For-Profit Schools and Universities
Floor Speech
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 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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