Rep. Takano to Education Department: Your Job is to Protect Students, Not Profits

A transcript of Congressman Mark Takano’s comments at the Department of Education’s public hearing on for-profit education

Good Afternoon.

I am here to express my profound concerns with the Department of Education’s effort to delay and undermine the rules protecting students and taxpayers from unethical practices in the for-profit college industry.

As a public-school teacher for 24 years and as a community college trustee for two decades, I had the privilege of seeing our education system open opportunities to thousands of students.

But I also saw for-profit colleges exploit my students’ hunger for opportunity by recruiting them with dubious promises of a brighter future, and sending them instead to financial ruin.

The Department of Education has a responsibility to protect students, not the earnings of for-profit colleges.

Delaying, weakening, or repealing the Gainful Employment or Borrowers Defense to Repayment rules abandons the Department’s mission and betrays the students and taxpayers who deserve fairness and effectiveness in the American education system.

The Gainful Employment rule provides students with essential information to choose a career education program that will meet their needs. The transparency and accountability it creates is valuable for both potential enrollees as well as the taxpayers that funnel billions of dollars into these programs every year.

Lobbyists at for-profit colleges often spin the Gainful Employment rule as a limit on access to institutions.

But — as champions of education and as stewards of taxpayer money — the measure of our success is not the quantity of career education programs supported by federal dollars, it’s the quality of instruction and outcomes that these programs provide.

Any program that leaves students with more debt than they can pay, and fewer job prospects than they were promised, is not deserving of taxpayer support. The Gainful Employment rule is critical to protecting both students and taxpayers from predatory and abusive practices.

If implemented as it should be, the updated Borrowers Defense rule could serve an equally important function in protecting students. The new rule would provide students and taxpayers the financial relief they deserve when they have been defrauded by a school. In addition, it ensures real accountability by prohibiting mandatory arbitration clauses, which schools use to evade the consequences of illegal or unethical behavior.

When an institution uses deceptive practices to collect financial aid money, the school — not the student, and not the taxpayer — should be responsible for repayment.

The Administration’s decision to delay and undermine accountability in for-profit education will leave many students vulnerable to predatory practices, but I’m particularly concerned about one group — and that’s America’s veterans.

In 2014, eight of the top 10 schools receiving Post-9/11 GI Bill money were for-profit institutions. Two of those schools were the now-defunct ITT Technical Institute and Corinthian Colleges, which together collected more than a billion dollars in veterans’ benefits from 2009 to 2015.

When veterans return home, they should be met with our gratitude and support. Instead, too many are met by an army of for-profit recruiters seeking to cheat them out of the education benefits they earned through their service.

By delaying the Gainful Employment and Borrowers Defense rules, the Department of Education is putting the interests of for-profit companies above the interests of student veterans.

I was struck by Secretary DeVos’s recent characterization of these rules as “burdensome” on for-profit institutions. The true burden we should be discussing today is the burden placed on Ruben Marlang, a veteran from Southern California who enrolled at ITT Tech because he was promised that his credits were transferable and the school’s accreditation was secure, only to discover that neither of those promises were true.

Or the burden placed on Jose Morales, also a veteran, who was recruited by DeVry University on the promise of a scholarship that never materialized, leaving him with a balance he couldn’t pay.

It is regulatory weakness, not regulatory overreach, that has created a business model that does not work for students, veterans, or taxpayers.

If you take one thing away from my comments I hope it is this: The Department of Education is not responsible for protecting fraudulent for-profit companies.

It is responsible for protecting students and taxpayers by holding for-profit colleges accountable for unethical and illegal practices.

Thank you for your time.