For-Profit Schools

Floor Speech

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Mr. DURBIN. Mr. President, I have come to the floor many times to talk about for-profit colleges and universities. This is a problem and a challenge we face. What you need to know are three numbers to understand the for-profit college and university industry in America.

By way of preface, this is the most heavily subsidized private business in the United States of America. What are we talking about? The largest, the University of Phoenix; Kaplan University; DeVry University; Rasmussen; Corinthian--you have heard all the names because they advertise constantly, and the money they use to advertise comes from Federal taxpayers.

There are three numbers--and if I were a college professor or law school professor, I would say this is going to be on the final--on for-profit colleges and universities. Ten percent of high school graduates attend for-profit colleges and universities--10 percent. Twenty percent of all the Federal aid to education goes to for-profit colleges and universities. Why so much? They charge so much. Their tuition is so high. Ten percent of the students; 20 percent of the Federal aid to education; 44 percent of all the student loan defaults in America are at for-profit colleges and universities. Ten percent of the students, 44 percent of the defaults. Why? They charge so much that the students can't finish their education or they end up with a worthless diploma. That is the reality.

There is a second reality. This industry is in serious economic trouble. Last week we had news of another Federal investigation of a for-profit college. In a filing with the Securities and Exchange Commission, the University of Phoenix--the largest for-profit college and university--revealed it is under investigation by the Federal Trade Commission for unfair and deceptive practices.

This news comes just weeks after the Center for Investigative Reporting published a story about the University of Phoenix's thinly veiled, dubious marketing and recruiting efforts on military bases--exploitation of our men and women in uniform. Over the past several years, the University of Phoenix has spent millions of dollars to sponsor events, including dances, parties, and concerts, on military bases. Is it because they love our men and women in uniform? No. It is because they want to sign them up. To the University of Phoenix, these sponsorships were simply advertising and marketing events to enroll more men and women in uniform.

When you serve our country, we show our appreciation by saying there is a GI bill waiting for you at the end of your service--in fact, in some cases, while you are still serving--and for your family, too, so that you will be prepared after you have served our country to have a good life with good education and training and job opportunities.

These for-profit colleges and universities can smell an opportunity to make even more money. The University of Phoenix is after these men and women in uniform. They are after tuition assistance dollars. TA is a program that provides up to $4,500 a year, so servicemembers can use it toward a postsecondary education. And guess what. The money isn't counted in the Federal 90/10 calculation that caps the amount of money these for-profit schools can receive from the Federal Government. Did you hear that? Ninety percent of their revenue comes from the Federal Government. That is why for-profit colleges and universities are the most heavily subsidized private for-profit businesses in America. To for-profit colleges, the money from servicemembers and veterans is unlimited money. All they have to do is sign them up. And that is what they are doing with these sponsorships.

After the article was published, I wrote to Secretary Ash Carter--Department of Defense--to ask him to take action. The University of Phoenix reportedly is in clear violation of Executive orders limiting the access of these schools to our men and women in uniform. The Department of Defense has confirmed to me they have opened an inquiry into the matter.

During the Senate's reconsideration of the National Defense Authorization Act, I filed an amendment to require the Department to post information on Federal and State investigations and lawsuits against schools on its online education resources for servicemembers.

As part of the Tuition Assistance Program, the Department of Defense has created what it calls TA DECIDE. This allows servicemembers to find information about specific schools when deciding where to use their tuition assistance benefits. It includes information such as the graduation and default rates. Do you know why? Because once that servicemember has used up that GI bill, it is gone. If they waste it on one of these for-profit colleges and universities that give them little or nothing for their GI bill, they do not get a second chance.

Of course, servicemembers need accesses to this information. Publicly traded companies such as the University of Phoenix have to disclose the information to the SEC when they are under investigation. Members of the military should know that, as well as the general public. It only makes sense.

My amendment wasn't taken up during the Senate's debate, but last week 12 Senators joined me in writing Secretary Carter. This commonsense step to ensure better information for servicemembers about their education options is one the Department of Defense needs to make.

I also want to say a word about another for-profit college that is notorious for its exploitation of students--Ashford University. Ashford University first came to my attention when former Senator Tom Harkin of Iowa had an investigation. He took a look at this so-called university in his home State of Iowa. Do you know what he found? He found they had purchased a small Catholic girls college, purchased their accreditation, and then reopened it under the name ``Ashford University.'' Do you know how many faculty members there were at Ashford? One faculty member for every 500 students. It wasn't a real university; it was an online scam. They announced last week they are closing down their campus in Iowa. What a heartbreak that must be for the people of Iowa--to lose such a stalwart higher education citizen. That is the reality.

I have run into students in Illinois who said they had just graduated from college.

I said: Where did you go?

They said: Ashford.

And I thought, oh my goodness. What a disappointment. You have wasted your time and your money, you are deep in debt, and that diploma, sadly, is worth very little.

The tide is turning against the for-profit colleges and universities. The question is whether this Senate, this Congress, this government will step up once and for all and defend those young men and women who are wasting their time and money and taxpayer dollars--and in many cases GI bill benefits--on these worthless for-profit schools.

It is time for us to wake up to this reality. I am glad to see this industry is finally facing its day of reckoning.

Mr. President, I yield the floor.

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