[Congressional Record Volume 166, Number 3 (Tuesday, January 7, 2020)]
[Senate]
[Pages S35-S37]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                  For-Profit Colleges and Universities

  Madam President, I have come to the floor many times to speak to the 
American people about an industry, the most heavily federally 
subsidized industry in America today. No, it is not a defense 
contractor. It has nothing to do with American agriculture. What I am 
speaking of are the for-profit colleges and universities of the United 
States. These colleges and universities, sadly, have written a 
notorious record when it comes to the treatment of their students. They 
have often cheated their students, luring them into signing up for 
expensive, often worthless college courses with false promises and 
inflated outcomes if they graduate.
  At the end, the students are left with massive student debts, a 
diploma that is worthless, credits that can't be transferred to any 
other reputable college or university, and the prospects of a job that 
is almost impossible to find. In many cases, these sham operations 
actually go out of business in the middle of the student's education.
  As an industry, for-profit colleges need to be remembered for two 
numbers--two numbers that tell the story of this industry. Nine percent 
of all postsecondary students go to for-profit colleges and 
universities in the United States. The University of Phoenix, DeVry--
you have heard their names. They advertise quite widely. Nine percent 
of students are attracted to these for-profit colleges and 
universities. But 33 percent of all of the federal student loan 
defaults in the United States are by the students who chose to attend 
those colleges and universities.
  What is going on here, with 9 percent of the students and 33 percent 
of the student loan defaults? The answer is obvious. The cost of 
education at for-profit colleges and universities is too

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high. Students incur more debt than they would by attending community 
colleges, city colleges, or other universities and colleges that have 
good reputations.
  Secondly, the education is substandard. You can advertise everything 
online about this great education. I can recall an ad that was on 
television in the Washington, DC, area a few years ago, and it showed a 
young woman--probably a teenager, not much beyond--in her pajamas, on 
her bed, saying: I am going to college on my laptop here.
  Well, that kind of easy education, many times, is no education at 
all. At for-profit colleges and universities, too many students end up 
taking these expensive courses that are meaningless. It turns out that 
none of these courses can be transferred to some other school or 
university. When you take these courses and you spend your money and 
you spend your time and you end up with so-called college credits by 
for-profit colleges and universities, no one else will take them. No 
one else accepts them. They laugh at them. Then the students, if they 
can hang in there long enough with massive student debt, end up with a 
diploma that is a joke, a diploma that can't even lead to a job. That 
is what the for-profit colleges and universities are all about. Despite 
the fact that they have been pretty widespread across the United 
States, many of them have gone bankrupt.
  What happens to you as a student if you have gone to one of these 
universities that has made all these promises to you along the way 
about taking college courses and how it is going to end up being an 
education that will lead to a job, and it turns out they were all lies, 
fraud, deceit, deception? You have the debt, right? You have the 
student debt, but you can't find a job. You went through 4, 5 years of 
these so-called courses at for-profit colleges and universities, and 
the only thing you have to show for it is a debt that is going to 
decide the rest of your life.
  It is not just the for-profit college industry that is burdening and 
exploiting our students. I come to the floor this morning because, 
sadly, at this moment in time, an agency of our government is 
complicit. Secretary Betsy DeVos and the U.S. Department of Education 
have made a fateful decision for hundreds of thousands of American 
students that I have just described. Let me explain.
  After a for-profit college defrauds a student--lies to the student--
Federal law gives that student the right to have his or her Federal 
student loan discharged under a provision known as borrower defense. 
Follow me. I have gone to a school and incurred a debt. They lied to me 
about their courses leading to a certain degree or to a job. Now the 
college is going out of business, and I still have the debt, but, under 
American law, I am protected as a student.
  The law says that if you were defrauded, you can use something called 
a borrower defense to discharge the student debt, wipe it clean, and 
get another chance at life. Congress has rightly decided with this law 
that we shouldn't leave students holding the bag when these schools 
should be held responsible.
  Is that something most Americans agree with? Take a look at this New 
America poll. Americans agree that students should have their Federal 
student loan debt canceled if their college deceived them. For 
Republicans, 71 percent agree with that statement; Democrats, 87 
percent. Seventy-eight percent of the American people say that if these 
colleges lied to them, the students shouldn't end up holding the bag. 
It is pretty obvious.
  But sadly, Secretary of Education Betsy DeVos is trying to make it 
difficult, if not impossible, for defrauded student borrowers to get 
the relief. Secretary DeVos has allowed a backlog of--listen to this--
more than 223,000 claims of students with student debt who claimed they 
were defrauded by these colleges and universities. There are 223,000 
queued up, waiting in line for the Department of Education to implement 
the law. For more than a year, she has also failed to approve one 
single claim of the 223,000 who say they were defrauded--not one. She 
couldn't help one student who was defrauded out of 223,000.
  Now she wants to change the rules to make it impossible for future 
student borrowers to be relieved from their student debt when the 
schools have deceived them and defrauded them. She has put forward a 
new rule that places unreasonable burdens on student borrowers to seek 
and receive relief. Under this rule, the applicants looking for 
discharge of their student debt must prove that the school 
intentionally misled them. How is the student supposed to prove 
intention on the part of the school? Borrowers must also file a claim 
within 3 years of leaving the school, even though the conduct is often 
not discovered until many years later. The new rule also requires 
borrowers to apply individually instead of receiving automatic 
discharge when they are part of a group who has been harmed by similar 
widespread misconduct.
  We have seen it before. Some of these names may ring a bell with you: 
Corinthian Colleges. They were all over the United States. They went 
bankrupt. It turned out they were defrauding students, saying: Go take 
these courses, and you can end up being qualified for these jobs.
  It turned out it was a lie. After they went bankrupt, under the Obama 
administration, many of the students, as a group, were protected by 
this law, the borrower defense rule. Secretary DeVos says: Every 
student, you are on your own at this point. Lawyer up. You are going to 
have to prove your case as an individual.
  This new rule requires borrowers to apply individually, instead of 
receiving this automatic discharge, which was the case under the Obama 
administration. With this new rule, Secretary DeVos is saying to 
borrowers: We are not on your side. You are on your own.
  In addition, if a borrower's claim for relief is denied, they would 
not be allowed to appeal under Secretary DeVos's new rule. Even if more 
evidence of deception and misconduct is found.
  This new rule also puts taxpayers on the hook for relief, shielding 
schools from being held directly accountable by students. The DeVos 
rule eliminated the current prohibition on institutions using class 
action restrictions and mandatory arbitrations as conditions of 
enrollment.
  These practices, which you have seen over and over again by 
Corinthian and ITT Tech and others, require borrowers to sign away 
their rights when they go to school. Think about that. You are 19 years 
old, and you are starting your college education. You are going before 
one of these schools. They push in front of you that you have to sign 
up for $10,000 or $20,000 in tuition and sign the following contract. 
There you are, at age 19 without much life experience, being asked to 
sign up. Do you know what the fine print says? The fine print says that 
if I am lying to you, you can't go to court. Most students don't even 
understand that. They sign it because they are off to college, 
thinking, finally, here is our opportunity to be educated and have a 
life, a future. They don't know they are being deceived by these 
schools.
  Secretary DeVos has said: Sorry students, you signed that paper when 
you were 19, and now you are stuck with it.
  It is impossible for student borrowers to get relief under this new 
rule by Secretary DeVos. According to an analysis by the Institute of 
College Access & Success, the new Secretary DeVos rule will end up 
forgiving, at most, 3 percent of the loans associated with school 
misconduct. They will be able to recoup just 33 percent of that relief 
from the schools themselves, and taxpayers will foot the difference. 
The current rule is estimated to forgive 53 percent of loans associated 
with misconduct and recoup a greater percentage of the relief from 
schools. Secretary DeVos has loaded up the U.S. Department of Education 
with people who were in the for-profit college industry. These are 
folks who are devising rules good for their industry but not good for 
the American student borrowers. The bottom line is, the DeVos rule 
makes it harder for borrowers to receive relief, and the schools who 
commit the misconduct will pay for a lower portion of the relief that 
is given.
  I introduced S.J. Res. 56 last September to overturn Secretary 
DeVos's borrower defense rule. Representative Susie Lee of Nevada 
introduced a companion resolution in the House. Many organizations have 
endorsed my bill, including the Leadership Conference on

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Civil and Human Rights, the AFL-CIO, American Federation of Teachers, 
National Education Association, Consumer Federation of America, Student 
Veterans of America, and the NAACP, but there is one most recently that 
I want to share with you because I think it is important that Members 
of the Senate of both political parties realize that we now have a 
major organization--a nonpartisan organization--that speaks for the 
veterans of America who have endorsed this effort.
  I have in my hand a letter submitted to me by James Oxford, who goes 
by the nickname ``Bill,'' national commander of the American Legion of 
the United States of America, sent to me on December 18, 2019. He tells 
the story of veterans who were exploited by these for-profit colleges 
and universities. They ended up serving our country, earning their GI 
bill of rights, then losing their benefits to these schools--these 
worthless schools--and going further in debt to pay for their 
education.
  Commander Oxford sent this letter.
  Mr. President, I ask unanimous consent that this letter be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                December 18, 2019.
       Dear Senator Durbin: On behalf of the nearly 2 million 
     members of The American Legion, I write to express our 
     support for Joint Resolution 56, providing for congressional 
     disapproval of the rule submitted by the Department of 
     Education relating to, ``Borrower Defense Institutional 
     Accountability.'' The rule, as currently written, is 
     fundamentally rigged against defrauded borrowers of student 
     loans, depriving them of the opportunity for debt relief that 
     Congress intended to afford them under the Higher Education 
     Act. Affirming this position is American Legion Resolution 
     No. 82: Preserve Veteran and Servicemember Rights to Gainful 
     Employment and Borrower Defense Protections, adopted in our 
     National Convention 2017.
       Thousands of student veterans have been defrauded over the 
     years--promised their credits would transfer when they 
     wouldn't, given false or misleading job placement rates in 
     marketing, promised one educational experience when they were 
     recruited, but given something completely different. This 
     type of deception against our veterans and servicemembers has 
     been a lucrative scam for unscrupulous actors.
       As veterans are aggressively targeted due to their service 
     to our country, they must be afforded the right to group 
     relief. The Department of Education's ``Borrower Defense'' 
     rule eliminates this right, forcing veterans to individually 
     prove their claim, share the specific type of financial harm 
     they suffered, and prove the school knowingly made 
     substantial misrepresentations. The preponderance of evidence 
     required for this process is so onerous that the Department 
     of Education itself estimated that only 3 percent of 
     applicants would get relief.
       Until every veteran's application for student loan 
     forgiveness has been processed, we will continue to demand 
     fair and timely decisions. The rule that the Department of 
     Education has promulgated flagrantly denies defrauded 
     veterans these dignities, and The American Legion calls on 
     Congress to overturn this regulatory action.
       Senator Durbin, The American Legion applauds your 
     leadership in addressing this critical issue facing our 
     nation's veterans and their families.
           For God & Country,
                                         James W. ``Bill'' Oxford,
                          National Commander, The American Legion.

  Mr. DURBIN. Let me read one paragraph from Commander Oxford:

       As veterans are aggressively targeted due to their service 
     to our country, they must be afforded the right to group 
     relief. The Department of Education's ``Borrower Defense'' 
     rule eliminates this right, forcing veterans to individually 
     prove their claim, share the specific type of financial harm 
     they suffered, and prove the school knowingly made 
     substantial misrepresentations. The preponderance of evidence 
     required for this process is so onerous that the Department 
     of Education itself estimated that only 3 percent of 
     applicants would get relief.

  Whether you are a Democrat or Republican, don't go waving that flag 
and tell everybody how much you love our veterans and ignore this 
letter. The leader of the largest veterans group in the United States 
of America--a nonpartisan group--told us these schools exploited 
veterans, and Secretary DeVos's new rule means that these veterans will 
never get relief. Ninety-seven percent will never get any relief.
  In a matter of a few days--maybe weeks--I will be calling this matter 
to the floor. I am asking my colleagues on both sides of the aisle to 
put the party labels outside, hang them up in the cloakroom, come on 
inside here, and stand up for students across America who did their 
best to get a college education and were deceived in the process, stand 
up for students who were loaded up with student debt, which could 
destroy their lives, and give them a fighting chance for a future by 
saying that Secretary DeVos's borrower defense rule is unfair to 
veterans, unfair to students, and unfair to American families.
  I ask my colleagues on both sides of the aisle to do the right thing 
when the time comes and give these borrowers a second chance at being 
financially independent Americans who can contribute to their families 
and our national economic growth. For our veterans, please join me in 
making sure that Secretary DeVos's borrower defense rule is disapproved 
by both the House and the Senate.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Scott of Florida). The Senator from 
Connecticut.