Tom Harkin

Mr. HARKIN

Mr. HARKIN. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HARKIN. Madam President, I wish to take a few moments to talk about the Republican budget, the so-called Ryan budget in the House. This has been widely condemned, of course, for its plan to end Medicare and for its radical cuts to Medicaid. But I have come to the floor to highlight yet another extreme element of that Republican budget--its unprecedented assault on education funding and the grave threat this poses to school reform efforts across the United States. This Republican budget would slash funding for education by 15 percent next year--2012. Even more drastic cuts to education funding would come in each of the years to follow. These Draconian cuts to education could not come at a worse time for America's public schools. The final budget agreement for the current fiscal year reduced education funding by $1.3 billion. It zeroed out, for example, the successful Striving Readers Initiative, the only comprehensive Federal program to help struggling adolescent readers. I might just add, that budget ended all literacy programs for kids in America funded by the Federal Government. The Federal Government now does not fund one literacy program in America. That is how bad it has gotten. Meanwhile, cash-strapped State and local governments are slashing school budgets and firing tens of thousands of teachers. In Texas, Gov. Rick Perry has called for a $10 billion cut in education funding. In New York City, the mayor, Mike Bloomberg, has proposed laying off 6,000 teachers. I have an unusual perspective, as both the chair of the appropriations subcommittee that funds our Federal education programs as well as the chair of the authorizing committee, the Health, Education, Labor, and Pensions Committee, which authorizes education programs. There is no question in my mind that combined Federal, State, and local budget cuts pose a grave threat to education reform efforts across the country, just as these efforts are reaching a critical mass. Here is why. Forty-eight States and the District of Columbia have collaborated to create high-quality common education standards for the first time. The Obama administration's Race to the Top Initiative has jump-started ambitious State-level reforms ranging from expanded charter schools to stricter teacher and prep school accountability. In the HELP Committee, Senator Enzi and I together are working on a bipartisan effort to reauthorize the Elementary and Secondary Education Act. However, it is wishful thinking to expect improvements in school quality at a time when we are laying off teachers, increasing class sizes, and reducing instructional time. I am struck by the fact that the Republican budget's assault on education comes at a time when America's competitors are surging forward. For example, China has tripled its investment in education and is building hundreds of new universities. Even in times of austerity and shrinking budgets, smart countries don't just turn a chainsaw on themselves, they continue to invest in the future and, above all, they continue to boost investments in education. So as we go forward with education reform in the United States, we are building on strength. Most kids in affluent communities already attend high-quality public schools and go on to higher education. Our challenge is to ensure that all American students have this opportunity, including the nearly 20 percent of children who live in poverty. Again, certainly money is not the only factor in creating high- performing schools, but it does take money to modernize school facilities, to hire highly qualified teachers, to create effective assessment systems, and to provide appropriate instructions for students with special needs. To demand reform without resources is to set up students and teachers to fail. Let me repeat that. To demand reform without resources is to set up the students and the teachers to fail. In the months ahead, Congress will be focused on reducing the deficit and trying to prevent a default on America's debt obligations. Of course, this is appropriate. But it must not preclude sustained, strong investments in education for our young people. We need to invest more, not less, in helping States and districts to close the gap between world-class schools that are in the affluent suburbs and the struggling schools in poor, urban, and rural communities. We need to provide resources to ensure that the goal of graduating students who are college and career ready applies equally to all students, including kids with disabilities, including English language learners. In the face of steadily rising college tuition, we must maintain the maximum Pell grant so kids from low-income families can achieve the American dream and get a college education. Pundits have attributed the GOP loss in the special election in New York's 26th congressional district to voter anxiety because of the plan the Republicans have to end Medicare. So a lot of the pundits have said: Well, this recent election in New York's 26th congressional district is the result of that. But public dissatisfaction with the Republican budget goes way beyond Medicare. Americans see this budget as unbalanced and unfair, especially when it comes to education. The American people are asking: Why do the Republicans insist that trillions of dollars are available for new tax cuts, mainly for big businesses and the wealthy, but supposedly we cannot afford to sustain funding for public education? This is a classic case of eating your seed corn. It is an approach that does not remotely reflect the priorities and values of the American people. The Republican budget, as I have said before, is premised on the idea that America is poor and broke, that our best days are behind us, and that we have no choice but to slash investment required in order to keep our middle class strong. I totally disagree. Many Americans are hurting because of the struggling economy, but the United States overall remains a tremendously wealthy and resourceful nation. Quite frankly, we are the richest Nation on the face of the Earth. Even further, we are the richest Nation in human history. We have the highest per capita income in America of any major nation. So one has to ask the question, if we are so rich, why are we so poor? The question is not the lack of money. It is not the lack of wealth. It is because the system is broken. We have a system malfunction in this country, and we have to right that system. Because we are an optimistic, forward- looking people, we can do it. We can work together, and we can meet any challenge. But we expect the government to be on our side--not holding us back, not dragging us down, not shorting our futures, not telling people who are low income or recent immigrants to this country or kids who do not have a good start in life that, sorry, we cannot give you a world-class quality education, we cannot afford to have the best teachers, we cannot afford to have good schools for you. If you happen to be wealthy and live in a wealthy area that has high property taxes and you have a good school and you have good teachers, good for you. But if by happenstance of birth you are born to a family who does not have any money and maybe your parents never went to college--maybe, as I said, they are new immigrants to this country; maybe they do not speak English that well--if you are in a poor urban area or a poor rural area and you have low-quality schools, low-quality teachers, chances are you never had any early learning available to you. So when you started kindergarten, you were already way behind those kids in that affluent school in high-income areas. Is that what we are about? Is that what we are trying to say, that we are going to have this kind of almost class warfare, that if you are born wealthy and stuff, you have it made but if you are born poor, forget about it when it comes to education? That is what the Republican budget says. We are not going to have quality public education for our kids. As I said, this does not reflect the values of the American people. We want to make sure our public education system is good for all children, that they all have the best qualified teachers, that they have good schools, good facilities, the latest technology, that they are challenged to do their best, and that they know if they do their best and if they study hard and they get good grades, they will be able to go to college and not have a mountain of debt hanging over their heads when they graduate. We have done great things as a society, things we have had to do together, which we could not do as individuals, such as building an interstate highway system, a rail system, mapping the human genome, and, again, creating world-class universities. We have done this. We have done this working together, as something we can do together as government that we cannot do as individuals. Through our government, we come together to provide a ladder of opportunity to give every citizen a shot at the American dream--a ladder of opportunity that includes Pell grants, the GI bill, job training, early learning, and, yes, world-class schools. I am convinced the great majority of Americans share this positive vision. Again, we are determined to bring deficits under control. But we cannot eat our seed corn. We have to make smart investments in education, and we refuse to be dragged backward into a winner-take-all society, where the privileged and the powerful seize an even greater share of the wealth, even as our schools are crumbling and our middle class is struggling and declining. For nearly half a century, robust Federal investments in quality public schools and access to higher education have been a critical pillar undergirding the American middle class. The Republican budget will take a jack hammer to that pillar. This, I believe, is a grave mistake. The middle class is the backbone of our Nation. It is time our leaders show the backbone to defend it. Amendment No. 390 Madam President, I would like to take this opportunity also to strongly oppose the amendment offered by the Senator from Maine. If passed, the amendment would impose severe and unnecessary burdens on agencies charged with protecting the American people and would severely weaken our vital health and safety protections. My Republican colleagues have tried hard to make the word ``regulation'' into a bad word. They have created an absurd caricature: the nameless bureaucrat arbitrarily imposing random rules and regulations on businesses, and their sole purpose is making sure the business fails. That is ridiculous. Most Americans understand this is grossly distorted. The truth is, the amendment offered by the Senator from Maine, Ms. Snowe, is not about the government working more efficiently--a goal we all share--it is about using the sort of feel-good slogan of ``regulatory reform'' as cover for an effort to paralyze the ability of the government to enforce vital health and safety protections. In effect, the Snowe amendment ought to be called the ``buyer beware'' amendment. Go back to the days when the snake oil salesman could sell you anything and you took it at your own risk, where we did not have safe drug laws and food safety laws and things such as that to protect people. It was just a buyer beware society. Do we want to go back to that? I believe the American people want clean air and clean water and to know they are not adulterated. The Snowe amendment would weaken environmental protection. I believe the American people want to make sure their children's toys are safe, that they are not loaded with mercury and other elements that will destroy their health. The Snowe amendment would mean weaker protection of toys and other consumer products. I believe the American people want workers to come home safely at the end of the day. The Snowe amendment would mean more injuries and deaths in mines and other hazardous workplaces. I believe the American people want the food they eat to be safe and untainted. The Snowe amendment could mean we cannot enact implementing regulations for our recent bipartisan food safety bill, which we just passed last year--bipartisan. But when you pass a bill, obviously, the Food and Drug Administration is going to have to issue regulations. Well, the Snowe amendment would severely restrict that. Again, you would be playing Russian roulette with the food you eat. Maybe it is safe; maybe it is not--buyer beware. I believe, in the wake of the financial meltdown of 2008, which almost caused another Great Depression, the American people want oversight and regulation of banks and other financial institutions. The Snowe amendment, again, could mean banks would remain free to do the same reckless, predatory practices that nearly wrecked our economy. There are already important checks on regulatory authority. The law already requires agencies to perform comprehensive assessments of the impact of regulations on businesses and local government. There is an extensive notice and comment period under the Administrative Procedures Act, where those impacted by potential rules--including small businesses--are given an important say in regulation. Agencies already engage in regulatory flexibility analysis to ensure that their oversight does not needlessly overburden small businesses. In contrast, the aim of the Snowe amendment is to impose additional hurdles to dramatically slow down the issuance of critically needed rules and, in many cases, stop the rulemaking process altogether. For example, the Snowe amendment would require an analysis of ``indirect'' impact on small businesses--``indirect'' impact, whatever that means. Well, let me cite perhaps an example. Instead of the Mine Safety Health Administration spending its resources protecting our miners, the amendment could require the agency to determine whether a new mine safety standard indirectly harms, say, a small paper company that supplies paper to the mine's corporate offices. This is a ridiculous waste of resources and time. So we do not even know what the ``indirect'' impact means. That could mean almost anything. Likewise, the amendment would permit businesses to sue to block a rule even before it is finalized. In other words, businesses could seek to litigate a proposed rule. I often hear my Republican colleagues speak against activist judges. I can think of few things more activist than for unelected judges to review a rule even prior to the agency performing the lengthy notice and comment process to finalize a rule. It already takes years for agencies to promulgate health and safety rules. This amendment would exacerbate the problem and further clog up the court system. Think about all the court cases that would be filed just on a proposed rule, before it even goes to the comment period, before it is even finalized. Moreover, the bill requires an agency to review the impact of all-- all--its current rules on small businesses to determine if a rule must be modified, rescinded or continued unchanged. In other words, rather than addressing new problems and implementing new acts of Congress, an agency would need to spend all its time reviewing past, settled regulations, some of which may have been in effect for the last 50 years. To its credit, the Obama administration already is conducting a comprehensive, rigorous review of all rules in order to see which ones should be repealed, modified or kept in place. We should let this careful review take place before implementing severe constraints on agency rulemaking. So the Snowe amendment would make government less responsive. It seeks to cripple the government's ability to make sensible lifesaving regulations. Again, it ought to be titled the ``buyer beware'' amendment. If you like living in that kind of a society, I suggest you go to some Third World country, where you do not know what you eat or what you drink or whether the air you breathe and the water you consume is safe and healthy. If that is the kind of America you want, you should support the Snowe amendment. But if you want an America where our kids are safe from dangerous toys, where you know the food you eat is going to be safe and the water you drink and the air you breathe, where you know there are safety rules in place so you are not going to get unduly injured or harmed at the workplace, if you believe this is the kind of America that operates better and is more functionally productive than a buyer beware kind of society, then I suggest you should oppose the Snowe amendment. Again, I urge my colleagues to oppose the Snowe amendment as ill- advised. Again, it is a part of a bill that has never gone through the committee hearing process. If nothing else, it ought to go through committee, have hearings, and let's see if it has any support at all out there before we bring it to the floor of the Senate. I urge my colleagues to defeat the Snowe amendment. I yield the floor.

Mr. HARKIN

Mr. HARKIN. Mr. President, I wish to announce that the Subcommittee on Children and Families of the HELP Committee will meet on Thursday, June 9, 2011, at 10:00 a.m. to conduct a hearing entitled ``Getting the Most Bang for the Buck: Quality Early Education and Care.'' For further information regarding this hearing, please contact Jessica McNiece at the subcommittee on (202) 224-9243.

Mr. HARKIN

Mr. HARKIN. Mr. President, I have come to the floor, today, to introduce the Eunice Kennedy Shriver Act. I am very pleased that Senator Blunt has joined me in introducing this legislation; he and I are both long-time supporters of the Special Olympics and Best Buddies programs authorized in this legislation. Equally importantly, we are continuing the bipartisan support that this legislation has historically enjoyed. The Special Olympics program is respected around the world as a model and leader in using sport to end the isolation and stigmatization of individuals with intellectual disabilities. For more than 40 years, Special Olympics has encouraged skill development, sharing, courage and confidence through year-round sports training and athletic competition for children and adults with intellectual disabilities. Through their programs, Special Olympics has helped to ensure that millions of individuals with intellectual disabilities are assured of equal opportunities for community participation, access to appropriate health care, and inclusive education, and to experience life in a nondiscriminatory manner. Special Olympics gives athletes with intellectual disabilities the tools they need to be included in society, and it gives society the understanding and tools it needs to include them. I can speak first-hand about what a rewarding experience it is for all of us who have been involved in Special Olympics. In 2006, my state of Iowa hosted the first USA National Summer Games. Thousands of athletes, volunteers, coaches, and families attended our Games, in addition to 30,000 fans and spectators. Ames, IA, was transformed into an Olympic Village, and it was thrilling to experience. Similarly, the Best Buddies program is dedicated to ending the social isolation of people with intellectual disabilities by promoting peer support and friendships with their peers without disabilities. The aim is to increase the self-esteem, confidence and abilities of people with and without intellectual disabilities. Equally important, the Best Buddies program has provided opportunities for integrated employment for individuals with intellectual disabilities. Research shows that participation in activities involving both people with intellectual disabilities and people without disabilities results in more positive support for inclusion in society, including in schools. This bill is named in honor of Eunice Kennedy Shriver, who devoted her life to improving the lives of people with intellectual disabilities around the world. Mrs. Shriver founded and fostered the development of Special Olympics and Best Buddies, both of which celebrate the possibilities of a world where all people, including those with disabilities, have meaningful opportunities for participation and inclusion. In addition to reauthorizing the former Special Olympics Sports and Empowerment Act and providing an authorization for the Best Buddies program, this bill will also allow the Department of Education to award competitive grants to support increased opportunities for inclusive participation by individuals with intellectual disabilities in sports and recreation programs. I am pleased to be the chief sponsor of this legislation, which will continue our support for these important programs that promote the extraordinary gifts and contributions of people with intellectual disabilities as well as broader community inclusion. I urge all my colleagues to join with me and Senator Blunt in supporting this very worthy bill.

Mr. HARKIN

Mr. HARKIN. Mr. President, I have come to the floor, today, to introduce the Eunice Kennedy Shriver Act. I am very pleased that Senator Blunt has joined me in introducing this legislation; he and I are both long-time supporters of the Special Olympics and Best Buddies programs authorized in this legislation. Equally importantly, we are continuing the bipartisan support that this legislation has historically enjoyed. The Special Olympics program is respected around the world as a model and leader in using sport to end the isolation and stigmatization of individuals with intellectual disabilities. For more than 40 years, Special Olympics has encouraged skill development, sharing, courage and confidence through year-round sports training and athletic competition for children and adults with intellectual disabilities. Through their programs, Special Olympics has helped to ensure that millions of individuals with intellectual disabilities are assured of equal opportunities for community participation, access to appropriate health care, and inclusive education, and to experience life in a nondiscriminatory manner. Special Olympics gives athletes with intellectual disabilities the tools they need to be included in society, and it gives society the understanding and tools it needs to include them. I can speak first-hand about what a rewarding experience it is for all of us who have been involved in Special Olympics. In 2006, my state of Iowa hosted the first USA National Summer Games. Thousands of athletes, volunteers, coaches, and families attended our Games, in addition to 30,000 fans and spectators. Ames, IA, was transformed into an Olympic Village, and it was thrilling to experience. Similarly, the Best Buddies program is dedicated to ending the social isolation of people with intellectual disabilities by promoting peer support and friendships with their peers without disabilities. The aim is to increase the self-esteem, confidence and abilities of people with and without intellectual disabilities. Equally important, the Best Buddies program has provided opportunities for integrated employment for individuals with intellectual disabilities. Research shows that participation in activities involving both people with intellectual disabilities and people without disabilities results in more positive support for inclusion in society, including in schools. This bill is named in honor of Eunice Kennedy Shriver, who devoted her life to improving the lives of people with intellectual disabilities around the world. Mrs. Shriver founded and fostered the development of Special Olympics and Best Buddies, both of which celebrate the possibilities of a world where all people, including those with disabilities, have meaningful opportunities for participation and inclusion. In addition to reauthorizing the former Special Olympics Sports and Empowerment Act and providing an authorization for the Best Buddies program, this bill will also allow the Department of Education to award competitive grants to support increased opportunities for inclusive participation by individuals with intellectual disabilities in sports and recreation programs. I am pleased to be the chief sponsor of this legislation, which will continue our support for these important programs that promote the extraordinary gifts and contributions of people with intellectual disabilities as well as broader community inclusion. I urge all my colleagues to join with me and Senator Blunt in supporting this very worthy bill.

Mr. HARKIN

Mr. HARKIN. Mr. President, during my floor speech last Thursday on for-profit education, I neglected to insert a letter into the Record. I ask unanimous consent that the following letter from Apollo Education Group be printed in the Record.

Mr. HARKIN

Mr. HARKIN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HARKIN

Mr. HARKIN. Mr. President, over the past 6 months, I have come to the floor several times to discuss the findings of an ongoing investigation by the Health, Education, Labor, and Pensions Committee into the for- profit education sector, and the growing role they play in higher education. This investigation has been now ongoing for over a year. Today, I want to focus my remarks on our men and women in uniform and how the for-profit schools are focusing on recruiting them to their schools, and what this means for the taxpayers of America. The first GI bill made it possible for many of the servicemembers returning from World War II to go to college and get ahead in life. In the process, that ushered in a new era of American prosperity. That GI bill continued, of course, with Korea, through the Cold War, and through Vietnam. I myself used the GI bill after my service time so I could go to law school. Over the decades, we have built on that success by extending Federal financial aid to active-duty members of our Armed Forces, and indeed to all Americans who seek to build a better life through higher education. On the whole, this has proved to be one of the Federal Government's smartest investments--an investment in human capital that has produced huge dividends for our Nation. We in Congress have been eager to ensure that this new generation of veterans returning from Iraq and Afghanistan--those who sacrificed so much for our country--are getting the education benefits they earned and the quality of education they deserve. Led by Senator Webb and others, we have enacted new laws and expanded existing programs to provide generous new educational benefits to veterans, to active-duty servicemembers, and to their families. This is a historic achievement, and I am sure all of us were proud to support it. Implemented in August of 2009, the post-9/11 GI bill provides that veterans who serve 90 days or more on active-duty effort, after September 10, 2001, are eligible for up to 36 months of educational benefits; and for the first time ever in history, veterans can transfer these benefits to a spouse or to a child. Over the last decade, the Department of Defense has also expanded aid available to active-duty soldiers, sailors, and airmen through its tuition assistance program. This program will pay up to a maximum of $4,500 a year toward a servicemember's classes. Also in 2009, Congress created the military spouse career advancement account, designed to expand employment and career opportunities for active-duty spouses, and that provides for a grant of $4,000 over a 3- year period of time. When the Congress acted to give new and better benefits to veterans and active-duty members and their families, we fully expected that for- profit schools might have an important role to play in providing higher education. Obviously, they are flexible, and some of the primary work done is suited to veterans and active-duty soldiers and students juggling work and family obligations. During my time in the military, of course, we had the University of Maryland, which still obviously provides a lot of online work. At that time, it was called ``distance learning,'' and you did it by mail. The University of Maryland provided a lot of educational benefits for many years to active-duty personnel serving in far-flung places around the world. Of course, that was not a for-profit school; that was a nonprofit school. Unfortunately, when we enacted this whole new benefits package for servicemembers and veterans and their families, we didn't anticipate what would happen by opening up a new stream of funding to the for- profit schools. We didn't foresee that the for-profit sector, which is eager to please Wall Street investors, would go after student funding aggressively, in ways not in the best interests of veterans and servicemembers. We didn't recognize that by allowing servicemembers to combine, transfer, and borrow against these various Federal benefit packages we were giving for-profit schools an opening to enroll servicemembers, veterans, and family members in very expensive educational programs. My committee's investigation over the past year has revealed an industry dominated by the very same Wall Street companies and equity investors who brought about the subprime mortgage crisis. These investors are focused on rapid growth and quick profits. In relatively short order, for-profit colleges and universities have succeeded in enrolling 10 percent of the students and claiming fully 25 percent of the Federal financial aid budget, including $7 billion a year in Pell grants. So the for-profit sector has 10 percent of all of the students in the country and gets 25 percent of all Federal financial aid. Many of these companies generate big profits, and there is a big problem. The committee has compiled data for 30 companies that own for- profit schools, including the 15 largest publicly traded ones, showing that more than half of the students these institutions enroll drop out within the first year. Two-thirds of the students who are there for a 2-year program drop out in the first year. Some of the worst performing institutions have been the most aggressive to enroll servicemembers and veterans. Because profitability and the for-profit education industry is driven by enrollment growth, my committee's investigation has focused largely on the extraordinarily aggressive marketing and recruitment practices at these schools. Building on the findings of last year's undercover investigation by the GAO, which found abusive recruitment practices at each of 15 campuses visited, we have uncovered additional evidence that misleading and deceptive recruiting tactics are not the exception but the norm. Several months ago, on the floor of the Senate, I spoke about documents uncovered in my investigation. Those documents instruct recruiters in tactics designed to manipulate and emotionally exploit potential students in order to convince them to enroll. As I will demonstrate later in my speech they are going after the military by exploiting fear, uncertainty, and doubt. We should be concerned that Congress may have unintentionally created an opening for the current generation of veterans and active-duty servicemembers to be victimized by these abuses simply because of their eligibility for expanded Federal aid that we enacted in the Congress. My committee found evidence that large for-profit schools are aggressively recruiting active-duty servicemembers and veterans expressly because of their generous educational benefits packages. It is not just that these military benefits provide a new revenue stream for the companies. The point is that it is an especially valuable kind of revenue stream for these companies--more valuable than even going after nonveterans and non-GIs. Why is that? Well, military money helps these for-profit schools to meet a key statutory requirement that no more than 90 percent of their revenue can come from Federal financial programs. That is in the law. No more than 90 percent of the income coming into a for-profit school can be from Federal financial programs. If a school is getting close to that 90 percent, guess what they do. They go after military people. Why is that? Because a military person, active duty or veteran, enrolled in a for-profit school doesn't count towards the 90 percent; it counts towards the 10 percent. So the school could actually have--and there are some--92 or 94 percent of all their money coming from Federal financial programs, even though the law says you can only get 90 percent, because military doesn't count. So you can see why, when close to 90 percent, they would want to go after the military. And that is exactly what is happening. With their eyes on this 90/10 ratio, the for-profit schools have moved aggressively to exploit this opportunity. They have created marketing plans and a sales force specifically designed to target and enroll as many veterans, servicemembers, and family members as possible. Schools spend billions on sophisticated marketing campaigns and large sales teams to get those students in the door. Documents obtained by the HELP Committee paint a picture of an industry with a laser-like focus on enrolling military students. For example, I have a 56-page document from Kaplan. This lays out their strategy for recruiting military students. If you go through it, you will see their objective. As I said, they have a laser-like focus on enrolling military students. Objective No. 1: Grow our military enrollments to 9,000 per year by 2011. At the time, Kaplan signed up about 2,200 military students each year. They were aiming at more than a four-fold increase in the military. The document goes on to lay out the marketing and sales plan for achieving this enormous growth. This is in this document: Drive awareness via print advertising in key military publications and targeting key military installations. To do this, the document suggests that Kaplan plans to spend $30 million over 3 years for new military-specific recruiting staff, advertising, and public relations--just on the military. In a later brainstorming exchange between Kaplan executives, the No. 1 item on the list of initiatives to deal with Kaplan's 90/10 because they were getting close to that 90 percent was: Accelerate military billings/collections. Go to DC and pick up the check if you have to. Go get that military money so we do not go over that 90-percent limit. At Education Management Corporation--another for-profit school--the story is similar. Let me quote from a 2010 memorandum prepared by a consultant to the CEO of EDMC, Education Management Corporation. The memo begins: Thanks for the call outlining the interest of EDMC in learning more about potential areas of funding that could add revenue that would also address the 90/10 issue. No. 1 on the list says: Probably one of the most important potential short and long-term targets for EDMC are the 800,000-plus military spouses who have been authorized-- And this is in italics-- for the first time in history, for a one-time entitlement of up to $6,000 . . . An aggressive effort to reach these spouses at the military bases with various career fairs, direct communications, and visibility with the Office of Military Families in Washington would be very important. A subsequent e-mail message between EDMC's executives recommends that the company should be ``leveraging military spouse benefits to the fullest extent possible'' in order to overcome the 90/10 regulation. Executives of for-profit schools are candid about the value of military students in trying to ease investors' concerns about regulatory compliance. The CEO of Bridgepoint Education told investors: Our military enrollment grew from 1 percent in 2007 to 17 percent at the end of September 2009. He went on to say: We believe that when we are able to report our 90/10 for 2009 that it should decrease due to our penetration in particular into the military market. We know these for-profit schools, in their own words, are aggressively pursuing military personnel and their families. How are they enticing them to enroll? A Kaplan training manual entitled ``Military Learning Modules'' tells recruiters how to utilize fear, uncertainty, and doubt in the sales process with regard to competitors' offers and teaches them to overcome objections that potential students may raise in signing an enrollment agreement. This is the one from Kaplan: Fear, uncertainty, doubt. This technique was originally created within the computer hardware industry and uses these emotions to attempt to influence perceptions or beliefs. The technique is especially effective when prospects introduce the ``need'' to examine other online schools. In other words, a Kaplan recruiter calls up a veteran or a military person on Active Duty and wants to get them to enroll. If that person says: I have seen some ads for Phoenix, I have seen ads for ITT and others, maybe I will look them up, they want to use fear, uncertainty, and doubt when prospects introduce the need to examine other online schools. Statements such as the following: instill fear, uncertainty and doubt regarding the features of competitors' programs. It is one thing if you are selling a keyboard or hard drive. That is one thing. But when you are doing it to enroll a young man or woman whose family may never have gone to college--they enlisted in the military out of a patriotic sense of duty; they have had no college experience whatsoever; maybe they did not do all that well in high school, but now they are thinking about what they are going to do, and they get hit with this. And I find really objectionable when these for- profit schools exploit fear, uncertainty, and doubt in our young military people. I will have more to say about how onerous it is when they do this to get them to sign up with their school, to get students take taxpayers' money and turn it over to the school, only to find out they do not have any support, nothing to help them, and they drop out within a year. They have debt. They went through all their military benefits, which they can never get back, and the for-profit schools have the money. A military recruiter at Colorado Technical University--another for- profit school--owned by the publicly traded Career Education Corporation, told the New York Times: There is such pressure to simply enroll more vets--we knew that most of them would drop out after the first session . . . Instead of helping people, too often I felt like we were almost tricking them. Robert Songer, the coordinator of all education programs for servicemembers at Camp Lejeune Marine Corps Base in North Carolina, expressed his reservations to the Bloomberg news service. Some of these schools prey on Marines . . . Day and night, they call you, they e-mail you. These servicemen get caught in that. Nobody in their families ever went to college. They don't know about college. These recruiting tactics are nothing short of disgraceful. When students are enrolled through deception or fear, not only are they being tricked, they are also more likely to be unprepared for the challenges of college. These strong-arm, emotionally abusive tactics are indicative of schools that see students strictly as a means to an end of higher profits. They appear to have little or no interest in providing students the academic help and support they need to succeed. The end result is that servicemembers, veterans, and their spouses end up enrolling in high-cost programs, dropping out in staggering numbers, often winding up with a mountain of student debt. This often happens despite the availability of similar or better quality programs in the public and nonprofit sectors of higher education. The tactics have certainly paid off for the company's bottom line. I released a report last December documenting the absolutely tremendous increase in the amount of money these companies are receiving from military education programs. Building on the already substantial growth in revenues generated from the traditional financial aid programs-- which went, by the way, from $14 billion in 2005 to $29 billion in 2009--the relentless focus for-profits have brought to military recruiting has yielded an astonishing growth in the funds they get both from the Department of Defense and the Department of Veterans Affairs. Again, keep in mind we are talking about two entities: Active-Duty personnel and veterans. As the new post-9/11 GI bill was implemented, 18 large for-profit operators pushed their intake of VA dollars from $26 million in 2006 to an astonishing $286 million in 2010. This is what happened. This chart illustrates what happened in VA. Here we are at $26 million in 2006; $25 million in 2007; $27.6 million in 2008; and in 2009, when we passed the bill, it goes up to $55 million. Look what happened in 1 year, 2009, $55 million up to $285.8 million in 1 year. That is the amount of money they took in. That is just the Veterans Affairs funds. The same companies increased their collection of Department of Defense benefits by 337 percent--$40 million in 2006 to $175 million in 2010. Again, this is for Active Duty. We see the steady increase all the way into 2010--$40 million in 2006 to $175 million in 2010. This did not just happen; it happened because the for-profit companies decided they were going to go after the military because they were getting close to their 90-percent threshold. Keep in mind, these dollars do not count towards the 90-percent, so they can keep under the threshold by getting more military students. Let's be clear. These exorbitant amounts of Federal dollars are not going to small, family-owned institutions. They are going to some of the largest Wall Street-owned companies. Out of the $640 million in post-9/11 GI benefits that flowed to for-profit schools just in 2009 and 2010--that is $\1/2\ billion; $640 million, $\1/2\ billion in 1 year--$439 million went to the 15 publicly traded companies. This amount is equal to 69 percent of the military money going to for-profit schools and 25 percent of all post-9/11 GI bill benefits. Let me repeat that. Let's just say this: 25 percent--one-fourth--of all of the GI bill benefits post-9/11 went to 15 publicly traded companies. It would be one thing if the for-profit schools were using this for educational expenses, but unfortunately the lion's share of that money--taxpayers' dollars--went into profits, marketing, and-- guess what--Wall Street executive salaries and bonuses. What are we getting in return for this enormous investment of taxpayers' dollars? We are getting a lot of questions. We know student outcomes for the general population at for-profit schools are pretty dismal. On average, 55 percent of students who attend these schools drop out within a year, and there is no evidence that military students are faring better. Eight of the ten top recipients of VA dollars see more than half of the associate degree students they enroll drop out within the year, and five of the schools see more than a 60-percent drop. This is what our investigation revealed. Here are the 10 schools receiving the most Department of Veterans Affairs funds. You see ITT, and they got the most--$79.2 million, and that is a 1-year amount. Of those who enrolled for a 4-year degree program, 44 percent withdrew; of those who signed up for a 2-year program, 53 percent withdrew. We look down here to Kaplan, and they got $17.3 million. On their bachelor's degree, 68.2 percent withdrew--69 percent of the 2-year students withdrew in the first year. Here is with what is startling. That is bad enough as it is, but our investigation showed that neither the Department of Defense nor the Department of Veterans Affairs has any method to assess what is happening to these students. The money flows out, and neither the Department of Veterans Affairs nor the Department of Defense has any way to assess whether they are getting a good education. I might also add, Senator Carper has looked into this in his subcommittee. He has looked into this, and we have discussed the possibility of working on something to get the Department of Defense to start taking better care of their Active-Duty personnel and the Department of Veterans Affairs to take better care of veterans. We need to have better assessment of what is happening to these students, how much debt they are accumulating, and what is happening to their education. We are basically handing over huge and growing sums of military money to for-profit schools without any ability to assess whether these schools are giving our Active-Duty members or veterans the kind of a quality education they deserve. The complaints I have gathered in the course of our investigation point to a deeply disturbing willingness on the part of for-profit schools to exploit veterans. I repeat, our investigation shows clearly that a number of these for-profit schools are out to exploit veterans. I received this letter from a veteran who attended ITT Technical Institute, the greatest recipient of VA funds. Here is what he said: Unlike other institutions I reached out to, as soon as I expressed interest in ITT Tech, they began to actively and aggressively pursue me. Minutes after I filled out an online form, a recruiter called me. He then called every day, telling me it was urgent for me to enroll. The letter writer notes that due to the high cost of tuition, he had to take out loans. But he writes: The expensive tuition did not seem to go toward a quality education. He concludes with this: Within 2 months of leaving ITT Tech, they sent me a bill for $2,000 and a transcript that showed clear signs that it was altered in a way to specifically make my positive balance disappear and create a negative balance. This letter writer ends with these chilling words: I regret attending ITT Tech. The institution provided at best an absolute minimum education and left me with nearly insurmountable debt. This is a veteran. Here is another veteran who attended Bridgepoint Education Inc.'s Ashford University who wrote the following: I was extremely disappointed, confused and angry. I felt I had been misled, deceived or even outright lied to in an effort to gain my contractual agreement. He was repeatedly assured by Bridgepoint recruiters that his post- 9/11 GI bill benefits would cover the entire cost of his degree, only to find out after he was enrolled that he would owe close to $11,000. Another student, this one at the University of Phoenix, sent this letter to the Arizona attorney general after trying to resolve his complaint with the school: I have been a police officer for over 20 years. I am also an Iraq war veteran. I believe that the University of Phoenix is using deceptive practices in order to lure students into the school. The enrollment counselors tell students that they should be complete with their course of study in a short period of time fully knowing exactly how long it is going to take. The enrollment counselors eventually tell the student it is going to take a lot longer to finish their program but not until the student has committed all of his financial aid and invested so much money that it would be senseless to leave and waste his invested time and money. A letter to the attorney general of Arizona. What are the consequences for a student who enrolls at one of these schools but is not satisfied with their experience? The post-9/11 GI Bill benefit package can be depleted rapidly. If benefits are used up without completing a program or for credits that can't be transferred, the benefits cannot be recovered. In fact, because of the high tuition, many students, have to apply for additional grants or loans to pay for school. That means many veterans are pressured into signing up for one of these for-profit schools, told they have free money to pay for their tuition and then, all of a sudden, they find that is not quite enough money. Now they have to apply for a loan. They get a loan, they drop out within 1 year or so, the schools keep the money--some of it grant money, some of it loan money--and the GI or the military person is left with debt and no diploma. Here is a letter addressed to the Ohio for-profit school regulator that just tears your heart out. This is from a mother: Normally, a 26-year-old man doesn't need his mom advocating for him. But this is anything but a normal situation. I expected my son to be changed by his tour of duty in Iraq. But I could not have been prepared for the reality of those changes. My son struggles on a daily basis with symptoms from PTSD (post-traumatic stress disorder) and TBI (traumatic brain injury). He suffers from bouts of depression, anxiety, headaches, nightmares, vision problems, mental confusion, insomnia, and many other symptoms. You have to pretty much ``bottom-line'' your conversations with him. He can't mentally process a lot of details. If you continue with your details, he is done with the conversation, unless you can return to a quick ``bottom-line.'' The mother goes on: It is my belief that the ITT Representative may have quickly figured this out and taken advantage of the opportunity. I remember when he called from ITT because I was on my way out to an important occasion. He said the Representative told him he needed a co-signer just so he could start school immediately, but not to worry about it, because the military was going to pay for everything, even give him money to live on and pay his expenses. He sounded so hopeful, something I hadn't heard from him since before the war. It was really hard for him to admit he couldn't continue going to school. He said he just couldn't retain the material. It became too stressful for him to continue. My son is a proud, young man. He is not looking for pity or charity. He is embarrassed that he believed what he was told by the ITT Rep. He could hardly come around me when he found out that Sallie Mae was calling me for payment of his loan. Veterans with PTSD commonly isolate themselves from family and friends. This made it even worse. As a mother and a human being, I am outraged this kind of predatory lending tactic is used on anyone, but especially on an American soldier who gave everything he had and almost lost his life many times, and who continues to suffer. I will pursue this, on my son's behalf, until someone listens and forgives these loans. Thank you all for all of your effort, it is very much appreciated. This situation is unacceptable. It is unacceptable that Active-Duty military personnel and veterans using their hard-earned benefits are becoming victims of these kind of high-pressure tactics of the for- profit schools--enticing them to enroll, taking their money, causing them to go even further into debt, and then not giving them any support whatsoever. As I said before, the agencies distributing this money do not investigate or act on the reported abuses of for-profit schools. They just don't. Earlier this month, the GAO released a report concluding that the VA still faces numerous challenges in implementing a program to start to begin interventions. Many for-profit schools have succeeded in building a highly profitable business structure while failing to provide the student services, a learning environment, and career services that would enable their students to graduate and succeed. The Federal Government must be vigilant to ensure that poor performing for-profit schools with huge dropout and student default rates are not allowed to continue to receive billions of dollars in Federal taxpayer money every year. We owe this to taxpayers, but we also owe this to the men and women who served and sacrificed for our Nation in uniform. That is why I wanted to take the time on the floor today to point out this new and disturbing finding of our committee, how much these schools are targeting military personnel, how they are using high-pressure tactics to get them to enroll because they know they can get the money to help keep them below the 90-percent threshold. It is shameful that these for-profit schools are allowed to get by with this. They continue it today. They continue reaping huge profits, paying their CEOs and their executives enormous amounts of money. Yet our men and women in uniform, our GIs, who are taken in are not provided any help or support but now are saddled with a lot of debt or have used up their GI bill benefits. Maybe now they want to go to a community college, somewhere to really get a good education, and they find out they cannot get any more GI bill money. They are done. They gave it all to one of these for-profit schools.

Mr. HARKIN. I ask unanimous consent to have the documents I referred to printed in the Record.

Mr. HARKIN. I am delighted to yield to my friend from Illinois, who has been a strong fighter for students and also, I would say, over the last several years has focused a lot of attention on these abuses of the for-profit schools. Exhibit 1 Excerpts from KHE 267362 Kaplan Military University Agenda Objectives Our Military Value Proposition The Pricing Pilot The phases of the military strategy plan Field team deployment Staffing Plan Appendix A. Pricing Analysis B. Marketing Elements C. Public Relations Marketing D Web Strategy E. American Military University Objectives Grow our military enrollments to 9K per year by 2011 2009 increase from 2.2.K to 6K enrollments 2010 8.8K enrollments 2011 10.5 K enrollments Over 3 years: Bring retention rate on par with traditional students (28 to 34) Improve 90/10 by 5% Provide incremental revenue of $XYZ in year 3 Objectives Transition Kaplan into a ``top of mind'' educator within the active duty & veteran military segments, penetrating the key decision maker and influence (education service officers) Evolve our product offering to attract, retain, and better educate military students Transition current low converting lead & poor retaining student base into highly profitable segment Engage DOD/DHS in custom development of Kaplan Inc. solutions Our Military Value Proposition We have dedicated ourselves to serving our military students with advisors at each step who understand military challenges (admission/FA/Academic Advising/Career Counseling) We have designed our educational platform to help you take full advantage of your military training, experience and any previous college credit We are integrated into military educational system, making it easier for you to enroll and attend Kaplan Go Army Ed, SOC, AEX Portal, Air force ABC program We've built in the flexibility a military lifestyle demands Military Friendly LOA and coursework extension policies We're committed to your success and provide innovative tools to help you succeed in your studies and career such as Kaplan MyPath helping you customize your education We value the sacrifice you have made to our country and provide all active duty and veterans tuition packages, so you can get the quality education you deserve and books are included so there are no unforeseen expenses along the way We recognize that serving is a family commitment, and also offer reduced tuition rates to military spouses We support your lifetime learning needs, including an online high school completion programs, professional development programs, and higher degree programs Tactics Drive awareness via print advertising in key military publications and targeting key military installations ESO Relationship Manager ESO outreach effort leveraging, phone, web, DM, and supporting key military events and periodic base events Target veteran and spousal community via key publications and including military elements in traditional student marketing Continuous development of military offerings, providing tools for high conversion and referral rates Leverage MSG field team in regional areas to drive military events Community College Partners Educational Liaisons to attend military events Business Development efforts at Federal and DOD level Business Development Activities DoD Activities Representing All of Kaplan, Inc. Meeting with High Level Pentagon Officers Pursue Deeper Relationships with branches Veteran Associations Financial Plan Growth Projections Enrollments/Rev 2009 2010 2011 Expense Enrollment Total 6,196 8,848 10,526 MSGField Marketing Expense Total $7,247,975 $10,139,450 $11,632,550 MSG Marketing Net Revenue--Total $4,277,301 $7,957,358 $11,768,938 MSG Lead Generation MSGField NonAggregation Marketing 20082009 Military Marketing Impressions Total Investment Print Out of Home Marketing eNewsletter Direct Mail Total Impressions Operational (Events/Sponsorships) CollateralBase & ESO Booth & Graphics Web Integration and Landing Pages Development Costs Research Pricing Analysis $1,596,050 Marketing Staffing Plan Roles & Definitions Director of Military Marketing & Strategy Oversight over all military marketing including: Lead Generation Web strategy DM/EM Print Collateral Campaign management B2B Marketing (ESO/DOD etc) Product Marketing Direct Product Development Efforts Feasibility on new programs SOCAD/ SOCGUARD/SOCMAR etc Develop Sales Tools VA & other military student programs Single Course Offerings Alternate Delivery Modes Military Newsletter Coordinate Military Research Field Support Marketing Operates on shared services and with 1 direct report Military marketing manager Excerpts from KHE 271429 From: [High-level Executive] Sent: Wednesday, November 11, 2009 4:55 PM To: [High-level Executive]; [High-level Executive] Cc: [High-level Executive]; [High-level Executive]; [High-level Executive]; [High-level Executive]: RE: KU 90/10 Issue [High-level Executive], This has been an area of intense focus over the last 30 days. In mid October we ([High-level Executive], [High-level Executive] and I) projected our 90:10 at year end based on current run rates to be 89.6%. We shared our analysis and actions plans with [High-level Executive], [High-level Executive] and [High-level Executive] and the decision was made to switch SES from an automatic submission process to a manual process. We needed the ability to throttle our submissions based on our cash intake. Although we have implemented a number of initial steps that will help us increase our cash intake in the future, we have a larger list of additional initiatives that we are continuing to move forward and I could walk you through those at your convenience. In response to your suggestions we have added comments below: Accelerate military billings / collection at KU. We have streamlined our internal process on timely billings for our military students. The population of military folks that are awaiting TA vouchers is approximately $400K. Although our records indicate that we are current, we are currently reconciling the entire military group to see if we have any legacy items that were not billed correctly. From: [High-level Executive] Sent: Wednesday, November 11, 2009 12:07 PM To: [High-level Executive]; [High-level Executive] Cc: [High-level Executive]; [High-level Executive]; [High-level Executive]; [High-level Executive]; [High-level Executive] Subject: KU 90/10 Issue Importance: High Other areas to look at quickly/aggressively before yearend: 1. Accelerate military billings / collection at KU. Go to D.C. and pick up the check if you have to. Excerpts from EDMC916000228224 Memorandum Confidential TO: [Director] FROM: [Outside Consultant] DATE: July 8, 2010 SUBJECT: Possible Opportunities for EDMC ``90:10'' Thanks for the call outlining the interest of EDMC in learning more about potential areas of funding that could add students and revenue that would also address the ``90:10'' issue. In light of that dual set of interests, let us briefly review the opportunities we see among recurring sources of government funding, plus some other prospects to consider. THE FEDERAL GOVERNMENT There are a number of emerging opportunities that may present short, medium, and longerterm opportunities that should also be carefully considered, given their size and scale. The Military 1. Military Spouses. Probably one of the most important potential short and longterm targets for EDMC are the 800,000 plus military spouses who have been authorized, for the first time in history, for a onetime entitlement of up to $6,000 that can be used for training, as well as for counseling and other ways to assist them in finding work. We are told by the DOD that the largest demand among the spouses is for healthcare related training, although it can also cover almost all other occupational areas. The Department of Defense has also informed military personnel and their spouses that under the most recent G.I. Bill, they can authorize up to 50 percent of his/her education benefits for the spouse to continue their education. Therefore, in theory, every spouse has access to two separate sources of funding. As you probably know, military spouses are a particularly attractive group of prospective students. Nearly twothirds have at least some college education. The average age is 36, they have strong support systems with the military bases and operations and, of course, they tend to be very stable. The big issue that is driving these new training funds is that when the military do their surveys, the primary reason people give for leaving the military is that their ``spouse is not happy.'' When the military spouses are surveyed, they say the reason they are not happy is that they cannot find a job or, more often, they cannot find a good job for which they believe they are qualified with their background and experience. This is the reason for the focus on providing training and other forms of assistance: so that they can get better jobs and, in turn, encourage their spouses to stay in the military. The ``My CAA'' (My Career Advancement Account) program for the $6,000 entitlement for all 800,000 spouses, however, has been thoroughly bungled. The entire webbased system for enrollment literally collapsed in January. Therefore, the DOD is not authorizing any new CAAs at the moment, and they have spent months trying to restore the system. At least 100,000 military spouses had gained eligibility when the system ``crashed.'' Those are approved for their training. Once My CAA gets up and running, one can safely assume an enormous demand will follow, given all the interest that has been shown by the spouses. EDMC was provided information on becoming a ``Military Spouse Friendly School'' in the past. We would strongly encourage this to be a first step since that is the first stop the spouses see on their websites. No doubt, EDMC is already benefiting from some of this, but an aggressive effort to reach the spouses at the military bases with various career fairs, direct communications, and visibility with the Office of Military Families in Washington would be very important. 2. Enlisted Personnel. Of course, there is the longstanding tuition and other support for most members of the military as an entitlement. 3. Veterans also have a variety of tuition and other benefits, plus preferred eligibility for almost all other Federal programs. Excerpts from EDMC916000228222 From: [High-level Executive]: Friday, July 30, 2010 9:22:51 PM To: [High-level Executive] Subject: FW: Possible Opportunities for EDMC ``90:10'' Attachments: [High-level Executive] 0708 re Opportunties.doc Hi I attended the call yesterday with [Director] [High-level Executive] and [High-level Executive] (Strategic Partnerships). The call as expected was to review the areas that had been highlighted on the report as potential opportunities for 90/10 impacting funding sources. The outcome of the call was a followup call with [High-level Executive] and [High-level Executive] on opportunities on the local Workforce Boards and I took the action item for a followup discussion on ensuring we are leveraging the military spouse benefits to the fullest extent possible. I plan to include [High-level Executive] in the next discussion Do you recommend anyone else? [High-level Executive] Original Message From: [High-level Executive] Sent: Monday, July 12, 2010 6:47 PM To: [High-level Executive]; [High-level Executive] Subject: FW: Possible Opportunities for EDMC ``90:10'' [High-level Executive] and [High-level Executive], After you have had a chance to review please give me a call. I know you are probably wondering why the two of you. [High-level Executive] because of the potential match with BMC and [High-level Executive] because of the impact on OHE. [High-level Executive] Excerpts from KHE 094984 LEARNING OBJECTIVES Define and demonstrate (through role play) each step in the A.C.T.I.O.N. model Differentiate between Outcome Based and Process Based Selling Utilize Outcome Based Selling language effectively Differentiate between Feature, Advantage and Benefit (FAB) Differentiate between Needs and Wants Utilize Open Ended Questioning and Active Listening techniques Utilize Fear, Uncertainty and Doubt (FUD) in the sales process Handle and overcome objectives Utilize trial close techniques KAPLAN

Mr. HARKIN. The Senator is right on the mark. The House wanted to keep the Department of Education from issuing what we call a gainful employment rule, which basically is a rule saying, if you are going to take all this money and you are supposed to be educating kids to get a job or career, what is happening to them? We want to know if they are actually getting jobs. What could be more innocent than that? We want to know how they are doing. Yet the Republican leadership in the House of Representatives wanted to stop the Department from issuing that rule.

Mr. HARKIN. The Senator is absolutely right.

Mr. HARKIN. I say to my friend, yes, we did. On December 8, our committee issued a report, December 8, 2010, a report on, partially-- what the Senator is saying now, how much more expensive these programs are in these schools compared to what they could get, say, at a community college or a nonprofit school in their States. The Senator is right, it is three to four times as much. Plus there is one other thing, I say to my friend. He knows this. When these students go to a small not-for-profit school that you would have in Illinois or the colleges I have in Iowa, such as Simpson or Graceland or Central College--a number of our small private colleges-- they do a great job. They do a wonderful job in helping poor students who need a lot of Pell grants. What these colleges do when students come in and they borrow money and use Pell grants, is provide a lot of support from the university. The university is there to help them with their studies, to make sure they get the kind of help and support they need. A lot of these students come from families who have never gone to college, they never had that kind of experience. They come to college, and they get that support. What the for-profits do is they sign the kids up, and once they get the money, good luck in ever getting any help or support from the for-profit colleges.

Mr. HARKIN. That is right. Starting in August, that's about how much the GI Bill will pay per year.

Mr. HARKIN. Of course not.

Mr. HARKIN. I say to my friend, first of all, Westwood was one of the schools that the GAO had an undercover investigation into that had one of the most deceptive programs of getting students to sign up. That is all documented on film. Second, the accrediting agency that accredits Westwood was out at Westwood about the same time. Yet they found none of the things the GAO found. I talked to them. I had a hearing. I had them before our committee. I asked the accrediting agency: How could it be that on the one hand the GAO finds out all this, yet you say they are fine and they get accredited? They did admit there was some laxness or some loopholes, some things they were not paying attention to, that they needed to do a better job in accrediting. I say to my friend, what the Federal Government does is we say to a school: To be able to be eligible for Federal financial aid so you could accept Pell grants and get the guaranteed student loans, you would have to be accredited. The Federal Government doesn't do that accrediting. That is done by private agencies. Here is another one, I say to my friend from Illinois, that we need to look into. Get this. The accrediting agencies that accredit let's say a Westwood, do you know where they get their funding? From the schools they accredit. Talk about a fox in the chicken coop. They go out to accredit Westwood, but it is Westwood that is paying them to accredit them. This is something that I think we as a Federal Government have to get into. To me, this is a system that has kind of run amok, this whole accrediting system. I think there needs to be a better system of accrediting schools. I can assure my friend this is something else our Committee on Education will be looking at in the future.

Mr. HARKIN. I say to my friend it is. It is embarrassing, and it is just shameful. I said earlier this is from Kaplan's recruiting. They call it their military learning module. They call it ``Fear, Uncertainty, and Doubt.'' As I said earlier, they say--now, this is an internal document. This is for the recruiters. This is not something they hand out through the public. We got this through our investigation. They say: This technique was originally created within the computer hardware industry and uses these emotions to attempt to influence perceptions or beliefs--and on and on. As I said earlier, it is one thing to use high pressure tactics to sell someone a hard drive or a new computer or something, but when they are exploiting fear, uncertainty, and doubt on a GI who may have post- traumatic stress disorder, who may have served in Iraq, who didn't go to college, that is another thing. Young people now, they are worried about their future and what is going to happen to their future. Then these people come in and put the pressure on them with fear, uncertainty, and doubt to get them to sign a contractual agreement and turn over their GI bill benefits. It is just disgraceful.

Mr. HARKIN. I think it is the other way around. The Washington Post owns Kaplan University.

Mr. HARKIN. Yes, they are.

Mr. HARKIN. That is right.

Mr. HARKIN. I say to my friend, the Senator is right on target. What has happened as we have looked at this over the last year and a half now is even the good actors are being sucked into this vortex because the business model itself is bad. For example, how many times has my friend heard from the for-profit industry: Well, the reason we have these high dropout rates--for example, here is Westwood; 57.6 percent dropped out in the first year. Here is Kaplan; 69.1 percent dropped out in the first year--the reason we do is because, see, we serve a lot of low-income students. These are low-income people we serve, and they have a lot of problems in their lives. That is why we have such a high dropout rate. What they are not telling us is, because of the business model, that is exactly who they go after to recruit. Why do they do that? Because the lowest income student gets the highest Pell grant and the most guaranteed student loan. So if you are in the for-profit business and you want to make the most money, you don't want to recruit Senator Durbin's son or daughter. You want to recruit somebody whose parents never went to college, who is probably a minority, maybe doesn't even speak English all that well, who can get the maximum Pell grant and the maximum student loan, and once they get the money--well, if they stay, fine; if they don't, no big deal.

Mr. HARKIN. This is something else we have to look into. Right now, the Federal laws are that a student has to be in for at least 60 percent of the term. If they are in for 60 percent of a term, then the school can keep the money. Now, I ask my friend from Illinois, what is a term? I ask people that, and they say: well, isn't that a semester? Well, a term is whatever the school says it is. Some of these schools have a term that is 6 weeks long. So you sign up, you turn over your money, you spend 4 weeks there, you fulfill 60 percent of the term. If you leave, they keep the money.

Mr. HARKIN. And, by the way, as the Senator fully knows, these student loans are not dischargeable in bankruptcy. They are around your neck forever.

Mr. HARKIN. I thank the Senator for his great work on this. I just want to add one other thing about the school and about the debt of these students. Some have likened what the for-profit school industry is doing to the subprime bubble we had. But there is a big difference. Even as bad as the subprime mortgages were, a person who had a house they couldn't pay for could walk away from that house. They could always walk away from it, and that is the end of the debt. You can't walk away from this. No way. That is the difference. This is not a dischargeable debt, and these students, as the Senator points out, might end up alone. They might not be able to go to a legitimate school because they can't get any money for that. They could be barred from Federal employment. This will follow them for the rest of their lives until they pay it off. Yet these companies are making almost obscene profits and paying their CEOs tremendous salaries and benefits. As I pointed out earlier, many of these for-profit schools are owned by the same investment firms on Wall Street that brought us the subprime problem. Well, I say to my friend, we just cannot let this go. There is too much at stake not only for the taxpayers of this country but for these students, these young kids, these poor kids who are being preyed upon. So whenever we hear these schools say: Well, the reason we have this problem is because we are servicing all of these poor kids--don't forget. That is who they prey on. That is who they go after because they get the most Pell grants and the most student loans out of the poor kids. Then after they get the money, hey, if they leave, no sweat. They don't care. It is not a problem with them. I thank my friend from Illinois.

Mr. HARKIN. Mr. President, I yield the floor.