Protecting Volunteer Firefighters and Emergency Responders Act

Floor Speech

BREAK IN TRANSCRIPT

Mr. DURBIN. Madam President, I ask unanimous consent to speak as in morning business.

The PRESIDING OFFICER. Without objection, it is so ordered.

CORINTHIAN COLLEGES

Mr. DURBIN. Madam President, it has been nearly 1 year since Corinthian Colleges, Inc., began its death spiral--falling under the weight of its own wrongdoing. Corinthian Colleges defrauded students, defrauded taxpayers, lied to accreditors, lied to the Federal Government, and on Sunday, this for-profit college, Corinthian Colleges, announced it would close its remaining 28 campuses--campuses in California, Oregon, Hawaii, Arizona, and New York. So, finally, Corinthian has collapsed.

We reflect on this disaster and ask a basic critical question: Why did it take this long given the long litany of violations to finally stop the flow of hundreds of millions of dollars--Federal tax dollars--to Corinthian Colleges, and equally important, how many Corinthian disasters lie ahead in the for-profit college and university industry?

There are certainly more questions we need to ask of the Department of Education about how it handled this case and how it must be more aggressive in the future to stop violations earlier, especially to prevent the students at these for-profit education companies from suffering an experience similar to Corinthian.

There will be more to come on that in the weeks and months ahead, but today I wish to focus on what is next for the students who attended these Corinthian campuses. We know this for-profit college and university industry pretty well. Ask any high school student in America to go online and to search a word, such as college or university, and watch what happens. As soon as they get to any kind of directory of Web sites, they will start seeing the ads for the for-profit colleges and universities. Some of the names are pretty obvious and well known. The largest of all is University of Phoenix. The next largest is DeVry University, out of the city of Chicago, and the next largest is Kaplan, an entity that was once owned by the Washington Post and now is on its own.

These for-profit colleges and universities descend on students, as well as on those who graduated from high school, imploring them to sign up for an education online--to sign up for a for-profit college. It will be so easy. They can do this online and get their degree. It will be a snap. That is what Corinthian did for years.

I know that with the news of the closure, students who signed up for Corinthian and went to school there woke up wondering what is next. Their college just disappeared, but their student debt didn't disappear. They signed up for these loans to go to this worthless school, and now the school has disappeared and the debt is still there.

There is a Federal law that can help these students. The Higher Education Act gives students who attended a school such as Corinthian--within 120 days of its closure--the ability to discharge their Federal student loans. I am renewing my call to the Department of Education to reach out directly to the thousands of students who have been exploited by Corinthian Colleges and to provide discharge applications to these students and give them clear, upfront information about how transferring their credits to another school may impact their ability to discharge their loans.

If a student transfers these Corinthian credits, which have limited value, to another school, they likely cannot discharge the loan they took out at Corinthian. So a student has to make a choice. The notice that the Department of Education sent to students yesterday is unacceptable. It leaves students to navigate through a series of links to get more information and it glosses over the most basic right of a student to discharge the student loans from bankrupt Corinthian Colleges.

Federal regulations clearly state the Secretary of Education's responsibility when a school such as Corinthian closes. According to the law, it says: ``After confirming the date of a school's closure, the Secretary identifies any Direct Loan borrower (or student on whose behalf a parent borrowed) who appears to have enrolled at the school on the school closure date or to have withdrawn not more than 120 days prior to the closure date.''

It goes on to say: ``If the borrower's current address is known, the Secretary mails the borrower a discharge application and an explanation of the qualifications and procedures for obtaining a discharge.''

The law is pretty clear. It is up to the Secretary of Education--the same agency that published an accreditation for this failed school, the same agency which sent the loan forms for students to sign up for loans. That same agency now has an obligation under the law to tell these students there is a way out.

Do you know what the average tuition is for a 2-year degree at the failed Corinthian Colleges? About $40,000. Imagine if this were your son or daughter. They just went through 2 years of school and have $40,000 in debt, and the college they are attending, Corinthian Colleges, just essentially went bankrupt, and now they find out people are laughing at them when they show their diploma from Corinthian Colleges.

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What is wrong with this picture? A young person, 2 or 3 years out of high school, now has $40,000 worth of debt or more and nothing to show for it.
Now is not the time for the Department to be concerned with the cost to taxpayers of discharging this debt. That is an important issue, and we will take it on later. The time for that was really over the last 12 months when the Department of Education kept Corinthian alive by pumping in hundreds of millions of dollars to keep their doors open when they were headed for bankruptcy. Now is the time to focus on the students, particularly the students in the States I mentioned earlier. They need the relief from this student debt.

The Department has also been doing something which I really want to call them out on. You know what they are suggesting to the students who have just gone through this miserable experience at the for-profit, failed, bankrupt Corinthian Colleges? They are suggesting that they can transfer to another for-profit college. What are they thinking?

Students should be warned if they use their Corinthian credits to transfer to another institution, they will likely not be eligible for discharge.

I have a few examples of the schools the U.S. Department of Education suggested that the Corinthian Colleges students transfer their credits to and still keep their debt from Corinthian. ITT Tech is one example. We see their ads everywhere, don't we? What we don't see in their ads is the fact that they are being sued by the Consumer Financial Protection Bureau. Sixteen different State attorneys general are investigating ITT Tech, and they are on the Department of Education's heightened cash monitoring list. Our Department is recommending that these students transfer to this school? What are they thinking?

Here is another example: Le Cordon Bleu and International Academy of Design and Technology--powerful names. What we don't see in all of their ads is that their parent company, Career Education Corporation, is under investigation by 17 different State attorneys general and on the Department of Education's heightened cash monitoring list. And our Department of Education is suggesting that the students at the failed Corinthian Colleges--why don't you pick up a culinary degree from Le Cordon Bleu. Maybe it will stay in business.

Here is another example: the Art Institutes and Argosy University. Argosy University--I ran into their signs in Chicago last week, and I could not help but think how many students are lured into believing Argosy University is something more than it really is. It is a for-profit college and university.

Incidentally, for the record, the parent company, Education Management Corporation is being sued by the U.S. Department of Justice and investigated by 17 State attorneys general. They are also on the Department of Education's heightened cash monitoring list. This is another school that the Department of Education suggested that Corinthian Colleges students transfer to.

Westwood College, one of the most infamous in the Chicagoland area, is being sued by the Illinois attorney general for deceptive recruiting practices. They were suggested to Corinthian Colleges students to transfer to by the Department of Education.

DeVry is under investigation by the Federal Trade Commission and by two State attorneys general. The University of Phoenix's parent company is being investigated by two State attorneys general. Kaplan is under investigation by three State attorneys general.

Has the Department of Education learned nothing? How in good faith can they tell these Corinthian students--who just had their college disappear and are sitting on a pile of debt--that these are viable transfer options for their students?

Last summer the Department assured me they would not sell Corinthian campuses to companies being investigated. They didn't want the students to be placed in double jeopardy. Why now will the Department accept that outcome for these students?

A move such as this leads me to the sad conclusion that the Department of Education is out of touch with the reality of the danger of students signing up at for-profit colleges and universities.

I want to say a word about the students who don't qualify for the clear relief I mentioned under the Federal law--the closed-school discharge. I joined with Senator Elizabeth Warren and others to call on the Department of Education to provide meaningful debt relief for all students wronged by Corinthian. We believe the fraud perpetrated by Corinthian should constitute a defense for repayment to students. The Department should provide clear guidelines on how students can assert their claims. These students need it and deserve it.

Senator Warren and I will meet with Secretary Duncan and Undersecretary Mitchell later this week.

While Corinthian's fraudulent behavior has left tens of thousands of students in financial desperate straits, the company's leaders have been cashing in for years.

The CEO of the failed Corinthian corporation, which received 80 to 90 percent of its revenue directly from the Federal Treasury through student loans, made over $3 million in 2013. The vice presidents didn't do quite as well. They were only paid $1 million. The list goes on.

In September of last year, the Consumer Financial Protection Bureau sued Corinthian. This goes back a few months. They sued them for illegal predatory lending schemes by luring students with false job promises, saddling them with high-cost debt, and harassing them when they were unable to repay their loans. It turned out that only 25 percent of the students coming out of Corinthian Colleges were able to repay their loans--25 percent. Why?

Because the tuition is so high, the diploma is so worthless.

Why are we complicit? Why is the U.S. Department of Education not blowing the whistle on this school and every other school that is exploiting students all across America?

At the end of the day, the losers are not only the students who have wasted their time and ended up with debt, the losers are the taxpayers of America--the taxpayers of America, who provide funds for the student loans and unfortunately do not have the protection they deserve in this situation.

I call on the Department of Education to make their highest priority the casualties and victims of this Corinthian College.

I yield the floor.

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