Corinthian Colleges and the Introduction of the Class Act

Floor Speech

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Ms. MAXINE WATERS of California. Mr. Speaker, next month, almost 4 million students will graduate from college, but on Monday, more than 16,000 students--students who have sacrificed countless hours and resources--were robbed of the opportunity to achieve this goal.

These students are the victims of Corinthian Colleges, which closed its doors yesterday amidst ongoing State and Federal investigations regarding the school's fraudulent and predatory recruiting tactics. Corinthian's closure marks the end of one of the Nation's largest for-profit colleges, an industry wrought with fraud and deception.

The story of Corinthian starts with the rising cost of college, combined with repeated cuts to other affordable public educational options like community college or HBCUs. The combination of these factors led to the explosive growth of a for-profit college industry that quickly began to prey on low-income, minority, and veteran students by enticing them with the false promise of a quality education and good jobs. These promises were simply untrue.

Corinthian repeatedly misrepresented the quality of its programs and lied about the job placement rates of its graduates. By doing so, Corinthian lured in the country's most vulnerable student populations, whose Federal loan and grant dollars were used to line the pockets of its CEO, investors, and shareholders.

As a result, Corinthian and the for-profit college industry as a whole absorbed one-quarter of all the Federal student aid, more than $30 billion annually. During the Great Recession, Corinthian alone nearly doubled its revenue due to the enrollment of millions of vulnerable unemployed workers who were even more susceptible to the enticing offer of a quality education and future employment.

Make no mistake, these people preyed on at-risk students and workers. They took advantage of the next generation of America's leaders, and they used the economic distress and uncertainty our young people were dealing with for their own economic gain.

As Corinthian continued its deceptive practices, the school had 162 failing academic programs, more than any other for-profit college in the country.

During this Congress, I have continued my lifetime of work on this subject, which began in the California General Assembly. I have repeatedly called on the Department of Education to close Corinthian and offer full loan forgiveness for all its students. Last month, I was proud to endorse the Corinthian 100 and their efforts to obtain full debt relief.

Today, joined by my Senate colleague, Democratic Whip Dick Durbin, I am introducing the CLASS Act, a piece of legislation that will help restore students' legal rights against for-profit institutions.

We need this for a key reason. As Corinthian knowingly deceived its students, it also included in its enrollment agreements provisions that limited students' access to courts and shielded Corinthian from liability for its misconduct. These included mandatory arbitration and measures that prohibited students from joining together to form a class action lawsuit.

As a result, even though Corinthian Colleges has closed its doors, students are still suffering because they do not have a legal outlet to address their harms.

If students are to receive any relief, they are at the mercy of the Department of Education and the good faith of Corinthian Colleges itself, the same institution that has already deceived them and saddled them with debt.

The CLASS Act attempts to remedy this problem by prohibiting any school receiving Federal funding from including any restrictions on students' ability to pursue legal claims against it in court.

Essentially, this bill serves as the students' strongest line of defense against any future fraudulent conduct by restoring their rights to have their day in court.

I encourage all of my colleagues to take a stand against the practices of Corinthian Colleges and other predatory for-profit institutions by supporting this legislation and fighting for our students' right to an honest, quality education.

Mr. Speaker and Members, we still have a lot of for-profit colleges out there that are treating our students in the same manner that Corinthian has--deceiving them--and who are guilty of fraud.

We must take responsibility in this Congress to protect our students.

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