[Congressional Record (Bound Edition), Volume 160 (2014), Part 8]
[Senate]
[Pages 10702-10703]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  FOR-PROFIT SCHOOLS AND UNIVERSITIES

  Mr. DURBIN. Mr. President, for a number of years I have come to this 
floor to talk about an issue I wish to bring up again this morning, and 
the issue is for-profit colleges and universities.
  Many people, when they hear me describe this, don't understand which 
schools I am talking about. It is not the public and private 
universities that you would think of automatically, such as the 
University of Illinois and Northwestern University and others. It is 
the for-profit world of higher education.
  The for-profit colleges and universities are led by the Apollo Group, 
which owns the University of Phoenix, and is the largest; DeVry 
University, which is based out of Chicago; Kaplan and Corinthian, and 
many others.
  They bring about 10 to 12 percent of all the high school graduates 
into their for-profit colleges. They receive from the Federal 
Government 20 percent of all the Federal aid to education because the 
tuition they charge is very high, and these for-profit colleges have 
another distinction--their students account for 46 percent of all 
college student loan defaults. They enroll 10 percent of the students 
and account for 46 percent of the student loan defaults.
  What is going on here? What is going on here is they are charging 
these students a high tuition for these for-profit schools, and they 
are not preparing them to go to work or at least not to work at jobs 
where they can pay off those student loans. As a result students will 
drop out before they finish or they will finish with a diploma that is 
worthless. They can't find a job, they can't pay back their student 
loans, and now they are in the worst of all possible worlds--deep in 
debt with no education to speak of.
  The reason I am raising the point about the for-profit colleges and 
universities is because there have been several significant 
developments. Education Management Corporation owns a group of schools 
called the Art Institutes. I have run into them in the Chicagoland 
area. Argosy is another one of these for-profit schools, as is ITT 
Tech, and I mentioned Kaplan and Apollo.
  Career Education Corporation has schools such as the American 
Intercontinental University and the Harrington College of Design. They 
sound very appealing.
  I met one of the students who attended Harrington. Her name is Hannah 
Moore. She is a young woman from Chicago. She went to community college 
for 2 years, and then she transferred into the Harrington College of 
Design in the suburbs of Chicago to get a degree in design. When it was 
all over, after she received her degree, she could not find a job--not 
in that field. It turned out the degree was basically worthless.
  When she left Harrington College of Design, she had a college debt of 
$125,000. She could not find a job, and she could not make the 
payments. She had to move back in with her parents because that is all 
she could do, and because she could not keep up with the payments, her 
college loan debt grew to $150,000. Her father came out of retirement 
to help her pay for it.
  Think about it. She did what she thought was a good thing in going to 
college, went to one of these worthless for-profit schools, and now her 
life has literally changed forever because of this mountain of debt.
  Then there is a group called Corinthian College, which I want to 
focus on here. Corinthian College is based out of California. The local 
college's name, you may recognize, is Everest Colleges. We have 6 in 
Illinois, about 10 in Michigan, a dozen in California, and they are 
across the United States.
  It turned out that last year evidence surfaced that Everest Colleges 
were falsifying the information they provided to the Federal 
Government. In some cases it turns out they even paid employers to hire 
Everest graduates for a short period of time so they could report to 
the government that their graduates had found jobs, and then after the 
report was made, the people were let go. They didn't have a job.
  Everest was asked to send additional information to the Federal 
Government about this fraudulent practice, and for 5 months they failed 
to do it. Then last week the U.S. Department of Education said: Because 
Everest won't provide us with the data they are supposed to under the 
law, we are going to suspend new student loan money to them for 21 
days. Everest Colleges--or Corinthian, their parent corporation--
announced that because of this, they will not have enough money and may 
not be able to continue their operations. The value of stock in this 
corporation, Corinthian Corporation, went down to the range of 28 cents 
last week. Nobody would loan them money.
  Right now some 75,000 students across America are enrolled in Everest 
Colleges with student loans, and there is a very good chance that 
Everest Colleges--Corinthian as we know it--will not survive.
  My obvious question is: What will happen to these students? They have 
the debt to go to this worthless school that appears to be going out of 
business.
  We are working with the U.S. Department of Education right now. I am 
concerned about where these students are going to end up. I contacted 
the community colleges in my State and said: Reach out to the Everest 
College students and see if you can rescue these kids.
  But when we look at this and put it in perspective, we see this is 
only one of many for-profit colleges and universities. Most parents and 
most students don't know this whole brand of higher education is out 
there. They think it is just like every other college. It is not, and 
we are not doing a good enough job at the Federal level to regulate 
these for-profit colleges and universities that are exploiting these 
students.
  Let me tell my colleagues one story that was reported recently that I 
think is horrible, involving Corinthian Colleges. It is an article 
written by David Halperin entitled ``For-profit College Enrolls, 
`Exploits' Student Who Reads at Third-grade Level.''
  A 37-year-old man with what appeared to be a developmental 
disability--he was described as shaking, speaking haltingly, reading at 
an elementary school level--37-years-old--was allowed to enroll in 
Everest College's criminal justice program.
  According to the librarian who worked with him--and subsequently 
resigned because of the treatment of this man--the man was rarely able 
to comprehend sentences, was unable to sound out words, and does not 
have the ability to read documents he was asked to sign. She was 
worried about his ability to even understand the debt he was signing on 
for, the student loan debt at one of these Everest Colleges.
  It apparently didn't matter to Everest. They were ready to sign him 
up into college. As long as this man was eligible to take out Federal 
loans, Everest was going to get paid. The man was just an ATM machine 
spitting out dollars to Everest Colleges.
  Is that outrageous, to think they would lure someone with a 
disability into signing up?
  The list goes on and on, including Ashford University, another one of 
these for-profit colleges and universities.
  The obvious question we have to ask is this: When will our Department 
of Education and when will this Congress address this travesty? What is 
existing across the United States with these for-profit colleges and 
universities is an outrage, and it is exploiting the students and their 
families.
  Sadly, a couple of weeks ago we tried to pass a bill on the floor of 
the Senate so that students could renegotiate their student loans and 
bring down the interest rates. Every Democrat voted for it. We needed 5 
Republicans out of 45 to join us so that students in States such as New 
Jersey and Illinois could renegotiate their student loan rates down and 
make them more affordable. We got three Republicans: Senator Collins of 
Maine, Senator Corker of

[[Page 10703]]

Tennessee, and Senator Murkowski of Alaska. We needed two more to start 
the debate about renegotiating college loans.
  I think we have to wake up here. This debt families across America 
are facing--44 million individuals paying college loans--is an outrage. 
Part of it was started by these for-profit schools, but another part of 
it just reflects a debt that is out of control, and we ought to be more 
sensitive to it.
  We are going to call this again. Elizabeth Warren brought the bill to 
the floor. This time we are going to hope that some of our Republican 
colleagues go home to their States and in town meetings actually speak 
with families who are paying college student loans. If they will, I 
think they will understand they should join us in this effort: to give 
these college students and their families a fighting chance to pay off 
their loans and to reform this higher education system to stop the 
outrageous conduct by these for-profit colleges and universities.
  Mr. President, I yield the floor.

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