[Congressional Record Volume 165, Number 186 (Wednesday, November 20, 2019)]
[Senate]
[Pages S6684-S6685]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                  For-Profit Colleges and Universities

  Mr. DURBIN. Mr. President, there are various options available for 
graduates of high schools across the United States. Some of them choose 
to go to college or university, but even making that choice gives you a 
lot of options.
  There are basically two categories of schools, though, that I want to 
address in this statement this morning. One category is called for-
profit colleges and universities, and the other is the traditional not-
for-profit colleges and universities, which would include your 
community colleges and public universities and many not-for-profit, 
private universities.
  But I want to focus this morning on the for-profit colleges and 
universities in the United States. People sometimes can't make the 
distinction between which is which. Some of the big names in the for-
profit industry include the University of Phoenix. That is one you 
probably heard of. DeVry University is another one you might have heard 
of.
  There are some defining characteristics of these schools. They, of 
course, are in business to make money, and they have a different 
economic model than many of the other universities.
  I have met the CEOs of for-profit colleges and universities and found 
that in some cases they have limited or no experience when it comes to 
education. They are investors. They are business people. The idea of 
education is a secondary part of why they were chosen.
  There is an important statistic--in fact, two statistics--that I want 
to preface my remarks with, and these will be on the final, I might 
add, for those who are following this statement.
  The numbers 9 and 33--9 and 33. Why are they important? Nine percent 
of postsecondary students go to for-profit colleges and universities--9 
percent--but 33 percent of all the federal student loan defaults in the 
United States are students from for-profit colleges and universities--9 
percent of the students, 33 percent of federal student loan defaults.
  What is going on here?
  Well, what is happening here, unfortunately, is that many of these 
students are signing up for the for-profit schools that they think are 
legitimate colleges and universities, and, frankly, they are 
dramatically overcharging them.
  Every analysis we have gone through says that the tuition at these 
for-profit schools far exceeds what students are likely to pay, 
certainly, in a community college and in the case of many public 
colleges and universities. So they have a big tuition bill to start 
with, and they have poor results.
  What kind of results? Students graduate believing that they are being 
trained or educated to do a certain profession, and then they find out 
that they can't do the job or they don't qualify for the job, or they 
get so deeply in debt on the way to graduating, they give up and quit--
the worst of all possible outcomes.
  So that is the preface on these for-profit colleges and universities. 
I have come to this floor many times over the years to talk about this 
industry because we treat it in the eyes of the public like higher 
education across the board, and yet it is much, much different. It is 
for profit as opposed to not for profit, and, frankly, the results of 
that education leave a lot to be desired.
  It has been more than 5 years since the for-profit giant Corinthian 
College collapsed. Their economic model didn't work. For years, 
Corinthian had lied, inflating its job placement rates and engaging in 
high-pressure tactics to lure students into enrolling, often leaving 
them with massive student loan debt and a diploma that didn't work to 
find a job.
  But Corinthian was not unique. As I have said many times, it turned 
out to be the canary in the coal mine. Since Corinthian College, we 
have seen the collapse of several other major predatory for-profit 
colleges and universities. They include ITT Tech, Westwood, Education 
Corporation of America, and Dream Center. Nearly every major for-profit 
college company has been the subject of extensive investigations and 
lawsuits for unfair and deceptive practices similar to Corinthian 
College.
  Check with the attorney general of your home State about that for-
profit college and university, and, almost without fail, you will find 
that they have been investigated for misleading and deceiving the 
students who go to school at their universities.
  I have long said that we shouldn't leave the students holding the bag 
for the misdeeds of these institutions because, you see, we are 
complicit. The Federal Government is part of the problem.
  How do these schools reach the point where you can take out a Federal 
student loan to attend? We accredit them. We recognize their 
accreditation. We tell the world and the families and the students that 
these are legitimate schools. Depending on that, these students who 
sign up for a better experience, are often misled, deceived, and 
overcharged. Ultimately, a third of them are in default on their 
student loans because they can't pay them back.
  There is a provision in the Higher Education Act known as borrower 
defense. It gives the students the right to have their Federal student 
loans discharged by the Secretary of Education if they have been 
defrauded or subject to deception by these schools.
  After Corinthian's collapse, this little known, rarely used provision 
in the law became a hot topic. All of a sudden, here were large numbers 
of students who had been defrauded and deceived by Corinthian College 
and went deeply into debt, and now the college goes out of business.
  It turns out that most of the hours they took can't be transferred 
anywhere. It is worthless. They were defrauded, start to finish, and 
now they are left holding the student loan bag.
  Thousands of Corinthian students and other borrowers, mostly from 
for-profit colleges, began applying for this borrower defense discharge 
from the U.S. Department of Education. It was in the law. It led the 
Obama administration to undertake a new rulemaking to update the 
borrower defense regulation, which dated back to 1994, and to create a 
standard process for dealing with the inundation and to attempt to 
prevent future collapses.
  Soon after taking office, Secretary Betsy DeVos and the Trump 
administration delayed implementation of the Obama rule, despite the 
Department's own inspector general saying that implementing the rule 
would ``avoid costs to students and taxpayers that result from school 
closures.''
  Secretary DeVos said: I am not going to be a party to that. Her delay 
was challenged in court. Her decision to delay this new rule was found 
illegal by a Federal judge, after which the current rule went into 
effect, and it remains in effect today. Secretary DeVos also announced 
she would begin a new rulemaking to replace the current rule.
  In late August, Secretary DeVos released her borrower defense rule, 
the new rule which she wants to put in place. It actually guts the 
borrower and taxpayer protections in the current borrower defense rule 
and makes it nearly impossible for students holding this student loan 
debt who have been defrauded to get relief.
  How does she make it so hard?
  It is estimated that the rule will provide $11 billion less in relief 
to defrauded borrowers--students--than the current rule. Among other 
things, the new Betsy DeVos rule increases the burden on these 
defrauded students to gather and submit almost impossible amounts of 
evidence to somehow prove their claim. Student borrowers will have to 
provide evidence that the school intentionally harmed them.
  Now, how are they supposed to do that?
  The DeVos rule--the new one--requires borrowers to apply individually 
rather than receiving automatic discharges when they are part of a 
group of student borrowers who have been harmed by similar practices by 
places like Corinthian. In other words, you are on your own. Get your 
own lawyer. Lawyer up. Get some evidence together. Come see us, and 
maybe we will be convinced.
  Student borrowers who have been cheated are not exactly the 
wealthiest group in America. They are often facing incredible financial 
difficulties and deep emotional strain, with a mountain of debt and 
nothing to show for it because of these for-profit schools. Now 
Secretary DeVos wants them to be investigators and lawyers and get 
their own relief one by one.

[[Page S6685]]

  The DeVos rule also eliminates the current prohibition on class 
action restrictions and mandatory arbitration clauses in enrollment.
  What does that mean?
  Under the current rule which Secretary DeVos wants to replace, you 
could gather the other students from Corinthian College and work on 
this together as a class action claim, share whatever expenses that 
might be involved in proving your claim, and you couldn't be forced 
into an arbitration where you are likely to lose. You could have your 
day in court under the rule that Secretary DeVos wants to replace.
  Class action restrictions and mandatory arbitration were used by 
Corinthian and ITT Tech and others that required students to sign away 
their rights to sue the school as an individual or as part of a class 
as a condition of enrollment.
  The DeVos rule prevents students from holding schools directly 
accountable for their wrongdoing and seeking financial redress through 
the courts. It gives students no other option than to seek relief from 
taxpayers through borrower defense, but, as I just mentioned, it makes 
that process almost impossible.
  And if anyone doubts the devastating effect this rule will have on 
the defrauded students' ability to get relief, just look at what 
Secretary DeVos has done to date.
  Since taking office Secretary DeVos has had the authority to 
discharge hundreds of millions of dollars in student loan debt held by 
hundreds of thousands of defrauded student borrowers. Instead, she has 
allowed a backlog of more than 200,000 borrower defense claims from 
virtually every State in the Nation--student borrower defense claims 
coming from all 50 States--to build at the Department. She is sitting 
on it. She is playing slow ball. She has not approved a single claim. 
Although more than 200,000 claims are pending, she has not approved a 
single claim in more than 1 year.
  Here I want to show you what is behind this. In the few cases where 
Secretary DeVos has been legally required to provide discharges, she 
has done so with extreme displeasure.
  Think about that. Using her authority to help defrauded borrowers get 
a fresh start brings her extreme displeasure.
  How do I know that?
  She wrote it. Here is one of them. Recommendation to discharge. She 
approves it, signs it, and puts down as a comment: ``with extreme 
displeasure.''
  Discharging a student loan from a for-profit institution that 
defrauded borrowers, she is displeased to be forced to do such a thing.
  She defied a Federal court order and was held in contempt for 
continuing to collect from these students who had been defrauded by 
Corinthian.
  This is not a Secretary who rewrote the borrower defense rule to help 
student borrowers. In September, I introduced a resolution in the 
Senate to overturn the DeVos borrower defense rule; 42 of my colleagues 
have cosponsored that resolution.
  I plan to bring the resolution to a vote on the Senate floor where we 
will only need a simple majority to pass under the expedited procedures 
provided for in the Congressional Review Act. At that time, my 
colleagues will have a choice. Will you stand with Secretary DeVos or 
with the defrauded student borrowers in your State?
  There is no doubt where the American people stand. In a 2016 New 
America poll, the question was asked whether Americans agreed that 
students should have their Federal student loan debt canceled if their 
college deceived them, exactly what the borrower defense rule is about.
  Seventy-one percent of Republicans said yes, 87 percent of Democrats. 
On average, 78 percent of Americans understand it is fundamentally 
unfair to penalize these students, having been defrauded by a school 
that this U.S. Government said was doing business honestly and 
professionally. When you break the numbers down, it is clear. The 
overwhelming majority of people in this country stand by the students, 
but not by Secretary DeVos.
  I will stand with the defrauded students and the American people over 
Secretary DeVos, and my colleagues in the Senate will get a chance to 
vote. I hope they will, too.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Sasse). The Senator from South Dakota.