shut off the Federal loan supply, but
instead of acting, the Department of Education allowed Corinthian to
keep recruiting more and more students and sucking down more and more
Federal funds. When Corinthian's dangerous mix of mismanagement and
deception finally blew up, the Department of Education even stepped in
to bail out the college and keep it running a little while longer. Now
Corinthian is bankrupt and its students are scrambling to start over.
Last week--due to a lawsuit brought by the Consumer Financial
Protection Bureau--a Federal judge ruled Corinthian broke Federal
consumer protection laws and ordered the company to pay $531 million
for its illegal behavior, but Corinthian is dead broke, and its
executives are off the hook for the financial liability. Plus students
and taxpayers are left holding the bag.
Corinthian got people to sign up for student loans by scamming them.
If an insurance salesman or a car dealer did that, the buyer wouldn't
have to pay. The law is just as clear here, when a school breaks the
law, students are entitled to cancel their student loans. That is why
this week several of my Democratic colleagues are sending a letter to
the Department of Education telling them they have dragged their feet
long enough. These students don't owe the student loans that Corinthian
tricked them into signing.
Schools like Corinthian make it clear that the Federal Government
needs to be more aggressive and more willing to cut off the money
faster when schools defraud students. When schools such as Corinthian
break the law, their executives shouldn't be allowed to walk away from
the mess. They should pay real penalties.
This is about basic fairness. Neither students nor taxpayers should
be on the hook to a for-profit college that makes its money by cheating
its students. It is time for the Federal Government to step up and do
its job to hold for-profit colleges accountable and to ensure that
higher education remains a real pathway to success for all hard-working
students.
Thank you, Mr. President.
I yield the floor back to Senator Durbin.
[[Page S7765]]
Mr. DURBIN. I thank Senator Warren, and before we recognize the
Senator from Connecticut, I would like to make a point about executive
compensation, which is something we should not overlook.
We take a look at the actual amount of money that is being paid to
executives of these for-profit colleges and universities. It is
dramatically larger than what is being paid to presidents of public
universities. I will put this information in the Record at a later
point.
The average pay for college presidents is less than $500,000 a year.
There is an executive at the University of Phoenix who was paid over $8
million in 1 year. When we wrote to the Department of Justice recently,
we asked how many of these people are going to be held personally
accountable. They left the students holding the bag with student loans
and worthless diplomas or dropouts. They left the taxpayers holding the
bag because the students can't pay back their loans, and now they are
going to go away scot-free after taking billions of Federal dollars? If
there is any justice, they need to be held accountable.
I yield to my colleague Senator Murphy.
Mr. MURPHY. I thank Senator Durbin very much.
This article is a few years old, but it underscores his point. Here
is the opening line of an article from CNBC on this question of
salaries for the CEOs of for-profit universities. The article opens by
saying: ``Forget Wall Street and Silicon Valley. If you're looking to
rake it in post-graduation, set your sights on the executive floor at
one of the nation's for-profit colleges.''
That is an article from CNBC detailing the fact that in their
article--again this is a few years old--the salary of the head of
Phoenix University was $11 million, and the CEO of Bridgepoint, another
national for-profit university, was making over $20 million a year.
You can say to yourself: These are private, for-profit companies. Why
should Congress be in the business of caring what the CEO of Phoenix
University makes or what the CEO of Bridgepoint or ITT or DeVry makes?
Harry Truman made his name as a critic of wartime profiteering. LBJ
made his name as a young Member of Congress doing the same. Their idea
was that it is all well and good to make yourself rich in the most
dynamic capitalist economy in the world, but it is another thing to be
getting rich off the taxpayers. It is another thing to be making your
fortune almost exclusively coming from sources of money that really is
all of our constituents' money in the form of the taxes they pay.
That is what we are talking about today. What we are talking about
are executives who are getting rich off of companies that are 90
percent funded by the U.S. taxpayer because this 90-10 rule we talked
about is an important rule for these companies. They run their revenue
right up to the limit. So for many of these for-profit universities,
their revenue is 70, 80, 90 percent from the taxpayers of the United
States, and their CEOs are making $11 million, $12 million, sometimes
$20 million a year.
Listen, I am all for people making a million dollars. I have a lot of
people in Connecticut who are making $20 million, but if we are being
good stewards of the taxpayers' dollars, we should be wary of those who
are making their fortune off of the Federal dole. That is what is
happening today.
Senator Durbin, I just wanted to add in this conversation a note of
accountability. That is one of the things that used to unite
Republicans and Democrats. Frankly, the Republicans, I admit, cared
more about accountability in Federal dollars than sometimes the
Democrats did. It was the Republicans in the second Bush administration
who started attaching strings to education dollars that were flowing
out of Washington to make sure there was actually quality attached to
the money that was coming from U.S. Federal taxpayers, but that era
seems to be over.
Unfortunately, we don't have a bipartisan consensus on
accountability. We are about to approve a budget that a lot of
Republicans and a lot of Democrats will vote for that will send $140
billion in higher education aid to universities all across this
country. It will come with almost no strings attached. It will come
with almost no expectations that schools give a degree to kids that
will actually get them a job or attempt to keep them in school so they
can get some return on investment for the money we are all paying to
them.
Senator, you might have talked about it already today, but the
numbers of for-profit colleges that just came out today are absolutely
stunning. I don't know if you talked about the ``Trends in Student
Aid'' report that just came out today from the College Board.
Here is an amazing statistic. What this survey says is that borrowers
who don't graduate from public and private nonprofit 4-year schools
default at about the same rate as borrowers who do graduate from for-
profit schools. Think about that. You are just as likely to not be able
to pay back your student loan if you get a degree from a for-profit
school as if you had dropped out of a not-for-profit school.
Here are the numbers: 14 percent of for-profit graduates default; 15
percent of not-for-profit 4-year college nongraduates default. That is
a really stunning number. Yet we are just sending money willy-nilly out
to these schools that are not putting students in degrees. Why are they
not putting students in degrees? Because they are marketing themselves
in a way that just does not square with the job market today.
As part of one of these attorney general lawsuits--there is a litany
of stories about the abusive marketing techniques of these for-profit
universities.
One of them said: I told the enrollment representative that I did not
want to sign the loan unless I was guaranteed a job because I knew that
I would not be able to pay it back. She told me that the school placed
99 percent of the students and they could guarantee a job after I
finished my externship. She told me that I would be making between $18
and $20 an hour after completing the program. No worries about the
loan. She told me career services could place me in a job and that she
makes sure everybody who enrolls gets placed.
These are the claims that are being made. So it is frankly not
surprising, when you have these for-profit universities enrolling
thousands of kids in video game design degrees, that you are just as
likely to default on a loan if you graduate from some of those
worthless programs as if you don't graduate from a not-for-profit
university.
So last Congress, Senator Schatz and I, joined by Senator Murray and
Senator Sanders, introduced a piece of legislation that would start to
require some real outcomes from universities. We applied it to for-
profit and not-for-profit universities. We said: You have to show that
you are giving kids a chance to succeed and get a job, that you are
keeping your tuition at reasonable levels. If you do that, then you can
continue to get title IV dollars.
But if they don't, we are not going to continue to send money to
these schools that simply are not producing graduates who are ready to
compete or that are deceptively drawing students in based on claims
that just do not wash out in the end.
So, yes, we have to shut down these fraudulent institutions like
Corinthian. But we could just make a decision, Republicans and
Democrats, to put some additional accountability standards on title IV
dollars, apply it to for-profit and not-for-profit schools, and say: If
you have a certain number of students who are defaulting, you are not
going to continue to get title IV dollars. If you have a rate of
tuition increase that is way above that of the national average, you
are not going to continue to get title IV dollars.
We know by statistics that this would put a good number of for-
profits out of business. It might even touch a handful of the lower
performing not-for-profits. But it should be something on which both
sides can come together, just some basic accountability for higher
education, a basic accountability for the $140 billion we send, because
this does not make sense. It does not make sense to pad the pockets of
these CEOs who are making $20 million a year off of our taxpayers when
they are not delivering results that are actually making our economy
better.
Thank you, Senator Durbin, for bringing us together here. I hope that
as we debate the Higher Education Reauthorization Act in front of the
HELP
[[Page S7766]]
Committee--I think Senator Alexander is very interested in some of
these debates. So we are going to add some accountability standards. We
are talking about these for-profits, but if we really are being good
stewards of the taxpayer dollars, we should expect some results.
Mr. DURBIN. I thank Senator Murphy for his comments.
I will tell you that it is interesting to me that when you take a
look at what Wall Street thinks about the for-profit colleges and
universities, they are certainly bearish. You would think from what
Congress is doing--sending billions of dollars to this industry and
propping it up--we are bullish. Take a look at the stock prices of the
major for-profit colleges and universities since 2010. The University
of Phoenix went from a high of $57 a share down to $7.50. This was
after the Department of Defense suspended their activities under the GI
bill. ITT Tech--a high of $92 a share in 2011 and they now trade at $3
a share. Career Education was $20 a share in 2011 and was $3.80
yesterday. Education Management Corporation withdrew their stock from
NASDAQ so they would not have to make reports to the Securities and
Exchange Commission. In 2014, they lost $684 million. This is an
industry which is failing as a business, but sadly it is dragging along
students and families and taxpayers with it. That is why we have to
come to grips.
I endorse your idea. Apply the standards across higher education, to
for-profit and not-for-profit. I can tell you, these for-profits cannot
live with that standard. Thank you, Senator Murphy.
I thank Senator Blumenthal from Connecticut for joining me.
Mr. BLUMENTHAL. Mr. President, I thank my great colleague from
Illinois and my friend and partner from Connecticut for their very
powerful analysis, along with Senator Warren and Senator Carper,
because there really is a need for dispassionate, objective, and
targeted consideration of this area of education.
The Senator from Connecticut is absolutely right that we need
accountability in both the for-profit and nonprofit areas. Senator
Durbin has emphasized that fact repeatedly. I am here as a former
member of the Health, Education, Labor, and Pension Committee who
participated with Senator Harkin in announcing a report more than 2
years ago that highlighted many of the abuses in this area. Still,
Corinthian has happened since then. There are still abuses in the for-
profit area. But there is a need for accountability in the nonprofit
area as well.
In all of these areas, there is a need for facts. There are more
facts that may be available more recently that ought to be considered,
indications that some of the for-profit colleges are doing a better job
than others. Kaplan, for example, has recently released facts. None of
us can vouch for them independently. The Department of Education has an
obligation to do better and more to make sure it keeps faith with
American students and American taxpayers in the way dollars are
allocated to those for-profits.
I am particularly concerned, as the ranking member of the Veterans'
Affairs Committee, with the impact of some of these abusive practices
on veterans. One of the really unacceptable facts about this industry
is the way it can sometimes exploit and take advantage of our veterans.
Senator Carper put it very well when he discussed how the for-profit
schools are prohibited from receiving more than 90 percent of their
total revenue from Federal student aid, but VA educational benefits are
not counted toward that 90 percent. This 90/10 loophole causes the for-
profits to target veterans and to rake in billions of dollars in VA
educational benefits. In fiscal year 2014, the for-profit schools
received over $2 billion in VA educational benefits--that is our money,
taxpayer funds--including post-9/11 GI benefits.
As ranking member of the Senate Veterans' Affairs Committee, I am
working to help protect our Nation's veterans and the GI bill benefits
they have earned. In fact, I have introduced legislation--the Career-
Ready Student Veterans Act--to ensure that GI bill funding is not
squandered on education programs that lack appropriate programmatic
accreditation.
Facts are stubborn things, as Ronald Reagan famously said. Facts are
what we need. Accreditation and verification and credibility in this
area is essential rather than painting with a broad brush every for-
profit, rather than tarring all of them. Facts are necessary here, and
there is a need for accreditation and for facts that show credibility
and legitimate course work.
I will be introducing another bill this week to provide relief to
veteran students who have been harmed by for-profit schools. I want to
repeat that point. These veterans have been harmed directly and
tragically by some of these practices. We owe them better. We need to
keep faith with them. That is the reason I am going to be introducing
the Veterans Education Relief and Reinstatement Act. That will give the
VA Secretary authority to reinstate GI bill entitlements that a veteran
has used at a school that abruptly closed--think Corinthian--where
veterans have lost those benefits and they need a remedy, not just a
right but a remedy.
I am hopeful that we can advance these bills through the Veterans'
Affairs Committee and stop for-profit colleges like Corinthian from
scamming our Nation's veterans. Like my colleagues, I could cite real-
life instances of nonveterans as well. But the evidence is
overwhelming, and it is acknowledged by some in the industry who say
there is a need for corrective measures here, and some of the outliers
need to be treated with the strong discipline and discouragement they
merit.
I am proud to join my colleagues in this effort. I am hopeful that
the report Senator Harkin and the HELP Committee produced years ago
will finally reach fruition and that action will be taken by the
Department of Education and by this Senate to take measures that
protect taxpayer dollars, protect students of America, and protect our
veterans.
Mr. DURBIN. I thank my colleague from Connecticut, Senator
Blumenthal, for joining in this colloquy this afternoon.
What we have tried to do with a number of Senators is to lay out the
case that when we go to higher education reauthorization, we owe the
taxpayers and we owe families across America the responsibility to look
at this industry. What is happening here in inexcusable and
unacceptable. It is unfair. Ten percent of the high school graduates,
20 percent of the Federal aid education, 40 percent of all student loan
defaults.
Senator Murphy pointed to the statistics that came out today. You are
in just as bad shape with a diploma from a for-profit school as if you
drop out of school at a not-for-profit school. That is a damning
statistic, just like the 40 percent in student loan defaults.
We cannot continue to look the other way. Wall Street is not looking
the other way; they are downgrading these for-profit colleges and
universities because they believe this model is flawed. They don't
believe it can be sustained. Why do we kid ourselves? Let's apply
standards across higher education--standards that are fair to students,
fair to families, and fair to the schools--and say to them: This is
what we expect as a minimum if you are going to offer higher education
to the students across America.
I ask unanimous consent that this transcript from Sharyl Attkisson's
television program ``Full Measure'' which played last Sunday be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Transcript
sharyl attkisson's ``full measure''
(Aired Sunday, November 1, 2015)
Washington (Sinclair Broadcast Group).--Some for-profit
colleges are allegedly preying on military troops; veterans
with benefits and a desire to build a new life become
targets.
They've even been given a name by some college recruiters:
cash cows.
About 300 thousand vets get up to $21K a year in G.I. Bill
money. In all, 1800 colleges--many of them for profits--have
received more than $20 billion G.I. Bill tax dollars.
With so many billions in the mix, it's easy to see why some
colleges use high pressure and allegedly dishonest tactics.
Now, taxpayers are about to be on the hook for alleged
misconduct by the schools.
As a U.S. Marine, Bryan Babcock fought on the front lines
in Iraq including the Second Battle of Fallujah in 2004. His
post-military plan: police work. He used his GI Bill money to
pursue a criminal justice degree at the for-profit college
ITT Tech.
Attkisson: How did you hear about it?
[[Page S7767]]
Babcock: I saw a commercial on TV. That kind of got me
interested in them.
Babcock says ITT promised that police agencies everywhere
would accept the degree. The cost--$70,000--would far exceed
his GI Bill grant at the time, but ITT made it easy for
Babcock to borrow. He says they even helped him fill out
paperwork for student loans. Then, after his third year, he
made a startling discovery.
Babcock: We applied to 22 or 23 police departments.
Attkisson: And what did they say?
Babcock: All of them said that they did not recognize ITT's
degrees or their credits.
Attkisson: And what thoughts went through your head when
you heard this?
Babcock: I was angry that I'd spent all this money in
student loans and it turns out that the degree, if I would
have finished there, would have been pretty much worthless.
It's a story told by thousands of vets who attended for-
profit colleges where students are more likely to drop out,
default on their loans, or graduate in dire debt without a
useful degree.
Of eight for-profits that get the most GI bill funds, seven
have been targets of inquiries for possible violations
including deceptive or misleading recruiting.
Together, they received nearly a billion ($939,086,610
million) tax dollars over two school years.
One of those companies is DeVry University where Chris
Neiweem was hired as the school recruited vets under the new
GI Bill.
A veteran himself, Neiweem was assigned to ``Team Camo''
where he says managers urged the sales team to use high-
pressure tactics on troops who sometimes weren't suited for
college.
``Working in the industry at that time truly reminded me of
the film `Glengarry Glen Ross,' '' he said.
``There is this scene where a corporate sales manager is
brought in to improve the performance of the sales floor--
played by Alec Baldwin.''
In the scene, Baldwin says to a salesman ``they're sitting
out there waiting to give you their money, are you gonna take
it?''
``And that was similar at the company,'' said Neiweem.
If ``Team Camo'' dared to let veterans suspend class while
in combat like those in the National Guard Neiweem says
management called them on the carpet.
Neiweem: The company didn't care. They just wanted to make
sure that they stayed in their classes and so the university
could continue to be paid and they would continue to be on
the enrollments books.
Attkisson: Even if they were in a combat zone that didn't
make sense for them to try to go to college on the computer?
Neiweem: Yes. Management's guiding wisdom was, to be frank,
``get their ass in class.''
Neiweem showed Full Measure today's sales tactics at work.
In a chat on DeVry's website, he asks about costs and
benefits--but can't get direct answers.
``I can have a representative from our military admissions
team reach out to you,'' he said, reading the response of a
recruiter.
``It's fairly frustrating that I asked these questions and
I can't get answers. Rather, they're trying to sort of tie me
in and get me closer so they can work towards selling the
school.''
DeVry officials declined an on camera interview but said
``DeVry has a long history of serving veterans and military
personnel'' dating back to the 1940's. And ``['W]e offer
quality academics and student services with flexibility to
meet their busy schedules.''
Former Congressman Steve Gunderson leads the main national
for-profit college trade group called the Association of
Private Sector Colleges and Universities (APSCU).
``If anybody has a bad outcome, and certainly if a veteran
has a bad outcome, that's a problem and we want to solve
that,'' he said.
He believes for-profits are under assault from opponents
and competitors.
Gunderson: I have never before seen a situation where a
sector is the target of attacks for ideological reasons. I
mean, there simply are good people who do not believe the
private sector oughta be involved in the design and delivery
of education.
Attkisson: Fair enough, but is there any doubt in your mind
that some schools have used unfair, unethical, or even
dishonest tactics?
Gunderson: There is no doubt in my mind that there are bad
schools in every sector of higher education who have engaged
in inappropriate conduct for various reasons whether it be
athletics or whether it be admissions or it be something
else.
Gunderson said the industry is improving.
A Government Accountability Office report found for-profits
catering to military students actually beat public schools in
one area: higher graduation rates.
With billions flowing to for-profits under investigation,
President Obama dispatched a warning at Ft. Stewart army base
about any for profits that may be preying on the troops.
``It's not right. They're trying to swindle and hoodwink
you. They don't care about you; they care about the cash,''
he said.
But as federal scrutiny surged, the industry has countered
with Washington lobbyists and campaign cash.
Since 2010, for-profit colleges have poured nearly $10
million ($9,906,512) into campaign contributions and spent
$41 ($41,924,452) million on lobbying, according to the
Center for Responsive Politics.
Sen. Dick Durbin (D-Illinois): That's how you really win
friends and influence people on Capitol Hill. The for-profit
colleges and universities have friends in high places.
Attkisson: That implies some members in Congress, you
think, are bought and paid for on this issue.
Sen. Durbin: I would say this--they are influenced by it.
Senator Durbin has pushed one bill after another to fight
for-profit college fraud, only to see the bills get watered
down and voted down.
``If these schools that are enticing kids into loans for
educations that are worthless had some `skin in the game,'
some responsibility for default, they'd think twice about it.
But they don't. They could care less,'' he said.
It turns out taxpayers have the most skin in the game.
In June, the federal government said it will forgive loans
for students at Corinthian College, putting taxpayers on the
hook for up to $3.5 billion. Corinthian shut down in May amid
fraud accusations, which the company denied. And the feds may
wipe out loans at other problematic colleges.
In May, the federal government charged Babcock's alma
mater, ITT Tech, with fraud, alleging it concealed financial
information from investors.
ITT is fighting the charges, but declined our interview
request.
Gunderson says he doubts Babcock's ITT degree would have
really been useless.
``I am willing to say, that if he graduated, from an
accredited criminal justice program, there are many police
agencies that would hire him. Maybe not the one he wanted to
go to, but there are many that will, and evidence all across
the country shows that,'' said Gunderson.
Babcock gave up on the ITT degree and his dream of police
work. Instead, he's focused on warning other vets, and
working to pay down his $40 thousand student loan debt.
``I think it's a shame that they prey on men and women that
volunteered to protect this country. And that earned a
benefit with their service, and then ITT and the other for-
profit schools are just trying to take that,'' he said.
The Defense Department recently banned the University of
Phoenix from recruiting on military bases, alleging a pattern
of violating policies designed to protect military students.
Senator Durbin says ITT is now facing investigations by the
Justice Department and 18 Attorneys General.
Mr. DURBIN. I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. COTTON. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Waters of the United States Rule and the EPA
Mr. COTTON. Mr. President, today I wish to speak about our vote on
the waters of the United States and the Environmental Protection
Agency.
I noted that the White House has lately been advocating for criminal
justice reform. They say an underlying problem with the justice system
today is that Congress criminalized too much conduct too severely. But
it is the same White House that is behind the new waters of the United
States regulation--an Executive power grab that would effectively put
every landowner in Arkansas and in America at risk of Federal criminal
charges for making adjustments to land on their own private property.
The waters of the United States regulation gives the government
jurisdiction--and, in turn, the danger of Federal criminal charges--
over tributaries, adjacent waters, and ``other waters.'' This includes
streams that only exist after heavy rains or, as some of us call them,
mud puddles.
If a landowner in Arkansas has so much as a ditch on his or her
property, he or she could be liable for Federal criminal charges for
disturbing that ditch in any way. If a homeowner wants to add an
addition to his garage and this addition even touches ``land that fills
with water after rain,'' also known as just ``land,'' this homeowner
could be liable for Federal criminal charges.
President Obama and my Democratic colleagues argue that we are
exaggerating: Come on, they say; the Environmental Protection Agency
would never bring charges against a homeowner for expanding his garage
or trying to regulate a mud puddle.
They insist on the benevolence of the EPA and ask us to trust them to
exercise good judgment and reasonable discretion. Before we trust the
EPA's benevolence, though, it is prudent to examine the EPA's own track
record.
[[Page S7768]]
Let's consider that in August of this year, the EPA directed
contractors to excavate the Gold King Mine in Colorado without first
testing the water pressure or calculating water volume. In the worst
environmental disaster in recent years, the EPA caused more than 3
million tons of toxic wastewater to pollute the Animas River.
Since the spill, much of the toxicity remains, endangering farmers,
landowners, Native Americans, and anyone who relies on this river.
After the spill, the EPA has refused to turn over documents,
disciplined no one, failed to show up to congressional hearings,
refused to take responsibility, and still won't answer the simple
question of whether the Agency will pay for the damages it caused.
The Navajo Nation in New Mexico relies on the river polluted by the
EPA for drinking water and for farming. In the days following the
spill, the Navajo lost their water supply. The EPA offered to deliver
clean water that the Navajo could use for drinking and crop irrigation
but, instead, they used dirty oil tankers to deliver contaminated
water.
The EPA is not only a threat to citizens, to landowners, and to
businesses, but it is also a threat to the environment they purport to
protect. Since the disaster, the EPA has continued to spill toxic
wastewater into creeks and rivers. There has been zero accountability
for this Agency.
Based on that track record, I don't think we should be giving the EPA
any more power. That is why I joined my colleagues earlier today to
vote to roll back the waters of the United States regulation before the
EPA criminalizes nearly every landowner in the United States.
But we should also consider the bigger picture. This regulation is a
symptom, not the problem. The problem is the EPA itself--its overreach
and lack of accountability.
That is why we must pass the EPA Accountability Act. This legislation
would require the EPA to pay--out of its own budget--for the damages it
recklessly caused when spilling 3 million gallons of toxic waste into
the Animas River. Unless the EPA faces consequences for its actions
against the American people, nothing will change. It is our
constitutional responsibility to provide oversight of an agency that
has caused massive damage to both the American people and to the
environment.
We must protect Arkansans and Americans from EPA overreach and lack
of accountability.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Lee). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. NELSON. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. NELSON. Mr. President, what is our parliamentary posture?
The PRESIDING OFFICER. The Senate is on the motion to proceed to H.R.
2685.
Mr. NELSON. Mr. President, I ask unanimous consent that I be given 5
minutes to speak as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
``El Faro'' Tragedy
Mr. NELSON. Mr. President, on the morning of October 1, the El Faro
cargo ship--a container ship almost 900-feet long--was carrying 33 men
and women, and on that fateful day it sent its final communication,
reporting that the engines were disabled. This left the ship drifting
with no power, with an oncoming category 3 hurricane. Despite search-
and-rescue attempts by the Coast Guard, the El Faro and her crew were
not heard from again.
One month later, the National Transportation Safety Board, working
with the U.S. Navy, has found the sunken El Faro at the bottom of the
ocean in waters that are 15,000 feet deep. At nearly the same time, the
ship's owner, TOTE Maritime, began its attempt to limit the company's
liability for this tragedy.
News reports have indicated that the company filed a complaint last
week stating that the company did everything in its power to make the
ship safe and that the company ought to be exonerated from any and all
claims for all damages.
Well, this is clearly hasty decisionmaking. It clearly is a matter of
concern to me because most of these mariners were from my State of
Florida. Their families are grieving and hoping for any answers as to
what happened to their loved ones.
Well, right now, we don't have all of those answers. The NTSB only
just found the ship with the help of the U.S. Navy, and yet somehow the
company is able to definitely declare that they weren't at fault and
that they bear no responsibility for the loss. It seems that this is an
attempt to limit any liability of the company.
So this is a time when we need reflection for figuring out what
happened to the El Faro, for finding the ship's recorder, which the
U.S. Navy is now in the process of trying to find, and then once you
have that black box, for piecing together the ship's last minutes
before the ship sank.
So instead of being split apart, it is a time to come together as a
community and to support those who have been so tragically impacted.
I have some leadership responsibility on the commerce committee,
which has jurisdiction over maritime matters. It is my intention to see
that there is a thorough and honest investigation to try to find
answers for the families and to find answers so that we can prevent a
tragedy such as this from happening again. That is where we should be
focused.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Perdue). Without objection, it is so
ordered.
Mr. McCONNELL. Mr. President, it is hard to think of a time in recent
memory when the number of threats facing our country were more diverse
or more threatening than they are now--from ISIL to Russia, from China
to the Taliban, from Iran to Al Qaeda. These threats are real, these
threats are worrying, and these threats make the political games that
Democrats continue to play with our men and women in uniform all the
more hard to understand.
Democrats have spent months upon months blocking funding for our
troops. They have tried to hide behind a whirling kaleidoscope of
excuses, moving from one to another as each is debunked, but with the
setting of a top-line budget number last week, the final excuse is
gone. What is the excuse now?
It is time for the appropriations process to finally be allowed to
move forward. That means it is time for the men and women who put
everything on the line for us to finally receive the support they need
to be safe. It is time for our troops to finally get the certainty they
need to plan for training and operations.
The Defense appropriations bill is half of all discretionary
spending. The Defense appropriations bill contains no controversial
policy riders--none. The Defense appropriations bill was supported in
committee 27 to 3. Nearly every Democrat voted for it. Democrats even
sent out press releases praising the bill. It is obvious why we should
pass it now.
President Obama's own Secretary of Defense just wrote an op-ed titled
``U.S. Military Needs Budget Certainty in Uncertain Times'' in which he
implored Congress to authorize long-term funding for the military.
He said:
In this uncertain security environment, the U.S. military
needs to be agile and dynamic. What it has now is a
straitjacket. At the Defense Department, we are forced to
make hasty reductions when choices should be considered
carefully and strategically.
He concluded with this:
I appeal to Congress to act on a long-term budget deal that
will let American troops and their families know we have the
commitment and resources to see them succeed, and send a
global message that the United States will continue to plan
and build for the finest fighting force the world has ever
known.
So look, our colleagues across the aisle are just completely out of
excuses. It is time to move the bill forward. Once we do, we have every
intention of then moving on to other appropriations bills as well.
[[Page S7769]]
Remember, our Members worked very hard on these bills. Nearly all of
the appropriations measures passed committee with support from both
parties. We obviously want to process all of them.
If Democrats hadn't wasted literally months blocking every last one
as part of some political game, we could have passed all 12
appropriations bills a long time ago, but since they did, it has forced
Congress up against a December 11 deadline of the Democrats' own
creation. We are going to work within that deadline to get as much done
as we possibly can. With bipartisan cooperation, we can get a lot more
accomplished. With more political games, we can get a lot less done.
____________________