[Congressional Record Volume 164, Number 84 (Tuesday, May 22, 2018)]
[Senate]
[Pages S2803-S2804]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                          For-Profit Colleges

  Madam President, I would like to bring the Senate's attention to an 
article that appeared recently in the New York Times entitled 
``Education Department Unwinds Unit Investigating Fraud at For-
Profits.'' That is right. Even while tens of thousands of students are 
still waiting for the Federal student loan discharges to which they are 
entitled under law because they were defrauded by for-profit colleges, 
such as Corinthian and ITT Tech, the Secretary of Education, Betsy 
DeVos, is dismantling the enforcement unit that was set up to prevent 
future fraud.
  Corinthian and ITT Tech have become the most infamous examples of 
for-profit college predatory practices, but they are hardly unique in 
the industry. I have often said on the floor of the Senate--and the 
numbers have changed slightly over the years--that you can tell the 
story of for-profit colleges and universities if you know two numbers. 
This will be on the final. The first number: 9 percent of all post-
secondary students go to for-profit colleges and universities--
University of Phoenix, DeVry, Kaplan, similar universities. Nine 
percent go to for-profit colleges and universities, and 33 percent of 
all the federal student loan defaults are students from for-profit 
colleges and universities. Nine percent. Thirty-three percent. Why? Why 
is there such a dramatic difference between the percentage of students 
going to these schools and those who default on student debt, 33 
percent of whom went to the same schools? There are two reasons. For-
profit colleges and universities overcharge the students and produce a 
diploma that is virtually worthless when it comes to finding a job and 
paying off their student loan debt. That is the reality.
  In the last 5 years, nearly every major for-profit college has been 
investigated or sued by more than one State attorney general and 
Federal agency for unfair, deceptive, and abusive practices. Thanks to 
Secretary DeVos, they don't need to worry about the Department of 
Education anymore. The writing has been on the wall for some time.
  Last summer, Secretary DeVos hired former DeVry dean Julian Schmoke 
to be chief enforcement officer, where he would oversee the enforcement 
unit. I noted at the time that this was a particularly troubling 
decision given the enforcement unit's reported ongoing investigation 
into DeVry. The Times story confirmed my fears. They note that members 
of the enforcement unit have been marginalized, reassigned, and 
instructed to focus on other matters. What had expanded under President 
Obama to include around a dozen lawyers and investigators has now been 
reduced to three employees. According to the New York Times, the 
downsizing effectively killed investigations into several large for-
profit colleges, including--you guessed it--DeVry.
  In 2016, DeVry, which is based out of Chicago, agreed to pay $100 
million to settle a lawsuit with the Federal Trade Commission related 
to misleading advertising when it came to college students. Around the 
same time, DeVry agreed to a limited settlement with the Department of 
Education, but an enforcement unit investigation continued. According 
to the Times, the investigation became a point of contention between 
the Department staff and the new Trump administration.
  DeVry isn't the only former employer of a top DeVos adviser to escape 
Department scrutiny. The Times article also reports that the 
enforcement

[[Page S2804]]

unit investigations of Bridgepoint Education and Career Education 
Corporation have gone dark. The cops are being taken off the beat.
  Bridgepoint--owner of the notorious Ashford University--has a long 
record of abuse. Last year, the Consumer Financial Protection Bureau 
ordered the company to pay $30 million for deceptive acts and 
practices, including lying to students about their obligations under 
student loans. Bridgepoint is currently being sued by the California 
attorney general for defrauding and deceiving students. It is also 
facing investigations by State attorneys general in Iowa, 
Massachusetts, New York, North Carolina, and by the U.S. Securities and 
Exchange Commission and the U.S. Department of Justice. The U.S. 
Department of Veterans Affairs has also taken action to withdraw 
Ashford's eligibility to participate in the GI Bill because of its 
failure to comply with VA regulations. But, as the New York Times 
article points out, Bridgepoint has friends in high places when it 
comes to the Trump administration. A former consultant for Bridgepoint 
is now the Director of Strategic Communications at the White House.
  Then there is Robert Eitel, who was hired by Secretary DeVos in 
February 2017 as a special assistant. For the first 9 weeks of his 
Department of Education tenure, Eitel was actually on an unpaid leave 
of absence from Bridgepoint. You heard that right--he was an employee 
of the Department of Education and continued as an employee of one of 
the most predatory for-profit colleges in this country at the same 
time. ABC News reports Eitel had a hand in dismantling the Department's 
borrower defense rule, which would have helped students who were 
defrauded by for-profit colleges like Ashford. How is that for a fox 
guarding the henhouse?
  But we are not done yet. Don't forget about Career Education 
Corporation, which reports that it is currently under investigation by 
23 States attorneys general, including Lisa Madigan of Illinois. In 
2013, Career Education Corporation agreed to pay $10.25 million in a 
settlement with the New York attorney general over job placement rate 
inflation, an act of fraud. The company has been investigated by the 
FTC and the SEC. The Department of Education even placed one of its 
schools, American Intercontinental University, on heightened cash 
monitoring for concerns related to its administrative capability. But 
the enforcement unit's investigation into fraud by the company has come 
to a screeching halt, according to the New York Times. Who at the 
Department of Education is connected to Career Education Corporation? 
Well, in addition to working for Bridgepoint, Mr. Eitel was previously 
a top lawyer for that company, Career Education Corporation.
  Then there is Diane Auer Jones, who was previously a senior vice 
president for Career Education Corporation and was hired by Secretary 
DeVos to be her senior adviser on postsecondary education. Also, the 
Department's recently confirmed general counsel, Carlos Muniz, 
previously provided consulting services to the same company.
  The DeVos-orchestrated takeover of the Department of Education by the 
for-profit college industry is an embarrassment. It is an affront to 
students, their families, and to taxpayers. The Trump administration 
and Secretary DeVos are more concerned with protecting their rich 
buddies in the for-profit college industry than protecting America's 
students and their families. They don't seem to care that taxpayer 
dollars are being wasted as long as those dollars are going into their 
friends' pockets. It is shameful. It is scandalous. It has become 
routine in the U.S. Department of Education.
  I yield the floor.