Nomination of Kent Yoshiho Hirozawa to be a Member of the National Labor Relations Board -- Continued

Floor Speech

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Mr. DURBIN. Mr. President, Jennifer Kerr was a single mom who wanted to improve her family's future. In 2009, she signed up at Vatterott College. She thought that was the best way to improve her skills and training and do a better job for her family.

She went to the local campus. She told the admissions representative that she wanted to study to become a nurse. The admissions official told her that although the school did not offer a nursing degree, it did offer a medical assistant's degree that would allow her to earn $15 to $17 an hour and put her on a fast track to becoming a nurse.

After securing more than $27,000 in loans and being in the program for more than a year, Jennifer Kerr learned she wasn't even enrolled in the medical assistant's program--she was in the preliminary medical office assistant's program. If she wanted to continue and pursue the medical assistant's degree, she would need another 30 weeks of study and another $10,000 to be paid in tuition.

In a gutsy move, Jennifer Kerr sued Vatterott Education Centers for misleading her, even though there was a clause in her contract with the school that said if she ever sued the school and lost, she would be responsible for Vatterott's legal costs.

A jury in Missouri decided the school did deceive Jennifer Kerr and ordered the company to pay back the $27,000 she borrowed for tuition and fees. The jury then ordered the company to pay Kerr an additional $13 million in punitive damages. The punitive amount the jury awarded far exceeded the maximum under Missouri law, but it showed the sympathy of the jury for situations like Jennifer Kerr's. She borrowed tens of thousands of dollars to earn a certificate--not even a degree--at a for-profit school that turned out to be virtually worthless.

After she left Vatterott, she tried for 6 months to find full-time employment. Earning her medical office assistant's diploma not only put her in debt, but it couldn't land her a job anywhere.

Taking away the court victory, Jennifer Kerr's story is common to an industry--the for-profit school industry--that frequently uses unscrupulous tactics to deceive people who are trying to get an education.

Some trade schools provide quality training for reasonable prices. I acknowledge that. But throughout the for-profit college industry, abuses are well documented. Admissions offices at for-profit schools are often a guise for aggressive sales operations targeting students from low-income families. They end up enrolling, with inflated expectations for their employment and salary prospects upon graduating from for-profit colleges.

Because 96 percent of the students who enroll in for-profit colleges take Federal student loans, nearly all the students who leave these for-profit schools have student debt even when they don't have a degree or a diploma that can lead to a job. Most for-profit colleges charge significantly more in tuition and expenses than similar programs at community colleges or even State universities.

In 2008 and 2009, more than 1 million students started at schools owned by for-profit companies that were examined in an investigation by Senator Tom Harkin in the Senate HELP Committee. By mid-2010, 54 percent of those students who started at these for-profit schools had left school, without a degree or a certificate. Among associate degree students, 63 percent dropped out without a degree.

Vatterott made national news itself in 2009 and early 2010 when three of the top employees of this for-profit school in the Midwest, including Kevin Earl Woods, the former director of the Kansas City campus, pleaded guilty to a conspiracy to fraudulently obtain Federal student grants and loans for students who were ineligible for these loans.

The Senate HELP Committee looked at Vatterott in the course of Chairman Harkin's investigation of the for-profit industry. What they found was discouraging. In 2009, 88 percent of the revenue going to this for-profit school was Federal money. Of the money it took in, Vatterott spent 12.5 percent on advertising and marketing and took out 19 percent of this Federal money in profit.

Here is another way to look at it: Vatterott, a for-profit school, spent $2,400 per student on instruction in 2009, but it spent $1,343 on marketing, and $2,000 it took out in profit for each student.

In contrast, public and nonprofit schools generally spend a higher amount per student on actual instruction. By comparison, St. Louis Community College spent $5,000 per student on instruction; Vatterott, $2,400.

Jennifer attended the Vatterott campus in Independence, MO, which is now closed, but the company continues to operate a Kansas City campus. The default rate on loan repayment for students who attended Vatterott in Kansas City is 25 percent. One out of four students who went to this for-profit school defaults on their student loans. The national average is 15 percent.

Jennifer Kerr fought back and won, but the for-profit college industry won't be cleaned up in the courtroom. Not every student with a bad experience has a strong legal case. Most are victims of a system that allows unscrupulous schools to collect Federal loan and grant money from students regardless of outcomes, heaping debt on these students. Many of those students will carry that debt for a lifetime.

When the programs and the schools don't deliver and jobs don't materialize, the student gets the debt, the Federal Government bears the risk, and the school takes the money and runs. The for-profit sector took in $31 billion in U.S. Department of Education money in 2011. About one-fourth of all the Federal aid went to these for-profit schools, even though they only enroll 12 percent of all the students coming out of high school.

I might add one other statistic. The for-profit schools account for 47 percent of all the student loan defaults in America--12 percent of the students, 25 percent of the Federal aid to education, 47 percent of the student loan defaults.

Federal U.S. Department of Education regulations state that schools that engage in substantial misrepresentation about a program, its fees, or its job placements can be denied Federal money, and yet Vatterott is not the first or the only school to substantially mislead these students.

Abuses in the for-profit college industry will continue until Congress steps up and does something. It is about time for us to establish some standards of accreditation that apply to all schools across the board. How can you expect a student or a student's family to know whether this school that is advertising on the Internet or in the buses or on the billboards is a real school or a phony operation to lure kids into debt, have them drop out or end up with a worthless diploma?

I have worked with my colleagues who feel as I do on this issue. Senators Tom Harkin and Jack Reed, among others, will continue to tell these stories here on the floor of the Senate in the hopes that when the Senate has its higher ed reauthorization bill we will finally tackle this for-profit school industry.

Last Congress, Senator Tom Harkin joined me in introducing a bill that would include military education benefits in the calculation that limits how much of a school's revenue is derived from Federal funding. Today I announced the VA and Defense appropriations bill for the next fiscal year. It was reported out of my subcommittee of the Senate Appropriations Committee. We called in the representatives of the major services and asked them what is going on with the training of our active servicemembers and their families. What they told us is more than half of those active servicemembers and their families are going to these same for-profit schools. Some are good. Most are awful.

These military men and women and their families are not only wasting their time, they are wasting a once-in-a-lifetime opportunity we give them for the proper training and education to prepare them to be even better in the military or to have success in civilian life. Because they are lured into these for-profit schools, they end up wasting their time, wasting their money, many of them deeply in debt.

Senator Hagan of North Carolina has proposed banning schools for using Federal education dollars for marketing. She is right. Many for-profit schools literally take the Federal money to bombard students with messages that entice them to enroll, bringing the schools more Federal money.

I also want to take a look at the system of accreditation. Our current system provides a seal of approval for too many schools, many of them for-profit colleges, that is little more than a license to rake in the Federal dollars as opposed to truly educating and training students. I hope Jennifer Kerr's court victory can serve as a wake-up call to Congress so we can work together to correct the worst abuses of this system. On behalf of the taxpayers, we need to be better stewards of Federal education money. On behalf of the students, we have to improve a system that may or may not prepare them for a career and may or may not lead to a degree, but almost in every case leads to debt.

DIETARY SUPPLEMENTS

Mr. President, last week USA Today published an article that highlights the stories of people and families hurt by taking a dietary supplement containing the chemical DNP. It is a hazardous pesticide that was used as a weight-loss drug before 1938. Then the FDA declared it to be toxic for humans--in 1938, 75 years ago.

The article in USA Today featured Matt Cahill, a dietary supplement manufacturer with a high school education and no chemistry training, who illegally added this toxic pesticide, DNP, to exercise and weight-loss supplements. Some people who used his product suffered liver failure; some died. Cahill was arrested, criminally prosecuted, and served time in prison, but he is back selling dietary supplements that raise more health concerns.

The article in USA Today raises serious questions about whether we can do better to protect the American public. Dietary supplements have become a common health aid in medicine cabinets. More than half of Americans use dietary supplements, and you may be one of them. Most supplement makers are ethical and responsible. I take a multivitamin every day and believe it is safe. But most people assume that supplements on the shelves in stores have been tested by the Federal Government. How could they get on the shelf without a test? Most people think, like drugs that are prescribed, these supplements are tested for safety and effectiveness. That is not true.

Unlike more traditional supplements such as calcium and vitamin C, there are now many new and complex supplements on the market promising to help people lose weight, find energy, bulk up, prevent disease--you name it. Consumers need to be careful. If a product is promising something too good to be true, they need to make sure the product and its ingredients are safe. We need to know the information on the label is not misleading. The FDA, the Federal Drug Administration, needs to know more about these products.

This week Senator Richard Blumenthal of Connecticut and I are reintroducing the Dietary Supplement Labeling Act. Listen to what this bill would require. This bill would require more information on labels of dietary supplements and it would help ensure that the FDA has the information it needs if it turns out any of these products are dangerous.

Many people would be surprised to learn that the FDA does not know--does not even know--how many dietary supplements are being sold in this country. The USA Today article clearly states that when this Cahill character first sold his harmful dietary supplement tainted with DNP, he sold it on line. The FDA had no idea it was even on the market.

How does FDA learn when a product is on the market? People get sick and they die.

Another example is kava, a root whose extract people take to alleviate anxiety. But now that we know that kava is associated with severe liver damage and death, it would be useful for the FDA to have information readily available about the products on the market in America today containing kava. Our bill would require dietary supplement makers to give the FDA the name of each supplement they produce, along with a description of the product, a list of ingredients, and a copy of the label. Is that too much to ask? If you are going to sell this dietary supplement in stores across America, shouldn't the Food and Drug Administration at least have a copy of the label and ingredients? With this information, the FDA would know what products are on the market, what ingredients are in them, and be able to work with supplement manufacturers to address any problems.

This is a commonsense provision. It is supported by the Consumers Union and already practiced by many responsible supplement makers. Let's ask all the companies to provide FDA this basic information.

In addition to asking manufacturers to tell the FDA when a product goes on the market, this bill would require more information on the label of these products. Some ingredients may be safe for the general population but not for kids or pregnant women or perhaps those who have a compromised health condition.

St. John's wort is used safely by many people, but it can cause serious side effects in people who have ADHD or people who are bipolar, or people who are undergoing surgery. Information like that should be clearly listed on the label. This bill would help to ensure the information necessary to make an informed decision by consumers.

We have all seen claims in supplement stores. I was in Olney train station Saturday night with my wife and went into one of these dietary supplement stores and the shelves were packed with all of these products claiming all of these things. Some of them promised they will boost your immunity, enhance your athletic performance or make you a better husband. This bill would give the FDA the authority to require the manufacturer to provide upon request the evidence to support claims such as ``promotes weight loss.''

Consumers should be skeptical of any product making big claims and they should take the time to learn if the product is safe and effective. But we need to give the FDA the authority to request evidence to support any claims made on these labels.

The bill would also help curb the growing practice of foods and beverages with potentially unsafe ingredients masquerading as dietary supplements by directing the FDA to establish a definition for ``conventional foods.''

I will challenge you, whether it is West Virginia or Illinois or Washington, DC, or your home State, go to the cash register at a gas station. What is the first thing you see next to the cash register? Energy supplements, those little red bottles. They are everywhere. Products such as energy drinks, the huge one in 24- and 32-ounce cans, and baked goods, such as Mellow Munchies brownies, that contain unapproved food additive melatonin are marketed as dietary supplements that are safe ways to get a boost of energy or to relax. In reality, they are foods and beverages taking advantage of the more relaxed regulatory standard for dietary supplements.

Here is a quiz. Did you know the Federal Drug Administration regulates a food product known as cola? You pick it, Pepsi, Coca-Cola, you name it. Did you know the Food and Drug Administration, in regulating that product, regulates how much caffeine they can put in each bottle? They do. But when it comes to the monster energy drinks. And you ask what are the limitations on caffeine in monster energy drinks? None, nada.

A sad case here, recently, in Virginia, a girl, 15 or 16 years old, two 24-ounce high-powered energy drinks in a 24-hour period of time, and she died. She died from two energy drinks. Way too much caffeine for a person her age and her size.

I am working with Senator Blumenthal to try to get the FDA to establish some standards here. These are not benign products. They are certainly not benign products for young people. If they are consumed in quantity, they are dangerous. People get sick and people die. I have had press conferences in Chicago with emergency room physicians. You would be shocked to know how many people show up having taken these energy drinks, consumed too much caffeine, and are worried they are about to die. That is a reality. It is time for us to establish some standards to protect consumers and families.

Most dietary supplements available today are safe and are used by millions of Americans as part of a healthy lifestyle. As I said, and will repeatedly, I take my fish oil, I take my multivitamin. I do not believe I should have to get a prescription to buy them. But we also need to recognize how the regulation of supplements can be improved to protect the public in America. In the USA article, a representative from the U.S. Antidoping Agency, a nonprofit designated by Congress to oversee testing of those who participate in the Olympics, said that companies like Matt Cahill's ``..... are not fringe players. These are mainstream dietary supplement companies and products that are in your mainstream health and nutrition stores. ..... It's not there are a few bad actors. There are a lot of bad actors.''

Ensuring the health of consumers from these bad actors will take cooperation from the responsible people in the dietary supplement industry, the Federal Drug Administration, and Congress in both political parties.

Senator Blumenthal and I have put in a bill which includes commonsense steps to make sure risks for supplements are on the label, products are registered with the FDA, and manufacturers can be forced to back up their big claims. I look forward to working with my colleagues to enact that legislation.

I yield the floor and suggest the absence much a quorum.

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