Fail State (2017) Movie Script

1
[Fred Nelson] Right out of high
school, I wasn't quite sure what
I wanted to do,
but I knew that you were
supposed to go to college.
That's what everyone
tells you to do.
If you go to college
then you're able to,
you know, make more money,
provide for yourself,
get a car, get a house, you
know, all that type of stuff.
[Fred Nelson] My brother and I
we kind of grew up on our own.
My parents weren't there. So I
didn't really have any guidance.
I didn't have
any parental guidance.
[electronic music]
[Fred Nelson] I used to be on
the computer all day just trying
to figure out how it worked.
So I figured that would be
a good avenue for me to take
just to do IT.
[Luis Tayahua] My grandfather
worked for the railroad all his
life.
My dad worked construction.
Education wasn't a big thing
in my house, so I started
working at State Farm.
[Luis Tayahua] And at first when
you get out of high school,
the guys that go to college,
they're not making money,
you know what I mean?
So you're like,
oh, college is for suckers.
But then they get out of
college, they start
getting good jobs.
Man, I'm like maybe college is
for me, maybe I do need
to go to college
if I ever want to, you know,
do something.
[electronic music]
[narrator] A college education
wasn't always so important.
For most of the 20th century,
high school was enough.
Then in the 1980s,
the economy started to change.
And ever since, people without a
college degree have fallen
further and further behind.
At the same time, college became
more and more expensive.
For most Americans today,
college is the only path
to a middle class life.
But it's increasingly
out of reach.
People who grow up in the top
quarter of the income spectrum,
nearly all of them
go to college.
And the vast majority
by age 24 graduate with
a college degree.
That's increased dramatically
from the 1970s.
But if you look at everyone
else, the improvements since
the 1970s are really poor.
[narrator] Poor students have
just a 1 in 10 chance of
graduating.
And that divide is
becoming wider and wider
and more and more
cemented into place.
[narrator] And thanks to
crushing student loan debt and
predatory schools,
millions of students are leaving
college worse off than before
they enrolled.
In many ways, higher education
is functioning like
a caste system,
that takes in students
from different places
in the socio economic spectrum
and can churn them out
more unequal than they were
at the start.
[narrator] America's higher
education system is broken.
But with hundreds of billions of
dollars on the line,
there are some in the higher
education industry
fighting to
keep it this way.
[President George W. Bush]
For those of you who
received honors awards
and distinctions,
I say well done.
And to the C-students,
you too can be president of
the United States.
[Conan O'Brien]
When I got the call two months
ago to be your speaker,
I decided to prepare with
the same intensity many of you
have devoted
to an important term paper.
So, late last night I began.
I drank two cans of red bull,
snorted some Adderall.
Played a few hours of Call of
Duty and then opened my browser.
[applause]
The amount of delinquencies
on student debt is now higher
than credit card debt.
$1.2 trillion, how about that,
that's a big number.
My hat's off to you,
my hat's off to you.
I just received the email that
school's going to be closing.
It's something that I wanted to
do, I planned to graduate.
[JK Rowling] I have decided to
talk to you about failure.
The fact that you are graduating
from Harvard suggests
that you are not very well
acquainted with failure.
[Shepard Smith] Court documents
filled with former Trump
University staffers
calling it a scheme and a fraud
and a quote "total lie".
We're fortunate,
that Betsy DeVos is
the nominee
for US Education Secretary.
[reporter] What do you think
makes a good
commencement speech?
I think the most important thing
is that you can be
anybody you want to be,
it's just a matter of how much
effort you want to put into it.
You're in America.
[reporter] UC Davis students
protested on campus today.
Raise tuition
and we'll raise hell.
[electronic music]
[Suzanne Mettler] As recently as
1940, only 1 in 20
young Americans had
a four year college degree, so
on the eve of World War II,
it was still very rare
to go to college.
And then everything changed.
[archive news] The 84,000
ton liner "Queen Elizabeth"
enters New York Harbor carrying
almost 15,000 soldiers.
Arousing welcome awaits
the returning soldiers.
[Gail Mellow] We had a
generation come back from World
War II and America said:
"What are we going to do?"
[news] When a man gets out of
the Army or Navy or Marines,
he's worried most about a job,
an education and a home.
Not all higher education was
in favor of putting them
in college,
in fact Robert Maynard Hutchins
at the University
of Chicago said
that we would turn our
universities into
"hobo jungles".
But what happened
after we made that investment.
We saw the biggest
economic boom this country has
ever seen.
[electronic music]
The idea of opportunity really
came to fruition
with the Higher
Education Act of 1965.
[narrator] The higher education
act was created to open access
to college for all Americans.
Its programs included student
loans backed by the federal
government, work-study,
and grants sent to institutions
to give out to students in need.
[President Lyndon B. Johnson]
It is not enough
just to open
the gates of opportunity.
All our citizens must
have the ability
to walk through those gates.
[narrator] These federal
policies inspired states to
follow suit.
States made large investments in
their public college systems.
[news reporter] A national
news magazine described
the University of California as
probably the most successful
public institution
of higher learning
the world has ever known.
We're trying to train people
to solve problems
that are still only
dimly seen.
[narrator] During this time,
public colleges opened at a rate
of 1 or more per week.
Virtually every state had
public institutions that
provided education
at little or no cost
to students.
[Suzanne Mettler] It transformed
who we are as a nation.
We went from just 1 in 20 young
Americans having a college
degree in 1940,
to 1 in 4 in 1977.
[Ted Kennedy]
Thank you very much.
It is a great honor and
a high privilege for me
to join with you
in commemorating
the 107th anniversary
of this great university.
The traditions and
accomplishments
and the graduates
of the University of California
have made this occasion
one of the most prestigious
forums in America.
As a matter of fact at
a luncheon I attended here on
campus this noontime,
one of your professors asked me
where I had gone to college.
And I replied Harvard.
And he said, "Oh yes,
the Berkeley of the East."
[laughter, applause]
[narrator] But as public higher
education flourished,
private colleges and
universities began to panic.
Private higher education
saw themselves
not getting students,
students picking
lower cost institutions.
[narrator] Even Ivy League
schools said they were
struggling to compete.
So in the early 1970s, as
Congress considered a massive
expansion in financial aid
for low income students, private
colleges reshaped the debate.
They turned to the federal
government and said,
"This isn't simply about
access for students,
this is about saving
America's private higher
education system."
[narrator] Now Congress had to
figure out how to help
low income students
and private colleges.
So in the 1972
Higher Education Act,
lawmakers made a change
to the system that would
have enormous implications.
[narrator] Instead of sending
aid money to institutions, it
would go directly to students.
The chief proponent for this new
approach was Democratic Senator
Claiborne Pell.
But direct student aid
found support on both sides
of the aisle.
They argued
that if you really want to
enhance student's choices,
you should give the student the
money so that they could figure
out what was best for them.
That's the voucher model.
[narrator] Supporters of this
market-based approach argued
that giving grants and loans
directly to students
would even the playing field
between publics
and higher cost privates.
They believed direct
student aid would open the doors
of even the most elite private
colleges to all Americans.
This created
the system we have today.
Students can take
Pell grants and student loans to
the institution of their choice,
public,
private,
or for-profit.
[school ad] Can a
phone call change your life?
This one quite possibly could.
I was elected to
the California State Assembly
back in 1976.
My district included
a number of housing projects.
The work that I was doing
at that time really focused on
trying to deal with poverty,
trying to help get
young people trained for jobs,
diverting young people
from gang activity.
It brought me in contact with
a lot of young people
who were just hanging out.
People were looking for jobs,
looking for
any kind of resources
to help support
their families,
and I learned a lot about
how they were being
approached by these recruiters.
They would come into
the public housing projects
and they would tell people
they could learn how to become
a dental assistant,
and they would even bring
uniforms to show them the kind
of uniforms they would have
if they completed
their coursework.
And then I learned some of them
that had gone to these schools
had discovered
that they didn't have
teachers in some of
the so-called classrooms,
some of the computer training,
they didn't even have computers.
There's some 7,000 profit-making
vocational schools
in the United States, many of
them making false claims of
better, higher paying jobs
for their graduates.
It's a meat factory. They just
want to fill up the classroom,
they just want their money,
they don't care how.
They don't care what they
promise you, they're not
interested in you
on any level
or in education or in anything.
[congresswoman Maxine Waters]
It became very obvious
that very few, if any,
had realized real training
or an education that would help
them to get a job,
but these schools were getting
taxpayers' dollars.
[news reporter] The federal
government is a major supporter
of vocational schools
including those run by such
corporate giants as ITT, Bell &
Howell, CBS and Control Data.
When students don't get jobs and
default on their loans, it is
government money that's wasted.
When I came to the Congress
of the United States,
not only was this still
going on, but we had some
members who were, you know,
helping to advance
the cause of these private
postsecondary schools.
My first job in Washington DC
in 1989, I was working for
Senator Paul Simon,
a liberal senator from Illinois.
I would staff him on meetings,
some of them were traditional
colleges and universities,
some of them were
for-profit colleges.
A stable career with
the chance for promotions.
The colleges were different
than what we see today
but the argument they were
making was very similar.
Are you tired of barely
making it in a dead-end job?
Do you want to make more money?
-Where do I go from here?
-Nowhere.
That they were out there
finding the low income students
who were not being well served
by the public
or nonprofit institutions
and they focus on a job, train
them for that job. And that was
a good, great message,
and was something that
a liberal senator would
want to support,
and at that time, my boss was
supportive of them.
The Democrats had been big
proponents of the for-profits.
They felt that traditional
higher education wasn't
doing a good job
of serving low income students,
and here were these other
entities serving them.
[congresswoman Maxine Waters]
You would hear people say, "If
we bring down these schools,
there are a lot of young people
who won't have any place to go.
They need to have an alternative
to the institutions that they're
not welcome in."
All kinds of excuses,
and we had a big fight.
Then we started seeing
a lot of defaults.
The biggest problem is
high risk loans
to trade school students.
[news reporter] A third of all
trade school students
are now defaulting
on their loans.
That's costing the taxpayers
a billion dollars a year.
[Bob Shireman] Secretary of
education at the time William
Bennett, Republican, was
outraged and talked about how
these for-profits are fleecing
taxpayers and hurting students
and we needed to
do something about it.
Leaders who were most disturbed
by them then tended to
be conservatives,
both Republicans,
some of them in the
Reagan Administration,
and conservative southern
Democrats like Sam Nunn
who had many hearings
on the for-profits in 1990.
When we launched this
investigation late last year,
neither I nor I suspect
other members of the
subcommittee believed
that we would find problems
as extensive and as severe as
those that have surfaced
during the course of
these hearings.
You've had this explosion of
new proprietary schools. Why?
Because they had access to the
US Treasury, with no risk!
A lot of the stories were about
Mom and Pop shops
that had sprung up
only to collect the student aid
money and then shut down.
So we used a lot of phrases like
"fly by night schools".
[narrator] Some of the schools
didn't even have a real campus.
Instead, students would get
their education strictly through
correspondence classes.
[news reporter] To test how
easy it often is to get
accredited,
the Missouri Attorney General
actually invented
the bogus trade school.
This was the whole
school library,
a few books on the shelf.
The faculty brochure
listed the name of
one Professor Peelsburi Dobouy.
Eastern Missouri Business
College was approved
in just 3 weeks.
There was an incident with the
Culinary School of Washington.
My boss had helped this school
with a little regulatory problem
and it turned out that this
school was telling people that
they were training them
to be gourmet chefs, and they
were training them to be gourmet
chefs by having them work
in the cafeteria
at a sewage treatment plant.
And they were using
student loans to do this.
They were borrowing money so
they could work at a cafeteria.
Lobbyists representing the trade
and technical schools
refused to
discuss the problem.
I'm telling you I'm tired of
my community being ripped off
and communities like mine
all over this country.
I intend to be before this
Congress on this issue
year in and year out
until I stop the hemorrhaging of
taxpayer dollars in these
rip-off schools
that's doing nothing
for anybody.
[narrator]
After the Nunn hearings,
the government shut-down
over one thousand
for-profit schools.
[narrator] And in 1992,
Republican President George Bush
signed into law
three new regulations designed
to prevent further abuses.
[narrator] The 85-15 rule,
later changed to 90-10,
said that for-profit schools had
to get at least 10%
of their revenue
from sources other than
federal student aid.
The incentive compensation rule
made it illegal for schools
to pay recruiters a bonus for
enrolling students.
And to crack down on fraudulent
correspondence schools,
the 50-50 rule required that
at least 50% of a school's
students had to be
at a "brick and mortar" campus.
The schools that survived
were effectively put on notice.
California's budget problems
have been a blow to
college students
at state supported schools.
Education is a right.
No more cuts.
[narrator] The 1972 decision to
turn to a voucher model
didn't just create an abusive
for-profit sector,
it also sowed the seeds for
a crisis in public
higher education.
The federal government in 1972
made a determination
that states would handle
public higher education.
Well, that was
a big miscalculation.
[narrator] Almost immediately
after the 1972 decision
to move away
from institutional aid,
states started pulling back
funding from public higher ed.
Not just one state,
it's every state.
Because it's one of the few
things left that they can cut,
higher education is often
one of the first things
that they do cut.
That is the number one reason
why tuition keeps going up
throughout the United States.
[Suzanne Mettler] Medicaid, K-12
education, incarceration, these
are mandatory policies.
By contrast, higher education
spending is the largest
discretionary item
in most state's budgets.
[F. King Alexander] The states
and our state legislatures have
an easy out.
When I was at Murray State,
a high ranking state legislator
said: "King, I can't raise taxes
and get reelected, so I'm not
going to raise taxes.
I'm going to let you
raise tuition and you go to
the federal government
and get your money."
[narrator] But in the 1980s, the
federal government started
cutting back too.
[news reporter] The Reagan
Administration wants
to cut $1 billion
from the higher education aid
budget by 1982.
The underlying philosophy is
that the responsibility for
putting children through college
shifted in the '70s from parents
and their children
to the government,
and that that responsibility
should be returned
to the family.
These cuts are very foolish
because in the long-haul
they're going to make our nation
a less rich nation
determined by the sum total of
the education of the people.
[Suzanne Mettler]
At first early in the 1980s,
Democrats and Republicans were
somewhat at an impasse
about what to do
about federal student aid.
What was much easier for them
was to say:
"Let's allow more students to
borrow more money",
and that's what happened.
[Suzanne Mettler] In the 1970s,
a low-income student would
have about 50% of their tuition,
fees, room and board covered by
the average Pell Grant.
Now, that same Pell Grant will
cover just 30%.
[Sara Goldrick-Rab] When the
federal government created the
federal financial aid program,
college students looked
a certain way.
Over time, the visual of
the college student changed.
We have a process for
four-year college students
who are 18 to 20 years old.
We don't live in
that reality anymore.
[Deanne Loonin] The majority
of college students are
what they call
"non-traditional students".
I think we should actually
change the language
because "traditional"
is no longer typical.
Only about 15% of all
undergraduate students actually
live on campus now.
A lot of the students are
older than 25.
[Gail Mellow] Millions of
American students are
going part time.
[Sara Goldrick-Rab] They leave
work to come to the college
class, they take that class,
they go back to work, then they
go home to feed their children.
[Gail Mellow] I think that
there's a very elitist view that
the problem with American
college students today is that
"they're not prepared for
college, and then so maybe they
shouldn't all be in college."
In fact, we find
students drop out because of
financial reasons.
[Marquette Bascom] One of my
dreams was, I was gonna
finish high school
and I was gonna go to college
and unfortunately it didn't
work out that way.
Getting pregnant and having
my son at the age of 17,
was very young.
My whole world seemed
like it was crushed.
My son was young and I had
to work, I had to pay rent,
I had to pay bills.
I was just thinking of
how I'm going to survive.
Once I had him, then I kind of
put my dreams on hold.
[Marquette Bascom] When my sons
were 18 and 6,
I decided this was a great time
to go back to school.
And I enrolled at LaGuardia
Community College.
I had sat down and I told my
sons, I was like, "This is what
I'm going to do.
It's going to be rough,
we have to have cutbacks.
You're not going to be able to
go to the movies, you're not
going to ask me for that,
you know that $5 or $10,
because I can't do it right now
for a while.
[Marquette Bascom] Although
I received the financial aid,
it-- for a lot of the classes,
it-- it wasn't enough.
I still had to pay for books
and transportation, you know,
food on the table.
They have programs, I believe,
within the school that helped,
but um, some days unfortunately
there wasn't enough food.
It was a really rough time
not knowing how I was going to
provide for my sons,
and how I'm going to do all of
these things, you know, by
myself. I had to do something.
So then that's when I decided I
had to take out a loan.
[narrator] Since 1980, the
federal government increased
student loan lending
from $18 billion a year to
nearly $100 billion a year.
And with all that money on the
table, for-profit schools wanted
back in the game.
[Steve Burd] Since 1995, I have
followed the for-profits
as a reporter
at the Chronicle of
Higher Education.
There was this huge
transformation in the industry
where we suddenly had these
giant corporations.
[narrator] Infused with
Wall Street money,
the industry became dominated
by massive publicly traded
and private equity backed
companies.
[Steve Burd] And now you have
these giant corporations coming
in and buying up
these surviving schools
and they started to get
bigger and bigger.
You've got big hedge funds
on Wall Street owning
major interests
in some of these companies.
[narrator] These massive
corporations pioneered
online education.
Catering to working adults
and nontraditional students.
[Steve Burd] It was the shiny,
bright new thing.
It seemed much more flexible,
much more innovative than
traditional higher education.
[narrator] Enrollment and
profits grew across the sector
throughout the 1990s
and so did
its political influence.
They started to have
their voices heard much more
effectively in Washington DC.
[President George Bush]
Students are getting the money
and we're making the program
a lot more efficient
for the taxpayers.
America can be compassionate
and responsible
at the same time.
[Steve Burd] There was a new
sheriff in town and it was one
that wasn't interested in
policing the for-profit sector.
[narrator] In 2001, the Bush
Administration put Sally Stroup
in charge of higher ed policy
at the Department of Education.
Stroup had previously been
the chief lobbyist for
the University of Phoenix.
President Bush also installed
Bill Hansen, a former lobbyist
for the student loan industry,
as Deputy Secretary
of Education.
Talk about
a fox in the henhouse!
[Steve Burd] They really went on
an attack against
the regulations.
[narrator] Almost immediately,
Bush's Department of Education
began dismantling the safeguards
that Bush's father had
put in place a decade earlier.
First, spearheaded by
Bill Hansen, the department
created loopholes
for incentive compensation,
allowing for-profit colleges
to pay recruiters a bonus for
enrolling students.
[speaker archival]
The jobs of tomorrow are here.
[Laura Brozek] I had been
seeing ITT Tech commercials
probably from the time I was,
you know, 15 years old.
I turned 40 and I thought, you
know what, I really want to do
something for other people.
And I was looking for a job
and I just saw ITT Tech.
They were looking for
representatives.
So I went to
a group interview
and there was
a very, very dynamic
director of recruitment
basically selling the job.
She focused a lot on
the compensation scale,
how you can start at
a particular level
and in a short period of time,
you are able to
jump a number of levels.
And you obviously had
increases in your income.
[narrator] As Wall Street
infused more cash
into the industry,
recruiting floors were expanded
and the desire to grow
became insatiable.
You added
additional zeros to the amount
of money that was taken in.
You added a sophistication to
the pitching and marketing.
[woman archival] What will you
be doing in 17 months?
The "same old same old"
or starting a whole new
career in a new field?
Like business, healthcare,
justice, technology, or design.
At Westwood College, we have
programs in five schools that
can help prepare you...
Do you know with just one call
you can change your life?
[man archival] He started with
nothing and now he has
everything.
[woman archival] Make a choice
that can make a difference.
They were doing
this big marketing
on criminal justice programs.
It was all over the TV all the
time. They had people in
like a crime laboratory
doing CSI stuff.
It really looked professional.
[Mike Vasquez] The thing
that I run into with so many
for-profit students is
that they walk into a school and
they assume it's a noble thing.
And that's
a dangerous assumption.
I mean, imagine if I walked into
a used car dealership
and thought that the salesman
was my friend.
They would sell me 12 cars.
I'm waiting in the lobby,
I'm all nervous,
it's a college interview.
I didn't know what to expect.
The guy comes out, he was a bald
guy, real sharp dressed,
nice suit, big watch,
a ring probably.
Looked like the real deal
or from what I would think
would be the real deal.
He had pictures of his car,
his wife, vacation pictures.
And he's like,
"Why do you want to
come to Westwood College?"
And I was like: "Oh, I saw your
criminal justice program."
Then he takes out a list of
all the places I can get a job,
starts talking about the
criminal justice program,
how fast it was.
I'm like well, how much is it?
He says: "You know what?
you don't have to
worry about the price
because there's student loans
for all this stuff
so you don't
have to really pay anything.
You get a job, you'll be
making all this money.
What you're getting
is worth gold.
You don't have to
worry about the price."
You get into the classroom.
It's all people like you,
a lot of minorities.
We'd sit there with our books
like: "Ah, cool
we're college students."
You run into people like:
"Yeah, I'm going back to school,
I'm going to college now."
So, it gives you pride, you're
like oh, puff up your chest.
I have seen young person
after young person
who simply wanted to get trained
for a trade or for a job,
get ripped off.
Why hasn't anything been done?
Well, you know, these private
postsecondary schools
actually have
members of Congress
who protect them.
[narrator] In Congress, John
Boehner became chairman of the
House Education Committee.
And he, along with
Buck McKeon and Mike Enzi
introduced dozens of bills
to undo even more regulations.
The legislation makes minor, but
meaningful changes to expand
access to higher education
while maintaining the integrity
of our financial
assistance programs.
[narrator] From 2002 to 2006,
these three lawmakers received
one out of every five dollars
in campaign contributions made
by the for-profit industry.
One lobbyist compared
Boehner and McKeon to
being "bag-men" for the mob.
So I said, OK, let's look at
the campaign contributions.
And then I noticed that the
money wasn't really going into
their regular campaign accounts,
it was going into their
leadership PACs.
They used that money to rise up
the ranks in their parties by
contributing to other lawmakers.
I, I'm humbled by
the support of my colleagues
to be the new majority leader.
You had the Republicans kinda
falling over themselves
to praise these schools
as being
innovative and flexible.
The convenience of education
is so important to people.
Business community has
been a huge innovator
in changing the way we deliver
higher education.
Once they got
the leadership on board,
then the rank and file of the
Republican Party fell in line.
[narrator] At the Department of
Education, Sally Stroup's office
authored three reports
to convince Congress to
remove restrictions on
online education.
Her target, the 50-50 rule.
And in 2006, John Boehner
and Mike Enzi
slipped eight lines
into a budget bill,
repealing the regulation.
[Senator Tom Harkin] No longer
did 50% of your students
have to be campus based,
they could be all online.
You look back at that,
and after that, that's when
the explosion took place.
Tonight: Online education,
its popularity is soaring,
creating
a $6.2 billion industry.
[news reporter] 3.5 million
Americans are in college online.
That's almost 2 million more
than 5 years ago.
Bridgepoint Education was
a for-profit education company
backed by Wall Street investors
that bought a small private
liberal arts college in Iowa
just for
the accreditation that it held.
It was run by nuns for years
and years, it was accredited.
They bought that school
and they get the accreditation,
without doing anything.
The college had
about 300 students
when this company acquired it
and just
three or four years later,
they had 80,000 students,
the majority of whom were
learning online exclusively.
It's very inexpensive
to operate these programs.
They weren't passing along
that savings to the students.
The head of Bridgepoint made
like $20 million in one year.
Online education just let
these for-profits get to
that "federal spigot"
without jumping through
any hoops whatsoever.
[narrator] The total
federal financial aid
that went to for-profits
increased from
$5 billion in 2001,
to $32 billion in 2010,
a quarter of all
federal financial aid.
[Aaron Glantz]
Here at Fort Campbell
the University of Phoenix
is spending thousands of dollars
to sponsor this concert.
It's one of dozens of events the
for-profit school is sponsoring
on military bases
across the country.
I'm a veteran of the Iraq War,
I served in Iraq in 2003
as a military police officer
guarding enemy prisoners of war
and doing security
generally in southern Iraq.
A for-profit college cannot
receive more than
90% of their funding
from the federal government.
The idea behind the 90/10 law
was to say:
"We don't want these
institutions to be over reliant
on federal funds."
There's one huge loophole
in that though, service member
benefits don't count
against the 90/10 rule.
The traditional expectation was
to enroll nine students
every academic session
every eight weeks.
But for our team, they had
an astronomical expectation
of enrolling between
14 and 25.
If you didn't meet that target
you would begin feeling
the pressure immediately.
They would say, "Remember DOD
doesn't pay your paycheck
anymore, we do.
Get their ass in class."
I was the first one
in my immediate family to
graduate high school.
I wanted a better life. I knew
that college was a way to, to
get to the next level.
In 2000, I went
to Plattsburgh State University
and I went there
for microbiology.
I love the human body, the way
it works, and I wanted to
understand how it worked
and when it stopped working,
how to get it back to working.
And then...
Oh, my God!
[Murray Hastie] September 11th
happened during my second year.
It just affected me.
I didn't feel like I was
doing anything important
or anything useful.
So, I signed up for...
for the Marines.
I did two tours in Iraq.
Our unit was
the 2nd Battalion 5th Marines.
We were what they called
"the tip of the spear".
[voices on radio]
It was our units that were
the first ones over.
Four years was enough for me.
I finished my enlistment
and then I just wanted to get
back to a normal life
and go back to school.
I just did a computer search for
colleges that accept GI Bills.
I think it was like
an ad on the site that said:
"Do you want to go to college,
do you have GI Bill credits?"
I put my email address in
that advertisement and I got
quite a few responses.
All of the students
that were reached out to
were lead generated, so they
came in through a lead database
and there are
a variety of lead databases.
There's one particular company
called QuinStreet
that has
dozens of websites
that serve as lead generators
for the for-profit
college industry.
They also operated GIbill.com,
and it masqueraded as
a government website.
It looked like you could only
use your benefits
at for-profit colleges.
[Murray Hastie]
I got a phone call. It was
a representative for DeVry.
He said he was in the area
and he'd be able to
stop by my house.
And he ended up
scheduling a meeting.
The representative
was sitting to my right.
And he had the application
in front of him.
Now, I just remember
he was going so fast.
He assured me that
the GI Bill would cover
my cost of attendance.
In fact, he was certain that
with the GI Bill,
I would get a return
and get a stipend.
I questioned it,
but he assured me.
I was just
fresh out of the military,
my transition was terrible.
My biggest mistake
is trusting too many people.
[Steve Burd] I was at lunch
and the source hands me this
packet of documents.
They were from the Los Angeles
campus of Career Education
Corporation's American
Intercontinental University.
[male voice]
AIU the serious U.
They showed that the school was
routinely enrolling students
who hadn't graduated from
high school or gotten a GED.
It really opened my eyes to
the business model.
Growth at any cost.
[Mike Vasquez] Miami's fast
train college is famous.
They would hire former
exotic dancers as recruiters.
They would drive around
bad neighborhoods and try to
get men into the car.
It reads like some bad movie
script, but it was real.
I had a librarian at Everest
call me. She said,
I have a student here
who's mentally disabled.
He came here saying he wanted to
be a police officer.
He has absolutely no chance
and everybody here knows it.
But they want his money.
There was a management person
who would refer to students
as bottom feeders.
The conversation was:
"Now that we've lowered
the admission standards
how many more bottom feeders is
this going to bring in?"
They will call you
not once, not twice,
they will call you
20 times a day.
[voices on voice mail]
Lie about job placement rates.
Lie about how much debt
you'll take on.
Whatever it took
to close the sale.
[David Halperin] They can
use the pain pitch,
poking your pain until you
finally agree to sign up.
Somebody says to you,
"Christmas is coming
and I always hate Christmas
because it's always a struggle.
"Well, can you tell me
a little more about that?
What have you done about that
and did that work?"
You know that the answer is "no"
otherwise they wouldn't be
talking to you.
The pain funnel would be a way
to get them talking about
their feelings.
[Vince Martin] They're
embarrassed because they can't
support the kids,
they can't buy
the Christmas presents.
You want to make them relive
that embarrassment,
make them relive that pain.
What do you think you can do in
order to not feel so terrible?
[Jen Wilson] I called
and said I'm interested in
attending your school.
And she asked me,
"What field?"
And I said I am looking
to go into criminal justice.
I was wanting to become
a victim's advocate.
I could talk to families
and let them know
they aren't all alone in this.
I have been on that end of it.
She felt so horrible for me.
It almost sounded like
she was crying for me.
She asked me,
how was she murdered?
She asked me, who,
who murdered her.
When she was talking about it
I was actually glad somebody
actually cared enough
to be interested in
wanting to know.
She, in that hour and a half,
became my friend.
Then you could manipulate them
to say, well,
"How are you going to fix it?"
She kept informing me
that this was the best decision
I have ever made
and I could really help out
all these people.
When I talked about,
"Well, how much does it cost
to go to college nowadays?"
She said, "Well, there are
grants and loans and all sorts
of stuff you can do,
but let's not talk about that
right now.
I just need to hold your spot
because the next session
is starting soon."
I'm not entirely sure,
I actually just started
investigating this today
and she said, "No, no, no,
I'll send you the paperwork.
This is strictly
just to hold your spot.
Because your story touched me so
much, I want to make sure you
had your spot."
And I said, OK.
I didn't read it,
and, I wish I had,
but I didn't
because I, I trusted her.
That paper was not
to hold my spot,
that paper was to enroll me.
When I was, I want
to say, eight years old,
my parents bought for me the old
Nintendo Entertainment System
with the Mario Brothers
and Duck Hunt cartridge.
That was really my first
big introduction into gaming.
ITT Tech just got greedy.
Because so many prospects
played video games,
they came up with a program
called "digital entertainment
and game design".
But, how many people
get jobs doing that?
One of our course goals
was to open Photoshop.
[video instruction] File. New.
Course goals, not class goals.
We learned a lot of
programming languages
that are just nonexistent today.
"COBOL" was a programming
language. We spent hours.
No one uses COBOL anymore.
[Zach Turner]Our instruction
for the day was to navigate
to YouTube,
pull up
a specific YouTube video.
It was a well put together
YouTube video,
I'll give it that,
but, I could've done that
from home.
This whole program is a joke.
I just felt like we weren't
really learning the things
that I felt we would learn
when I signed up.
I realized when I went to
the first IT interview,
how deficient I was and how
subpar the education was.
That's when the weight of it hit
me and I realized that I had
really made a horrible mistake.
Who's supposed to police
quality, right,
in higher education?
It's typically accreditors.
[narrator] When the federal
government established
the student aid program,
it needed a way to determine
which colleges should be
eligible for
federal student aid.
Instead of creating its own
system for the task, Congress
turned to a third party.
Accreditation actually goes
all the way back
to the 19th century.
Colleges essentially created
clubs of colleges to decide what
it means to be a college.
If accreditors don't revoke
accreditation from
poor performing programs
those programs can still
access federal financial aid
and still attract students.
[narrator] And for-profits,
whose survival is
dependent on students
with federal financial aid,
have their own
accrediting bodies.
Their accrediting agencies
which were non-profit in name,
often had
interlocking boards
with the institutions
that they were accrediting.
They are the gateway to the
money and they get business by
saying yes.
Where do you get your money?
The sustaining fees of
our organization
come from the member
institutions and from user fees.
-[Senator Harkin] From where?
-User fees.
Those are fees that are paid to
us when an institution applies
for a new program
or a new branch campus,
there's a fee that's associated
with that application.
So, the institutions
that you accredit, pay for you
to do their accrediting.
That is correct.
A lot of things happened
that made everybody think
you know what,
we're getting had.
Someone wanted to
go to another school and they
wouldn't take their credits.
That's when a lot of us woke up
and were like, "Wait a minute,
something's wrong here."
How's a community college,
you know, that's a small
little college
not going to take this..
These credits from
this big college downtown?
That's ridiculous.
I didn't even know
what accreditation was.
It was a college,
a college is a college.
And then I applied for
a police department.
They said, "No, we're not going
to take your credits."
What police departments will
take it, you know I mean,
or which ones won't?
Westwood would tell us:
"We don't know if they're going
to take you or not."
Well, what do you mean,
you don't know?
Sometimes I say that
community colleges are like
the dark matter in the universe,
so there's the visible matter
and then there's
the dark matter,
and the universe would just blow
apart if it wasn't for
the dark matter,
and that's what
community colleges are.
Community colleges educate more
than half of all
undergraduate students.
But it's sort of which half
that really is important.
Students who are poor,
first generation, immigrants,
students who are black,
Latino, Asian,
the EMT paramedics,
the nurses, the fire-fighters,
the police, that's our future.
We give second chances to
the student who maybe had
a spotty high school career.
We give second chances
to someone who maybe didn't
discover their passion
until they were 30 years old.
I would argue that
we don't know who's smart
until we give them a chance.
School was
a whole new life for me.
I had to get used to, you know,
studying and going to work.
I said, oh gosh!
Good afternoon, Marquette
speaking, may I help you?
I had to give it thought,
I had to plan it,
I had to get organized.
"This is what you're
going to do. This is how
you're going to do it."
My commute would be like
an hour, fifty minutes one way.
And going home also,
and that's where I read.
I would get in 9 o'clock, 9:30
at night, sometimes even later.
I couldn't just get ready for
bed, the kids have to eat.
So after I do that.
Then you have to
check their homework.
And then I was like,
OK, now it's time for me
to do my assignments,
so I would sit there and just
read, just do homework.
You have to read
certain chapters and a lot
of those chapters are long.
You have to do what you have to
do to get it done. It's like 2-3
o' clock in the morning,
I'm like oh my goodness,
I have like four hours of sleep,
how am I going to live
with only four hours of sleep?
When you're by yourself
and you're doing
everything, it does,
it becomes overwhelming,
it becomes stressful and you
know the anxiety sets in.
These students who
need so much and who
with just a little bit more help
would make it over the barrier,
to watch them fall by the
wayside is just heartbreaking.
[Matt Reed] We have students
here who sleep in their cars.
We have students who couch-surf.
We have students who live in
domestic violence shelters.
When you are living in your car,
the odds that you'll
be able to focus fully
on your algebra homework
I think are slim.
Students going hungry, students
coming to the food pantry.
The problem of hungry, homeless
college students is gaining
some attention,
the study found, one in five
students had gone hungry
in the last 30 days
because they didn't have
enough money for food.
Our high schools have free and
reduced priced lunch programs.
There's a reason for that.
We know you can't learn
if you're hungry.
We also provide busses
because we know that if you
can't get there on time,
you can't be there
in your class.
But for some reason,
when they go to college,
when they turn 18,
the assumption is
that those socioeconomic
disadvantages that they
grew up with
are no longer there.
[Sara Goldrick-Rab] Schools that
quote-unquote "lack prestige"
and are places that are
predominantly attended by
students of color
or by poor people
tend to get fewer resources
on a per student basis.
[narrator] Elite private
colleges and universities where
most of the students come from
wealthy families
have a lot of money to devote
to their students.
Community colleges
have just a fifth of that to
spend on their students.
The whiter the institution,
the more money it gets
and the more affluent the
students at the institution,
the more money it gets.
[narrator] Private non-profit
colleges have done
extraordinarily well
under the current system.
But they still mostly serve
the wealthy.
I think we oughta' hold them
accountable to what
they promised in 1972.
Nobody has done that.
They're supposed to
substantially increase
the number of low-income
students that they serve,
they've done the exact opposite.
Our community colleges still
carry the bulk of
the low- income population.
Here at Miami-Dade, the
largest community college
system in the country,
well over capacity at
170,000 students.
The demand for classes
this semester crashed
the computer system.
[Sara Goldrick-Rab] When the
school doesn't have resources,
you tend to see a heavy reliance
on faculty who have
very short term contracts,
who are often paid very little
money, it doesn't mean that
they're worse teachers.
What we are going to do today
is to find the formula,
formula of the hydrate.
It means they don't have time
for the students.
At best, there are 750 students
to one counselor,
and at worst upwards of
1,500 students
for one counselor.
[narrator] At elite privates,
the ratio can be
as low as 14 to 1.
[Gail Mellow] If we start
closing the doors to students,
they're going to stay
outside of everything.
You are really creating
a permanent underclass
and you have to be
realistic about that.
It won't be immediately, right?
You won't see a big explosion
in the street,
but you will see it
downstream.
When the recession
hit hard here in Massachusetts,
we took a huge cut from
the state at the same time
that we had a double digit
enrollment increase.
[narrator] During the recession,
community colleges across the
country turned away students
for the first time
in their history.
[Matt Reed] California had
waiting lists of tens of
thousands of students.
A student who tries to enroll
at a community college
and gets frustrated,
will be found and recruited
very easily into a for-profit.
The way to make money is to
run a school successfully.
90% of the people who graduate
go out and get the job
they were trained for
in a very short period of time.
[news reporter] Former employees
say the school forged signatures
on job placement records.
If our students don't succeed,
our company won't succeed.
The employment records
of hundreds of students
at Everest College at Arlington
were falsified for years.
Think about the progress
we are making with our
graduate employment rate,
but there's still
much work left to do.
[news reporter] The Dow tumbled
more than 500 points
after two pillars of The Street
tumbled over the weekend.
[narrator] While the rest of
the market was tumbling,
for-profit college stocks
were on the rise.
In 2010 ITT Tech had better
profit margins than Apple.
After the 2008 election,
I was asked to serve
on the transition team
to sort of help meet with
constituency groups on behalf of
the incoming president.
Credit markets were collapsing,
there were worries about
whether even the student loan
money would be able to float.
The for-profit colleges talked
about how this is
their moment to shine.
They're expert at finding
the jobs of the future,
training people for those jobs.
It would have been great if
everything that they were saying
was true.
That year, 2009, students at
University of Phoenix were in
a program on office management.
Ten thousand of them
defaulted that year.
You wonder if these executives
that are making millions of
dollars a year,
did they know the level
of abuse? Absolutely.
These schools were loading
students up not just
with federal loan debt
but also private loan debt
that had interest rates of
like 17-18%.
The students that they
enroll, who are mostly low
income and minority students,
didn't really have great credit
ratings and normally wouldn't
have been able to
get private loans.
So then a bunch of
the companies started
creating their own institutional
private loan programs.
They didn't really care
if nobody could really
ever pay that money back
because it was entirely
a vehicle to get access to
the government loans.
[narrator] In order to comply
with the 90-10 rule,
for-profit colleges devised
an immensely complex series of
financial transactions
in which they obtained hundreds
of millions of dollars
from Wall Street banks
that they could dole out at will
without credit checks or
permission from the lender.
[Steve Burd] And that
allowed them to
lock students in quicker.
They could do it
automatically right there.
Publicly they were saying:
"We're providing access to low
income and minority students."
If you listen in to the investor
calls, you heard a much
different story.
The schools will turn around
and report that they expect,
you know,
50, 80% defaults on
some of these loans.
[narrator] These loans came
with few or zero protections
for the borrower.
[Steve Burd] So these students
were getting
a terrible education,
taking on huge debt,
and even if they graduated,
they didn't really have
the skills they needed.
These companies were knowingly
destroying people's lives.
When I found out I was enrolled,
I was like: "Ok, well alright,
I'll just go with it."
You know, because I really
wanted to go to college,
and I really wanted to get this
degree, and I really wanted to
make a difference.
This is the final picture of me
while I was still happy.
I graduated Summa Cum Laude.
I got my associate's degree,
and that was
the beginning of the end.
Then I remembered,
my school's got job placement,
I'll go to the school, because
they had promised that they
would be with me
every step of the way.
I tried to call, I tried to
call, I tried, I can't--
I called more times for the job
placement than I did calling
about the loans,
which I did backwards, I guess.
And I couldn't even
get them on the phone.
So, after about a year,
I kind of just gave up.
This $50,000 piece of paper is
actually completely worthless.
I owe $20,000 for
an 18-month program and I don't
have anything to show for it.
The bills are coming in, you
know, I would pay them, but
I was working at
a supermarket at the time.
I was working in the deli
department making $7 an hour.
Eventually I went
into default on those loans.
It just really messed me up, to
finish it and to, to not really
have what I needed to,
to get a job, it just crushed
me, man. It crushed me.
Some schools are notorious
for having students take out
a lot of loans,
making big profits,
but having really
low graduation rates.
Students get out of these
for-profit schools loaded down
with enormous debt.
They default.
Their credit is ruined
and the for-profit institution
is making out like a bandit.
[narrator] When Barack Obama
took office, his administration
started looking for a way
to rein in
the for-profit sector.
[Davis Halperin] For-profit
colleges that get federal money
are required by statute
to prepare students for
gainful employment in
a recognized occupation.
But despite hundreds of pages
of federal regulations, nothing
explained what that meant.
[narrator] So the Department of
Education decided that
if students couldn't
repay their loans,
they clearly weren't
gainfully employed.
Earlier this morning
we released
a proposed regulation that
addresses growing concerns
about unaffordable levels of
loan debt for students enrolled
in gainful employment programs.
[Kevin Carey] The government's
saying, we don't care if you're
accredited or not,
if it turns out that none of the
students who borrow money to get
your education
can pay their loans back, we're
throwing you out of the federal
financial aid program.
[Bob Shireman] When I started
looking at the repayment rates
as a possible indicator,
I thought there was no way we
could ever go below 50%.
I mean, how can you, with a
straight face, say that
if fewer than half
are repaying their loans, that
this school is doing an OK job?
When we started looking at the
numbers, we saw that using 50%
would eliminate so many schools
that we could not
politically survive.
We needed to make sure
that whatever rule
we came out with
could withstand possible
opposition from Capitol Hill.
Some of the biggest players
in the for-profit industry were
very close to
very powerful Democrats.
And some were close
to Republicans.
And so they, they played
a very smart inside game.
[narrator] The industry
mobilized, they already had
support from Republicans
like John Boehner and Mike Enzi,
but they needed Democrats to
fight their case.
They hired former Congressman
Dick Gephardt,
and former Clinton White House
lawyer Lanny Davis.
[narrator] Laureate University,
owner of Walden, paid Bill
Clinton over $17 million
to become an honorary
chancellor,
and John Sperling,
University of Phoenix owner,
took his friend Nancy Pelosi out
on a private helicopter ride.
They hired economists.
There were TV ads.
[TV voice] When Washington
proposes making it harder for
working people
to get the skills they need,
tell Congress:
It's my education, my job, my
choice. Now is no time
to get in the way.
[Brody Mullins] The
Department of Education got
thousands and thousands
and thousands and
thousands of letters.
The White House met
repeatedly with
representatives of the
for-profit industry,
whereas there was only one
meeting where there were
advocates of consumer
organizations and student
organizations and the like.
They recruited President Obama's
own former Communications
Director, Anita Dunn.
My question is for Anita Dunn,
you have a lot of access to
the President,
do you think it's a
little bit disingenuous that
you're simultaneously being paid
by a lot of corporations to
lobby against his reforms,
specifically predatory
for-profit colleges?
Ok, well I'd like to start by
saying that I'm not a lobbyist,
I never have been
a registered lobbyist
and I do public relations.
This sector overall
has much worse results
-and it continues to get
government funds.
-That's your view.
They threw a lot of
money at members of the
Congressional Black Caucus.
I know more about
gainful employment
than you would know
if you were born again.
Well sir, they fund your
campaign, they don't fund
my campaign.
[Steve Burd] They can't have the
Congressional Black Caucus
against them.
It will apply an unnecessary
broad brush approach.
[Steve Burd] They
largely serve minority students.
We have served,
for over 40 years,
the population that will be
most negatively impacted by
these proposals.
The gainful employment rule
is a job killer.
It's designed to attack
for-profits.
If you make trouble, a powerful
member of Congress may call
your boss and say,
"Who is this person
making trouble for my school?"
I got a call from Secretary
Duncan's assistant asking me
to go to his office.
The group of senior staff people
all started filing in.
It felt like I was
being interrogated.
"What is this? How did this come
about? Where is this going?"
I'm sure that some of them
were receiving an earful
from Don Graham.
The administration and Arne
Duncan backed down quite a bit
after they saw the fight
that they were involved in,
and they got a shock.
Members continuing
their votes on the gainful
employment regulation.
A good number of Democrats voted
with virtually every Republican
to strike down this rule.
What was finally produced
was a very watered down
set of rules.
[narrator] Under the final
rule, gainful employment is
determined by
a complicated debt to income
formula, and even if a
graduate's student loan payments
are considered too high,
for-profit colleges are allowed
multiple years of violations
before penalties kick in.
Yeah, these, these
for-profit schools,
boy they, they had,
they had a lot of tentacles
inside of Congress.
Poor people don't
have that kind of pull.
[narrator] In 2010, Tom Harkin
became chair of the Senate
Education Committee
and launched his own
investigation into the
for-profit college industry.
They were used to just saying,
"The company has good policies
but this individual at the
company is acting poorly."
We asked for some of
the training material.
That is where we found this
wasn't a rogue employee,
this is how the company taught
its employees to act.
I know for a fact that,
you know, that people were
trained on it
because I did it.
In the press release,
Kevin Modany said:
"It's not authorized,
it's not encouraged
to be used by the company."
This guy is lying.
[narrator] Laura Brozek decided
to come forward.
Techniques such as the pain
funnel were commonly used
by the recruiters to demoralize
potential applicants
by discussing their life's
shortcomings in order to
have them enroll.
[narrator] Despite overwhelming
evidence, Harkin couldn't get
Senate Republicans
to admit
the industry's wrongdoing.
I'll leave you to go ahead
and beat up on
the for-profit schools.
[narrator] All of the
Republicans walked out of the
committee's third hearing.
For-profit, that alone I can see
offends some on this committee,
I thank you, Mr. Chairman.
[Senator Tom Harkin]
Taxpayers being ripped off,
students are being ripped off
and they're getting
a mountain of debt that
they'll never pay back.
But, the executives that
skimmed off all this money,
they're free, they're free.
Is that unfair?
Hell yes, it's unfair.
People know
that the system is rigged,
and it's rigged against them.
Shortly after getting out
of the military, I didn't
really care about anything.
I didn't-- I didn't want to see
any of my classmates,
I didn't want to
do any of the coursework.
Looking back, probably
someone from the school
shoulda' came and said:
"Hey, what's going on?" 'Cause I
was doing great and then
all of a sudden I wasn't.
But when it came time
to sign up for more classes,
no one hesitated to put me
in a room and sign the
documents for more loans.
My drinking was out of hand
and I was isolating myself.
I felt like a failure.
Some friends came down
from my hometown
and we went to a baseball game.
I was just talking to my friends
about how I was doing,
when I was graduating
and everything that went on,
the amount of loan debt
that I had accrued.
They realized I was--
I was in over my head.
They were supposed to drop me
back off at the campus, but they
said: "You're coming home."
They're told by recruiters
to believe in their dream.
They're told by recruiters who
use this very powerful
emotional language that,
you know, this is their time,
and this is their time to make
something of themselves.
And when it goes wrong, students
typically blame themselves,
and I have to tell them that
you're a victim here.
There's not a day that goes by
that I do not find myself
thinking about it.
And wish I had not fell for it.
And still find myself getting
so angry with, with me,
because I fell for it and I
shouldn't have fallen for it.
I feel like
I went from one tragedy
right into
a whole other tragedy.
And-- and I just feel like
I'm still not able to
wake up from it at all.
[Luis Tayahua] You can't-- you
can't go back. They duped you.
You owe all this money.
This is it, this is
where Westwood College was.
It was just fancy enough for us
to think it was legit.
[Alex Shebanow speaks]
I'm sorry. Hold on.
I would never do that
to people, but that guy?
Real piece of work.
Good evening.
Tonight, an investigation
into the surging popularity of
for-profit colleges.
Widespread complaints
like overpriced degrees,
misleading claims
and an alarming level of student
debt led to some embarrassing
revelations this year
on the entire for-profit college
industry, including Westwood.
[news reporter] Is it
to educate students
or to turn a profit?
[news reporter] It's a costly
lesson not just for students but
also for US taxpayers.
I will say this for
for-profit schools,
they've just given us all
a first class education
in the depths of
human depravity.
[narrator] In 2014, the
department of education
subpoenaed
Corinthian's job placement,
attendance and grade records
for its graduates.
They failed
to produce the documents.
[narrator] So the Department
put a 21-day freeze on their
access to federal aid.
Corinthian somehow could not
survive three weeks
without federal funds.
School is over for thousands of
Southern California students.
The doors were locked in Everest
West LA & Santa Ana campuses,
same story for Heald Colleges
in the Sacramento area.
Corinthian Colleges was taking
as much as $1.5 billion a year
of our tax money. When they
finally shut down, they said:
"We can't afford to pay back the
students or the taxpayers or
our creditors, we're broke."
Where did the money go?
I guess to executives.
These students are going to pay
for that fraud for a lifetime.
And the question is, will
anybody at Corinthian pay for
what they've done?
The ITT Technical Institute
is shutting down
all of its campuses nationwide.
The school blamed the US
Education Department's
ban on IT from enrolling new students who
use federal financial aid.
The government is now talking
about how they're going to
discharge loans of students who
have been defrauded. But if
the government had done its job
and had been a gatekeeper,
these schools should never
have been getting the federal
student aid dollars
that they were getting.
Are you telling me
that you found no evidence
that Corinthian lied to
its students and defrauded them?
As I mentioned, for some
campuses, they were not
up to our standards
and those campuses are on
monitoring, or on,
they're on sanctions.
But you are monitoring them and
they continue to be eligible for
federal funds.
The U.S. Department of Education
might congratulate itself on
Corinthian, but, those who know
this industry,
know that it continues.
[for-profit ad] Whether you
know how to code, or you're
starting from scratch,
the path to a new career,
and a new you starts here.
[Elizabeth Baylor] A lot of the
for-profit colleges are now
opening these coding boot camps
because there's a perception
among young Americans that
that's like a cool ticket
to a great job
in Silicon Valley.
It doesn't seem like
the same kind of operators,
but it really is the same
companies over and over again
reinventing themselves.
[narrator] Coding boot camps
are unaccredited,
so they're not eligible
for federal financial aid, yet.
[Bob Shireman] My big worry is
it's going to come back,
you know,
and we don't know how exactly
that might emerge,
but we need to be vigilant
and watch for it.
[crowd] USA! USA! USA!
Thank you.
Thank you very much.
[narrator] The day after
Donald Trump won the election,
major for-profit college stocks
rallied by as much as 24%.
Wall Street and the industry
know, they have an ally.
Trump University is something
I've thought about
for a long time
and I didn't want to put my name
on anything having to do
with education
unless it was going to
be the best.
[narrator] Although Trump
university was never eligible
for federal student aid,
multiple lawsuits,
alleged widespread fraud
and student abuse
at the now defunct
for-profit education company.
Court documents show
the company instructing
recruiters to use
high pressure sales tactics to
coerce applicants to enroll
in the $35,000
unaccredited program.
[narrator] In November 2016,
the for-profit lobby invited
Trump advisor and former
speaker, Newt Gingrich,
to give a speech at
its annual conference in Dallas.
[Bob Shireman] The reforms
will be rolled back
and then we'll have
another repeat of
uhm, you know, massive abuse.
[narrator] For low-income
students about to enroll in
college, the options are grim.
The public sector is literally
falling to pieces.
[narrator] If cuts continue,
state publicly funded
higher education
could become a symbol
of a bygone era.
Eight years ago in Louisiana,
the state provided
60% of the funding
for its public colleges.
Today, it's barely a quarter.
In California, UC Berkeley
has warned that it faces
a substantial and growing
structural deficit.
And in Illinois,
severe cuts threaten to close
a number of the state's
public colleges.
And conceivably that means
there are kids in kindergarten
and first and second grade,
who by the time they graduate
from high school,
will not have a public
college or university
affordable opportunity
to attend any institution.
The story of what has happened
to American public support
for higher education
is a really discouraging one.
If we continue doing
what we're doing right now,
we are not going to see an
increase in college graduation
rates among low-income students.
And what this leads to
is the demise of opportunity
for Americans.
Some people have said
that American higher education
is becoming
"separate and unequal"
and that's, those are
sort of shocking words
in America, right? To--
to go back to a sort of
"Jim Crowe" analogy,
but it's unfortunately
all too true.
[Jon Marcus] We misunderstand
the notion of prestige
in higher education.
Taking a kid that already has a
1600 on the SATs and give them a
bachelor's degree, that's easy.
What's hard is taking a
low-income student whose parents
didn't go to college.
What's hard is
getting them to graduate.
[Marquette Bascom] Even
my youngest son, he would
see me studying late at night
and he would say:
"I'm proud of you."
My whole thing was like: "You
can't give up." I did not want
my sons to see me give--
I wasn't going to give up.
That feeling, that was like
the best feeling in the world.
To let my sons know that
you can do it, those nights
you saw me stay up late,
go through all the hard times.
It all led to this very moment.
Those graduations should be
considered like a miracle.
[Gail Mellow] I cannot tell you
how fabulous you all look.
It is such an exciting day.
I can feel the, both the energy
and the intellect
that's out in this room. You are
amazing and you're going
to change your lives,
the lives of your family,
the city and the country.
Everything we know
about what's going to make you
successful in higher education
you don't have, you don't have
parents who went to college,
you don't have a stable home,
you don't have the finances,
you're working two jobs,
you did not come from a high
school that trained you well.
And yet that student made it.
[F. King Alexander] I'd like
it to be free for every student.
I'd like to live in a society
where everybody has
a college degree
because I know what I will
benefit from because they do.
[Sara Goldrick-Rab] It's the
same reason that you
pay your taxes
to pay for
a public fire department,
because if you believe
that simply funding
a private fire department
to put out a fire at your house
will work for you,
you just need to have a fire
at your neighbor's house
to discover that
when they don't call
the fire department
because they can't afford it,
your house will burn down too.
That's getting lost in this
dialog, the societal benefits.
In today's world,
workforce preparation is
maybe the key issue.
[narrator] In Tennessee,
Republican Governor Bill Haslam
noticed that
there weren't enough
skilled workers to fill jobs.
I could see that there was
a looming mountain
coming where we were
going to crash.
[narrator] His solution:
Make community college free.
[Governor Bill Haslam] I had a
lot of people in my party say:
"Again, you're just setting up
another entitlement
if you're saying everybody gets
to go regardless of their GPA."
But, we felt like we had
to shock the system.
[Governor Bill Haslam] At the
end of the day we said, if you
graduate from high school,
you can go free. We had a higher
retention rate with our
Tennessee Promise students
than we did with
our traditional students.
We're squandering
an American Legacy
of using higher education
to promote
broad public purposes.
The middle of the 20th
Century was a very
transformative period
in all sorts of ways
in the United States.
We made tremendous progress.
[Suzanne Mettler] The fact
that you had many more
people than ever before
from all of these different
backgrounds, who now
had college degrees,
meant that they were able to
contribute to society
in a myriad of ways,
and they really
transformed the country.
[electronic music]
I really find hope that because
we've managed to do it before,
we should be
able to do it again.
Okay, Alex, here it is.
This is either going to be
the greatest letter
of my entire life,
or it's going to be
the biggest let down of my life.
And even though I don't
look my best right now,
I'm doing this for you.
[Jen] So here it goes.
Subject: Claim of Borrower
Defense to Repayment
of Direct Loans.
Dear Jennifer Wilson, as
your loan service, as your
federal loan servicer
for the U.S. Department of
Education, we write regarding
your claim for release
based upon the borrower defense
to repayment rules.
The purpose of this letter is to
inform you your student loans
have been discharged by E.D.
After carefully reviewing
your claim,
E.D. has determined that
your claim meets the
requirements of
a successful borrower defense
claim because the acts or
omissions of a school
you attended would give rise to
a cause of action
under state law.
Total...
Total amount discharged:
The first loan $12,655.
The second loan $29,441.
Total amount remaining: Zero!
At the time of this discharge,
your student loan account
serviced by us
has no remaining balance
to be paid.
We did it! Thank you!
Thank you to all of you,
we did it.
[tense music]