WASHINGTON – Late yesterday, Health, Education, Labor and Pensions Committee Chairman Tom Harkin (D-IA) spoke on the floor of the U.S. Senate to discuss his ongoing investigation into the for-profit education sector and the cynical and misleading tactics used to enroll students in for-profit schools. Citing documents produced to the HELP Committee, Harkin detailed the systemic focus on exploiting emotional vulnerabilities to convince students to enroll, to prey on their “pain” and sign them up at any cost. Harkin also noted the consequences of these tactics: new data from the Department of Education showing one in every four students that enroll at a for-profit school default on their loans within three years of leaving, with for-profit students account for almost half of all loan defaults.
“When students are enrolled through deception or fear, they are less prepared to meet the challenges of college,” Harkin said. “Rather than offering students a better life, these types of strong-arm, emotionally abusive tactics are all too typical of schools that have little or no interest in providing students the academic help and support they need to succeed. When these types of deceptive and exploitative tactics are used to enroll students, we should not be surprised to see high drop out and high default rates as a result.”
Last September, Harkin released a report that showed drop-out rates of 60 and 70 percent at the larger for-profit schools, while $24 billion taxpayer dollars went straight from federal student loan programs to the schools’ Wall Street owners and private shareholders, accounting for 87% of their total revenue. To date, Harkin has chaired three hearings on for-profit schools. For more information about the findings of his investigation, visit his website: http://harkin.senate.gov/forprofitcolleges.cfm
The full text of Harkin’s remarks is below. To view the documents used by for-profit colleges to guide recruiting practices, click here.
Statement by Senator Tom Harkin On Recruiting Practices of For-Profit Education Companies
“Mr. President, last December I came to the floor to discuss the Health, Education, Labor and Pensions Committee’s investigation into for-profit colleges and universities. It is an investigation with profound consequences for taxpayers.
For-profit colleges receive more than $26 billion in federal student aid each year. While some of these schools may be doing a good job, taxpayers deserve to know that their education dollars are being spent wisely. It is also an investigation with profound consequences for students. According to data released last week by the Department of Education, 25 percent of for-profit college student loan borrowers default within three years of leaving school.
"For-profit colleges have correctly pointed out that they educate a disproportionate number of low-income and minority students. And they argue that if they weren’t doing a good job, students would not continue to enroll. How then is it possible that schools with very high rates of withdrawal, high rates of loan debt, and high rates of default continue to enroll more and more students each year?
"The answer, according to my Committee’s investigation, lies in the enormous expenditure of money and effort that for-profit colleges put into their recruitment process. There have been many stories about abusive recruitment practices in newspapers and television programs across the country. Last August, the Government Accountability Office documented many of those abuses in undercover videos that were presented at the HELP Committee hearing. The industry argued that these misleading and deceptive practices were the work of a few rogue actors. But the overwhelming evidence of misleading, deceptive and even fraudulent conduct documented by GAO cannot be attributed to anything but a systemic effort to enroll students at any costs.
"For anyone who questions that this is a systemic effort to pressure, deceive and mislead, I’d like to take a few minutes today to explore details of the training practices that led directly to the GAO findings. I hope that my colleagues on both sides of the aisle and both sides of the Capitol find this a useful window into the training tactics used by these companies.
"One of the most common words in the industry’s recruiting documents is “pain.” It is not the first word that comes to mind when you think about enrolling in college. However, nothing worthwhile was ever accomplished without effort, so you might be thinking that schools are talking about preparing students for the hard work and pain of excelling in school.
"The reality is quite the opposite. For the most, part for-profit higher education companies want to make college seem easy. The reason they’re focusing on pain is to try to get students to enroll in school.
"Consider this quote from a memo written by a Director of Recruitment at a campus of ITT. After falling short of the required quota of “starts” – the industry term for new students – the recruiter writes: “The department needs to focus on selling the appointment by digging in and getting to the pain of each and every prospective student. By getting to the pain, the representative will be able to solidify the appointments and have a better show rate for the actual contacts.”
"Here is an example from an ITT document about what recruiters should do to keep students in class. “Remind them of what things will be like if they don’t continue forward and earn their degrees. Poke the pain a bit.”
"In their training, ITT went beyond rhetoric and created what they call a “pain funnel.” It illustrates four levels of pain, with questions that are supposed to get progressively more hurtful to the student. Level 1 starts off with questions like “tell me more about that” or “give me an example.” Level 2 is “What have you tried to do about that?” By Level 4, the recruiter is asking questions like “have you given up trying to deal with the problem?” A different document from ITT goes through the same levels of pain; their Level 4 question is once again “What are you willing to change now or have you given up trying to deal with the problem?”
“What are you willing to change now or have you given up trying to deal with the problem?” That’s a question I’d like to ask the executives who believe that preying on past failures is a sound method for enrolling students, or a reasonable way to run a college. According to the Department of Education 30 percent of student loan borrowers at ITT default within three years of leaving school.
"Kaplan University also encourages its recruiters to focus on pain and fear. This is a page from a manual dated July 8, 2009. With side notes about “advisor call control” and maintaining “rapport with PROSPECT,” the document is similar to ITT’s with questions to “uncover the pain and fear.” At the bottom, in big capital, bold letters is the takeaway message for staff. “It is all about uncovering their pain and fears. Once they are reminded of how bad things are, this will create a sense of urgency to make this change.” Sixteen pages of sales tactics later, the recruiter is taught to “restate back word for word, the better you restate the brighter the dream.”
"Another Kaplan document says “keep digging until you uncover their pain, fears and dreams…” If you get the prospect to think about how tough their situation is right now and if they discuss the life they can’t give their family because they don’t have a degree, you will dramatically increase your chances of gaining a commitment from the student. “Get to their emotions and you will create the urgency!” According to the Department of Education 30 percent of student loan borrowers at Kaplan default within three years of leaving school.
"And let me cite one more example: Corinthian Colleges. At Corinthian, recruiters are taught to convince students that their lives are bad and can be improved only by enrolling in the school. As a former recruiter, Shayler White, testified in a lawsuit filed against Corinthian by ex-students: “The ultimate goal was to essentially make [prospective students] wallow in their grief, feel that pain of having accomplished nothing in life, and then use that pain" to pressure them to enroll. I’ve focused on the blatant exploitation of pain to demonstrate the terrible cynicism that pervades these companies. But the schools’ recruiting documents also are rife with misrepresentations. From a brochure for Ashford University, owned by Bridgepoint: “established in 1918”, a “Traditional 4-year campus with sports teams, dormitories, regionally accredited since 1950 -- what this means to you is that your degree will be recognized both professionally and academically.” What it doesn’t tell you is that, up until 2005, Ashford was a small Catholic college with 350 students rather than today’s 70,000 online behemoth with astronomical drop-out rates and 67 percent owned by investment bank and private equity fund Warburg Pincus. According to the Department of Education, 21 percent of student loan borrowers at Ashford’s parent company Bridgepoint default within three years of leaving school, a 17 percent increase in a single year.
"The HELP Committee has heard testimony from experts in college counseling. This testimony details the detrimental effects that such overly aggressive and misleading recruitment can have on the lives of students. When students are enrolled through deception or fear, they are less prepared to meet the challenges of college. Rather than offering students a better life, these types of strong-arm, emotionally abusive tactics are all too typical of schools that have little or no interest in providing students the academic help and support they need to succeed. Perhaps the attitude of these schools towards students is best exposed in a document provided by Vatterott, a privately held college based in Missouri. Under the heading “Emotion,” it notes that: “We deal with people that live in the moment and for the moment. Their decision to start, stay in school or quit school is based more on emotion than logic. Pain is the greater motivator in the short term.”
"If this is the attitude of the institution, what does this say about its students’ chances for success? Is it any wonder that outcomes are appalling and defaults are skyrocketing – accounting for nearly 47 percent of all student defaults?
"Mr. President, the bottom-line finding of my Committee’s investigation is that these schools are expensive. They are exploitative. And, as these documents show, they are focused on their own success, not the success of their students. Mr. President I ask unanimous consent to place these documents in the record.”