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tv   U.S. Senate  CSPAN  November 4, 2015 4:00pm-6:01pm EST

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to define. we had a chance to fix that error with senator barrasso's bill. this rule allows the e.p.a. to regulate any body of water that has a significant nexus to navigable water. unfortunately, the rule leaves the definition of significant nexus open to the e.p.a.'s interpretation. here's something that fascinates me. if you contest guess who gets to make the ruling in the case? the e.p.a. does. guess how they're going to rule. as anyone from wyoming would attest never has a federal federal bureaucrat missed an opportunity to make life a little more complicated for the folks out west. i can't possibly think of why we'd give the e.p.a. an opportunity to do so here. the clean water act recognizes states as having primary responsibility for land and water resources within their boundary. that's a responsibility taken very seriously in places like my home state of wyoming where so
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many farmers and ranchers and small business owners rely on water for their livelihood. in wyoming folks know that if you have to take care of the land that you have to take care of the land or the land will never take care of you. you won't find better stewards for land and water anywhere. so if the folks in wyoming tell you a rule governing the use of water is no good, you can take that to the bank. as the state's governor, matt meade has said, this rule was bad from the start. in his words -- quote -- "the e.p.a. failed to properly consult with states or consider states' concerns. the rule unlawfully seeks to expand federal jurisdiction over water undercuts states' primacy and burdens landowners and water users in the west." wyoming has joined 30 other states in suing the e.p.a. and the corps of engineers to block this rule. if over 0% of the states in -- 60% of the states in this nation are spending time and money to ask the courts to block this rule then this resolution
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should pass with -- with flying colors. in fact, if the two senators from each of the 31 states that are suing were to vote for either the resolution before or this resolution the previous one would have passed cloture. this one didn't require cloture. so on passing this joint resolution of disapproval our actions appropriately reflected what our states are telling us to do -- stop this rule. two federal courts have already recognized the fallacy of this rule and issued stays to prevent it from being enforced. those courts have recognized what we all should recognize the massive scope of this rule and the potential damage it could cause. wyoming was lucky in that it got some relief from a u.s. district court judge before the rule could be enforced in late august. in that ruling by which the court stayed the rule's enforcement, the court said --
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quote -- "the rule of search jurisdiction over waters that are remote and intermittent no evidence actually points to how these intermittent and remote wetlands have any nexus to navigable in fact water." count have said it better. what the e.p.a. is doing more out of control than infection. it's an overreach. it's power. and they can't afford it. for the sake of farmers ranchers manufacturers and small businesses and their employees it's time to stop this outrageous regulation. i thank the majority leader and senator barrasso and senator ernst for recognizing how important it is to fight this bad e.p.a. rule and bring legislation to the floor to push back. and i urge my colleagues in the house to pass this resolution of disapproval so that we can send a clear message to the president that this congress will not continue to accept ill-thought
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ever-expansive unendingendingly complicated regulations from this administration. ones that the courts have already ruled on three times. thank you mr. president. i yield the floor. mr. durbin: mr. president? the presiding officer: the senator from illinois. mr. durbin: mr. president, i ask unanimous consent to enter into a colloquy with senators carper, warren murphy, bloom that you will schatz and brown for up to one hour, if my voice lasts. the presiding officer: without objection. mr. durbin: thank you. today i come to the senate floor to discuss the issue of for-profit colleges. you may wonder how a member of the united states senate takes up an issue. this came to my attention when a young woman in chicago illinois illinois contacted our office and told her story. she was a conscientious young woman who wanted a college education. and having graduated high school she shopped around on the internet and she found the degree that she wanted. it was a degree in law enforcement offered by westwood college.
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westwood is a for-profit college based in colorado. she enrolled in westwood and five years later -- five years of classes later she got her diploma from westwood in law enforcement. she took it to every law enforcement agency in the chicagoland area and they said young lady, this is not a real college. this is one of those for-profit westwood colleges. we don't recognize your degree. well she'd go to another place and get the same reaction. and then she realized she had wasted five years of her life on a worthless diploma. but that's not the worst part. she incurred a student loan debt of $80,000 and she couldn't get a job. she moved back into her parent's basement. her dad came out of retirement to help her pay off this loan. and she's going to take years to do it.she's postponed buying a car getting her own apartment
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even considering marriage or a family. this was one personal tragedy that opened my mind. i used to drive out on the kennedy expressway and see westwood university signs on these large tall buildings thinking wow this must be some university. well it turned out that it was part of a network of for-profit colleges and universities which hi been researching and speaking about ever since. when i started five years ago it was a much different industry than it is today. but too many people like this young lady ended up with empty promises deep debt and worthless diplomas from for-profit colleges and universities. westwood isn't the only one. the biggest one? the university of phoenix is a for-profit university. devry university based out of chicago, illinois, is the second largest. cap larntion which used -- kaplan, which used to be owned or owned "the washington post," depending on your point of view. i.t.t. le cordon blue.
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these are names which young people know right off the bat because they're inunvaitd with advertising from for- -- inundated with advertising from for-profit schools. and they think and their parents think these are real schools it's worth the debt to pursue this degree. a few years ago enrollments and profits were sky-high. they were a favorite of wall street investors. between 1998-2008 enrollment at for-profit colleges exploded by 225%. by 2010, total enrollment in these for-profit schools reached 2.4 million. when the former chairman of the help committee senator tom harkin of iowa, released a report on the industry in 2012 they had grown to take an incredible share $32 billion in federal taxpayers' dollars. 25% of all the federal aid to
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education. despite the fact they had 10% of the students, they were at that point taking 25% of the federal aid. why? they're so expensive. the tuition is so much higher than public colleges and universities or even many private colleges. meanwhile, more than half the students enrolling in for-profit colleges left without a degree. within four months, found themselves in student loan default. 10% of the students; 47% of the student loan defaults five years ago. how can that be? 47% of the students who can't pay back their student loans went to for-profit colleges. it costs so much and the degrees were worthless. john murphy was a cofounder of the university of phoenix. this was the mother mothership of all the great for-profit college
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movement. here's what he said in the "desert news national." "they are not educators and they're looking to manipulate this model to make money. there's nothing wrong with making money but i think anyone making money in an educational activity has a higher standard of accountability." john murphy, a cofounder of the year of phoenix is right. he explained that when they started off as a serious venture to educate students, they soon became a -- a company listed in wall street chasing stock prices prices tapping into the open spigot of federal loans which mr. murphy calls the juice of the for-profit college industry. he went on to say phoenix -- university of phoenix was the one that got it rolling. then all the others followed. i'm going to yield at this point to my colleague from hawaii. i want to try to conserve my voice and senator schatz, thank you for joining me in this colloquy. mr. schatz: i thank the
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assistant democratic leader for his leadership on this issue and for his willingness to educate colleagues and educate the public and to push the u.s. d.o.e. to take much-needed action in this area. what is happening with some for-profit colleges is truly a national scandal and it's a scandal for two reasons. first, students are being hurt. and, second, we are wasting tens of billions of dollars. the numbers speak for themselves themselves. almost 2 million students are enrolled in for-profit colleges and they've collectively taken on $200 billion in debt to attend. but they often leave with little to show for it. more than half drop out within a few months. and at some programs, less than 5% of their students ever graduate. for those who leave without a degree repaying loans is a struggle. students at for-profit colleges default on student loans at
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double the rate of students at not-for-profit colleges. people may be surprised to learn that these substandard programs are financed almost entirely by the federal government and the amount is totally staggering. in total for-profits receive $32 billion a year in federal financial aid. over 20% of the total financial aid and yet they serve only 12% of the students. there are several for-profit companies that each take in more than a billion dollars a year in federal aid and graduate less than 10% of their kids. now, think about that. they take in more than a billion dollars in federal taxpayer money and they graduate less than 10% of their kids. these companies include the apollo group devry i.t.t., kaplan and education management corporation. and not only are the educational
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metrics awful but many of these for-profit colleges are also under investigation for fraud and deception. essentially they've been lying to students and to state and federal agencies to cover up how bad their record is. so even while prosecutors go after these schools for fraud they remain accredited and they continue to rake in federal funds. and here are a few examples. education management corporation corporation, e.m.c., faces charges of fraud and deception brought by prosecutors in 13 states and the department of justice and faces a lawsuit to recover $11 billion in federal and state funds and yet e.m.c. is still accredited and still received $1.25 billion from the u.s. d.o.e. so you have the department of justice trying to recover $11 $11 billion at the same time that the department of education gives them $1.25 billion.
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i.t.t. educational services, is being investigated and sued by 19 states, the s.e.c., the cfpb and the d.o.j. it's also under scrutiny for u.s. d.o.e. for failure to meet financial responsibility standards, and yet they're still accredited. and last year they received just under $600 million. another 152 schools are under investigation by a working group of 37 state attorneys general. they too are still accredited. collectively, they received $8 billion in federal financial aid last year. so what do all these schools have in common? they're accredited. accreditation is a key to the castle for accessing this spigot of federal financial aid. it's supposed to signify that a program provides eye quality education for its students -- provides a quality education for its students. too often however the accreditation means nearly
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nothing. the g.a.o. released a stud doi accreditation last -- study on accreditation last year and its findings are shocking. over a four-year period, the g.a.o. found that an accreditor sanctioned only 8% of the institutions they oversee and revoked accreditation for just 1%. even more troubling g.a.o. found that there was no correlation between accreditor sanctions and educational quality. in other words schools with bad student outcomes were no more likely to be sanctioned by their accreditor than schools with good student outcomes. our accreditation system is broken. according to the higher education act accreditation agencies are supposed to be -- quote -- "reliable authorities as to the quality of education or training offered by institutions of higher education. that's the reason for making accreditation a core criteria for receiving federal funds. how are we following the law when accreditation reviews find 99% of institutions are
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providing an education of -- are not providing -- excuse me, when the accreditation reviews find that basically everybody 99% of institutions are providing an education of value? how can we say with a straight face that accreditors are acting as reliable authorities on policy? and the quality here is money. incentives are lined up against being critical and against setting high standards. the problem can be faced to the funding and governance of the accreditation agencies. first, accrediting agencies are funded by the same institutions they credit. colleges pay for site visits and other services. second accrediting agencies are run and overseen by the institutions they accredit. the member institutions elect their own academics and administrators to serve on the board of the accreditation agency. it is not hard to see how the incentives are misaligned here. we have create add dysfunctional
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if not corrupt ecosystem in which it is far too easy to become and remain accredited. the system is eerily similar to the one that enabled credit rating agencies to pump out inflated asset ratings which contributed to the worst financial crisis of our time. like credit rating agencies, accreditors have a financial interest to churn out accreditations. the d.o.e. has the authority to improve accreditation. there are a lot of things that senator durbin and others and myself and senator murphy are working on in terms of changing the higher education act and working in the appropriations context, but u.s. d.o.e. has authority that it is beginning to use but needs to use more of in the accreditation space. it can and must do more to assure that accreditors are actually looking at quality and
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holding schools to high standards. for the sake of students and taxpayers, the d.o.e. must make this a top priority. with that, mr. president i yield the floor and thank the assistant democratic leader for his leadership on this issue. mr. durbin: if the senator from hawaii would stay for just a moment. so if you are a student looking for a college about to graduate from high school, and you go online type in the word "college" or "university," watch what happens. the page is flooded. the university of phoenix devry, awful all of these schools are saying, come to our school. how do you mow if it is good or not? do they receive federal pell grants? do their students receive federal loans? the answer gh when it comes to for-profit schools is "yes." senator schatz has put his finger on the problem. they accredit themselves. they decide among themselves who will stay in business. and guess what? they all stay in business.
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so the unsuspecting student goss a worthless for-profit school, gets a worthless diploma goes deep in debt and thinks, "i thought this was a good school. how can i gate federal get a federal pell grant at this school and get a worthless diploma?" the department of education is not doing its job. congress is not doing its job. we have to enforce these standards. corinthian was one of the giants. they went bankrupt. they measured how many students came out of corinthian and got a job. the numbers were pretty encouraging. then the huffing ton "huffington post" started following how many students got a job. they were giving $2,000 to employers to hire their graduates for one month so they could report to the federal government our graduates all have jobs. when they were caught, they went bankrupt. you know what the federal taxpayers lost?
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$5 30*31 over that corinthian bankruptcy. who ended up on the hook? the students. the students ended up with the debt. and the taxpayer ended up as losers. corinthian should never have been accredited. they couldn't meet the standards standards. mr. schatz: there are two problems here. look normally when something is a waste of taxpayer, it is not only harmful to individuals across the country, this is a double whammy. this is causing students to incur collectively tensions of -- tens of billions of dollars of debt. the obama administration has done the right thing in terms of going after malfeasance in this space. but they are split among their executive agencies. you have the department of justice who understands the fraud and deception. you have even parts of the
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d.o.e. understand thats what's going on and yet they have been slow on the uptake in terps of using the authority -- in terms of using the authority under the statute to make the accreditation process a little more reliable when it comes to students. that's one of the key things that we're going to be able to accomplish in the next couple of years is get the u.s. d.o.e. to understand that i understand that there are separate accrediting agencies but under the higher education statute u.s. d.o.e. has the authority to make sure that no institution that's providing a low-quality education, no institution that is engaging in fraud and deception ought to avail themselves of tens of billions of dollars in federal financing. i yield the floor. mr. durbin: i thank the senator from hawaii. last week the senior senator from arizona came to the floor and said it was durbin's speeches that brought down corinthian. correction: brought down correspondent ridgecorinthian was their own malfeasance.
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they were under investigation by 20 different attorney generals for fraud and deception. they were also under investigation by the securities and exchange commission and the department of justice. it was their malfeasance that brought them down. as senator schatz has indicates the victims students and taxpayers. in this colloquy, i would like to yield to senator carper. mr. carper: i want to thank the senator for really sort of inviting us down to have this conversation. it is great to be with our colleague from hawaii, as well. before senator durbin i came to the house of representatives together in 1982. i'd been a state treasurer before that. before that i was a p-3 aircraft mission commanderrer. served in southeast asia. in 1968 the p-38 four-engine aircraft tracked snr submarines, through a lot of missions over cambodia -- that was what i did
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on three tours over there -- and i qaim back came back from the last tour and moved from california where my station was homeported, our squad was homeported during the war, and ended up moving across the country. found delaware on the map. drove my volkswagen across the country and enrolled in business school. signed up for the g.i. bill. i remember the first check i got -- $250. i was thrilled. and i used that money to help pay my expenses and signed up with a reserve p-3 aircraft squadron up at the naval air station north of philly and started to fly again with a new squadron. did that for another 18 years and retired as a navy captain. we as a senator and governor -- i was governor for 18 years and commander in chief of the air national guard and they have a
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special spot in my heart. a couple months ago we were in a delegation sending off 3900 300 men and women from the delaware national guard to eventually end up in afghanistan. i suspect they're there by this time. i said to the men and women there as they were preparing to leave and their families, i told them about my g.i. bill, how grateful toifs have it for my generation. i talked to them about their g.i. bill. i said when you come home, if you have three years of service including your time in afghanistan, here's what you're going to get: if you go to delaware state university the university of delaware delaware technical community college -- free. tuition-free books free fees, tutoring free -- plus you get a $1,500 housing allowance. they went, wow! and i said, and if the g.i. doesn't use it, the delaware national guard -- if you guys
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don't use it when you come home, your spouse can use it. if your spouse doesn't use it your dependent children can use it. the most incredible g.i. bill benefit ever -- ever. my generation, we got $250 a month. and i'm happy for the folks that today who've served in afghanistan, who served in iraq for the benefit they receive. but it's not only been a great benefit for the veterans and their families, it puts, in the wordswords -- i think it's holly pa traypetraeus who works at the consumer protection bureau, polysaidpolly said it puts a bull's eye on the veterans. they come back -- what happens is a lot of training schools and colleges and universities want to help those g.i.'s, their spouses, mare their kids go to -- maybe their kids go to school. some of them are for-profits.
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some are not-for-profits. some of them are colleges and universities some do a great job. even some of the for-profits do a great job. you've meninged some of mentioned some of them here today senator durbin. some of them do not. what they do is spend more money on trying to recruit people to come to their school. they're preparing them for careers where there's really no jobs. and you mentioned what corinthian has done to place people in work opportunities for a work or so just so it'll look like people are being gainfully employed. there is a lot of money to be made by these for-profit universitiesuniversities. but for the ones that wear the black hats, what's happening to g.i.'s and taxpayers is shameful. i want to say about 19 -- maybe 1992 maybe early 1990's, here
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maybe on this floor the senate debated whether or not there should be some way to harness market forces, to ensure that -- whether it is people using the pell grants or other federal aid programs or maybe the g.i. bill, whether or not we should somehow harness market forces to ensure that money going to people going to college is well-used. congress adopted something called the 85155-15 rule. the idea was that students receiving federal assistance, that they would have to be coming on nonfederal money nonfederal money. 85% of the students. and that seemed to make sense and for a while that worked pretty well. the rule was changed to the 90-10 rule so that at least 10% of the students -- 10% of the revenues had to come from
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nonfederal sources. and the idea was to have -- use market forces to ensure that the quality of the program was actually worthwhile at that school. and then we had this new g.i. bill then we had the new g.i. bill. we have spent i think -- and the senator probably knows better thank me. but i think we've spent to date close to $50 billion on the iraq or afghanistan g.i. bill, close to $50 billion. probably dwarfs whatever we spent for folks coming back after the vietnam war. some of the smart for-profit colleges figured out a loophole, though. what they figured sought the law didn't really focus on the g.i. bill because it wasn't that you will robust. and the 90-10 bill focused on stuff that did not include the g.i. bill. so when folks veterans go to
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college and the g.i. bill helped to pay for their tuition or for their spouses or their children, that does not count towards the 90%. wha soso what we have as a result, there's a loophole that allows a private schej or college or university to recognize at much as 100% of their revenues from the federal government. nothing about market forces, 10%, 15% of their students have to come by nonfederal means. all of them -- all of them are there on the federal government's doll. -- dole. i think the pooh emthat people that pushed for the 85-15 rule were bob gramm and bob dole. they said we ought to have something like the 90-10 rule and then a couple years before that a guy that senator durbin would remember named william
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bennett -- remember him secretary of education? -- here's what he called for-profit trade schools. here's what he called them in 1987. he said this is his quote diploma mills designed to trip the poor-- trick the poor to the take on federal loan debt or graduate them ill had prepared to enter the job market and pay off their loans. that's what he called them. as i said earlier there's some for-profits that do really good jobs but there's a bunch that don't. that was the case in 1987. and unfortunately it's the case today. i just want to say, we have -- you have -- i have -- tom harass quinn in past years -- continually drant attention drawn the attention of our colleagues to anyone who wants to listening to this issue. this needs to be fixed. it needs to be fixed. i want to thank senator tour dur win.
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i think we're starting to break through. some of the folks that are the worst in this business are starting to fold. that is a good thing. mr. durbin: thank you for that. let me show you on this chart before i introduce my colleagues what has happened to the enrollment of the for-profit colleges and universities as people have come to realize that they're wasting their time, many times their g.i. bill benefits, debt ending up with a did i p.l.o.diplomathat doesn't take them anywhere. the university of phoenix. this is the mothership, the ones that launched this industry, peak enrollment nearly 500,000 in 2010. now, 227,000. it's come down from this chart nearly 50% loss. i.t.t. advertised constantly, enrollment in 2010, 88,000. and now they're down to 53,000.
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career education corporation -- they enrolled 41,000 students in 2014. compared to 118,000 in 2010. a 65% decrease. education management corporation down 25%. devry decline in enrollment. what's happening here? i talked to some of these people from the for-profit colleges. parents and families are finally realizing, this is a waste of time and money. itersit's time for taxpayers to realize the same. i don't want to hear my colleagues conservative colleagues teaching me -- preaching to me about the miracle of free markets. we're talking about the most heavily subsidized industry in america, accounting for over 40% of the student loan defaults. 10% of the students, 40% of the defaults. i thank the senator from delaware for coming. i yield to the senator from massachusetts, senator warren. mrs. warren: thank you senator durbin. and i ask unanimous consent that
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joshua delaney a staff member in my office, be granted floor privileges for the remainder of this session of congress. the presiding officer: without objection. mrs. warren: all right. thank you. and thank you senator durbin, for calling us together to discuss this important issue. our higher education system is broken. right now a student borrows money to go to college and the college gets paid in full regardless of whether the college provides a decent education or not. in fact, federal loan money is so easy to come by that a new business model of for-profit colleges has sprung up, spending more money on advertising to attract students than actually teaching them anything. consider three numbers -- 10, 20 40. just over 10% of all college students attend a for-profit college yet they take in about 20% of all federal student aid and they account for about 40% of all student loan defaults.
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now, many for-profit colleges target young vets and single bombs for programs that promise the moon but end up delivering nothing more than heartache. i've met with student veterans at terrific public colleges and universities across massachusetts, schools like u-mass lou he will and bunker hill community -- lowell and bunker hill community college. these universities are working hard to reach vets and help them get a first-rate education through their office of veteran services and other resources. it is an exciting story. but time after time the for-profit colleges got there first. so young vets show up already tens of thousands of dollars in debt and without a single credit that will transfer to a decent public college. this makes me sick. these for-profit schools are stealing more than money. they are stealing the hard work
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and dreams of some of our finest young people. there are 347 colleges in the u.s. in which a majority of students a majority, have defaulted or failed to begin paying down their loans. of these colleges, 85% are for-profit. and even with those huge default rates they keep raking in the federal loan dollars and paying out millions of dollars in dividends to their shareholders. these 294 for-profits are sucking down $2.2 billion in federal assistance and leaving the majority -- the majority -- of their students unable to repay their loans. the business model of for-profit colleges challenges the conventional wisdom that a college degree is always a smart investment. a recent study found that the average salary increase of
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for-profit graduates isn't even enough to cover the costs of attending a typical for-profit institution. the research is clear -- attendance at a typical for-profit college is simply not worth the cost. it is a bad return on investment investment. for-profit colleges know this but too often potential students don't. instead of taking the tough steps necessary to improve the value of the education they offer most of these for-profit institutions have simply ramped up their marketing operations and some just flat-outbreak the law to keep the gravy train going. these colleges have engaged in fraud in order to swindle more and more students and suck down more and more federal funds. corinthian colleges is a prime example. at its peak, corinthian was the nation's largest for-profit
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chain with 120 campuses enrolling over 100,000 students. it was massive. corecorinthian built its business model to scoop up federal financial aid by any means necessary. including fraud. corinthian was trying to rope students in by using false and misleading information and then saddling them with debt that would be impossible to repay. federal policy-makers had imernz corinthian's conduct for -- concerns about corinthian's conduct for years and they had the tools to shut off the supply of federal loan money. but instead of acting, the department of education allowed corinthian to keep recruiting more and more students and sucking down more and more federal funds. when corinthian's dangerous mix of mismanagement and deception finally blew up, the department of education even stepped in to bail out the college and keep it running a little while longer.
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and now? well corinthian is bankrupt and its students are scrambling to start over. last week due to a lawsuit brought by the consumer financial protection bureau a federal judge ruled that corinthian broke federal consumer protection laws and it ordered the company to pay $531 million for its illegal behavior. but corinthian is dead broke and its executives are off the hook for the financial liability while students and taxpayers are left holding the bag. you know, corinthian got people to sign up for student loans by scamming them. if an insurance salesman or car dealer did that, thedn't have to pay and the law is just as clear here. when a school breaks the law like this students are entitled to cancel their student loans. and that's why this week several of our colleagues, led by senator durbin, are sending a letter to the department of education telling them that they
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have dragged their feet long enough. these students don't owe the student loans that corinthian tricked them into signing. schools like corinthian make it clear that the federal government needs to be more aggressive and more willing to cut off the money faster when schools defraud students. and when schools like corinthian break the law their executives shouldn't be allowed to walk away from the mess. they should pay real penalties. this is about basic fairness. neither students nor taxpayers should be on the hook to a for-profit college that makes its money by cheating its students. it is time for the federal government to step up and do its job to hold for-profit colleges accountable, and to ensure the higher education remains a real pathway to success for all hardworking students. thank you mr. president.
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i yield back to senator durbin. mr. durbin: i thank senator warren and i'd like to make a point. i thank senator warren and i'd like to make a point about executive compensation, which is something we should not overlook before i recognize my senate colleague from -- from connecticut. we took a look at the actual amount of money that was being paid to the executives of these for-profit colleges and universities. it is dramatically larger than what is being paid to the presidents of universities. i'll put it in the record althoughrecord at alater point. the average pay for college presidents is less than $500,000 i year. there's an executive with the university of phoenix who was paid more than $8 million in one year. when we wrote to the department of justice recently, we said, how many of these people will be held personally accountable that let the students -- left the students holding the bag with student loans and worthless diplomas or dropouts and left the taxpayers holding the bag
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because the students can't pay back the loans and now they're going to go away scot-free after taking billions of federal dollars? if there's any justice they need to be held accountable. let me yield to my colleague from connecticut, senator murphy, and thank him for joining us. mr. murphy: thank you very much, senator durbin. this article is a few years old but to underscore your point here's the opening line of an article from cnbc on this question of salaries for the c.e.o.'s of for-profit universities. the article opens by saying -- quote -- "forget wall treat and silicon valley. if you're looking to rake it in post-graduation, set your sights on the executive floor of one of the nation's for-profit colleges." that is a article from cnbc detailing the fact that in their article -- and again, this is a few years old -- the salary of the head of phoenix university was $11 million. the c.e. off of bridgepoint
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another national for-profit university, was making over $20 million a year. and, you know, you can say to yourself well, these are -- these are private companies,these are for-profit companies. so, you know, why should congress be in the business of caring what the c.e.o. of phoenix university makes or what the c.e.o. of bridgepoint or i.t.t. or devry makes? you know, harry truman made his name as a critic of wartime profiteering. l.b.j. made his name as a young member of congress doing the same thing. and their idea was that it's all well and good to make yourself rich in the most dynamic capitalist economy in the world but it's another thing to be getting rich off of the taxpayers. it's another thing to be making your fortune almost exclusively coming from sources of money that really are all of our constituents' money the taxes that they pay. and that's what we're talking about here today.
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what we're talking about executives that are getting rich off of companies that are 90% funded by the u.s. taxpayer. 90% funded. because this 90/10 rule that we talk about is an important rule for these companies because they run their revenue right up to the limit. so many of these for-profit universities their revenue is 70%, 80% 90% from the taxpayers of the united states. and their c.e.o.'s are making $11 million, $12 million sometimes $20 million a year. i -- listen, i'm all for people making a million dollars. i've got a lot of people in connecticut that are making $20 million. but if we are really being good stewards of the taxpayers' dollars, we should be wary of those that are making their fortune off of the federal dole. and that's what's happening today.
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and so senator durbin, i just wanted to add to this conversation a note on accountability. because that used to be one of the things that united republicans and democrats t. used to be, frankly the republicans, i'll admit cared more about accountability when it caims to came to federal dollars than democrats did sometimes. it was republicans in the second bush administration that started putting a lot of strings attached to education dollars that were flowing out of washington to make sure that there was actually quality attached to the money that was coming from u.s. federal taxpayers. but that era seems to be over. and unfortunately, we don't have a bipartisan consensus on accountability. we're about to approve a budget which a lot of republicans and a lot of democrats will vote for that will send $140 billion in higher education aid to universities all across this country. and it will come with almost no
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strings attached. it will come with almost no expectations that schools give a degree to kids that actually get them a job or attempt to keep them in school so that they can get some return on investment for the money that we are all making in them. and senator durbin, you might have talked about it already today, but the numbers for for-profit colleges that just came out today are absolutely stunning. i don't know if you've already talked about this trends in student aid report that just came out today from the college board. but here's an amazing statistic. what this survey says is that borrowers who don't graduate from public and private nonprofit four-year schools are about -- default at about the same rate as borrowers who do graduate from for-profit schools
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schools. so think about that. you are just as likely to not be able to pay back your student loans if you get a degree from a for-profit school as if you drop out of a not-for-profit school. here's the numbers. 14% of for-profit graduates default. 15% of not-for-profit four-year college nonned graduates default. -- nongrat wattsnongraduates default. that's an amazing number. and yet we're sending money willy-nilly out to these schools that are not putting these students in degrees. why are they not putting them in degrees? because they're marketing themselves in a way that just didn't doesn't square with the job market today. there are a litany of stories about the abusive marketing techniques. one of them said i told the enrollment representative that i did not want to sign the loan unless i was guaranteed a job
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because i know that i would not be able to pay it back. the school placed 99% of its students and they could guarantee a job after i finished my internment. she told me i'd be making $18 to $20 an hour after completing. she told me she'd make sure everybody who was enroll the gets placed. these are the claims that are being made and so it's frankly not surprising when you have these for-profit universities enrolling thousands of kids in video game design degrees that you are just as likely to default on a loan if you graduate some of these worthless programs as if you graduate from a not-for-profit universality. so senator schatz and i and senator sanders we introduced a piece of legislation that would start to require some real outcomes from universities. now, we aflied to for-profit and
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not-for-profit universities. we said that you've got to show that you have -- that you are giving kids a chance to succeed and get a job, that you're keeping your tuition at reasonable levels, and if do you that then you can to inget title 4 -- you can continue to get title 4 dollars. if you don't then we're not going to continue to send money to these schools that simply aren't producing graduates that are ready to compete or deceptively drawing students in on claims that don't wash out in the end. so yes, we have to shut down these fraudulent institutions. but if we could just make a decision to put some additional accountability standards on title 4 dollars applying it to for-profit and not-for-profit schools, and say if you have a number of students that are dwawling, youdefaulting, you are not going to get title 4 dollars. if you havewe know by statistics that this would put a good number of
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for-profits out of business, might even touch a handful of the lower-performing not-for-profits, but it really should be something that both sides can come together on. just some basic accountability for higher education a basic accountability for the $140 billion we send. because this doesn't make sense. it just doesn't make sense to pad the pockets of these c.e.o.'s that are making $20 million a year off of our taxpayers when they aren't delivering results that are actually making our economy better. so thank you senator bur durbin, for bringing us together here. i hope as we debate this act before the committee -- and i think senator alexander is very interested in some of these debates -- that we're going to add some accountability standard. if we really are being good stewards of the taxpayer dollars, we should expect some results. thanks senator murphy, for your comments. and i would tell you that it is interesting to me that when you
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take a look at what wall street thinks about the for-profit college university, they are certainly bearish. you would think from what congress is doing sending billions of dollars to the industry and propping it up, we're bullish. take a look at the stock prices of the major for-profit colleges and universities since 2010. university of phoenix it went from a high of $57 a share down to $7.50. this was after the department of defense suspended their activity under the g.i. bill. i.t.t. tech, a high of $92 a share in 2011. they now trade at $3 a share. career education $20 a share in 2011. $3.80 yesterday. education management corporation, they withdrew their stock from nasdaq so they wouldn't have to make a report to the securities and exchange commission. in 2014, they lost $684 million. this is an industry that is failing as business.
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sadly, it is dragging along students and families and taxpayers with it. that's why we've got to come to grips. i endorse your idea. apply the standards across higher education to for-profit and not-for-profit. i can tell you these for-profits can't live with that standard. thank you senator murphy. i want to thank senator blumenthal from connecticut for joining me and to yield to him. mr. blumenthal: i want to thank my great colleague from illinois and my friend and partner from connecticut for their very powerful analysis, along with senator warren, senator carper, because there really is a need for dispassionate, objective and targeted consideration of this area of education. and the senator from connecticut is absolutely right that we need accountability in both the for-profit and nonprofit areas. senator durbin has emphasized that repeatedly.
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i am here as a former member of the health, education labor and pension committee who participated with senator harkin in announcing a report more than two years ago that highlighted many of the abuses in this area and still corinthian has happened since then, and still there are abuses in the for-profit area. but there is a need for accountability in the nonprofit area as well. and in all of these areas there is a need for facts. there are more facts that may be available more recently that ought to be considered, indications that some of the for-profit colleges are doing a better job others. kaplan has recently released facts. none of us can vouch for them independently. but the department of education has an obligation to do better and more to make sure that it
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keeps faith with american students and american taxpayers in the way that dollars are allocateed to these for-profits. i'm particularly concerned as the ranking member of the veterans' affairs committee with the impact of some of these abusive practices on veterans. one of the really unacceptable facts about this industry is the way it can sometimes exploit and take advantage of our veterans. senator carper put it very well when he discussed how the for-profit schools are prohibited from receiving more than 90% of their total revenue from federal student aid but v.a. educational benefits are not counted toward that 90%. this 90-10 loophole causes the for-profits to target veterans and to rake in billions of
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dollars in v.a. educational benefits. in fiscal year 2014, the for-profit schools received over $2 billion in v.a. educational benefits. that's our money taxpayer funds, including post 9/11 g.i. bill benefits. as rank member of the senate veterans' affairs committee, i am working to help protect our nation's veterans and g.i. bill benefits that they have earned. in fact, i've introduced legislation, the career ready student veterans act to ensure that g.i. bill funding is not squandered on education programs that lack appropriate programmatic accreditation. facts are stubborn things, as ronald reagan said famously. facts are what we need. accreditation and verification and credibility in this area is
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essential. rather than painting with a broad brush every for-profit, rather than tarring all of them, facts are necessary here, and there is a need for accreditation for facts that show credibility and legitimate coursework. i will be introducing another bill this week to provide relief to veteran students who have been harmed by for-profit schools. i want to repeat that. these veterans have been harmed directly and tragically by some of these practices. we owe them better. we need to keep faith with them. that's the reason that i'm going to be introducing the veterans education relief and rein-statement act that will give the v.a. secretary authority to rein-state g.i.
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bill entitlement that a veteran has used at a school that abruptly closed. think corinthian where veterans have lost those benefits and they need a remedy, not just a right but a remedy. and i'm hopeful that we can advance these bills through the veterans' affairs committee and stop for-profit colleges like corinthian from scamming our nation's veterans. like my colleagues, i could cite real-life instances of non-veterans as well. but the evidence is overwhelming and it's acknowledged by some in the industry. -- some in the industry who say there is a need for corrective measures here. and some of the outliers need to be treated with the strong
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discipline and discouragement that they merit. i am proud to join my colleagues in this effort. i'm hopeful that the report that senator harkin and the help committee produced years ago will finally reach fruition in action by the department of education and by this senate to take measures that protect taxpayer dollars protect students of america and protect our veterans. thank you mr. president. mr. durbin: i want to thank my colleague from connecticut senator blumenthal for joining in this colloquy. what we have tried to do is lay out the case that when we go to higher education reauthorization, we owe the taxpayers and we owe families across america the responsibility to look at this industry. what is happening here is inexcusable and unacceptable. it is unfair. 10% of the high school graduates, 20% of the federal aid to education 40% of all
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student loan defaults. senator murphy points to the statistic that came out today. you are in worse shape with a diddiploma from a for-profit school than if you drop out of a not-for-profit school. that is damning statistic just like the 40% of student defaults. we can't continue to low-income at other way. wall street isn't looking the other way. they are downgrading these for-profit colleges and universities because they believe this model is flawed and they don't believe it can be sustained. why do we kid ourselves? let us apply standards across higher education standards fair to students, fair to families and fair to the schools to stay to them, this is what we expect at a minimum if you're going to offer higher education to the students across america. mr. president, i yield the floor and before i do, i ask that this transcript from chairlady atkinson's program "full measure" which played last sunday, be made a part of the record at the end of my statement. the presiding officer: without objection. mr. durbin: i yield the floor and i suggest the absence of a
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quorum. the presiding officer: the clerk will call the roll. quorum call:
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a senator: mr. president? the presiding officer: the senator from arkansas. mr. cotton: i ask unanimous consent that the quorum call be lifted. the presiding officer: without objection. mr. cotton: i want to speak about our vote on the waters on
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the u.s. regulation and environmental protection agency. the white house has lately been advocating for criminal justice reform. they say an underlying problem with the justice system today is congress criminalized too much conduct too severely but it's the same white house that is behind the new waters of the united states regulation. an executive power grab that would put every landowner in arkansas and america at risk of federal criminal charges for making adjustments to land on their own private property. the waters of the u.s. regulation gives the government jurisdiction and in turn the danger of federal criminal charges over tributaries adjacent waters and -- quote -- "other waters." this includes streams that only exist after heavy rains. or as some of us call them mud puddles. if a landowner in automaker saw has -- arkansas has a ditch on their property he or she could be liable for criminal charges for disturbing that ditch in any
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way. if a homeowner has a garage with land that fills with water after rain also known as land, this homeowner could be liable for federal criminal charges. president obama and my democratic colleagues argue that we're exaggerating. come on, they say. the environmental protection agency would never bring charges against a homeowner for expanding his garage or trying to regulate a mud puddle. they insist on the benevolence of the e.p.a. and ask us to trust them to exercise good judgment and reasonable discretion. before we trust the e.p.a.'s benevolence, though, it's prudent to examine the e.p.a.'s own track record. let's consider that in august of this year, the e.p.a. directed contractors to excavate the gold king mine in colorado without first testing the water pressure or calculating water volume. in the worst environmental disaster in recent years the e.p.a. caused more than three million tons of toxic wastewater to pollute the animas river. since the spill much of the
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toxicity remains endangering farmers, landowners, native americans and anyone who relies on this river. after the spill the e.p.a. has refused to turn over documents disciplined, no one failed to show up to congressional hearings refused to take responsibility and still won't answer the simple question of whether the agency will pay for the damages it caused. the navajo nation in new mexico relies on the river polluted by the e.p.a. for drinking water and for farming. in the days following the spill the navajo lost their water supply. the e.p.a. offered to deliver clean water to the navajo that it could use for drinking and crop irrigation but instead they used dirty oil tankers to deliver contaminated water. the e.p.a. is not only a threat to citizens, to landowners and to businesses, it's also a threat to the environment they purport to protect. and since the disaster, the e.p.a. has continued to spill toxic wastewater into creeks and rivers. there has been zero accountability for this agency.
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based on that track record, i don't think we should be giving the e.p.a. any more power. that's why i'm joining my colleagues earlier today to vote to roll back the waters of the united states regulation before the e.p.a. criminalizes nearly every landowner in the united states. but we should also consider the bigger picture. this regulation is a symptom not the problem. the problem is the e.p.a. itself and its overreach and lack of accountability. that's why we must pass the e.p.a. accountability act. this legislation would require the e.p.a. to pay out of its own budget for the damages it recklessly caused when spilling three million gallons of toxic waste into the animas river. unless the e.p.a. faces consequences for its actions against the american people, nothing will change. it is our constitutional responsibility to provide oversight of an agency had that has caused massive damage to both the american people and to the environment. we must protect arkansans and
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americans from e.p.a. overreach and lack of accountability. mr. president, i yield the floor. and i would suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. nelson: mr. president? the presiding officer: the senator from florida. mr. nelson: mr. president i ask consent that the quorum call be lifted. the presiding officer: without objection. mr. nelson: mr. president what is our parliamentary posture? the presiding officer: the senate is on the motion to proceed to h.r. 2685. mr. nelson: mr. president i ask consent that i be given five minutes to speak as if in morning business. the presiding officer: without objection. mr. nelson: mr. president, on the morning of october 1 a cargo ship, a container ship almost 900 feet long called the el faro was carrying 33 men and women, and it set on that fateful day its final communication reporting that the engines were disabled.
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this left the ship drifting with no power with an on coming category 3 hurricane. despite search and rescue attempts by the coast guard the el faro and her crew, we didn't hear from them again. one month later the national transportation safety board working with the navy, has found the sunken el faro at the bottom of the ocean in waters that are 15,000 feet deep. at nearly the same time the ship's owner tote marine, began its attempt to limit the company's liability for this tragedy. news reports have indicated that
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the company filed a complaint last week stating that the company did everything in its power to make the ship safe and that the company ought to be exonerated from any and all claims for all damages. well, this is clearly hasty decision making. it clearly is a matter of concern to me because most of these mariners were from my state of florida. their families are grieving and hoping for any answers as to what happened to their loved ones. well right now we don't have all of those answers. the ntsb only just found the ship with the help of the u.s. navy and yet somehow the
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company is able to definitely declare that they weren't at fault and that they bear no responsibility for the loss. it seems that this is an attempt to limit any liability of the company. and so, this is a time that we need reflection on figuring out what happened to the el faro for finding the ship's recorder which the u.s. navy is now in the process of trying to find, and then once you have in a black box then piecing together the last minutes before the ship sank. so instead of being split apart it's a time to come together as a community and support those
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who have been so tragically impacted. i have some leadership responsibility mr. president on the commerce committee that has jurisdiction over maritime matters. and it is my intention to see that there is a thorough and honest investigation and to try to find answers for the families and to find answers so that we could prevent a tragedy like this from happening again. that's where we should be focused. mr. president, i yield the floor. and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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