BREAK IN TRANSCRIPT
Mr. DURBIN. Mr. President, I know that pending is the firearms legislation, which America is watching very closely, and which we will speak to at length as we proceed to this measure. I, of course, will come to the floor at that time to address some of the issues which were brought up in the Senate Judiciary Committee. One of the bills that is being brought forward under this firearms act is one related to straw purchases--purchases by an individual who can legally purchase a gun so that firearm can be given to someone who could not because of a felony conviction, for example, or perhaps mental instability.
Those third-party purchases--straw purchases--have become the scourge of many communities. One of them is the city of Chicago, IL, which I represent. We found that about 9 percent of the crime guns confiscated in Chicago over the last 10 years came from the State of Mississippi--Mississippi. So how did those guns get from Mississippi to the mean streets and alleys and backways in Chicago? Well, some people decided they could make some money by filling up the trunk of a car with easily purchased guns in Mississippi, driving up to Chicago, and selling them to gangbangers and thugs and drug kingpins in some dark alley late at night. That is a profitable business for some, but it has proliferated firearms and weapons in the city of Chicago to a level that many people find incredible.
Our superintendent of police, Garry McCarthy, came to Chicago from the New York City area. He learned that the per capita possession of firearms in the city of Chicago--per capita--is roughly six times what it is in the city of New York--six times more firearms. We are awash, flooded with these firearms, and most of them, virtually all of them, are coming in from outside the city--9 percent from Mississippi, 20 percent from one firearms dealer in the suburbs of Chicago.
Well, I can tell you these guns are not being purchased by end users in most instances. They are being purchased by girlfriends, by partners, those who could clear a background check and buy a gun and hand it over to someone else who commits a crime.
One of the provisions in the firearms bill that I authored with Senator Kirk, Senator Collins, Gillibrand, and, of course, our chairman, Patrick Leahy, relates to whether we are going to throw the book at those who purchase guns with the knowledge or reasonable belief that they are going to prohibited purchasers or to be used in the commission of a crime; and we do. The penalty starts at 15 years of hard time. In Chicago at a press conference we said: Girlfriend, think twice. Is he worth it? Is he worth 15 years behind bars for you to go buy that gun in the suburbs, hand it over to that gangbanger who kills somebody that night?
That is what folks have to put into their calculation of whether they are going to take that risk. That is one of the provisions in this firearms bill. I would like to think everybody would agree with this provision. Unless one happens to be in that rare group of Americans who believe selling firearms in volume, no matter whom they are sold to, is the best thing for our country, then they have to agree that clamping down with Federal hard time for those who make straw purchases is a good idea. I think it is. It is the lead measure in this firearms bill that will come before us.
There are other measures in there that have been somewhat more controversial, and we will come to them during the course of the debate. But I have asked for this time as in morning business to speak to two unrelated issues, not to diminish the importance of the firearms bill, which I have spoken to already, but to speak to two other issues which I hope will be taken up seriously by the Senate soon.
BREAK IN TRANSCRIPT
Mr. DURBIN. Mr. President, I have come to the floor many times to talk about for-profit schools. It is another consumer issue. It is a very serious one. I come to the floor to describe to my colleagues and put on the record of the Senate some of the things that are taking place across America today that I think are nothing short of outrageous, things that we can stop--we have the power to stop in the Senate.
Let me tell the story of Sharon LoMonaco. Sharon is a 65-year-old woman who is on Social Security and in debt because of her student loans. Sharon attended the Art Institute of Pittsburgh, a for-profit college owned by Education Management Corporation. Sharon saw a commercial and was attracted to the school and called them. Then the recruiter at the school kept calling and calling her until she finally agreed to sign up. Sharon says the recruiter acted as if he were her best friend, told her everything would be great, and then practically filled out her financial aid forms for her. She ended signing up for $55,000 in loans, to the Art Institute of Pittsburgh.
She started the program and started to question almost immediately the quality of the education she was receiving. But she stayed in school--that is, she stayed until her money ran out. Sharon received a Pell grant, which is a grant given to low-income individuals in America to go to college, but she had also exhausted her Federal student aid eligibility. She was borrowing money even while she was putting the Pell grant into the cost of her education. She could not get any more Federal loans and could not qualify for private student loans. She had no choice--she had to drop out of the Art Institute of Pittsburgh. She now attends a community college and is trying to finish her degree there. For now her loans are deferred, but every day, she wakes up and worries about what will happen when the day comes and she will have to start to pay them back.
Unfortunately, Sharon is not alone. Every week, former for-profit college students who attended one of the schools like the Art Institute of Pittsburgh that are run by the EDMC corporation find they are drowning in debt and contact our office. We have invited them to tell us their stories.
Let me talk a little bit more about the type of business EDMC runs--that stands for the Education Management Corporation. It received over 77 percent of its total revenue from Federal student aid programs. However, according to a 2012 HELP Committee report Senator Tom Harkin filed, if all Federal aid is included--that means counting GI Bill funds, Department of Defense tuition assistance money--EDMC receives 80 percent of its total revenue from the Federal Government. This is not a business, this is an outlet for Federal taxpayers' dollars to subsidize a private company. Eighty percent of its revenue comes in the form of a check from the Federal Government.
It is only 20 percent away from being a total Federal agency, but, believe me, the salaries that are paid and the profits that are taken by this so-called private sector company would not even be considered at the Federal level.
For-profit colleges received $32 billion in Federal student aid funds in the 2010-2011 academic year. This might seem like a good investment for the Federal Government to make--that is, if students were actually learning, graduating, and getting jobs in their chosen fields and paying off their loans. They are not. Over 23 percent of the students who attended the Art Institute of Pittsburgh are going to default on their student loans within 3 years.
Sharon LoMonaco is not alone. More and more older Americans are in debt either because they went to school later in life or, in a gesture of kindness, cosigned costly private student loans for their children or grandchildren. According to the Consumer Financial Protection Bureau, outstanding student loan debt now tops $1 trillion in America. These are people who were retired and planning to live a life of comfort. They cannot anymore. A grandmother cosigns a granddaughter's student loan for her, the granddaughter defaults, and they are now collecting and garnishing grandma's Social Security check. In Sharon's case, she worries her Social Security check will be garnished in the future.
While other types of household debt continue to decline, there is one that does not: student loan debt. Between 2004 and 2012, there was a 70-percent increase in the average amount being borrowed for college. Borrowers like Sharon, clearly over the age of 30, make up 67 percent of the total outstanding student loan debt.
There are some for-profit colleges that are doing the right thing--educating students to succeed in the workforce--but there are other bad actors, such as EDMC, that continue to spend a large portion of their revenue on marketing rather than educating. This committee report from the HELP Committee in the Senate found last year that for-profit colleges spent an average of 22 percent of their revenue on marketing and recruiting. One particular school we looked at today is trying to hold out that it is educating and training members of the military. It turns out they have hundreds of recruiters trying to get military families to sign up and 1 job placement counselor. You know what their priorities are: Sign them up and get their money.
Congress needs to raise the standards for for-profit colleges and stop this unrestricted flow of funds to these schools that are failing their students.
I have been giving these speeches on the floor for some time now. Senator Harkin of Iowa, who is the chairman of the HELP Committee, has had extensive investigations of these for-profit schools. Some of them are struggling. Their share value has gone down. They are not making money the way they used to. But they are still very much in business.
What we should remember is what I have told folks are the three most important numbers:
Twelve. Twelve percent of all college students go to for-profit schools. University of Phoenix, Kaplan, DeVry, EDMC--12 percent go to these for-profit schools. These for-profit schools take out over $30 billion a year in Federal aid to education. Twelve percent of the students, and they take 25 percent of all of the Federal aid to education. They know where the money is. They are grabbing it as fast as they can. Forty-seven is the third number you ought to remember. Forty-seven percent of the student loan defaults are students and their families from for-profit schools.
Many of these schools are just plain worthless. Some of the students could never tell.
They say: Well, Senator, wait a minute, if you are giving Federal Pell grants to these schools, then isn't the Federal Government acknowledging the school is a good school?
Sadly, that is an in escapable conclusion, a wrong one. They are not good schools. Yet we continue to allow them to tap into Federal funds. Oh, there are exceptions. Some of them do train people for good jobs. But too many of them are worthless.
These poor students, high school students are inundated with all of this advertising and marketing to go to those for-profit schools. They are lured into it. There was a commercial that used to run on television here in Washington. I think they finally pulled it off the air. It showed this lovely young girl. She was in her pajamas in her bedroom with her computer on the bed. She said: I am going to college in my pajamas. It was an advertisement for a for-profit school.
I do not want to suggest that online education is a bad thing. I think it can be a good thing. But this notion that you can go to school so easily and come up with a valuable degree is one that people ought to stop and think about. What we know now is that many students who do not know which way to turn coming out of high school would be well advised to go first to a community college. It is local. It is affordable. It offers a lot of options. You can learn a lot about yourself and what you might want to be when you grow up and do it without going deeply in debt.
What we are discovering is more and more students are signing up for debt they do not comprehend well. What does it say when a student has to borrow $20,000 a year to get an undergraduate degree, or $80,000 in debt for 4 years? Is it worth it? Many students are starting to ask this question.
When I grew up college was a given. Go to college; it is the only way to succeed.
Now students are asking the hard questions. Is it worth that much debt? Will it really help me that much? There are questions which need to be asked and answered. Sometimes these questions are being answered by young people who have had no experience in the world. They have not yet borrowed money for anything. Perhaps their parents never attended a college or any institution of higher education. They are excited about going to college and sign on the paper because they don't want to miss a class. The next thing they realize is they are stuck in these schools.
After a period of time, possibly 4 or 5 years later, some may actually finish in these for-profit schools only to discover their diplomas are worthless and cannot help them secure a job.
A young lady went to Westwood College, one of the most notorious for-profit schools in the Chicagoland area, for 5 years. She completed a law enforcement degree from Westwood. There wasn't a single employer who would recognize her degree when she went out into the real world.
Where is she now? She is living in her parents' basement. This is the only place she may reside because she is $85,000 in debt to Westwood College for a worthless diploma. This isn't fair.
We need to do a better job at the Federal level in accreditation to ensure these schools are worth their tuition. Secondly, we need to demand full disclosure in terms of how much their education costs. What kind of debt obligation is the student incurring? What is the likelihood they will get a job? How many of these students are dropping out and defaulting on their loans long before graduation?
These are important questions which need to be asked and answered. It is tough. This is an industry which is politically well connected and put themselves in a favored position in the bankruptcy court--through friends in the U.S. Congress. They wish to protect their profitmaking, even at the expense of a lot of these students and their families.
We can do better. We need to establish standards which restore the confidence of American families and these future students in the institutions they attend.
Mr. President, I yield the floor, and I suggest the absence of a quorum.
BREAK IN TRANSCRIPT