For-profit college

new category 6/15

see cecu

Related Articles Around the Web

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i'm sure FIRE is on the case; accred by who?

an 1 22

Baker College, one of the largest private schools in Michigan, is threatening legal action against a former faculty member who spoke to ProPublica and the Detroit Free Press for an investigation published this month.

Jacqueline Tessmer, who taught digital media for 14 years at Baker’s campus in Auburn Hills, told the news organizations that students often came to the nonprofit college unprepared to succeed and exited without degrees or good jobs but with heavy debt from loans. “Baker College has ruined a lot of people’s lives,” she said in the story.

A Jan. 19 letter to Tessmer — sent by the law firm Plunkett Cooney on behalf of Baker — demanded she retract her statements, which it described as “false and defamatory.” It did not specify what, if anything, was false. Arguing that Tessmer was in violation of a nondisparagement clausein a settlement she reached with Baker in an employment dispute, attorney Courtney L. Nichols also demanded that she “agree voluntarily to remit payment to Baker College for the damages it has suffered as a result of your violation(s), including attorney fees.” The letter did not include a dollar amount.

Since publication, Baker has not contacted either news organization to contest the validity of her statements. Before publication, the Free Press and ProPublica informed Baker that Tessmer would be quoted and shared her comments. Baker did not specifically address those quotes or Tessmer’s time at the college.

Baker’s letter to her after publication gave her seven days to respond. Tessmer said in an interview this week she stands by her comments and will not meet the college’s demands.

She said she didn’t see how it would be possible to make a retraction even if she wanted to, given that she expressed her opinion “based on what I did in service to the college” and her comments were only “a couple of sentences in a giant article.”

“I could be quiet, but is it really going to matter at this point?” she added.

The story on Baker examined the college’s low graduation rates, its aggressive marketing and the oversight of a Board of Trustees that has included former presidents of the school.

In addition to the letter to Tessmer, Baker responded to the article by emailing students, writing a letter to the editor in the Free Press, and placing a statement on its website that disparaged the story and touted the school’s achievements. Officials have defended the 111-year-old college as an affordable open enrollment school whose practices are reviewed by regulators and accreditors.

Neither Baker nor its lawyer has responded to a request for comment on the legal threat.

Tessmer’s relationship with Baker ended in a lawsuit she filed for breach of contract and retaliation. The school disputed her claims in a countersuit, and the case ended in a settlement in 2014. The letter from Baker’s lawyer also suggested that if Tessmer had spoken about the settlement, she would be in violation of it.

“This is what they do,” said Tessmer, now self-employed. “They scare. They huff and they puff, and it works a lot of the time. I mean, it’s worked on me.”

The letter to Tessmer said that if she did not comply, “Baker College will consider its available recourse.”

As of Thursday evening, Tessmer had not heard again from the law firm.

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https://theconversation.com/going-back-to-school-to-deal-with-hard-times-for-profit-schools-could-make-things-even-harder-134872

disaster cap'lism?

aha extraction, but special cat: dereg makes big public taxpayer $ vulnerable for extraction (via uber myth corps good/effic and gov't bad/bloated/collectivist)

//charter

aha2: pvt // deregulation; afr and latix ppl of color mos need education, but cn last afford, least prepard for it; fed loans (and maybe student/family savings) are a big target to extract from; online fior profit college biggest grift/profit attractor b/c can do in "spare" time. betsy devos dereg accredidation

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https://www.alternet.org/2020/02/obama-closed-an-agency-that-accredited-a-university-with-no-faculty-or-students-then-betsy-devos-saved-it/

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Obama closed an agency that accredited a ‘university’ with no faculty or students. Then Betsy DeVos saved it

Written by Daily Kos February 16, 2020

If you have never heard of Reagan National University, in Sioux Falls, South Dakota, you’re not alone. But like many small colleges you’ve never heard of, this one boasted (at least until this month) full accreditation as sanctioned by the federal government.

There’s just one small problem.

By all appearances, at present it has no students, no faculty and no classrooms.

As an investigation for USA Today by Chris Quintana and Shelly Conlon found, this institution of higher learning was accredited by the Department of Education under the auspices of Trump-appointed Secretary of Education, Betsy DeVos. Or more precisely, it was accredited by an “approved” and sanctioned agency of DOE with a track record so dismal that, back in the good old days (known as the “Obama administration”) when the federal government was actually being run by competent people who worked for the interests of American ciitizens, it had been summarily shuttered and put out to pasture.

The agency in question, the Accrediting Council for Independent Colleges & Schools, has a history of approving questionable colleges, with devastating consequences. It accredited ITT Tech, Corinthian Colleges and Brightwood College, massive for-profit universities whose sudden closures last decade left thousands of students without degrees and undermined the value of the education of those who did graduate. Those closures led President Barack Obama’s Education Department to strip ACICS’ powers in 2016.

After a Federal Judge ruled that the Obama Administration had failed to consider a substantial number of documents that ACICS had submitted to appeal its closure, DOE was ordered to reconsider its decision, which it did. DOE career employees again found that ACICS failed to meet appropriate standards in its accreditation process.

But by then Trump acolyte and billionaire-by-marriage Betsy DeVos, who, following standard Trump-appointee procedure, was proceeding to reverse every single action taken by the prior administration, no matter how sensible or helpful to the American people, had begun to remake the Department. DeVos reinstated the ACICS agency despite its horrid past record of promoting colleges that exist solely to rip off American students (usually poorer ones and disproportionately students of color).

Since its short-lived disbandment, the agency had lost many colleges as “members” and, as Quintana and Conlon note, lost their “membership fees” as well. It needed money, and fast. So, apparently it was time for some quick calls to those “institutes of higher learning” out there.

Accreditation is the key to obtaining federal grant and loan money for students who want to attend college. Of course, that money then goes straight to the “accredited” college. But as USA Today found out, “Reagan National University” is a very strange college. To begin with, when the reporters attempted to learn more about the college itself, its website links were all dead. They still are.

Adding further to the mystery, “[n]o students or graduates could be found on LinkedIn or Facebook.”

When USA Today tried to contact faculty from this so-called college, they could find none. People whose names were listed on the “college’s” website swore they’d never heard of or taught at Reagan National University. Other names had absolutely no internet history, something quite unusual for academics. Phone calls to the University ended in curtly disconnected lines. Attempts to physically visit the school were similarly unavailing, yielding locked offices. Peering through the window, a vacuum cleaner and some insulation were visible.

As the USA Today investigation found, ACICS specializes in accrediting “for profit” colleges, the same ones notorious for ripping off students with phony promises of inflated job prospects and providing worthless degrees. But since the Obama administration shut it down, its members have dwindled from 290 in 2016 to 63 at present. ACICS told USA Today that Reagan had somehow met its stringent accreditation standards, but it refused to provide any details on how that may have occurred.

Michelle Edwards, CEO and president of ACICS, defended the council’s accreditation process in emails this month to USA TODAY. ACICS first accredited Reagan in 2017, though Edwards said the university had to address some areas where it was initially out of compliance. She declined to say what those areas were.

But hey, ACICS pulled out all the stops to get Reagan National U. up to snuff! In January 2019, it sent an (apparently) sternly worded letter to its accredited so-called college, informing Reagan that its job placement rate was a whopping 0%. Of course, the agency’s standard procedure provided a window of time for an institution to “show cause” why its accreditation should not be pulled in such an instance. For Reagan, that “window” expired in May, 2019. According to the agency CEO, “Reagan” provided some sort of satisfactory information to ACICS (we’re not told what that was), and the “show cause” order was lifted.

But in December, 2019, ACICS really laid the hammer down.

This time accreditors raised concerns about the language in a course catalog and the university’s grading system. It also hinted at more existential issues, such as a lack of evidence of a qualified person to run the business programs. And the computer science program didn’t have the materials necessary to teach.

It’s not clear who ACICS was talking to at “Reagan,” if they were actually talking to anyone at all. This entire shoddy episode reeks of either purposeful negligence or something worse. As Antoinette Flores, with the Center for American Progress who studies accreditation asks, how could this agency possibly have accredited a “school” with no faculty and no students?: “You accredited this institution. How did you miss this?”

In February of 2020, while USA Today was conducting its investigation, “Reagan National University” voluntarily withdrew its accreditation.

The USA Today investigation found something that provides a clue to exactly what “Reagan National University” is. It seems that in 2011, agents from Immigration and Customs Enforcement visited another questionable institution, called the “University of Northern Virginia” on “suspicions” that it was operating to exploit the issuance of visas through legal loopholes for foreign visitors rather than acting as an actual educational institution. That university was shut down by the state of Virginia because of its lack of accreditation in 2013, but popped up again, listing an address in South Dakota—the same address used by “Reagan National” in its corporate filings. It even listed the name of its agent as “Xianhua Fan”, seemingly the same name as Reagan’s president (in its business filings spelled as “Xuanhua Fan,” although the official “website” listed president of the University was a fellow named “Harold Harris”).

South Dakota, as the authors of the USA Today article point out, is probably not the ideal place to go to college: “State officials merely ask colleges whether an accrediting group has approved them — they don’t independently hold universities accountable.”

If it seems that all of this should have been obvious to ACICS, the agency DeVos stepped in to save, it should. The article describes the many criticisms and problems that agency has, including denial of recognition by the Council for Higher Education Accreditation, a university-member body that sets stringent standards for accreditation.

But ultimately, as the article notes, this is all traceable back to DeVos and the Trump administration philosophy of rolling back every regulation in favor of business interests, no matter who is harmed in the process.

The education secretary wants to cut back the rules governing accreditation. Fewer regulations could allow colleges to implement new training programs swiftly to fill holes in the workforce, she says — an approach cheered by for-profit colleges like the ones accredited by ACICS.

Critics argue these rollbacks will make it easier for shoddy or predatory institutions to take advantage of students. They have pointed to the high-profile closures of several for-profit colleges over the past decade as a need for more regulations to protect students, rather than fewer.

What this all boils down to has nothing to do with learning or “education,” and everything to do with political campaign contributions from the “for-profit” college mill industry and lining the pockets of the investors that fund such scam schools. As noted by Jeff Bryant of the Campaign for America’s future,”The favors Trump and DeVos are granting to the for-profit college industry reflect the generosity of campaign contributions the sector has generally showered on Republicans, especially since the advent of the regulatory constrains issued in the Obama years.”

And whether those colleges actually have any faculty or students, or whether they even can provide degrees, is apparently not a major concern.

https://www.alternet.org/2019/09/betsy-devos-is-at-it-again-the-education-secretarys-new-rule-is-a-win-win-for-everyone-but-defrauded-students

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Betsy DeVos is at it again: The education secretary’s new rule is a win-win for everyone but defrauded students

Written by Christopher Brauchli / Common Dreams September 8, 2019

They’re back — the folks in the Education Department.

Remember Betsy DeVos? Trump made her Secretary of Education. She had no experience in education but was a big fan and supporter of charter schools in Michigan. Those schools were, by most measures, less successful than their public school counterparts and scored much lower on various comparative measures than schools in other states. Nonetheless, she was very wealthy and that, as we have learned over the years, is all that is required for someone to be invited to play in the Trump playground.

Remember Diane Auer Jones? She is a senior adviser to the Department of Education on post-secondary education. She was an early hire by Betsy. Before starting work there she spent five years as a senior vice-president at Career Education Corporation.

Career Education Corporation was a company in the for-profit education world that in early 2019 agreed to forgive $494 million in student debt as a result of an investigation into its practices by 49 State Attorneys General. The Attorneys General concluded that Ms. Jones’ employer had engaged in deceptive tactics in order to recruit students. Among other things, the students were charged for vocational programs that did not have the proper accreditation for students to obtain licenses to work in their fields of study. The forgiven loans were for money owed to the institution. The practices in question had all occurred during the time Ms. Jones was a senior vice president at the company.

Now, Mesdames Jones and DeVos are at it again. On August 30, 2019 , the Education Department announced that it was making it more difficult for students who had been defrauded by for-profit institutions to receive relief from their debts. They were reforming rules known as the “borrower defense to repayment” rules. Those rules had enabled recipients of educational loans to avoid repayment under certain circumstances.

The new rules apply to loans made after July 2020. The loans significantly tighten up the ability of a student to get a loan discharged when, for example, the for-profit institution closes its doors before the student has graduated. Under the Obama era rule there was something called the “automatic closed school discharge.” That rule provided that, if a for-profit school, such as Ms. Auer’s, closed its doors before a student had gotten a degree, the student could apply to have the loan discharged. Under the Obama era rules, there was no time limit on when the student had to apply for debt relief.

Under the DeVos rule the student must apply for relief within three years after the school closing. As Ms. Auer explained: “We believe that within three years, the borrower will know whether or not there has been misrepresentation.” In masking that assertion she is probably drawing on her own experience while working at Career Education Corporation.

Under the Obama rules, the student debt was automatically discharged if the student did not enroll elsewhere within three years. Approximately 20,000 borrowers availed themselves of that provision resulting in the discharge of close to $222 million in student loans. That will no longer be permitted.

The burden of proof on the student seeking loan forgiveness has been increased. A student seeking relief will have to prove that the college made a deceptive statement “with knowledge of its false, misleading or deceptive nature or with reckless disregard for the truth” and that the student relied on the statement in deciding to enroll or stay in the school.

The burden the new rules place on students seeking relief from for-profit schools that scammed them, is offset by the benefit received by the taxpayer. As Ms. Devos said when announcing the new rules, fraud in higher education “will not be tolerated.” But, she went on to explain, the rules include “carefully crafted reforms that hold colleges and universities accountable and treat students and taxpayers fairly.” The “fairness” means that the amount of student debt being forgiven will be reduced by more than $500 million annually. Over the next ten years it is estimated that the taxpayers will save more than $11 billion. The savings to the taxpayers will, of course, rest on the backs of the defrauded students.

Commenting on the new rules, Senator Dick Durbin of Illinois said: “This rule is another Trump-DeVos giveaway to their for-profit college cronies at the expense of defrauded student borrowers.” Rep. Bobby Scott (D.Va.) said that “the Trump administration is sending an alarming message: Schools can cheat [their] student borrowers and still reap the rewards of federal student aid.”

Betsy DeVos is pleased with the new rule. So is Diane Auer Jones. So is Ms. Jones’ former employer. It is pleased because the new rule makes it less likely that it will be on the hook for paying back students it scammed. Ms. Jones is pleased because her new position enabled her to do a favor for her former employer and other companies in the student loan business she got to know when working in the business. Ms. DeVos is pleased because she could do a favor for taxpayers like herself. It’s a win-win for everyone but the defrauded students.

https://www.alternet.org/2019/08/how-betsy-devoss-department-of-education-props-up-for-profit-educational-companies-and-help-financially-troubled-colleges-rip-off-veterans/

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How Betsy DeVos’s Department of Education helps financially troubled colleges rip off veterans

Written by Jillian Ambroz / DC Report August 2, 2019

Education Secretary Betsy DeVos’s move to reverse Obama-era restrictions on for-profit colleges and reinvigorate the shady industry has backfired spectacularly.

Since DeVos and team greenlighted the accreditation of one of the nation’s largest chains of for-profit colleges, Dream Center Education Holdings, and its purchase of schools, thousands of students have been affected by school closures and conversion to nonprofit status. One group of students that have been greatly affected are military veterans, who have racked up useless credits and massive debts that can become the burden of taxpayers and the federal government to the tune of hundreds of millions of dollars.

The deregulation efforts of the for-profit college sector began back in 2017, soon after Dream Center—a charity affiliated with aLos Angeles-based megachurch with no higher-education experience—acquired some colleges from a major for-profit player in bankruptcy. DeVos had made it a priority to bolster for-profit schools, according to an article by The New York Times. In addition to relaxing oversight on the sector, DeVos also allowed for-profit schools to convert to non-profit status by loosening the rules of that process.

School closures also cost taxpayers and our federal government hundreds of millions of dollars in financial losses in discharged federal student loans.

It’s also come to light that a DeVos aide, Diane Auer Jones, a former lobbyist and executive for for-profit colleges, was granting personal favors to help Dream Center, which controls more than 100 campuses with 50,000 students, to help the company gain accreditation. DeVos, before becoming Education secretary, had invested in companies with ties to for-profit schools.

Back in 2016, Dream Center had its eyes on the failing ITT Technical Institutes but the Obama administration astutely blocked that acquisition as part of its crackdown on the for-profit college sector. And ITT ultimately shuttered its doors. But Dream Center found a new deal that would be blessed and moved forward by DeVos and team to purchase three large for-profit chains, the Art Institutes, Argosy University and South University from the bankrupt Education Management Corp.

Fast forward to the present. Dozens of Dream Center’s campuses are out of money and set to close, more than a dozen more campuses have already been sold—some to a New York private equity firm in a deal arranged by DeVos and team—and more than 40 other schools are under the control of a court-appointed receiver. In total, some 26,000 students have been affected by the demise of Dream Center Education Holdings.

Thousands of those students left scrambling to salvage their education plans are Post-9/11 GI Bill recipients, who are hard targets of the predatory for-profit schools because they can use the GI Bill funds to collect up to 100% in federal aid. For-profit schools must pull in at least 10% of their funding from sources outside of federal aid, the so-called 90/10 rule. But Congress wrote a big loophole, excluding GI Bill funding from the 90% limit, and for-profit schools actively seek-out veterans as students.

“For-profit schools really aggressively target veteran students and spend a ton on marketing, but spend little on instruction,” Walter Ochinko, research director at Veterans Educations Services, told DCReport. “They have large marketing teams that do robocalls all the time and use lead generators to reach out to veterans.”

With the closures of ITT Technical Institutes schools and the failing of Corinthian Colleges Inc., another 12,000 GI Bill students were affected by the failings of the for-profits in the past few years.

“Deregulation efforts have created a situation where vets are being harmed, they don’t have much recourse,” Ochinko said. “When a school closes, there’s only a partial restoration of benefits for veterans. Essentially they are left out in the cold.”

When these schools close, students transferring from for-profit to public schools could lose an estimated 94% of their credits. And if they retain their credits, they often don’t apply toward fulfilling their degree requirements toward their majors, according to a report filed in June by the U.S. Government Accountability Office (GAO). For many veteran students, school closures and transfers can exhaust their GI Bill benefits.

School closures also can cost the federal government and taxpayers hundreds of millions of dollars in financial losses due to discharged federal student loans.

Lax Oversight

For GI Bill beneficiaries, the Department of Education works with the Veterans Business Affairs agency and State Approving Agencies (SAA), known as “the triad.” State Approving Agencies, state employees under contract with the VA, have the authority to shut down schools and remove GI Bill benefits, the VA does not. But DeVos’ deregulation efforts would undermine protections for GI Bill beneficiaries by making it more difficult for state approving agencies to hold schools accountable, according to a report by Veterans Education Success, which works with military service organizations to educate federal and state policymakers to ensure the success of the GI Bill and its beneficiaries.

The Office of the Inspector General of the Department of Veterans Affairs (VA) conducted an audit of the Veterans Business Affairs and state approving agencies oversight of all programs for military veterans from February 2015 through January 2016, and estimated 44 of the 51 state agencies “did not adequately oversee the education and training programs to ensure only eligible programs participated in the Post-9/11 GI Bill program.”

The report, published in December 2018, found that out of an estimated $585 million paid for these “improper payments,” a staggering 81% or $473.8 million went to for-profit schools. If the Veterans Business Affairs agency does not implement oversight and better recommendations to the SAAs about $2.5 billion in related improper payments will go to potentially ineligible programs over the next five years, “putting billions of dollars at risk for fraud and waste and hindering efforts to provide quality education to eligible students,” according to the audit.

Poor Performance

Then there’s the problem of performance at these schools. The for-profit colleges examined in the GAO report showed the lowest graduation percentage of any type of college, at 22% for a four-year program, compared with 73% for public schools and 66% at nonprofit schools. Retention rates for full-time students also lagged, at 56%, compared with 88% for public schools and 85% for nonprofit schools.

The Department of Education recently filed a regulation in June stating plans to loosen requirements and oversight of accreditation agencies, which will only create more incentives for the Dream Centers of the nation.

“Essentially, they are up a creek,” Ochinko said. He and his organization, Veterans Education Success, recommend that Congress restore full benefits to GI Bill students in these circumstances.

Rep. Donna Shalala (D-Fla.) recently introduced a bill to close the 90/10 loophole at for-profit colleges, a small step in the right direction.

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Veterans groups have been asking Congress to close a loophole in the GI Bill that enables for-profit colleges to exploit veterans. The main lobbying group of the scam-plagued industry is fighting back and has recruited Fox News host Pete Hegseth to support their cause. Hegseth has denied that for-profit schools have preyed on veterans, attacked veterans groups as being “really drunk on the swamp,” and said he could potentially lobby President Donald Trump on the issue.

Hegseth also wrote a FoxNews.com opinion piece in support of for-profit colleges, saying they are “improving the lives of veterans every day!” But Fox News didn’t disclose that Hegseth is working with the lobbying group.

Hegseth is a co-host of Fox & Friends Weekend. He also regularly advises Trump on military issues, including lobbying the president to pardon accused and convicted war criminals. Trump at one point last year reportedly considered Hegseth to serve as secretary of Veterans Affairs.

Career Education Colleges and Universities (CECU) is a trade association that serves as the main lobbying organization of the for-profit college industry. The group spent $362,000 lobbying the federal government in 2018.

The for-profit college industry has been plagued by reports of scams and fraudulent advertising that lead to many students ending up with essentially worthless degrees and large debts. Multiple states have taken action against the industry while the Trump administration has protected it. As NBC News reported in April, the Obama administration had “created new rules intended to help rein in the worst-performing schools and to protect taxpayer dollars. … Now, the Trump Administration is trying to overturn those rules — and veterans and low-income Americans are the most at risk. Education Secretary Betsy DeVos has begun a months long process to unwind the Obama-era rules, easing oversight of for-profits’ use of tax dollars and protections for defrauded students.”

The industry has also exploited veterans over the years. In a February New York Times op-ed, Veterans Education Success President Carrie Wofford and Student Veterans of America Executive Vice President James Schmeling explained that for-profit colleges target veterans because they “milk a federal loophole that allows them to count G.I. Bill benefits as private funds”:

Why are veterans the targets? Because for-profit colleges milk a federal loophole that allows them to count G.I. Bill benefits as private funds, offsetting the 90 percent cap they otherwise face on their access to taxpayer-supported federal student aid. Nearly two dozen state attorneys general have said this accounting gimmick — known as the “90/10 loophole” — “violates the intent of the law.”

Hundreds of for-profit schools are almost entirely dependent on federal revenue, and if the 90/10 loophole were closed, they would be in violation of this federal regulation. Taxpayers, in other words, are largely propping up otherwise failing schools.

In December, a damning Department of Veterans Affairs internal audit estimated the risk of G.I. Bill waste was exceptionally high at for-profit schools, which received over 75 percent of improper G.I. Bill payments. The report highlighted the schools’ deceptive advertising campaigns used to recruit veterans and warned that the government will waste $2.3 billion in improper payments over the next five years if changes are not made to reel in the abuse.

As a result of systematic problems, veterans groups have urged Congress to close the 90/10 loophole.

In response, CECU recently formed Veterans for Career Education, which it claims “supports the right of veterans to use their earned education benefits to gain career skills at the college or institution of their choice.” CECU has also recruited Hegseth, an Army veteran, as a public face of its campaign.

Hegseth gave a June 3 speech in New Orleans, LA, for CECU, during which he announced that he was working with the organization and attacked critics of the for-profit education industry.

Hegseth said that he’s “so excited to be working with” Michael Dakduk, a Marine Corps veteran who is CECU’s executive vice president, director of government relations, and a lobbyist for the organization. Hegseth later said: “I’m all-in on this effort. I cannot wait to get even more involved, go to Washington, be with this organization, be with the vets, travel around the country, put pressure on the folks that deserve to have pressure put on them.”

During his speech, Hegseth offered an unapologetic defense of the for-profit schools industry, stating, “The fact that profit is made only makes these schools better”:

PETE HEGSETH: There’s a condemnation of profit. Since when did profit become a dirty word? There’s a belief that if you’re making money that’s a bad thing. I think the fact that profit is made only makes these schools better because it means you treat your students -- and having talked to a number of you before I came up here, there’s a beloved feeling toward the students you have in your institutions. They’re not just students, they’re also customers and as customers, you want to serve and meet their needs just like you want to meet the needs of the companies that would hire them in the future. And when you treat someone like a customer, it means you want them to come back. Or you want them to refer new customers to you. There’s an incentive. And if you look -- I’m going to talk a little bit about the VA and my fight against the VA and the VA bureaucracy. When bureaucracies and places treat you like a number, that’s when you are treated poorly because there’s no accountability to treat you like a customer. Profit is a good thing when channeled properly, and I’m not talking about the few cases where folks are messing around and not doing the right thing. Everybody knows that can happen. There’s bad actors in any industry, in any place. That’s not what we’re talking about here.

Hegseth later claimed that “some of these extreme leftists, Democrats, unfortunately at this point, they’ll say that these college degrees are mediocre, worthless, that schools prey on vets. These are direct quotes. And you and I both know that is just not true. I can’t get involved in something that I don’t fundamentally believe in.”

He criticized veterans groups, claiming, “There are a lot of veteran organizations in Washington that say they support vets, but they also -- they really just want to get invited to the cocktail parties. They really just want to be loved by both sides. They’re really drunk on the swamp and the power and the access they have there, and they’ve forgotten about all the guys at the VFW post level or the Legion post level who are doing those jobs throughout America. They’re not the ones they serve anymore; it’s the special interests in Washington that they serve.”

Hegseth spoke about his relationship with Trump, stating that he thinks “if anything were to ever pass in the House, in the Senate right now that restricted veterans choice it would get the fastest … veto stamp or pen you’ve ever seen. So, right now you've got a president that would veto the bad stuff. And if he ever gave me a call -- and sometimes he does -- I’d tell him that.”

Hegseth also wrote a June 25 FoxNews.com opinion piece defending for-profit colleges, writing: “I’ve met these veterans. I’ve met these college administrators. Nobody is being duped. In fact, to the contrary, these schools are improving the lives of veterans every day!” He additionally attacked Rep. Donna Shalala (D-FL) for introducing legislation seeking to end the 90/10 loophole and criticized Democratic presidential candidates for allegedly "targeting veterans’ educational choices." The piece did not mention Hegseth’s ties to CECU.

It’s not immediately clear whether the multimillion-dollar lobbying organization is compensating Hegseth for his work. CECU did not respond to a request for comment. But the organization also worked with commentators Newt and Callista Gingrich -- the latter of whom is now the U.S. ambassador to the Vatican -- and compensated at least Callista. According to her financial disclosure report, the organization paid her an amount “exceeding $5,000 in a year.”

Hegseth’s work on behalf of the for-profit college industry is another example of how Fox News has held the host to a low standard. The network has allowed Hegseth to keynote numerous Republican fundraisers and receive compensation for the speeches. Hegseth also repeatedly interviewed then-2018 Michigan Senate candidate John James on Fox News despite appearing with him at one of those fundraisers. (James is running for U.S. Senate in 2020.)

Posted In

Education, Military Personnel & Veterans

Network/Outlet

Fox News Channel

Person

Pete Hegseth

mma 619

no lnx

terans groups have been asking Congress to close a loophole in the GI Bill that enables for-profit colleges to exploit veterans. The main lobbying group of the scam-plagued industry is fighting back and has recruited Fox News host Pete Hegseth to support their cause. Hegseth has denied that for-profit schools have preyed on veterans, attacked veterans groups as being “really drunk on the swamp,” and said he could potentially lobby President Donald Trump on the issue.

As a result of systematic problems, veterans groups have urged Congress to close the 90/10 loophole.

Hegseth gave a June 3 speech in New Orleans, LA, for CECU, during which he announced that he was working with the organization and attacked critics of the for-profit education industry.

During his speech, Hegseth offered an unapologetic defense of the for-profit schools industry, stating, “The fact that profit is made only makes these schools better”:

Posted In

Education, Military Personnel & Veterans

Network/Outlet

Fox News Channel

Person

Pete Hegseth

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Betsy DeVos Back to School To-Do List

Education Secretary Betsy DeVos, the infamous billionaire political donor with a Cayman Islands-chartered yacht, has been awfully busy lately.

https://corporatepresidency.org/universityofgreed/

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818 AN see also other vet screw lending

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In the latest of her many rollbacks of Obama-era rules designed to protect students from for-profit college scams -- like Trump's own defunct university -- Education SecretaryBetsy DeVos announced plans to kill the "gainful employment rule," which "sought to punish for-profit college programs that left graduates with heavy debt compared to their incomes."

According to Collin Binkley at *The New Republic,*it was "the second planned rollback of a major Obama-era rule in a matter of weeks. On July 25, DeVos proposed changes to the so-called borrower defense rule to toughen the process by which defrauded students can get their loans erased."

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mick m shuts down swat team on student debt fraud; devos put devry in charge, rebrand 5/18

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Trump administration announced Thursday that it had picked a former official at for-profit DeVry University to head an Education Department unit that polices colleges for student aid fraud.

Last year, DeVry paid $100 million to settle federal claims it misled students.

Julian Schmoke Jr., who was an associate dean at DeVry from 2008 to 2012, will lead federal student aid enforcement activities, Education Secretary Betsy DeVos said.

"In addition to a track record of successfully advocating for students for more than 20 years, he brings experience in higher education leadership, instruction and accreditation, including serving in an academic capacity at DeVry University, where he ensured the delivery of a quality education to students," the Education Department said in a news release.

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Trump administration picks former official at for-profit DeVry University ...

www.latimes.com/business/la-fi-devry-student-enforcement-20170831-story.html

Aug 31, 2017 - And DeVos is an advocate of for-profit schools; her government ethics ... which is one of the nation's for-profit college chains, renamed itself ...

hired Julian Schmoke, the former dean of the for-profit DeVry University

https://www.theatlantic.com/education/archive/2017/08/julian...for-profit.../538578/

Aug 31, 2017 - DeVry, a for-profit college, has faced allegations that it was using ... for-profit colleges, emphasized that, under DeVos, “the department is ...

Missing: rename

Betsy DeVos's Newest Hire Was a Dean of DeVry, Everyone's Favorite ...

https://www.gq.com/story/devos-hires-devry-dean

Aug 30, 2017 - It shouldn't be a surprise then that, according to Politico, DeVos has chosen Julian Schmoke Jr., former dean of the for-profit DeVry University, ...

Missing: rename

DeVry University - Wikipedia

https://en.wikipedia.org/wiki/DeVry_University

DeVry University is a for-profit college based in the United States. The school was founded in ... The school was renamed DeVry Technical Institute in 1953 and gained accreditation .... This has been attributed to deregulation by the U.S. Department of Education under Secretary Betsy DeVos, which contrasts with the more ...

NYT: For-profit college fraud investigations scaled back under Besty ...

www.1490wosh.com/.../nyt-for-profit-college-fraud-investigations-scaled-back-under...

An investigation into DeVry University, now known as Adtalem Global Education, “ground to a halt early last year,” and later, over the summer, DeVos picked ...

Barack Obama cracks down on for-profit colleges

politico

https://www.politico.com/story/2014/03/barack-obama-education-for-profit-colleges-104661_Page2.html

For-profit colleges reject the Obama administration's regulation as unacceptable. |

Doing so through the regulatory process allowed the administration to circumvent Congress. That has infuriated some members.

“Once again, the Obama administration is making substantive changes in law without consulting Congress,” said Rep. Virginia Foxx (R-N.C.). “We all agree that substandard schools, whether public, private or for-profit, should face consequences if they fail to provide the education and opportunities they promise, but we are in the middle of re-authorizing the Higher Education Act, and this is a perfect opportunity for the president to work with Congress to find a solution on this complex issue.”

The courts rejected the Education Department’s first gainful employment regulation, finalized in 2011, on the grounds that one of the metrics used to assess the vocational programs was too arbitrary.

Administration officials and attorneys have been working ever since to craft a replacement. They spent months in negotiations with key stakeholders, trying to come up with a regulation that everyone could accept. But those negotiations failed late last year, freeing the department to go its own way. In recent weeks, the Office of Management and Budget has held a fresh round of meetings with interested parties, seeking to answer questions and anticipate concerns.

In the end, however, the administration did not change much from the drafts it circulated during the negotiations.

“All the big picture elements are unchanged,” said Ben Miller, senior education policy analyst with the New America Foundation. “The department is holding fast to its goals.”

The new regulation is stricter than the one shot down in the courts. But Duncan said he was confident it would pass legal muster.

The department has rewritten its formula to eliminate the element the judge found questionable — the rate at which program graduates repaid their loans. Instead, the department will be rating programs based on the “cohort default rate,” or the percentage of students in any given entering class who default on their student loans. That metric has been around for two decades and Congress has used it in statutes addressing other elements of higher education.

Despite that tweak, Gunderson questioned the department’s authority to regulate his industry.

He also warned that the regulation would likely backfire on an administration eager to raise college completion rates for low-income and minority students.

In his letter to Duncan, Gunderson argued that colleges facing federal sanctions would have every incentive to admit only those students most likely to succeed academically and land a solid job immediately. That would likely freeze out many students with rocky academic, financial or work histories — precisely those “who are most poorly served by more traditional educational institutions and therefore most in need of the tailored, flexible and innovative options provided by private sector colleges and universities,” Gunderson wrote.

The colleges he represents serve mostly nontraditional students, age 24 or older. Half of them are parents and almost 40 percent work full time while enrolled, he said. Close to two-thirds are eligible for Pell Grants based on their low incomes.

Gunderson added that he did not understand why vocational programs were being singled out when huge numbers of graduates from other universities also struggle to pay back their student loans.

The administration, however, says special attention to the industry is justified. Though students at for-profit colleges make up only 13 percent of the total higher education population, they account for nearly half of all loan defaults, according to the Education Department. The department calculates that 98 percent of federal loan recipients who are enrolled in low-performing career training programs attend for-profit schools.

Student advocacy groups tell horror stories of young adults, including many military veterans, lured into enrolling in worthless degree programs by aggressive TV advertising and relentless admissions counselors.

“Often, those people who need help the most are left in the lurch,” Duncan said.

To help students make informed decisions, the regulation requires institutions to publicly disclose tuition and fees, graduation rates, student debt and graduates’ earnings. It also stipulates that programs must be accredited and meet state and federal licensing standards to continue receiving federal funds.

The gainful employment regulation, which will be open to public comment for 60 days, is just one of several controversial initiatives the administration is pressing in higher education.

The Education Department is also working on a plan to rate colleges and universities according to metrics that might include how well they serve low-income students; how many incoming freshmen end up earning degrees; and how well their graduates fare in the job market. That proposal has kicked up a its own firestorm of protest from college presidents.

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david halperin

https://www.republicreport.org/author/david-halperin/

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halperin

https://www.republicreport.org/2016/friends-in-high-places-who-endorses-americas-troubled-for-profit-colleges/

JUNE 21, 2016

Friends In High Places: Who Endorses America’s Troubled For-Profit Colleges?

POSTED AT 12:54 PM BY DAVID HALPERIN

Today Republic Report is releasing a brand-new investigative report: Friends In High Places: Who Endorses America’s Troubled For-Profit Colleges?

Our report describes in detail the network of prominent Americans — lawyers, lobbyists, board members, university presidents, politicians, celebrities, and others — who continue to lend their credibility and talents to defending or promoting seven of America’s biggest for-profit college companies, amid growing indications, including law enforcement investigations, that these companies have engaged in predatory practices that harm students and taxpayers.

You can read and download the report here (pdf). Or read it all below.

UPDATE 07-04-16: Friends in High Places is now also an Amazon Kindle book, available for download.

UPDATE: 06-22-16: I have updated this report to provide a more accurate and complete listing of attorney Timothy J. Hatch’s representations of for-profit colleges. If you want the updated pdf version, be sure to clear your browser cache before loading it.

Friends In High Places: Who Endorses America’s Troubled For-Profit Colleges?

A Report

by David Halperin, Republic Report

June 21, 2016

Summary

Timothy J. Hatch and Ronald L. Olson are two of the most prominent and successful lawyers in Los Angeles. Hatch is a partner at the national litigation powerhouse firm Gibson Dunn. Olson, a name partner at Munger, Tolles & Olson, has represented some of America’s biggest corporations. He is a former chair of the American Bar Association’s Litigation Section, and today he serves on the boards of directors of Warren Buffett’s Berkshire Hathaway, the RAND Corporation, the Mayo Clinic, and the California Institute of Technology.

Both Hatch and Olson also have been for years key parts of the protective infrastructure that has shielded predatory for-profit colleges, institutions that have deceived and abused U.S. students and taxpayers. Hatch has represented the giant publicly-traded for-profit college businesses Education Management Corporation (EDMC), Kaplan, ITT Tech, Bridgepoint, and Apollo/University of Phoenix against charges of fraud, and he has sued the U.S. Department of Education to halt regulations that would hold poorly-performing colleges accountable. Olson is on the board of directors of Graham Holdings Company, which owns Kaplan, and his law firm has represented Corinthian in major fraud litigation — which is fitting, as the Graham company owned a significant stake in Corinthian until its 2015 collapse. In the fraud case where Olson’s firm represented Corinthian, the other party that whistleblowers were suing was Corinthian’s auditor, giant accounting firm Ernst & Young. Their lawyer in the case was Timothy Hatch.

Although the notorious Corinthian Colleges is gone (sort of), many bad actors remain in business. Seven of America’s ten biggest for-profit college companies, which collectively received about $8 billion dollars in taxpayer money last year, have in recent months and years been under investigation or sued by federal and state law enforcement agencies for deceptive business practices. Despite the mounting evidence that these seven companies — Apollo/ University of Phoenix, EDMC, ITT Tech, Kaplan, Career Education Corporation, DeVry, and Bridgepoint Education — have engaged in predatory behavior against their own students, they continue to market themselves as affordable places to build successful careers, and they continue to enroll new students and deposit their federal grants and loan checks. These companies also have continued to fight reform measures by government to hold bad schools accountable for abuses.

A key reason why such predatory for-profit colleges have been able to continue receiving billions annually in taxpayer dollars while ruining the financial futures of students across the country is that national power players — politicians, lawyers, academic leaders, celebrities — have been willing to vouch for these companies, serving as their paid lobbyists, board members, investors, and endorsers. It’s not just Donald Trump who has made big money off a deceptive college operation.

Although some well-known Americans have severed their ties to the industry in recent years, the many prominent people who have continued to lend their credibility to one or more of these seven troubled for-profit college companies include: Columbia University president Lee Bollinger, University of Arizona president Ann Weaver Hart, Senator John McCain, publisher Steve Forbes, Democratic former U.S. Deputy Attorney General Jamie Gorelick, former House of Representatives GOP leaders Vin Weber and Deborah Pryce, senior Republican adviser Charlie Black, and talk show host Ellen DeGeneres.

These pillars of American society uphold a shining edifice protecting corporations that have been in the sustained practice of ripping off students and taxpayers on an enormous scale. The skills and reputations that they lease to predatory for-profit colleges help to deflect attacks and allow abuses to go on, year after year.

In our system, everyone accused is entitled to a lawyer, and companies are entitled to petition the government, advertise, and otherwise make themselves heard. But, in turn, the public is entitled to evaluate the records of individuals who choose to be lobbyists, investors, board members, or validators for a predatory company, consider whether their work is harming the public interest, and further consider whether such persons, despite all their accomplishments and good deeds, should continue to command our respect, and be eligible for positions of trust in more responsible corporations and institutions, and in government. That is a discussion I hope to advance with this report.

The For-Profit College Controversy

In recent years, America’s for-profit colleges — schools organized as businesses rather than non-profits or state institutions — have received as much as $32 billion a year in federal student aid. Although some for-profit programs do a good job training students for careers, and there are good teachers at even some of the worst-behaving schools, government and media investigations have revealed that many for-profit colleges have deceived and coerced prospective students, misled regulators, charged sky-high prices, and left numerous dropouts and graduates alike buried in debt and without improved job outlooks. As an advocate for students, I have spoken with, and written about, scores of Americans who wanted to train for careers as medical assistants, computer technicians, diesel mechanics, or other jobs and ended up ripped off, unemployed, and deep in debt. I’ve also spoken with many employees and executives in this industry who have recounted brazen, cynical efforts to defraud students and government overseers.

More than half of the students who have enrolled in for-profit colleges — many of them veterans, single mothers and other low- and middle-income people seeking a better future — dropped out within about four months. The relentless drive to meet recruiting and revenue goals — to get “asses in classes” — has led many for-profit schools to enroll numerous students whom their programs are not strong enough to adequately assist. Many of these colleges have been caught using deceptive advertising and misleading prospective students about matters like program costs, accreditation, transferability of credits, job placement rates, and likely starting salaries. Although for-profit colleges often promise that their programs are affordable, the real cost can be nearly double that of Harvard or Stanford. But the quality and reputation of the programs are often weak, so even students who manage to graduate often struggle to find jobs beyond the Office Depot shifts they previously held.

The U.S. Department of Education has reported that 72 percent of the for-profit college programs it analyzed produced graduates who, on average, earned less than did high school dropouts. A May 2016 study published by the National Bureau of Economic Research concluded that for-profit college students, graduates and dropouts combined, earned less after leaving school than they did before they enrolled.

Today, 10 percent of all college students attend for-profit colleges, on campuses and online — but these institutions account for 40 percent of student loan defaults. For-profit schools are driving a national student debt crisis that has reached $1.3 trillion in borrowing. They absorb 20 percent of all federal student aid, diverting sums from better, more affordable programs at nonprofit and public colleges.

Just a few years ago, this badly-behaving industry was flying high, with large Wall Street institutions like Goldman Sachs and Wells Fargo taking major shares in large publicly-traded higher education companies, and private equity firms dominating some others. Industry revenues had soared, as students, lured by powerful sales pitches, had flocked to enroll. The industry’s main trade group, the Association of Private Sector Colleges and Universities (APSCU), was holding lavish conventions, and industry executives enjoyed fancy homes, private planes, nights on the town, Park Avenue dinner parties, and fancy ski junkets.

The industry thrived, also, by always remembering that it was fueled almost entirely by federal aid dollars — some schools were getting 90 percent or more of their money from the U.S. Departments of Education, Defense, and Veterans Affairs. Recognizing that federal policy was the key to making more and more revenue, the for-profit college industry set aside some of its earnings to build a powerful Washington D.C. presence, and it lobbied successfully for changes that opened the federal spigots even wider — at the expense of accountability and student outcomes.

Faced with the reality in 2009 that the new Obama Administration was prepared to start cracking down on industry abuses, the for-profit colleges could have pursued a deal that would mandate certain reforms but perhaps allow bad actors to keep some of their predatory business model intact. Instead, the industry decided to wage war — hiring the most expensive and connected Washington lobbyists and lawyers; ramping up campaign contributions; making phony attacks on advocates for reform; and buying the endorsement or partnership of celebrities, think tanks, even media outlets to try to improve its public image.

As described in news reports, pressure from the for-profit college industry, and from Members of Congress in both parties who have accepted campaign contributions from the industry, helped weaken the Obama Administration’s leading initiative to reform the sector: the “gainful employment” rule, which imposes penalties, and possible loss of federal aid eligibility, for career education programs that consistently leave former students with insurmountable debt. The for-profit college industry, in fact, has fought the Administration aggressively on every relevant issue.

But while the gainful employment rule lost some of its force as compared with its initial incarnation, the rule has survived, and several other Obama administration initiatives have gone forward to increase accountability on the sector. Meanwhile, with the industry choosing an all-out fight, scrutiny of for-profit colleges — in the U.S. Senate, especially when Democrats controlled the chamber; in the media; and by state and federal law enforcement agencies — has increased. And advocacy on behalf of abused for-profit college students, which in 2009 was mostly limited to a small group of organizations, has expanded to an increasingly cohesive and determined coalition of more than 50 student, veterans, civil rights, consumer, educator, and education policy groups. (Disclosure: Going back to my time at Campus Progress / Center for American Progress and continuing after I became a self-employed lawyer in 2012, I have worked to build and increase the influence of this coalition.)

All of this effort, spurred in large part by industry intransigence, has helped produce a dramatic reversal of fortune for for-profit colleges. In recent years, exposure of abuses have helped send enrollments and share prices plummeting, regulators have pressed for greater accountability measures, and many companies are closing campuses as they face mounting federal and state law enforcement probes, as well as financial and administrative instability.

Some major for-profit colleges have now collapsed or are in peril. Billions of dollars in for-profit college student loans are already in default, and former students across the country are now demanding that the Department of Education, having vouched for fraudulent schools, forgive their debts. Many of the big for-profit colleges, which had egged on the trade group APSCU to engage in all-out war in Washington against the Obama Administration, have now quit that group, leaving the organization short of funds and with a depleted staff. APSCU was so desperate to start over that in June 2016 it changed its name to Career Education Colleges and Universities, its second name change in six years.

But today, some $20 billion annually in taxpayer money continues to flow to for-profit colleges, and for some of the biggest, baddest actors in the industry, the business model has stayed fundamentally the same: deceptive online, TV, and radio marketing; coercive recruiting; enrollment of students in programs that cannot help them succeed; mixed-quality instruction; and high prices. As you read this, for-profit colleges are using bait-and-switch tactics, and misleading, high-pressure sales pitches, to convince your fellow citizens — single parents, returning veterans, and others seeking a better future — to enroll in education programs that will ruin their financial futures, and further burden U.S. taxpayers.

Just as disturbing, the Washington D.C. business model has not changed much either. At least some in the industry remain in a take-no-prisoners mode, continuing to spend millions annually buying influence in Washington. Industry players, including APSCU, continue to try to overturn the gainful employment rule in the courts and in Congress. Powerful members of Congress like Rep. John Kline (R-MN), Rep. Virginia Foxx (R-NC), and Rep. Alcee Hastings (D-FL), once agressive public champions of this industry, seem less interested in defending for-profit colleges in public forums, but they remain reliable votes to overturn Obama Administration reforms to hold the industry accountable, just as they have continued to receive campaign contributions from industry executives.[1] For-profit colleges continue to hire revolving door lawyers and lobbyists to pressure the Administration against imposing penalties for abuses. They fight tenaciously in court against industry whistleblowers and students seeking relief for abuses — paying high-priced corporate litigators out of revenues that often are 90 percent taxpayer dollars.

The industry continues to have traction because it retains enough cash to hire some of the most expensive and esteemed validators and defenders that money can buy.

Endorsers of for-profit colleges in the past decade

The lure of for-profit college money is so strong that both of the leading candidates for president in 2016 are linked to the industry. Donald Trump ran his own for-profit Trump University, which was unaccredited and thus not eligible for federal student aid; Trump’s “school” is now the subject of fraud lawsuits by New York’s attorney general and by former students who feel cheated and want their money back. Meanwhile, in 2009, as Secretary of State, Hillary Clinton pressed to include in a State Department event on education policy the giant for-profit college company Laureate Education, which several months later hired Bill Clinton to be “honorary chancellor” of its international division and paid him $16.5 million between 2010 and 2014. (However, while Trump continues to defend the conduct of his predatory “university,” Hillary Clinton, to her credit, has criticized for-profit college abuses and pledged to crack down on bad actors.)

But Clinton and Trump are far from the only ones. Here are just a few more examples of other powerful Americans linked in recent years to for-profit colleges:

2012 GOP presidential nominee Mitt Romney (R-MA), as a candidate in that race, extolled the virtues of for-profit colleges, including the University of Phoenix and Florida’s Full Sail University. Romney didn’t disclose that the private equity owners of Full Sail and Vatterott College, both schools with troubling records, were major donors to his campaign – or that Romney’s own private equity firm, Solamere Capital, was invested in those schools.

Former 2016 presidential candidate Senator Marco Rubio (R-FL) in 2014 wrote to the U.S. Department of Education asking it to “demonstrate leniency” to for-profit giant Corinthian Colleges, despite the strong evidence that the company was deceiving students and government regulators alike. Corinthian was a donor to Rubio’s political action committee. Corinthian, one of the worst actors in the entire sector, has since collapsed under the weight of disturbing revelations and multiple law enforcement investigations.

Richard Gephardt (D-MO), the former House Majority Leader, was paid $360,000 in 2010-11 — the height of the first gainful employment rule fight — to lobby for Corinthian.[2]

Former Obama Secretary of Defense Leon Panetta and National Urban League president Marc Morial both joined Corinthian’s board of directors in June 2013 — long after it was clear that the company had engaged in troubling behavior. Facing public criticism, Panetta soon quit, but Morial stayed on, collecting $60,000 annually in director fees, plus stock options, until the company shut down.

Former Senate Majority Leader Trent Lott (R-MS), former Senator John Breaux (D-LA), and their firm, Squire Patton Boggs, received $1.44 million over four years, ending in late 2015, to lobby for the for-profit college trade group APSCU, which has included in recent years many of the industry’s most troubled companies, such as Corinthian, Education Management Corp. (EDMC), ITT Tech, Kaplan, Career Education Corporation (CEC), DeVry, and Bridgepoint Education. APSCU also included ATI, which was shut down by the Justice Department in 2013 for systematic fraud, and FastTrain College, whose CEO was sentenced to eight years in prison in May 2016 for defrauding the government.

Former Secretary of State Colin Powell has for a number of years been the chair of the advisory board of Leeds Equity Partners, which invests in for-profit education and until recently owned a major stake in the second-largest for-profit college company, EDMC. EDMC recently agreed to pay or forgive some $200 million to settle multiple fraud suits brought by federal and state law enforcement. The private equity firm’s founder, Jeffrey Leeds, has been an aggressive advocate against accountability for the sector, and he serves on the board of APSCU; Powell praised the industry when he was the keynote speaker at the APSCU convention in 2011. Bill Clinton (2009), George W. Bush (2012), and Jeb Bush (2014) also were keynote speakers at APSCU conventions, and in his APSCU speech Jeb Bush sharply attacked the Obama gainful employment rule that the for-profit college industry so despises.

Another EDMC insider was former Maine governor John McKernan (R), who was CEO and then executive chairman of the company from 2003 to 2008 and then served as chairman of the board — in the period when the company ratcheted up its predatory practices. Another private equity owner of for-profit colleges is former New Jersey governor Tom Kean (R), whose company, Quad Partners, has invested in colleges including Marinello School of Beauty, which was shut down for fraud by the Department of Education in February 2016. And former Pennsylvania governor Ed Rendell (D) joined with Kean in a for-profit college industry-funded group called the Foundation for Educational Success, which was supposed to create a voluntary code of conduct for the industry as an alternative to government regulation. The foundation and code of conduct were trumpeted in a press release and in a Politico op-ed by Kean and Rendell — neither of which disclosed that the foundation was funded by for-profit colleges or that Kean is an owner of for-profit colleges. The code of conduct dissolved into a mere public relations scheme when the Foundation for Educational Success, without explanation, simply ceased to exist.[3]

Former U.S. Department of Education officials have cashed in on their government experience to become lobbyists for for-profit colleges. Diane Auer Jones, who was Assistant Secretary for Postsecondary Education under President George W. Bush, was from 2010 until 2015 senior vice president and chief external affairs officer at Career Education Corporation. Sally Stroup, who had the same job at the Education Department earlier in the Bush administration, served as vice president and general counsel at APSCU from 2012 to 2015.

Celebrity personal finance expert Suze Orman created an online course for the University of Phoenix and in 2013 appeared at a Capitol Hill event hosted by the school, whose owner, Apollo Education, has been receiving as much as $4 billion a year from taxpayers and now is under investigation by multiple federal and state law enforcement agencies.

What’s The Problem?

In our system of democracy, everyone accused is entitled to a lawyer, and companies facing regulatory challenges are entitled to petition the government and make themselves heard. But, in turn, the public is entitled to evaluate the records of individuals who choose to become lobbyists or validators for a company, consider whether their work is harming the public interest, and further consider whether such persons should continue to hold or be considered for positions of trust in more responsible corporations and institutions, and in government.

We don’t always know who those people are. Although federal law requires people who meet the statutory definition of a lobbyist, or who serve on the board of a publicly-traded corporation, to publicly disclose their service and fees, others who work as consultants or lawyers for for-profit colleges can remain in the shadows until and unless the media or other watchdog finds out. These would include former Obama White House communications director Anita Dunn, who, having joined the firm SKDKnickerbocker, advised the troubled for-profit college Kaplan as it sought to stop the Obama Administration from issuing a strong gainful employment rule. It also includes former Bill Clinton Deputy Attorney General Jamie Gorelick, who, as discussed below, served as the lawyer for the University of Phoenix as it successfully lifted a Pentagon ban on recruiting military service members, following allegations of persistent abuses.

But when the truth is found, people who have built distinguished careers, and then trade on their reputations and connections to protect the interests of predatory companies, deserve scrutiny.

A key reason why predatory for-profit colleges have been able to receive billions annually in taxpayer dollars while ruining the lives of students across the country is that Washington power players — politicians, lawyers, lobbyists, spinmeisters, analysts, even journalists — have been willing to vouch for these companies and use their talents and connections to free them from accountability. These advocates either don’t take the time to find out how badly these companies behave, and how much harm these companies cause, or else they just don’t believe it or don’t care.

This report highlights some of the distinguished Americans who, despite all the evidence of industry abuses, have continued into the past year or so to lobby for, defend, or lend their reputations to predatory for-profit colleges. We will look at validators of seven of the top ten for-profit college recipients of U.S. Department of Education aid, according to Department of Education data — the seven companies on that top ten list that, in recent years, have been under investigation by multiple federal and state law enforcement agencies:

(1) Apollo/ University of Phoenix

(2) Education Management Corporation (EDMC)

(3) ITT Tech

(4) Kaplan

(5) Career Education Corporation (CEC)

(6) DeVry

(7) Bridgepoint Education.[4]

None of the recent law enforcement investigations of these seven companies has resulted in a trial verdict of liability, and although some of these companies have settled cases and agreed to pay fines and implement reforms, none has ever admitted wrongdoing. But the collective allegations of law enforcement, insiders, and former students as to each of these seven companies present a troubling picture of predatory operations that have deceived and abused students and taxpayers.

To be clear, these seven companies are far from the only for-profit college businesses against whom there is strong evidence of blatant misconduct. But I focus on these seven because they enroll the most students and take the most taxpayer dollars.

I attempted to reach for comment each of the for-profit college advocates and validators pictured below. Most did not respond at all. A few communicated with me only off the record. I have included in the text the on the record responses of all those who provided them.

Apollo Education Group

uphoenixwho

Schools: The University of Phoenix, BPP, Bridge School of Management, FAEL, IACC Professional Institute, Milpark Education, Open Colleges of Australia, Universidad de Artes, Ciencias y Comunicación (UNIACC), Universidad Latinoamericana (ULA), Career Partner Group, College for Financial Planning, Western International University.

Taxpayer aid (U.S. Department of Education funding) last year[5]: $1.99 billion

Current & recent law enforcement investigations or actions[6]:

U.S. Department of Education, Department of Defense, Federal Trade Commission, Consumer Financial Protection Bureau, Securities and Exchange Commission, attorneys general of California, Delaware, Florida, and Massachusetts. Details.

Sample troubling behavior:

Department of Education data has shown that the University of Phoenix’s graduation rate for first-time, full-time students is about 16 percent, and that graduation rate for the school’s online programs is about 4 percent.[7]

A 2012 comprehensive investigative report on for-profit colleges by then-Senator Tom Harkin (D-IA) found that the University of Phoenix spent $892 per student on instruction in 2009, compared to $2,225 per student on marketing, and $2,535 per student on profit. “This,” the report found “is one of the lowest amounts spent on instruction per student of any company analyzed.”

Around 25 percent of University of Phoenix students default on their loans within three years of leaving school.

A 2015 investigative media report exposed that the University of Phoenix paid the U.S. military for exclusive access to bases through sponsoring concerts and other events, sidestepping a 2012 Obama executive order. The school also held “résumé workshops” that seemed to be recruiting sessions, and it handed out “challenge coins” that included Phoenix logos on one side and, without the required permission, military branch insignias on the other side. The Pentagon concluded that “the frequency and scope of” Phoenix violations of the rules was “disconcerting,” and it temporarily suspended the school from recruiting on bases and receiving DoD student tuition assistance. (See below.)

Paul Rieckhoff, founder and CEO of Iraq and Afghanistan Veterans of America, said in October 2015 that the University of Phoenix has been the “worst by far“ for-profit college in terms of taking advantage of the veterans who are members of his organization. A letter sent that same month to Secretary of Defense Ashton Carter by more than 30 veterans, civil rights, and consumer organizations supported the Pentagon’s investigation and cited, as support, the complaints of hundreds of servicemembers and veterans “who experienced deceptive recruiting” by the University of Phoenix.

Based on accounts of whistleblowers, as well as online research, I have uncovered multiple scams in which companies build web sites promising help with jobs, food stamps, veterans benefits and other things needed by low-income people and vets, but the sites actually collect personal information so that it can be sold to marketers who then relentlessly pressure people into enrolling in expensive for-profit college programs. Among the companies whose recruiters have bought leads from lead generation companies using deceptive sites are the University of Phoenix, as well as all the other companies addressed in this report: Bridgepoint, EDMC, Kaplan, CEC, DeVry, and ITT. The FTC has begun to take action against these deceptive lead generation practices.

CEO: Gregory W. Cappelli

cappelliwho

Prominent advocates & validators:

Degenereswho

Ellen DeGeneres. In May 2016, the plucky TV talk show host and Finding Dory star promoted the University of Phoenix’s “RISE TO YOUR DREAM” Scholarships on her website, her Twitter and Instagram account, and on her show, where she gave an Oklahoma stay-at-home mom a $25,000 “scholarship” to the school in honor of Mother’s Day. In the same breath, DeGeneres announced that Phoenix would award ten students a full-ride scholarships. Given Phoenix’s high prices and high dropout rates, the mom’s “scholarship” — really, just a coupon from the company — may not have been such a great gift. It was obviously a paid promotion. After student advocates complained, the Twitter and Instagram posts were removed, but the promotion remained on Ellen’s website. My guess is that the kind-hearted DeGeneres was not aware of the depth of controversy at the University of Phoenix and wishes she had never gotten involved, but that the corporate suits may have told her it would be too expensive to untangle the promotion now and to just ride it out. But given how many people admire and trust Ellen, she owes them better than that.

elmendorfwhomotturwho

Steve Elmendorf and Alfred Mottur. Long-time Democratic party strategist Steve Elmendorf, a Hillary Clinton 2016 bundler and advisor who runs the lobby firm Subject Matter, has been a registered lobbyist for Apollo since 2011, getting $200,000 a year from the company, according to federal lobbying disclosure forms. Another Clinton bundler, Alfred Mottur, was a registered lobbyist for the University of Phoenix from 2012 until late 2015, with his firm, Brownstein Hyatt, getting $320,000 a year from Apollo. More recently, in March 2016, Mottur and his firm registered as lobbyists, and declared $80,000 in first quarter 2016 fees, to work on “Issues related to higher education and proprietary schools” for “AP VIII Queso Holdings LP,” a limited partnership which, according to a Politico Pro story, is an affiliate of Apollo Global Management, one of the private equity firms that recently acquired Apollo Education Group. Other registered lobbyists for Apollo Education in the past year include Liberty Partners LLC (including the firm’s chairman, major political donor Andrew Woods; getting $120,000 from Apollo in the past six months), Penn Hill Group (including Alex Nock, a former Democratic deputy staff director of the U.S. House Committee on Education and Labor under Representative George Miller (D-CA); $180,000 in the past twelve months), and Crossroads Strategies LLC (including Jake Perry, a former “senior political advisor and confidante” to Senate Democratic leader Harry Reid (D-NV); $200,000 in the past twelve months).

kirschnerwho

Ann Kirschner. Dr. Ann Kirschner has served on the Apollo Education Group board of directors since 2007. From 2006 until early 2016, she was the University Dean of Macaulay Honors College of the City University of New York (CUNY); she is now Special Advisor to CUNY’s Chancellor. According to the Apollo website, Kirschner also has been president of Comma Communications, a higher education consulting company, founded Fathom, “an online knowledge network” in association with Columbia University, and “co-created NFL Sunday Ticket and NFL com for the National Football League.” She has a Ph.D. in English literature from Princeton.

kdawhoSchneiderwho

Jorge Klor de Alva and Mark Schneider. If you read the Wall Street Journal on March 5, 2016, you would know that Jorge Klor de Alva, identified as “president of Nexus Research and Policy Center in San Francisco” and Mark Schneider, “a fellow and vice president of the American Institutes for Research in Washington” wrote an op-ed in that newspaper opposing broad student loan debt relief for people who were deceived by their colleges. These think tank co-authors contended that such relief will be expensive — potentially more than $1 billion for students of now-shuttered for-profit Corinthian Colleges alone. They noted that the U.S. Department of Education is considering not only issuing new debt relief rules and beefing up enforcement efforts against school misconduct, but also pondering new rules to allow the Department to recoup discharged loan costs from the offending schools. They expressed concern about that: “Bankruptcies at the for-profit schools are the likely outcome, which will decimate this form of career education that today includes well over 10% of all postsecondary students.” And, they warn, “taxpayers will be left holding the bag.”

The two authors implied that, instead of making student victims whole or using financial penalties to deter bad behavior, the Department of Education should just tell offenders to straighten up: “In the past … colleges found to have questionable practices have been forced to discontinue false advertising and required to establish policies and procedures that produce accurate and verifiable documentation on job-placement rates and postgraduation earnings.”

What the authors, and the Wall Street Journal, didn’t mention was that these writers are connected to the University of Phoenix and the for-profit college industry.

Jorge Klor de Alva was from 1996 to 2010 a senior vice president at the Apollo Education Group, parent company of the University of Phoenix. For six years in that period, Klor de Alva also served as the president of the University of Phoenix. The very same Apollo Education Group created and is the funder of the Nexus Center, the think tank where Klor de Alva now works.

Given the mounting law enforcement investigations against the Apollo Education Group, it is the very kind of for-profit college company whose students could be seeking the debt relief that Klor de Alva’s op-ed argues against.

Klor de Alva also failed to make such disclosures when he published a 2014 op-ed in The Hill opposing the Obama Administration’s gainful employment rule, aimed at holding colleges accountable for consistently leaving students with insurmountable debt.

Nexus thus presents itself to the public as an independent think tank, and Klor de Alva as an independent scholar, arguing against tighter regulation of for-profit colleges, when the institution is in fact a creation of the University of Phoenix and the supposed scholar was a long-time employee of the University of Phoenix.

As for Klor de Alva’s op-ed co-author, Mark Schneider, a long-time Department of Education official, he is identified in the op-ed as affiliated with the American Institutes for Research. Not mentioned is that Schneider is on the Apollo-funded Nexus Center’s board of directors. In 2015, Schneider filed an amicus brief in federal court in Manhattan supporting a lawsuit by for-profit college companies to strike down the gainful employment rule. Schneider’s attorney in that matter was Dennis Cariello, a long-time for-profit college lawyer who recently represented the industry in the rulemaking proceedings about which Schneider’s 2016 op-ed complains. (The judge in the New York case declined to admit Schneider’s amicus brief and ruled against the companies.)

Meanwhile, some more prominent, long-established think tanks in Washington, such as the American Enterprise Institute and the Cato Institute, also have criticized Obama administration rules and actions affecting for-profit colleges, while accepting contributions from predatory college interests.

This also wasn’t the first time that the Wall Street Journal editorial page, which consistently rails against efforts to curb for-profit college abuses, has failed to disclose the financial relationships of its op-ed writers on these issues. In 2013, the Journal published an op-ed by private equity firm owner Jeffrey Leeds, then one of the key investors in EDMC, and former Senator Bob Kerrey, arguing against the gainful employment rule without disclosing the writers’ extensive ties to for-profit education companies.

gorelickwho

Jamie Gorelick. Lawyer Jamie Gorelick, who served in the Bill Clinton Administration as general counsel of the Department of Defense and later as the number two official at the Justice Department (Deputy Attorney General), in 2016 successfully pressed the Pentagon on behalf of the University of Phoenix to lift a suspension of the school for alleged recruiting abuses directed at U.S. military servicemembers.

Gorelick is one of the top lawyers associated with the Democratic Party. Although Gorelick supported Hillary Clinton for president in 2008, she was considered a candidate for Attorney General in President Obama’s administration, until she reportedly took herself out of the running. Gorelick also is the former boss of Obama Supreme Court nominee Merrick Garland. Garland worked for Gorelick when she held her powerful post at the Clinton Justice Department. She has described Garland, a Harvard college and law school classmate, as “one of my closest friends.” Gorelick has consistently contributed to Hillary Clinton’s Senate and presidential campaigns. And in 2015, Gorelick, now a partner at the powerhouse law firm WilmerHale, represented the Clinton Foundation in its successful defense of an absurd lawsuit filed in Miami by conservative activist Larry Klayman of Judicial Watch.

After leaving the Clinton Administration, Gorelick served as vice chair of Fannie Mae, the giant mortgage lender, from 1998 to 2003, and received some $26.4 million in total compensation, including bonuses. (In 2006, DC-based Fannie Mae was fined $400 million for accounting manipulation tied to executives’ bonuses that occurred from 1998 to 2004; Gorelick was not charged with any wrongdoing.) In that period, Gorelick also served as a Democratic appointee on the 9/11 Commission.

At WilmerHale, Gorelick has represented a wide range of major corporate clients. Federal disclosure forms show she has lobbied for Google, JPMorgan Chase, Lazard Freres, and others. She lobbied for BP in the face of government efforts to hold the energy giant responsible for the massive Gulf of Mexico oil spill.

Of interest to students, Gorelick lobbied on behalf of student loan giant Sallie Mae regarding, according to disclosure forms, “Student loan issues as they relate to reform of the Federal Family Education Loan Program” in the years 2009 to 2010. As media reports confirm, Gorelick was part of the intense lobbying campaign by Sallie Mae and big banks to block the Obama Administration’s effort to reform the student loan system by eliminating nonsensical, wasteful loan subsidies to private lenders. The Obama Administration ultimately prevailed over Gorelick and the other special interest lobbyists, and the reform has saved billions for students and taxpayers.

Gorelick’s well-paid effort to undermine this signature Obama education initiative was just part of the Washington game, though — apparently no hard feelings. She was rumored to be a candidate for FBI Director in early 2011, and later that year she was appointed by Secretary of Defense Leon Panetta to the Pentagon’s Defense Policy Board.

In August 2015 Gorelick visited the White House, visitor logs show, and dined at the mess with Neil Eggelston, the White House Counsel — President Obama’s top in-house lawyer.

Federal Election Commission records show that Gorelick has donated more than $165,000 to federal candidates or committees since 1997, mostly to Democrats but also, when she worked at Fannie Mae, to Republican Senators Orrin Hatch (UT). Richard Shelby (AL), and Phil Gramm (TX), members of the finance and banking committees. Gorelick has, since 1999, donated more than $11,000 to Hillary Clinton’s campaigns, including the maximum $2700 contribution in 2015.

Gorelick brought this record as a powerful Democratic insider to her effort to convince the Obama Pentagon to drop its penalties against the University of Phoenix.

After an investigative media report in June 2015 highlighted troubling, potentially unlawful recruiting practices by the University of Phoenix directed at service members, the Defense Department in October put the school on probation, kicking the school’s recruiters off bases and suspending student tuition assistance to the company.

The investigative report, in Reveal, a publication of the California-based Center for Investigative Reporting, found that the University of Phoenix paid the military for exclusive access to bases through sponsoring concerts and other events, sidestepping a 2012 Obama executive order whose aims included preventing for-profit colleges from gaining preferential access to U.S. troops. The school also reportedly held “résumé workshops” for troops that seemed to serve as recruiting sessions, and it handed out “challenge coins” that included University of Phoenix logos on one side and, without the required permission, military branch insignias on the other side.

On October 7, 2015, a Pentagon official, Dawn Bilodeau, sent a letter to the University of Phoenix imposing the suspension. She cited the Reveal report and wrote that a Department review “revealed several violations” of a Memorandum of Understanding (MOU) between the Pentagon and the school including “transgression of Defense Department policies regarding use of its official seals or other trademark insignia and failure to go through the responsible education advisor for each business related activity requiring access to the DoD installations” at Fort Worth, TX, Fort Bragg, NC, Fort Carson, CO, Fort Hood, TX, and Fort Campbell, KY.

Bilodeau wrote that the school had “responded to these infractions with appropriate corrective action at this time,” but she concluded, “the frequency and scope of these previous violations of the DoD MOU is disconcerting.” She also noted that the company was being investigated for deceptive practices by both the Federal Trade Commission and California’s attorney general.

But in January 2016, the Pentagon reversed course, ending the probation, and simply put the school on “heightened compliance review” for a year. In ending the suspension, the Pentagon issued a statement offering little information:

The department determined that the removal of probationary status was warranted based on the department’s internal review, the university’s response to the department’s concerns as set forth in multiple potential non-compliance notifications including the department’s letter dated Oct. 7, 2015, the active engagement and cooperation by representatives of the University of Phoenix, and other relevant materials.

What had not been disclosed until I found out is that Gorelick, according to government officials, served as the attorney for the University of Phoenix as it managed, behind the scenes, to free itself from penalties imposed by the Department where she once was the top lawyer.

A Pentagon spokesman, Matthew Allen, citing DoD policy, declined to provide me with information regarding meetings and communications between DoD and the University of Phoenix related to DoD’s decision to end the suspension. He even declined to confirm what I already knew: that Gorelick served as Phoenix’s lawyer in the matter. (While federal law requires lobbyists to file regular disclosure forms identifying clients and payments with respect to activities aimed at affecting legislation or regulation, attorneys engaged in an adjudication don’t have to make such disclosures.)

Government officials also said that the three-month suspension did punish Apollo with loss of revenue and bad publicity and might deter bad behavior going forward, and they noted that the Pentagon office overseeing education is too small to conduct an adequate investigation that could have sustained a longer punishment.

In January 2016, the University of Phoenix president, Timothy B. Slottow, issued a statement in response to the lifting of the ban that said, in part, “we are grateful to leaders at the Department of Defense and in Congress for supporting a clear process and high standards from all educational institutions, and for ensuring military students are able to use their educational benefits for career-relevant programs at University of Phoenix.”

But others already had contended that the University of Phoenix was harming servicemembers and veterans.

Senator Dick Durbin (D-IL), a strong advocate for students, in October 2015 had praised the Pentagon decision to suspend the school: “This is a decisive action by the Department of Defense to protect service members and taxpayers from a company that offers degrees of questionable value. With below-average graduation rates and a student loan default rate almost forty percent higher than the national average, the University of Phoenix is going to have a hard time explaining why students should continue to enroll in this institution.”

Gorelick’s successful work to end the Pentagon punishment was not her law firm’s only recent effort to prevent executive branch measures to hold for-profit colleges accountable for abuses. WilmerHale recently represented the U.S. Chamber of Commerce, which is subsidized by for-profit colleges, in a lawsuit brought by the industry trade group APSCU to overturn the Obama Administration’s “gainful employment” rule. This rule, a cornerstone of the Administration’s effort to protect students from predatory practices, penalizes career education programs that consistently leave graduates without sufficient income to pay down their student loans.

The amicus brief submitted by Gorelick’s firm argued that the appeals court was required to strike down the Obama rule as “irrational” because many for-profit college students “come from traditionally underserved and underprivileged communities” and the result of the rule would be that “the individuals perhaps most in need of these higher education programs will be deprived of the chance to matriculate and graduate, and in turn will lose the opportunity for social mobility that postsecondary education provides.” On March 8, a federal appeals court panel, in a four-page opinion, summarily and soundly rejected the challenge to the rule and the industry’s offensive arguments; the court wrote, “It would be a perverse system that, by design, wasted taxpayer money in order to impose crippling, credit-destroying debt on lower-income students and graduates.” The three-judge panel included Gorelick’s friend Judge Merrick Garland.

mccainwho

John McCain. Jamie Gorelick’s persuasive skills may not have been the only factor leading to the Pentagon’s lifting of the suspension of the University of Phoenix. The reversal also followed an aggressive public push to lift the ban by Arizona’s senior senator, Armed Services Committee chairman John McCain (R), along with Senate Education and Labor Committee chairman Lamar Alexander (R-TN).

Government officials tell me they were not surprised when the Pentagon lifted the suspension of the University of Phoenix, in light of the aggressive effort on behalf of Apollo led by powerful Armed Services chair McCain, who aggressively attacked the Obama Administration and charged that DoD had relied on “overly technical violations” of the agreement. GOP senators also threatened to block confirmation of presidential appointees until Apollo was let off the hook.

In an October 2015 speech on the Senate floor, McCain charged that fellow Senator Dick Durbin had “orchestrated” a “shameful … vendetta against for-profit universities.” McCain upped the ante by asserting that Durbin has a “well-known record of not supporting the men and women who are serving in the military.”

Alleging a larger conspiracy, McCain repeated accusations in a recent Wall Street Journal editorial that “the Obama Administration’s military tribunal is punishing” the University of Phoenix “for being a target of the political left” and that “General Durbin has commanded the Education Department and Department of Veterans Affairs to ‘take appropriate action’ against the company. Bombs away.”

In fact, it was McCain, by using his power as chairman of the Senate Armed Services Committee to pressure the Department of Defense to back off a legitimate investigation of the University of Phoenix, who was doing a disservice to servicemembers and veterans, who deserve to be protected against deceptive recruiting, poor quality programs, and other predatory practices.

Remarkably, McCain, in his floor speech, defended not only his home state-based University of Phoenix but also the disgraced, collapsed Corinthian Colleges. Even some for-profit college executives stopped defending Corinthian after it shut down; they started saying Corinthian was the one bad apple in the bunch. But McCain repeated the Wall Street Journal claim that the U.S. Department of Education, the Consumer Financial Protection Bureau, and California attorney general Kamala Harris “mounted a coordinated campaign that drove for-profit Corinthian College out of business.” McCain claimed these agencies acted “without any proof of misconduct.”

Senator McCain, Senator Alexander, and Senator Jeff Flake (R-AZ), who joined in the effort to end Phoenix’s suspension, all have received campaign contributions from the company. Indeed, Apollo is the largest donor in the 2016 election cycle to both Flake and Alexander.

McCain, who is up for re-election in 2016, benefitted from very early TV ads supporting him from the for-profit college industry’s paid ally, the U.S. Chamber of Commerce. The last time McCain ran for his seat, in 2010, Apollo CEO Greg Cappelli invited University of Phoenix employees to a town hall meeting with McCain, whom he called “a strong supporter of proprietary education.”

Millerwho

Tony Miller and Martin Nesbitt. The University of Phoenix appears far from done hiring prominent Democrats as it seeks to maintain its access to federal billions. In February 2016, Apollo Education Group announced a deal to sell the public company to a group of private equity firms, led by the controversial (but no-relation) Apollo Global Management and including Vistria, a firm founded by Marty Nesbitt, one of President Obama’s closest friends and the chairman of the Obama Foundation, and former Obama Deputy Secretary of Education Tony Miller. Under the deal, Miller will become the new chairman of Apollo Education, while Gregory Cappelli, who has presided over nearly a decade of predatory behavior by the company, remains CEO. When word of this potential deal surfaced, Reuters reported that sources said that “[b]ringing in Vistria was a strategic decision … to smooth relations with government regulators once a deal is completed.”

In a letter to the Wall Street Journal, Miller explained Vistria’s intentions, and seemed to push back on suggestions that his firm’s involvement was aimed at improving Phoenix’s position in political Washington:

It is our foundational belief that success is solely rooted in graduating the vast majority of students who enroll with the knowledge and skills that employers value, at a cost to the student that is not burdensome and that ensures a compelling return on their educational investment. Success in today’s environment isn’t predicated on special treatment from regulators or legislators.

We are committed to building on and enhancing the efforts already under way at University of Phoenix to help reach the goal of becoming the most trusted provider of career-relevant higher education for working adults in the country.

But political Washington is certainly on Miller’s mind. At a March 2016 conference on for-profit education hosted by Credit Suisse, Miller sat among for-profit college industry executives and consultants and, according to Credit Suisse’s account of the event, bemoaned the current weakened support of the industry on Capitol Hill: “[Miller] further suggested that the for-profit sector’s support in Congress was tepid as progressive Democrats were firmly opposed to the sector, conservative Republicans were ambivalent about the student aid program in general, and moderate Republicans had been embarrassed by bad publicity and unwilling to risk political capital anymore to defend the sector.”

As the new University of Phoenix seeks to smooth relations in Washington, its new owners have hired the public relations firm SKDKnickerbocker, whose principal Anita Dunn, a former Obama White House communications director, also has advised for-profit Kaplan.....

...

SEE diff corps]

end:

Deborah Pryce. Bridgepoint has paid large sums for Washington lobbyists in recent years, as its reputation has declined. It has paid the big national law firm Holland & Knight LLP $320,000 per year for the past three years, and $150,000 the year before that, to lobby on the gainful employment rule, Pell grants, and other higher education issues. Included on the Bridgepoint lobbying team are Holland lawyers Paul Bock, who was chief of staff for Senator Herb Kohl (D-WI) from 1997 to 2009, and Rich Gold, who once worked for Senator Llloyd Bentsen and worked in the Clinton administration EPA. Bridgepoint also paid the ominously-named firm Fierce Government Relations $240,000 over the past year to lobby in Washington. Kirk Blalock is one of eight lobbyists listed on Fierce’s federal disclosure form. Most are Republican former government staffers, and Blalock’s resume is especially impressive. He was Special Assistant to the President and Deputy Director, White House Office of Public Liaison in the George W. Bush Administration. According to his bio, Blalock “was Bush’s lead staff liaison to the U.S. business community…. Previous to his Presidential appointment, Kirk served in several key positions, including: Director of External Affairs, Philip Morris Companies Inc.; Special Assistant to Chairman Haley Barbour, Republican National Committee; and Special Assistant to U.S. Secretary of Education Lamar Alexander. Kirk served as the National Chairman for Young Professionals for John McCain during the 2008 Presidential election.” Another lobbying firm, CCN Group, got $120,000 to lobby for Bridgepoint in the same period, and the most notable of the eight CCCN lobbyists assigned to the account is former U.S. Representative Deborah Pryce (R), who represented Ohio’s 15th district from 1993 to 2009 and was, from 2003 to 2005, House Conference Chair, making her, according to her bio, “the highest-ranking Republican woman in the history of the U.S. House of Representatives.”

Conclusion

Some of the people described in this report, such as the corporate litigators who have defended multiple predatory colleges in court against claims of fraud, and the connected lobbyists who have worked in Washington to fight against Obama Administration rules to protect students, have been actively using their considerable skills to form a protective infrastructure that has allowed bad for-profit colleges to act with impunity. Others have simply agreed to be used as window dressing, signaling with their own reputations to policymakers and potential students alike that troubled institutions are actually fine, affordable places to train for careers. Either way, these individuals have chosen to enrich or advance themselves at tremendous cost to both students and taxpayers.

Nothing, it appears, can stop esteemed lawyers, lobbyists, and other prominent people from defending and endorsing predatory actors — the lure of the money is just too strong for too many. It’s easy for people to tell themselves stories about the rights of companies to have their day in court or to present their case in public, the opportunity to act as conciliators and reformers by working out differences between regulators and industry, the genuine respect and admiration they have for the powerful CEOs and investors in this industry.

Certainly, not all claims against even the worst schools are meritorious, and government reform efforts can benefit from the input of industry members.

But there is no good excuse for the ways that individuals have made themselves powerful, sustained validators for higher education companies that have for years deceived, abused, and ruined the financial futures of countless Americans — and continue to do so to this day — and that have aggressively opposed all meaningful accountability measures.

The only appropriate solution is strong enforcement by the Department of Education and other government agencies, and strong engagement by students and other citizens, to press against powerful industry validators and ensure effective measures to channel taxpayer money only to those schools that are genuinely helping people to train for better futures. We must make the case that sending billions annually to deceptive and poorly-performing for-profit college companies is not in America’s national interest.

This report also appears on Huffington Post.

About the writer

David Halperin is a Washington, DC, lawyer. He engages in advocacy on public policy issues, including higher education, environmental protection, open government, and money in politics, and he advises organizations on strategy, policy, communications, and legal matters.

Halperin was previously: founding director of Campus Progress and senior vice president at the Center for American Progress; senior policy advisor for Howard Dean’s presidential campaign; founding executive director of the American Constitution Society; White House speechwriter and special assistant for national security affairs to President Bill Clinton; co-founder of the Internet company Progressive Networks (now called RealNetworks); and counsel to the Senate Intelligence Committee.

Halperin writes at RepublicReport.org and Huffington Post, and his articles have appeared in the New York Times, the Washington Post, The Nation, The Georgetown Journal of Legal Ethics, and many other publications. He published the 2014 ebook, Stealing America’s Future: How For-Profit Colleges Scam Taxpayers and Ruin Students’ Lives. He graduated from Yale College and Yale Law School.

https://kpfa.org/episode/the-ralph-nader-radio-hour-december-26-2016/

http://www.huffingtonpost.com/davidhalperin/college-staffed-by-ex-tru_b_10757076.html

Tampa-based college Ultimate Medical Academy (UMA), whose co-CEO was the chief operating officer of controversial Trump University, has emailed its employees regarding an article that Republic Report published earlier this week. UMA CEO Steven Kemler wrote to his staff (see images below) that Republic Report‘s article “presented an unbalanced perspective about UMA” and directed all employees to “please refer any media or other external inquiries” to an email address for a company spokesperson.

As we reported on Monday, Ultimate Medical Academy’s co-CEO, David Highbloom, was the chief operating officer of Trump University, while April Neumann, UMA’s vice president for corporate alliance & career services, was Trump University’s director of operations. Another UMA vice president was an intern with “the Trump organization,” and at least one former UMA employee also previously worked for Trump U., which has been sued for fraud by former students and New York’s attorney general.

Donald Trump shut down Trump University in 2010. UMA appeared to be seeking to distance itself from Trump in a statement to me Monday that read, “To the best of our knowledge, only three of our hundreds of employees have worked for Trump University and none have worked at any Trump entity in the last five years.”

Kemler’s email indicating the employees should not talk with reporters echoes similar warnings to staff in the Trump University “playbook“ that was disclosed in the lawsuits against the Trump school. The playbook stated

You are specifically prohibited from speaking with any journalist, reporter, author, blogger, newspaper, or media outlet with regards to Trump University, Trump Organization or Mr. Trump... UNDER NO CIRCUMSTANCES SHOULD A TRUMP UNIVERSITY TEAM MEMBER EVER SPEAK TO THE MEDIA OTHER THAN TO INFORM THEM OF THE APPROPRIATE CONTACT AT THE CORPORATE OFFICE... Immediately email Josef Katz media information including name, media affiliation and phone number, and cc April Neumann and Michael Sexton... No matter how much confidence you have in Trump University, you should not say anything.... Reporters are rarely on your side and they are not sympathetic... If a problem arises, immediately contact April Neumann.

As I reported Monday, UMA, which offers programs in medical assisting, medical office assisting, and related fields and has been getting more than $150 million annually in taxpayer-funded student grants and loans, has faced numerous student and staff complaints about its recruiting practices. I also noted that UMA was a for-profit company but had recently been acquired by a new non-profit organization, in a transaction, whose key details remain undisclosed, that involved the largest owners of the for-profit company temporarily taking control of the non-profit and transferring some payments to the for-profit.

UMA has 13,000 students, approximately 90 percent of whom train for medical careers exclusively online, with the rest studying at campuses in Clearwater and Tampa, Florida.

Kemler’s email tells employees that the Republic Report article “was the first time we received less-than-positive press” and that the article “did not include coverage of the successful student outcomes and the great work we are doing to help students.”

Since we published our article on Monday, several former UMA employees have contacted me to discuss their experiences at UMA; for now I will say only that they have a different view of the institution than Kemler. Former staff from outside lead generation companies also talked with me about selling UMA programs over the phone to students who had provided their contact information to bait and switch websites that promised jobs, rather than slots in career colleges.

According to the Department of Education’s College Scorecard tool, just 42% of UMA’s former students earn more than a high school graduate. Graduates of UMA, which generally offers lower tuition prices than some comparable for-profit colleges, still end up with an average of $13,224 in federal student loan debt.

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https://www.democracynow.org/2016/12/2/veterans_helped_trump_win_but_critics

univ of phoenix

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hecker

http://www.help.senate.gov/imo/media/for_profit_report/Contents.pdf

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see poster child corinthian

includes online

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2 reports on fraud:

trump u both use dci?

http://go.propublica.org/e/125411/l-utm-campaign-dailynewsletter/2djgvy/35114236

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http://www.huffingtonpost.com/davidhalperin/

includes arbitration

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note: on the take:

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https://www.propublica.org/article/accreditor-of-for-profit-colleges-agrees-it-needs-a-makeover

annie waldman

Amuch-criticized group that accredits for-profit colleges announced Monday that it would temporarily stop taking new applications from campuses.

The Accrediting Council for Independent Colleges and Schools described the move as an effort to restore “trust and confidence.”

ProPublica and others have detailed serious problems at the organization. As ProPublica reported, students at ACICS-accredited schools graduate at particularly low rates and often can’t pay off their debt.

“Every aspect of the agency must be re-evaluated, fortified and enhanced,” said ACICS’ top executive Anthony Bieda in a press release.

As part of the changes, the organization announced the creation of an ethics review panel to police conflict of interests by board members.

The move comes after ProPublica showed that many commissioners come from for-profit colleges under investigation.

The ethics board will have the power to remove any council members who work for schools that are under scrutiny or not meeting the accreditor’s own standards.

The accreditor’s reforms come amidst a deluge of criticism from state attorneys general, government officials and consumer protection groups.

In April, a dozen state attorneys general called on the Department of Education to rescind ACICS’ recognition. “Even in the crowded field of accrediting failures, ACICS deserves special opprobrium,” the attorneys general wrote in a letter to U.S. Secretary of Education John King.

Last week, California’s attorney general Kamala Harris joined the other attorneys general. In her own letter to the Department of Education, Harris noted the accreditor’s failure to penalize Corinthian Colleges, which kept its accreditation until the day it declared bankruptcy.

Under ACICS’ watch, the college chain received $3.5 billion in federal aid, despite investigations from the Department of Education’s inspector general, the Consumer Financial Protection Bureau, the Securities and Exchange Commission, and almost two dozen state attorneys general.

Last week, three former employees of for-profit college chain ITT Technical Institute also released letters they sent to the Department of Education detailing their experience with what they saw as ACICS’ shoddy accreditation practices.

One of the employees, Dawn Lueck, recalled that accreditation staff would seldom show up at campuses unannounced. During visits, they would rarely sit in during classes, instead sequestering themselves in conference rooms for paperwork review.

Lueck also said that the students or employees that were interviewed by the accrediting team were handpicked by the school, and were often coached by ITT administrative staff on what to say.

“Just because you meet ACICS’ compliance standards does not mean that you are not defrauding somebody or you’re not misleading somebody,” Lueck told ProPublica.

The letters were released by the student debt advocacy group, The Debt Collective.

“Three complaints of a workforce currently made up of approximately 10,000 do not constitute a pattern,” said an ITT spokeswoman, Nicole Elam, in an emailed statement. “ITT Educational Services takes any matter attacking its reputation and service to students seriously — and will be defending those in the appropriate arena at the appropriate time.” (Read the full statement here.)

Asked about the letters, ACICS’ chief executive Bieda said in an emailed statement that the council “takes the allegations very seriously.” He also wrote that in light of employee concerns, the use of student and faculty interviews within the accreditation process “will be revisited and analyzed.”

ITT is facing a series of ongoing government lawsuits and investigations related to alleged abusive recruiting tactics, predatory lending and fraud.

“While the career college sector has been under scrutiny for years,” said Elam, “there has not been a single finding of wrongdoing by a court of law to confirm the allegations made about ITT Tech.”

Attorneys General Come Down on Accreditor of For-profit Colleges

Citing ProPublica’s reporting, twelve attorneys general called on the federal Department of Education to revoke the recognition of the quasi-regulator. Read the story.

Who’s Regulating For-Profit Schools? Execs From For-Profit Colleges

And many of them come from schools that have been under investigation. Read the story.

ACICS has accredited ITT for years. In April — four years after one of the first federal investigations began — the accreditor sanctioned the for-profit college chain, citing the pending litigation. According to recent ITTinvestor documents, the accreditor questioned the college’s “administrative capacity, organizational integrity, financial viability and ability to serve students.” The company will go before ACICS’ board in August to defend the college’s record and justify continued accreditation.

On Monday, a new report from the Center for American Progress also called on the Department of Education to revoke ACICS’ recognition, finding that the agency’s standards are substantially weaker than other accreditors, particularly in terms of publicly investigating and sanctioning colleges under scrutiny.

“We have evidence of other accreditors raising red flags and nothing publicly being done by ACICS,” said Ben Miller, the author of the report and the senior director of postsecondary education at the Center of American Progress. (The Center for American Progress receives funding from the Sandler Foundation, which also is a funder of ProPublica.)

At least 17 colleges accredited by ACICS have been subject to state and federal investigations or lawsuits, the Center for American Progress found. Over the past three years, those schools have received more than $5.7 billion in federal aid, representing half of all of the federal aid going to ACICS-accredited schools.

“If we think ACICS is too big to fail, we should just give up on accreditation altogether,” said Miller. “If the worst-seeming accreditor can’t get shut down, we shouldn’t even pretend that we’re dealing with quality.”

A Department of Education committee is scheduled to review ACICS’ accrediting status in late June.

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Today, nine Senators, led by Sherrod Brown (D-OH) and Dick Durbin (D-IL), called on the U.S. Department of Education to cut off federal student aid to colleges and universities that bar their students from going to court to pursue claims against their schools.

Addressing the same issue, some of the negotiators participating in the Department’s ongoing negotiated rulemaking on higher education issues are putting a similar proposal on the table ahead of next week’s meeting.

In their letter to Under Secretary of Education Ted Mitchell, the senators note that many for-profit colleges, and almost no non-profit colleges, use enrollment agreements containing mandatory arbitration clauses — fine print provisions that require students to pursue any legal claims against their schools before a private arbitrator, rather than in a courtroom.

The Senators argue that the Higher Education Act’s provisions requiring schools to enter into program participation agreements with the Department can be used to require a ban on mandatory arbitration as a condition for schools receiving federal funds.

“If a for-profit college deceives students about cost, transferability of credits, program quality, job placement, salary after graduation, or other claims,” the Senators wrote to Mitchell, “these students should have the right to hold them accountable.”

Mandatory arbitration requirements tend to favor the corporations that impose them, rather than individual consumers or students, because the parties must often pay high fees to the arbitrator, and arbitrators can have incentives to rule for the corporation in hopes of getting repeat business. These fine print provisions often also bar students from joining class action lawsuits or otherwise combining their claims with other students, thus making it harder to find a lawyer with enough financial incentive to take a case. If wronged students can’t recover from their schools, they may be more likely to seek forgiveness of their federal loans, increasing the burden on taxpayers. To make matters worse, arbitration agreements are conducted behind closed doors, so the public, including other students, don’t learn about any wrongdoing. Denying individuals the option of filing a lawsuit thus reduces the deterrence that encourages corporations to comply with the law and treat individuals fairly.

In addition, consider that mandatory arbitration clauses don’t just cover issues relating to for-profit colleges deceiving and defrauding students about financial matters and their educations. If a student, for example, is assaulted on campus by a school employee, a mandatory arbitration clause can force that student to address the issue with the school before an arbitrator, rather than a judge and jury.

The Department of Education is at last stepping up to enforce its rules and guard against abuses by colleges against their students. It has stopped insisting that it is powerless to act against predatory schools, and stopped bowing to the hectoring and threats of high-priced lawyers, lobbyists, and Members of Congress in thrall to the for-profit colleges that line their campaign pockets. The Department, which has been sending as much as $32 billion a year to the for-profit college industry, has every right to condition that money on the colleges respecting the legal rights of students. The Department should act promptly to ensure those rights.

UPDATE 02-24-16: Today the consumer advocacy organization Public Citizen submitted a detailed petition to the Department of Education asking the Department to issue a rule requiring colleges to agree, as a condition of receiving federal student aid, not to include mandatory arbitration clauses in enrollment agreements. The Public Citizen petition also urges the Department to consider restricting other barriers to students seeking relief, such as enrollment agreements that prohibit students from requesting a jury trial. (Disclosure: I serve on the board of directors of Public Citizen Foundation.)...

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John Kline. The chair (R-MN) of the House of Representatives committee overseeing education is one of the top recipients of campaign cash from the for-profit college industry, along with House Speaker John Boehner (R-OH), Kline’s lieutenant Virginia Foxx (R-NC), and ethically challenged House members Vern Buchanan (R-FL), Alcee Hastings (D-FL), and Rob Andrews (D-NJ). These members, at the bidding of for-profit colleges, cheerlead for the industry and promote bills to prevent accountability for waste, fraud, and abuse with our tax dollars. A 2011 APSCU draft memo I obtained described the group’s strategy on Capitol Hill as “directed by House Republican leadership.”

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see rhee:

For-Profit Colleges Ready to Rumble Again

by Brandon Conradis on September 10, 2013 11:11 AM

With students enjoying their first weeks on campus and President Obama's call to bring more accountability to colleges still reverberating, for-profit schools are gearing up for what could be another round of battles over government efforts to tighten regulation of their operations.

The for-profit education industry has been under fire for the past few years, thanks in part to charges that their students are more likely to graduate with higher levels of debt and fewer prospects of employment than students at nonprofit colleges.

In 2010, the Obama administration attempted to take the industry to taskby proposing a set of new rules that would clamp down on the schools. Among these was a measure that would bar them from the government's financial aid programs -- their main source of profit -- if fewer than 35 percent of their graduates were actively repaying their student loans.

That same year, for-profit colleges ramped up their spending on lobbying to unprecedented levels in an effort to weaken the regulations. After they spent a record high $10.2 million in 2011, the Department of Education issued a series of softer regs, including a multi-year grace period in which for-profit schools would have time to meet the DOE's stricter requirements. Many saw this concession as a victory for the for-profit schools.

Still, the schools fought the 35 percent rule -- the key component of the Obama administration's newly issued regulations -- in court, and in 2012, a federal judge struck it down for being "arbitrary." The industry shaved its lobbying expenditures to less than $8 million that year.

Now, a 15-member panel has been established by the Department of Education to rewrite those regs.

The for-profit institutions seem ready to slip into war footing again. A look at the industry's current lobbying totals in 2013 shows that its spending could by year's end match that of last year. Companies like the Apollo Group (which operates, among other institutions, the University of Phoenix) and Corinthian Colleges, both of which are in the for-profit niche, continue to be among the top spenders on lobbying in the education industry as a whole.

The hefty increase in campaign contributions from the industry last year -- totaling nearly $4.5 million in 2011-2012, up from $2.5 million in the 2010 cycle and $1.6 million in 2007-2008 -- could help, too, as lawmakers often weigh in with regulators to comment on the impact of actions affecting their favored industries. Tops in that department were the Apollo Group, which gave $525,902, and Bridgepoint Education, which gave $472,637, with the majority going to Republican candidates.

http://www.opensecrets.org/news/2013/09/for-profit-colleges-ready-to-rumble-again.html?utm_source=CRP+Mail+List&utm_campaign=1e96a8d5f8-Newsletter_9_12_20139_12_2013&utm_medium=email&utm_term=0_9df8578d78-1e96a8d5f8-210710609

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http://www.republicreport.org/2014/law-enforcement-for-profit-colleges/

Apollo Group (The University of Phoenix)

Florida attorney general investigation of Apollo

Apollo Group SEC 8-K, 10-22-10:

“Today, Apollo Group, Inc. announced that its subsidiary, The University of Phoenix, Inc. (“University of Phoenix”), has received notice that the State of Florida Office of the Attorney General in Fort Lauderdale, Florida has commenced an investigation into possible unfair and deceptive trade practices associated with certain alleged practices of University of Phoenix. The notice includes a subpoena to produce documents and detailed information for the time period of January 1, 2006 to the present about a broad spectrum of University of Phoenix’s business. The Company is evaluating the notice and subpoena.”

https://www.sec.gov/Archives/edgar/data/929887/000095012310095156/p18257e8vk.htm

Delaware attorney general investigation of Apollo

Apollo Group SEC 8-K, 08-04-11:

“Today, Apollo Group, Inc. announced that on August 3, 2011, its subsidiary, The University of Phoenix, Inc., received a subpoena from the Attorney General of the State of Delaware to produce detailed information regarding University of Phoenix students residing in Delaware. The time period covered by the subpoena is January 1, 2006 to the present. Apollo Group is evaluating the subpoena.”

https://www.sec.gov/Archives/edgar/data/929887/000095012311072900/p18993e8vk.htm Investigation has been [closed.]

Massachusetts attorney general investigation of Apollo

Apollo Group SEC 8-K, 05-13-11:

“Today, Apollo Group, Inc. announced that its subsidiary, The University of Phoenix, Inc., has received a Civil Investigative Demand from the Office of the Attorney General of Massachusetts. The Demand relates to an investigation under Massachusetts General Laws, Chapter 93A, Section 6, of possible unfair or deceptive methods, acts, or practices by for-profit educational institutions in connection with the recruitment of students and the financing of education. The Demand requires the University to produce documents and detailed information and to give testimony regarding a broad spectrum of the University’s business for the time period of January 1, 2002 to the present. Apollo Group believes that Massachusetts is one of a coalition of several states considering investigatory or other inquires into recruiting practices and the financing of education at proprietary educational institutions. Apollo Group is evaluating the Demand.”

https://www.sec.gov/Archives/edgar/data/929887/000095012311050367/p18877e8vk.htm

California attorney general investigation of Apollo

Apollo Group SEC 8-K, 08-07-15:

“On August 6, 2015, Apollo Education Group, Inc. (“Apollo” or the “Company”) received an Investigative Subpoena from the Office of the Attorney General of the State of California. The Subpoena requires Apollo to produce documents and information regarding the business and practices of its wholly-owned subsidiary, University of Phoenix, Inc., relating to members and former members of the U.S. military and California National Guard, including marketing, recruiting, billing, financial aid, accommodation and other services for military personnel, compliance with Executive Order 13607 (Establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members), and use of U.S. military logos and emblems in marketing, for the time period of July 1, 2010 to the present.

Apollo is evaluating the Subpoena and intends to cooperate fully with the California Attorney General’s Office.”

https://www.sec.gov/Archives/edgar/data/929887/000092988715000084/apol-august072015x8k.htm

Apollo Group SEC 8-K, 02-05-16:

“On February 4, 2016, we received a Second Investigative Subpoena from the Office of the Attorney General of the State of California in the Matter of the Investigation of For-Profit Educational Institutions, following the Investigative Subpoena we received in August 2015. The Second Investigative Subpoena seeks the production of documents and information regarding a broad spectrum of the business and practices of Apollo Education Group, Inc. and each of our subsidiaries, including University of Phoenix, Inc., relating to marketing, recruiting, compensation of enrollment advisors, complaints, financial aid, compliance, accreditation, other governmental investigations, private litigation and other matters, as well as additional information relating to marketing and services to members and former members of the U.S. military and California National Guard, for the time period of July 1, 2010 to the present. We are cooperating with the Attorney General in this investigation. We cannot predict the eventual scope, duration or outcome of the investigation at this time.”

https://www.sec.gov/Archives/edgar/data/929887/000119312516452435/d115329d8k.htm

SEC enforcement inquiry to Apollo

Apollo Group SEC 8-K, 04-19-12:

“Apollo Group has been contacted by the Division of Enforcement of the SEC requesting documents and information relating to certain stock sales by company insiders and the filing of our Form 8-K on February 28, 2012 in which we announced that new degreed enrollment growth at University of Phoenix was less than previously expected. We have robust policies and procedures regarding insider trading and we intend to fully and voluntarily cooperate with the SEC. We cannot predict the eventual scope or outcome of this preliminary investigation.”

https://www.sec.gov/Archives/edgar/data/929887/000119312512169783/d337407d8k.htm

Department of Education Inspector General subpoena to Apollo

Apollo Group SEC 10-Q, 04-01-14:

“On March 21, 2014, University of Phoenix received a subpoena from the Mid-Atlantic Region of the OIG. The subpoena seeks the production by the University of documents and detailed information regarding a broad spectrum of the activities conducted in the University’s Centralized Service Center for the Northeast Region located in Columbia, Maryland, for the time period of January 1, 2007 to the present, including information relating to marketing, recruitment, enrollment, financial aid processing, fraud prevention, student retention, personnel training, attendance, academic grading and other matters. We intend to cooperate with these requests but cannot at this time predict the eventual scope, duration or outcome of this matter.”

http://www.sec.gov/Archives/edgar/data/929887/000092988714000036/apol-feb282014x10q.htm

Federal Trade Commission investigations of Apollo

Apollo SEC 8-K 07-29-15:

“Apollo Education Group, Inc. (“Apollo” or the “Company”) announced that it received yesterday a Civil Investigative Demand from the U.S. Federal Trade Commission (the “FTC”). The Demand indicates that it relates to an investigation to determine if certain unnamed persons, partnerships, corporations, or others have engaged or are engaging in deceptive or unfair acts or practices in or affecting commerce in the advertising, marketing, or sale of secondary or postsecondary educational products or services or educational accreditation products or services. The Demand requires Apollo to produce documents and information regarding a broad spectrum of the business and practices of its wholly-owned subsidiary, University of Phoenix, Inc., including in respect of marketing, recruiting, enrollment, financial aid, tuition and fees, academic programs, academic advising, student retention, billing and debt collection, complaints, accreditation, training, military recruitment, and other compliance matters, for the time period of January 1, 2011 to the present.

Apollo is evaluating the Demand and intends to cooperate fully with the FTC.”

http://www.sec.gov/Archives/edgar/data/929887/000119312515267187/d23737d8k.htm

Apollo SEC 10-K 10-22-15:

“In addition, in August 2015, we received a notice from the FTC that it had commenced an inquiry into the University of Phoenix’s practices and procedures for safeguarding student and staff personal information, with a request for relevant information from the University.”

http://www.sec.gov/Archives/edgar/data/929887/000092988715000131/apol-aug31201510k.htm

Department of Defense Actions Against Apollo

Department of Defense letter to Apollo, 10/07/15:

“[A Department] review revealed several violations of the DoD MOU attributed to the University of Phoenix, including, but not limited to, transgression of Defense Department policies regarding use of its official seals or other trademark insignia and failure to go through the responsible education advisor for each business related activity requiring access to the DoD installations identified in the aforementioned article (i.e., Navy Operational Support Center, Fort Worth, TX; Fort Bragg, NC; Fort Carson, CO; Fort Hood, TX; and Fort Campbell, KY). Although the University of Phoenix has responded to these infractions with appropriate corrective action at this time, the frequency and scope of these previous violations of the DoD MOU is disconcerting. Now it has come to our attention that the University of Phoenix is under review by both the Federal Trade Commission (FTC) and the California State Attorney General….

Please be advised that, as of the date of this letter, we have placed the University of Phoenix in probationary status and we are considering whether to terminate our MOU with you pursuant to paragraphs l.r(l) and 6(f) of the MOU. Such termination would preclude your

participation in the DoD Tuition Assistance (T A) program. While in a probationary status, and with a view to minimizing harm to students, the University of Phoenix will be permitted to “teach-out.” This means that a current University of Phoenix student receiving DoD TA will be

permitted to complete courses already in progress and enroll in new courses deemed to be part of that student’s established academic program. However, other than as required to complete the “teach-out” process for current students, the University of Phoenix will not be authorized access to DoD installations for the purposes of participating in any recruitment-type activities, including but not limited to job training, and career events and fairs. Further, no new or transfer students at your institution will be permitted to receive DoD TA.”

http://www.republicreport.org/wp-content/uploads/2015/06/Suspension-Letter-to-University-of-Phoenix_7Oct20151.pdf

Apollo SEC 8k, 10-09-15:

https://www.sec.gov/Archives/

Apollo SEC 8k, 01-15-16:

“On January 15, 2016, our wholly-owned subsidiary, University of Phoenix, Inc., was notified by the U.S. Department of Defense (“DoD”) that the University’s probationary status in respect of its participation in the DoD Tuition Assistance Program for active duty military personnel has been lifted, effective immediately. The University had been placed on probation in October 2015 pending a review by the Department of the University’s compliance with the DoD Voluntary Education Partnership Memorandum of Understanding with the University, which is the basis on which the University’s active duty military students participate in the DoD Tuition Assistance Program.

The Department determined that the removal of probationary status was warranted based on the Department’s internal review, the University’s response to the Department’s concerns, and the active engagement and cooperation by representatives of the University.

The University will be subject to a heightened compliance review for a period of one-year following the removal of probationary status. During this period, the University will continue to engage with the Department and complete the production of information and documents previously requested by the Department. In addition, the University will be subject to an enhanced compliance review in fiscal year 2017.”

http://www.sec.gov/Archives/edgar/data/929887/000119312516431197/d121603d8k.htm

http://www.militarytimes.com/story/veterans/best-for-vets/2016/01/15/dod-reinstates-university-phoenix-military-tuition-assistance/78848088/

Department of Education fine and related False Claims Act lawsuit against Apollo

Arizona Republic, 09-14-04:

“A government review of the University of Phoenix, the country’s largest for-profit university, paints a picture of a school so hungry to enroll new students that it has threatened and intimidated its recruitment staff in meetings and e-mail, pressured them to enroll unqualified students and covered up its practices to deceive regulators. In a 45-page report obtained by The Arizona Republic, the U.S. Department of Education describes corporate culture overly focused on boosting enrollment. The review, based on site visits and interviews with more than 60 employees and former employees, led to the largest settlement of its kind last week. The Phoenix-based university agreed to pay $9.8 million without admitting any wrongdoing.”

http://www.azcentral.com/families/education/articles/0914apollo14.html

Justice Department statement, 12-15-09:

“ The Justice Department announced today that the University of Phoenix has agreed to pay the United States $67.5 million to resolve allegations that its student recruitment policies violated the False Claims Act…. Whistleblowers Mary Hendow and Julie Behn, two former University of Phoenix employees, alleged that the university accepted federal student financial aid while in violation of statutory and regulatory provisions prohibiting post-secondary schools from paying admissions counselors certain forms of incentive-based compensation tied to the number of students recruited. Though the United States did not intervene in this action, the Government provided support and assistance to the whistleblowers at many stages of the case, including filing friend-of-the-court briefs when the case was on appeal to the Ninth Circuit.”

http://www.justice.gov/opa/pr/2009/December/09-civ-1345.html

Ashworth College...

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http://www.huffingtonpost.com/davidhalperin/50000-owed-money-by-corin_b_7212134.html

Neutron Interactive. Last fall, Republic Report exposed Salt Lake City-based Neutron’s bait-and-switch scam — posting fake job listings and then trying to sell the desperate job-seekers overpriced for-profit college programs. Former employees involved in implementing this cruel hoax told me that one customer company was Corinthian. The creditor list provides further evidence that Corinthian and Neutron were in business together. UPDATE 10:40 am: Neutron’s partner call center, [EduTrek, whose employees first blew the whistle on this scam, is also on the creditor list (as “Edu Trek”).]

2. Dickstein Shapiro, the powerhouse Washington DC law firm, one of whose specialties, as described in the New York Times, is currying favor with state attorneys general on behalf of corporate clients, including, as the firm acknowledges in its own promotional brochure, Corinthian Colleges. 37 state attorneys general are now investigating abuses at for-profit colleges.

3. APSCU, the for-profit colleges’ Washington DC lobbying group, which has pressed policymakers to abandon common sense rules that would hold accountable predatory actors like Corinthian. Corinthian is no longer an APSCU member, just an APSCU debtor.

4. Something called the “Higher Ed Allied Leaders Coalition,” located at the same DC address as Akerman LLP, one of the two DC law firms recently registered as lobbyists for Corinthian.

5. The American Council on Education. The Corinthian creditors list includes three different departments of ACE, the leading lobby group for U.S. colleges and universities, including the “membership department.” What was Corinthian’s relationship with ACE? [UPDATE May 8: Corinthian was indeed a member of ACE; it joined in 2007.]

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’ve just published a new 100-page e-book, Stealing America’s Future: How For-Profit Colleges Scam Taxpayers and Ruin Students’ Lives. (You can find it on Amazon.)I hope you’ll read it, because it is a critical moment for Americans to examine and speak out on the issue of for-profit colleges, the trade schools that bombard us with advertising promising students a better future through careers in fields like medical assisting, auto repair, and information technology.

Some of these schools do a good job training students for careers. But many of them, through a toxic mix of high prices and low-quality programs, systematically wreck the financial futures of many students. Students like Massachusetts’s Mike DiGiacomo, an Army veteran who was misled into enrolling by two for-profit colleges in a row and now is unemployed and more than $80,000 in debt; California’s Amber Morgan, who was promised by her for-profit college recruiter a fast track into the fashion industry but ended up back at her old retail job at Macy’s and starting over at community college; and Missouri’s Jennifer Kerr, a single mother whose school (with investors including Mitt Romney) told her she would be on her way to a nursing career but instead left her with heavy student loans and worthless credits.

Predatory for-profit colleges use deceptive and coercive tactics to pressure students into signing up. More than half of for-profit college students drop out within about four months. Although the for-profits promise that their programs are affordable, the real cost of some schools can be nearly double that of Harvard. And graduates often struggle to find jobs beyond shifts at Office Depot. The U.S. Department of Education just reported that 72 percent of the for-profit college programs it analyzed produced graduates who on average earned less than high school dropouts. As a result, today, 13 percent of all college students attend for-profit colleges, on campuses and online — but these institutions account for 47 percent of student loan defaults.

It’s not just students who are harmed. For-profit colleges get more than $30 billion a year in federal student grants and loans; many get almost 90 percent of their revenue from federal aid. When a student defaults on a federal loan, taxpayers must foot the bill; the for-profit college already has been paid.

In the past few months, federal and state law enforcement agencies have at last stepped up to meet the problem. They’re investigating a range of for-profit college companies — including the University of Phoenix, Education Management Corp. (EDMC), Career Education Corp., ITT Tech, Kaplan, DeVry, and Corinthian Colleges — for fraud or other misconduct.

President Obama also understands this scam, and he has spoken out forcefully, saying that some schools are “trying to swindle and hoodwink” students, because they only “care about the cash.” In the end, the President has said, the students “can’t find a job. They default.... Their credit is ruined, and the for-profit institution is making out like a bandit.”

Yet the Obama administration may be on the verge of issuing new “gainful employment” regulations whose intent is to hold for-profit colleges accountable for leaving students with overwhelming debt, but in fact are too weak to get the job done.

What’s going on? Big money has corrupted the system. Many for-profit colleges have devoted a substantial portion of their federal riches to lobbying against new rules, and giving campaign contributions to Members of Congress, so that they can keep the federal dollars pouring into company coffers, regardless of how badly they serve students. Members of Congress then pressure the White House to back off. In short, Washington has created a monster that is very hard to stop.

Part of my book describes the army of lobbyists, spin doctors, and celebrity endorsers whom for-profit colleges have enlisted for their cause. Here are just a few:

Colin Powell. The former Secretary of State and Chairman of the Joint Chiefs of Staff was the keynote speaker at the 2011 convention of the for-profit college trade association APSCU. Powell chairs the advisory board of Leeds Equity Partners, part-owner of the second-biggest for-profit college company, EDMC, which is being sued by the Justice Department for fraud and is under investigation by a dozen state attorneys general.

Arthur Benjamin. Pictured above with Powell, Benjamin has been hobnobbing with celebrities on the charity circuit and donating to politicians from Obama and Clinton to McCain and Romney. He helped run APSCU’s PAC, giving cash to officeholders who protected for-profit colleges on Capitol Hill. Some of Benjamin’s riches came from serving as CEO of the for-profit college ATI, shut down by the Justice Department last year for systematic fraud.

Suze Orman.She calls herself “America’s most recognized expert on personal finance,” but Orman teaches an online personal finance course at the University of Phoenix and promoted the school at a Capitol Hill event, even though attending an expensive for-profit college can be one of the worst financial decisions a person can make. The University of Phoenix is under investigation by the attorney generals of Massachusetts and Florida.

Trent Lott. The former Senate Majority Leader (R-MS) has lobbied on behalf of APSCU to block accountability for predatory colleges. Republic Report has him on camera explaining how he uses his Senate connections to get things done but also struggling to explain the merits of his position.

Anita Dunn. She was Barack Obama’s campaign and White House communications director. Having helped get Obama elected, Dunn then was hired by Kaplan, one of the biggest for-profit colleges, to undermine Obama’s effort to hold predatory schools accountable.

Mitt Romney. Asked on the 2012 campaign trail what he would do about higher education, Romney praised for-profit colleges, especially Florida’s Full Sail University, as affordable, innovative options. It turned out that Full Sail was possibly the third most expensive college in America. Also, Full Sail’s owners made huge contributions to the Romney Super PAC, and Romney’s own investment company was offering clients stakes in Full Sail.

Marc Morial.The former New Orleans mayor is CEO of the National Urban League, which is dedicated to advancing the economic progress of African Americans. Morial wrote an op-ed opposing Obama’s gainful employment rule, even though the victims of predatory for-profit colleges are often students of color. The Urban League later publicly accepted a million-dollar gift from for-profit Corinthian Colleges, and in 2013 Morial joined Corinthian’s board of directors, whose members generally receive $150,000 per year. California’s attorney general sued Corinthian last year for widespread abuses and deception, and the company is also being probed by a dozen more state AGs, plus the federal Consumer Financial Protection Bureau, Securities and Exchange Commission, and Justice Department.

Dick Gephardt. The former congressman (D-MO) and presidential candidate was known as a champion of working Americans. But he became a lobbyist for Corinthian Colleges, whose abuses come down hard on veterans, single mothers, and others struggling to feed their families.

Ed Rendell & Tom Kean.The bipartisan pair of former governors (D-PA and R-NJ) co-authored a 2011 op-ed announcing a new panel to craft and monitor a code of conduct for for-profit colleges. The op-ed failed to disclose that Kean is a partner in a private equity firm that invests in for-profit colleges. The panel proved to be nothing more than a public relations stunt when it quietly disappeared.

Ernesto Perez. The CEO of Florida’s Dade Medical College donated heavily to national and local politicians, explaining, “you need access to these individuals if you want to engage the political process.” Perez resigned after he was charged with perjury and failing to disclose to a legislative panel his criminal conviction and jail term for battery and exposing himself to a child.

Donald Graham. He turned his fabled Graham family’s Washington Post Company into an enterprise dominated by the troubled Kaplan for-profit college. He has used his D.C. power and prestige to take the lead in pressuring the Obama administration to gut the gainful employment rule. Four state AGs are probing possible wrongdoing at Kaplan schools.

John Kline. The chair (R-MN) of the House of Representatives committee overseeing education is one of the top recipients of campaign cash from the for-profit college industry, along with House Speaker John Boehner (R-OH), Kline’s lieutenant Virginia Foxx (R-NC), and ethically challenged House members Vern Buchanan (R-FL), Alcee Hastings (D-FL), and Rob Andrews (D-NJ). These members, at the bidding of for-profit colleges, cheerlead for the industry and promote bills to prevent accountability for waste, fraud, and abuse with our tax dollars. A 2011 APSCU draft memo I obtained described the group’s strategy on Capitol Hill as “directed by House Republican leadership.”

Bob Kerrey. Like Colin Powell, Kerrey, the decorated Vietnam veteran, former U.S. Senator (D-NE), and 1992 White House hopeful, is now an economic appendage of private equity man Jeffrey Leeds, an EDMC and APSCU board member. Leeds and Kerrey recently wrote a Wall Street Journalop-ed equating the gainful employment rule with Obamacare. The article didn’t disclose that Leeds owns for-profit colleges, that Kerrey is part of a for-profit education venture, or that Leeds helped fund Kerrey’s failed 2012 campaign. Also following Powell, Kerrey will be the keynote speaker at this year’s APSCU convention, as were George W. Bush, education reformer Michelle Rhee, and General Wesley Clark in recent years, all lending their credibility to this troubled industry.

Lanny Davis & Melanie Sloan. Former Clinton White House counsel turned mega-lobbyist Davis and Sloan, head of the ethics watchdog group CREW, each alleged during the gainful employment fight that Wall Street short-sellers who bet against the for-profit college industry might have manipulated U.S. Department of Education officials. University of Phoenix founder John Sperling, a major donor to Democrats and liberal causes, was making similar claims behind closed doors and paying consultants to write similar op-eds. Davis for a period ran the Coalition for Educational Success, the for-profit college trade group that set up the Rendell-Kean panel. Sloan announced she was leaving CREW to join Davis’s firm, but later backed out.

eve Forbes. Last year, the former GOP presidential contender signed a deal with Bridgepoint Education under which Bridgepoint would pay Forbes Media at least $45 million over twelve years to name Bridgepoint’s Ashford University business school the Forbes School of Business and license Forbes content. Following this deal, would Forbes magazine be prepared to report honestly on Bridgepoint, which has been under investigation by the attorneys general of Californa, Iowa, New York, and North Carolina, and which Senator Tom Harkin (D-IA) called “a scam, an absolute scam”?

If you think this industry has spent enough of your tax dollars buying lobbyists and famous friends, and you want to tell the Obama administration that predatory for-profit colleges should be held accountable, you have until May 27 to submit comments here.

This article also appears on Republic Report.

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The public comment period ended this week on the Education Department’s proposed new rules to limit federal aid to colleges and universities whose graduates are particularly debt-saddled or have high rates of student loan default. The rules would hit for-profit institutions hardest.

But the industry is fighting back — and it has allies. Last week, 36 lawmakers sent a letter to the House Appropriations Committee, asking its members to insert language to keep DOE from finalizing the new rules into pending funding legislation.

Some of the signers represent districts where for-profit schools are based, or where there are many students enrolling in for-profit institutions. But a common trait of almost all of the signers is that the for-profit industry has shelled out big bucks for their campaigns. There are just five lawmakers on the letter who have never taken for-profit education money; the other 31 have taken a combined $1.2 million from the industry over the course of their careers.

The letter is evenly bi-partisan — 18 Democrats and 18 Republicans — but the Democrats who signed have an edge in terms of money received from the industry, $631,000 to $584,000 over their careers. That’s not representative of the industry’s giving in general. So far this cycle, PACs from companies and trade associations in the industry made contributions to about one quarter of all House members — 64 Republicans, with an average contribution of $6,401, and 46 Democrats, with an average contribution of $4,000.

The first signature on the letter (see below) is that of Rep. John Kline (R-Minn.), chairman of the House Committee on Education and Workforce, whose campaign committee has received more than $395,000 from for-profit education companies over the course of his career. So far in the 2014 cycle alone, Kline has received $187,000 from individuals and PACs in the education industry — almost all of it from those in the for-profit sector. His leadership PAC has picked up another $20,000 from the for-profits’ PACs. An OpenSecrets.org analysis of all donations from the industry to all politicians in our databases show Kline is the second biggest recipient of its cash, behind only former Rep. Robert Andrews (D-N.J.) who resigned recently.

Other names from the list of biggest all-time recipients of for-profit education cash are on the list as well: Rep. Carolyn McCarthy (D-N.Y), who has received $185,000 over her career, is No. 6; Rep. Eliot Engel (D-N.Y.), who has received $139,000, is No. 8; and Rep. Alcee Hastings (D-Fla.), who has received $115,000 is No. 10.

Below is a full list of all 36 members who signed the letter and how much they received from the industry.

Some of the letter’s recipients are already quite familiar with the for-profit education donors. House Appropriations Committee Chairman Hal Rogers (R-Ky.) has only received $250 in his career from the industry, but his Democratic counterpart, Rep. Nita Lowey (D-N.Y), has received $116,800 — although none so far this election cycle.

The for-profit education industry has been battered by bad publicity in recent months. The latest such story came this week, when it was revealed that five South Carolina judges and lawyers who started the Charleston School of Law withdrew $25 million in profits from 2010 to 2013 and distributed it among themselves, leaving the school in financial straits.

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WASHINGTON, Feb. 18, 2011 /PRNewswire-USNewswire/ -- The National Black Chamber of Commerce today issued the following statement in response following a House of Representative's vote to defund Gainful Employment.

(Logo: http://photos.prnewswire.com/prnh/20110217/DC50791LOGO)

"The National Black Chamber of Commerce applauds the House of Representatives for supporting college access for minority students and passing an amendment to defund Gainful Employment. This great victory will help stop a rule that would disproportionately hurt African American and other minority students who rely on career colleges to learn real-world skills that help them get jobs.

"We thank the bi-partisan leadership of House Education and Workforce Committee Chairman John Kline (R-MN), Chairwoman Virginia Foxx (R-NC) of the Subcommittee on Higher Education, and Representatives Alcee Hastings (D-FL) and Carolyn McCarthy (D-NY) for bringing this amendment to the floor and rallying support to get it passed.

"With unemployment rates so high, it is a mystery why the Education Department would propose a rule that makes it harder for students to get a college degree that prepares them for the working world. Gainful Employment unfairly singles out for-profits schools, whose student bodies are comprised of 39% minorities due to their flexible course loads and skill-focused classes. The U.S. Chamber of Commerce warns that if the 'Gainful Employment' rule is implemented, it will result in 100,000 jobs lost. Now is not the time to make it harder for minority students to get a college degree.

"We urge the Senate to fully support this amendment and protect college options for minority students who rely on federal financial aid."

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