National Defense Authorization Act for Fiscal Year 2016

Floor Speech

BREAK IN TRANSCRIPT

Mr. DURBIN. Mr. President, we have an industry in America called for-profit colleges and universities. It is a unique part of America's private sector--and I use the phrase ``private sector'' with some caution. These are profitable entities which portray themselves as colleges and universities. We know their names: the University of Phoenix, DeVry University, Kaplan University, and--until very recently--Corinthian, one of the largest for-profit schools. What do they do? They entice young people to sign up at their for-profit colleges and universities and promise them they are going to give them training or education to find a job.

Now, it turns out that as alluring as that is, it doesn't tell the whole story. The real story about the for-profit college industry can be told with three numbers:

Ten. Ten percent of all high school graduates go to these for-profit colleges and universities.

Twenty. Twenty percent of all the Federal aid to education goes to these for-profit colleges and universities. About $35 billion a year flows into these schools. If it were a separate Federal agency, it would be the ninth largest Federal agency in Washington, DC--$35 billion.

But the key number we should remember is 44. Forty-four percent of all the student loan defaults in America are students at for-profit colleges and universities.

How can that be--10 percent of the students and 44 percent of the loan defaults.

First, they overcharge their students; secondly, when the students get deeply in debt, many of them drop out; and, third, those who end up graduating find out many times the diploma is worthless. That is what has happened.

Back in December of 2013, I wrote to the Department of Education asking them to investigate Corinthian Colleges. There was an article in the Huffington Post that drew my attention to it, as well as the actions by the California attorney general, Kamala Harris. It turned out that Corinthian was lying. It was lying to the students about whether they would ever end up getting a job, and it was lying to the Federal Government about their performance and how well they were doing. They were caught in their lie. As a consequence, the Department of Education started threatening Corinthian Colleges for defrauding taxpayers and the government in their official reports. Things went from bad to worse. Corinthian Colleges declared bankruptcy.

What happens when one of these for-profit colleges and universities declares bankruptcy? Well, the students many times are left high and dry. They have nothing, no school to go to. Oh, wait a minute. They don't have ``nothing.'' They have something. They have debt--a debt that they carry away from these failed schools.

Well, we have a provision in the law which says if your school goes bankrupt, you might be able to walk away from your student debt.

The Department of Education made an announcement yesterday, which I support, that says that they are going to work with these students who have been defrauded by Corinthian Colleges and misled into believing this college was worth their time and money. Some of these students will get a chance to be relieved from their college debt.

It is a good thing because student loan debt is not like a lot of other debts. It is not like the money you borrowed for a car. It is not like the money you borrowed for a home. Student loan debts are not discharged in bankruptcy. You have them for a lifetime. If you make a bad decision when you are 19 years old and sign up for $18,000 a year at Corinthian Colleges or at ITT Tech, you have it until you pay it off. We find that many of these schools garnish Social Security checks. They will stay with you for a lifetime. So now the Department of Education is working on this, trying to do the right thing by these Corinthian students.

I have been in touch with Arne Duncan, Secretary of Education, whom I respect. I told him this is, unfortunately, an early indication of an industry that is on hard times. The stock prices of these for-profit schools are in deep trouble across the board. People are finally realizing there is too much fraudulent activity going on at these institutions.

Who are the losers? It is not just the students with debts from these worthless schools but taxpayers. We are the ones who send these billions of dollars to these so-called private companies that have their CEOs take home millions of dollars while the kids are getting little or no education. They are the losers.

What should we do about it? I think we ought to be a lot tougher when it comes to the for-profit colleges and universities--holding them accountable for what they are doing to these young people and their families, holding them accountable for what they have done to taxpayers.

Do you know how much money we sent to Corinthian after it became clear they were lying to us? It was $1 billion dollars--$1 billion dollars, Mr. and Mrs. Taxpayer. There are schools like that, unfortunately, across this country.

The last point I will make on this is that, speaking to the Secretary of Education and others, the real losers many times are also veterans--veterans. The GI bill was offered to veterans after they served our country for a chance to get an education, training, and to make a life. They used it, sadly, at worthless for-profit colleges and universities, and they have used up a once-in-a-lifetime chance to build a future. They are left high and dry, not with a student-loan debt but with an empty promise that this education is going to lead to something.

I am going to continue to work with my colleagues, including Senator Blumenthal of Connecticut, to change that and to protect our veterans. But I am also going to continue to work on these for-profit colleges and universities. America can do better. These schools with 10 percent of the students, 20 percent of the Federal aid to education, and 44 percent of the student loan defaults have to be held accountable.

I yield the floor.

BREAK IN TRANSCRIPT

Source