 Hi everybody. My name is Kevin Carey. I'm the Vice President of Education Policy and Knowledge Management at New America. Thank you so much for coming to today's event about David Whitman's magnificent new book, Profits of Failure. If you pay any attention to higher education in this country, particularly the parts of higher education that aren't the very elite schools you know that far too often, students are exploited by the colleges that they choose to attend. And the problem with kind of focusing on what you see in front of you in the here and now is that it's often difficult to really see the big picture. If you've been around for a while you may know that things like these have happened before if you're lucky enough to know someone who's been around even longer than you may have heard of similar problems that were solved and other times in the past. But it's really hard to see the whole sweep of history. In fact, it's never been told before in before David's book. This is really the first time that anyone has looked at the entire expanse of the way American higher education chooses to finance and regulate higher education and the consistent pattern of the failures of those policies and the real incredible human costs that those failures have created. It's a book that will make you angry, if you read it, but it'll make you angry in a good kind of way in the sense that it will also give you hope that the failures of the past, don't have to be repeated. Going forward in the future, particularly now that I think we have some opportunities to not just correct problems that we've correct mistakes we've made but actually build a better architecture for all students and all institutions. We're thrilled to have David and a fantastic group of panelists here to discuss this book, including former Secretary of Education already Duncan. I'm very grateful to all of you for joining us here in this virtual event. And now I'm going to turn it over to my friend and colleague Bob Sharman at the Century Foundation. Thank you Kevin and hello to everyone who has tuned in. Thank you for joining us today for the premiere of the profits of failure for profit colleges and the closing of the conservative mind by David Whitman. I'm Bob Sharman, the higher education program director at the Century Foundation, which is co-sponsoring this event with New America. A special thanks to Danielle Douglas Gabriel, National Higher Education reporter at the Washington Post, who will be moderating today's discussion after some opening remarks by the book's author. So joining in that discussion in addition to Arnie Duncan will be Antonette Flores, managing director for post-secondary education at the Center for American Progress. I first met David Whitman in 2009 when I joined the Department of Education where he was serving as Arnie's speechwriter. We never formally worked together on the issue of for profit colleges, but I remember a hallway discussion where David was telling me about the fact that he had attended a for profit school to get his massage therapy training and license. David had had a good experience. So we talked about the importance of figuring out how to set up guardrails that allow federal aid to for profit schools, but to prevent those schools from using that federal stamp of approval in a way that hurt consumers. Well, little did I know that that little spark that conversation would grow into the most comprehensive history of US for profit education ever compiled the book that we are discussing today. Before preparing for this webinar, I did not know what David had done before he was serving as Arnie's speechwriter. He had had a long career as a senior writer at US News and World Report. Before that his first job out of college was to draft public policy case studies for the Kennedy School at Harvard. Building on that skill, we now have a giant case study of the regulation of for profit colleges. I present journalist speechwriter historian and now book author David Whitman. Are you unmuted David. Okay, there we go. You can hear me now. We can hear you now. Okay, great. Thanks to Bob and Kevin for those extraordinarily generous introductions. And to New America and the Century Foundation for co-sponsoring their lease of my book and this webinar. There are a lot of folks listening today who are very well versed on the subject of for profit colleges. But I want to start by briefly talking to those of you who are not experts on the subject. The obvious question to start with is this. Why is the seemingly eye glazing subject of the history of for profit college regulation, not only important, but surprising. Most Americans know little or nothing about for profit colleges. That's because the for profit sector has long been the Rodney danger field of higher education, it's the sector that just can't get no respect. Parents may dream of sending their child to an Ivy League college, the flagship research university in their home state, maybe they're on a moderate. They don't dream of sending their child to a for profit university. In 2020, just one in three Americans thought that for profit colleges are quote for people like me, former House Speaker john Boehner who was a big booster for profit colleges, lamented that for profit colleges are second class citizens in the world of higher education. Those popular prejudices are both mistaken and short sighted, because the fate of for profit colleges, and how the government chooses to regulate them is surprisingly consequential for millions of Americans. Each year, good for profit colleges successfully train tens of thousands of students to take jobs as medical assistants, cosmologists, business administrators registered nurses, HVAC technicians, jobs that can change the trajectory of students and their families for years to come. But each year, bad for profit colleges leave hundreds of thousands of students with no job and steep debts, and they can ruin or mar the lives of students and their families for years to come. And because career colleges are heavily subsidized by the federal government through the federal student aid program. Government regulation for profit institutions helps determine the return and effectiveness of tens of billions of taxpayer dollars. So, like it or not, everyone on this webinar today is helping to fund for profit colleges, and the more than one million students who attend them today. Now, this public ignorance and indifference to for profit colleges is compounded by the fact that the adults who attend them are among America's most vulnerable and neglected students. Next slide. They are single moms, disadvantaged adults, veterans, minority students and displaced workers. Students are doing all the right things. They are enrolling in for profit colleges to get new and better paid jobs, and they're trying to improve the lives, their lives and those of their family. These are the very students, the most vulnerable consumer that government inside and society should place a priority on protecting and from racking up unaffordable debt for a worthless degree or certificate. The majority of students at for profit colleges are minority students. How students fare at for profit colleges is very much a test, both of social justice and of racial equity. Now that's, that's why taxpayers that's why the person in the street should care about for profit colleges. To compare it to what people see on the news. The worst outrage in higher education today is not the operation or city blues scandal. This was the scandal in which Hollywood actresses Felicity Huffman and Lori Laughlin along with 30 other wealthy parents were charged with cheating on the kids admissions test or bribing their way to get their kids in the selective colleges. And I don't defend what those parents did for a moment. But the worst scandal in higher education today, far and away is the subpar education, the hundreds of thousands of non traditional students and low income adults receive a mediocre for profit schools. In the college admissions bribery scandal, about 50 people were charged with conspiracy to commit fraud between 2011 and 2018. By contrast, since 2016, more than 315,000 students have filed claims to have their federal student loans forgiven, because they say their for profit college defrauded them. Now before turning to the book, I want to just add a brief personal note. During the nearly six years when I was the speechwriter for Secretary of Education Aaron Duncan in the Obama administration. I wrote about many subjects for Arnie, but for profit colleges was not among. And yet I watched the regulatory debates about for profit schools from a distance with keen interest for a couple of reasons. I started my career as a journalist way back when that US News and World Report in 1985. During the second term of Ronald Reagan, I covered social policy and I interviewed Reagan's then Secretary of Education Bill Bennett. Bill Bennett was a ferocious critic of for profit schools. Next slide. So when the Obama administration started regulating his career education schools. I was surprised that many conservatives had completely forgotten Republicans traditional support for accountability measures at for profit schools, and that they didn't even realize. They were taking the same position with the Democrats who had opposed Bill Bennett in the 1980s, folks like Senator had Kennedy and Paul Simon. Now there was one other more personal reason I kept tabs from a distance on the regulation before profit sectors Bob mentioned as part of a mid career transition out of journalism before I went to the department. I got enrolled in a for profit massage therapy school. I earned my certificate, I got licensed and certified, and I worked part time as a therapist at an area spot. I had a good experience that my massage therapy school, and I knew firsthand the virtues of a good for profit school. I was the only relatively senior political pointy in the education department who had ever earned a certificate at a for profit school. So with all of that as an introduction I want to take a few minutes just to lay out the three main themes and findings of my research in my book. The first of these three overarching patterns of history is that federal regulation of for profit schools consistently follows the same. Identical cycle. Next slide. In this cycle is driven by the federal government making new dollars new pots of money available before profit school, which spurs abuses and propels the need for new regulation law, the strength and consumer protection. Identical cycle occurred in the 1940s, after the passage of the World War two GI Bill, and it took place again in the mid 1970s. The latter half of the 1980s, early 1990s, and from about 2006 until today, the second overarching pattern of history is that there are three what I call unofficial laws of for profit college regulation that one can deduce from history. Next slide. The first law of for profit college regulation is that good money spawns bad practices, and that's particularly case for easy one federal money with fewer no strings attached to it. Since the World War two GI Bill, the federal government has opened up pots of money before profit colleges on 12 occasions. I described in detail in my book, those 12 turning points. And I'm not going to list them here, but each time that led to a rapid growth in the for profit sector and new abuses. The second law of for profit college regulation is this. Any law or regulation to curb competitive access to federal revenues will create an equal counteraction to circumvent it so as to increase competitive advantage. That is why for profit regulation has been riddled with big infamous loopholes for 75 years. And the third law of for profit regulation is that industry opposition to performance measures are inversely related to a regulations effectiveness of measuring a given programs performance. So the more accurate and specific performance measure of a given program, the more it will face industry opposition. Firstly, the more general performance measure is easier is the game, the more likely it will be that it will run or industry support. Now there's one last big bucket of history here of lessons learned about potential policy remedies for protecting consumers. Conservatives today espoused to main remedies for abuses in the for profit sector. Federalism devolving more power to the states and private accrediting agencies on the theory that states and accreditors are better situated to regulate quality in the schools they oversee than a distant federal government. The second remedy and really this is the one that's most favored by conservatives and industry is relying on the market to correct abuses in the for profit sector. This is a very approach of Secretary Betsy DeVos and the Trump administration, which argued that if you provide consumers with information on something known as the college scorecard website. Provide them information about the earnings and debt of former students in the program. The invisible hand of the market will do the rest. Students will flock to programs with good records of placing graduates and jobs that pay a living wage. They won't apply to the lousy programs with poor job placement records that leave students deep in debt. And the market would effectively force programs to close that prepared students for jobs and fields in which there were already vast labor services. And programs to look better than their competitors would carefully screen out under prepared students who had little chance of succeeding. So that's, that's the classic exposition of free market theory. What's surprising is that advocates of market based accountability, and this includes former Education Secretary Betsy DeVos are surprisingly ignorant of basic elements of free market theory, and the actual operation of educational markets. And that's despite the fact that the big believers in educational choice and competition. This match here starts with the fact that for profit colleges, don't at all function in a traditional free market. In fact, the for profit sector is actually a textbook example of market failure. And when markets fail, that's precisely the situation where they need government regulation to protect consumers. So why is the for profit sector and illustration of market failure. Next slide. First, because it suffers from what economists call asymmetric information. And that's a fancy way of saying that the sellers in this case, the for profit colleges know much more about their product than the buyers, the students. The consumer is at a huge disadvantage because they have very little opportunity to sample and compare the educational product in places that the for profit college is often for profit colleges also have a third party payer. Their students get scholarships in the form of programs or the most cases students borrow the money to pay for their program by taking out student loans from the federal government. But either way, the federal government is the third party payer it's paying the bill, so long as the student is enrolled. So as a result, there are no competitive pressures to lower prices or improve the quality of programs. There is no invisible hand of competition. All the federal government does before it sends out checks to the for profit college is to check if the student qualifies for a higher education market. Normally, education markets themselves are different. Higher education is what's known as a trust market. And a functioning competitive market, the buyers make repeat purchases and can meaningfully comparison shop. So if there are two grocery markets a block apart, you can over time, figure out who is the best prices and products for you. Education isn't like that. It's a one time purchase, and you may not know until years afterwards, whether your program was a good program and a good deal. Now unfortunately, conservatives and Republican lawmakers today have completely abandoned the idea of holding for profit schools, accountable for meeting even minimum student outcomes with the use of federal dollars. Next slide and conservatives have taken this position in large measure, I believe, because they are wedded to the ideological belief that the market will adequately protect consumers and do so better than the government. And that's even in markets that are riddled with perverse incentives to cut corners in educating students. So here's how extreme the abandonment of accountability by conservatives is today. Secretary DeVos rescinded the Obama administration's gainful employment, which required career programs, not to saddle students with unaffordable federal student loan debts. It is now possible for a career education school that zero graduates, zero students placed in jobs in the field of training and have every one of the graduates deep in debt. But still, the federal gravy train will keep flowing to that school. So now I want to switch gears for a moment and briefly detail the cycle of regulation scandal that I referred to earlier. I liken this cycle to the five stages of regulation scandal through a version of Elizabeth Kubler Ross's five stages of grief. So the five stages are exposure, outrage, action, denial, and acceptance. In the exposure stage, generous federal aid programs for veterans and other students fuel rapid growth at for profit schools. That prompts news outlets to publish exposés of deceptive and predatory recruiting practices by school salespeople who were available, unqualified students in the signing up for student loans. Stage two is outrage. Congress appoints a select committee to examine the abuses chronicled the news accounts invariably commissions the government accountability office to examine for profit abuses and the waste of government dollars. Stage three is action, the newspaper exposés the congressional investigations spotlight the inadequacy of federal and state safeguards, and that sets off new efforts by the administration and Congress to curb the abuses. At the same time, one or more of the era's largest for profit change goes into bankruptcy. Stage four is denied. The for profit industry claims it has been unfairly targeted for the abuses of a few bad apples. It launches a furious counterattack in Congress and the courts against the new regulations. Stage five is acceptance. New federal legislation and regulation shrink the for profit industry temporarily. The years of the industry pledge the battle days will never return. There's time passes without wholesale flagrant abuses reappearing. Congress and the administration loosen the purse strings on federal funding and the whole cycle of scandal and regulation starts all over again. Let me give some specific examples of this cycle. Many people think of the World War two GI bill as landmark legislation. And in many ways it was. But contrary to popular war the educational component of the GI bill wasn't just about sending GI's on master college for the first time. Next slide. This is a surprising fact more GI's use their educational benefits to attend for profit trade schools that enrolled in four year colleges and universities. The GI bill fueled a stunning explosion in for profit schools, eager to corner these new federal dollars. 18 months of the passage of the 1944 GI bill, more than 2100 new for profit schools popped up. That's an average of four new profit for profit schools per day. The 1948 colliers magazine reported that the educational provisions of the GI bill that squandered at least half a billion dollars. So porting what crew, in many instances, and I quote, to be the greatest boondoggle of all time. They're using their GI bill benefits to become amateur piccolo players horseback riders, and to learn the fine art of chicken sexing, so they could distinguish male from female chicks. Here, the colliers article here, Homer Ramey, a Republican lawmaker from Ohio wrote his own article for colliers and complained that for profit owners that established new school that quote milk the federal treasury of the taxpayers funds without giving any worthwhile return. Several years later, a select congressional committee followed up by completing the first of a half dozen committee investigations that would follow in coming decades. Next slide. It's 222 page report found that exploitation by private schools has been widespread, and that hundreds of millions of dollars have been frittered away on worthless training. There was no examination that same year, 1952, but more than 640 for profit schools from the two thirds of them use questionable advertising recruiting and billing practices, and then only about 20% of veterans who took courses at the school, even completed their courses. It's been forward about 20 years and the Texas Attorney General is testifying the congressional hearings that Congress is 1952 report on for profit abuses mirrors with quote disquieting exactly the findings made here today. This is the first time when a new select congressional committee held hearings on for profit schools in 1974. It's opening to witnesses were actually Republican congressman in California were furious about for profit schools, ripping off their constituents in the Los Angeles area. Next slide. The Republican congressman warned his fellow lawmakers that they were dealing with a quote national scandal of multi million dollars of portions. The second Republican congressman urged his colleagues to do something to rid ourselves from this curse. A few months later, the Republican whip in the house, the public within the house was then Congressman Bob Michael of Illinois, took to the floor to warn lawmakers about for profit abuses and language that could have been ripped from the pages of pollyers 1948 magazine report. He said that bad for profit schools were running a con game of immense proportions involving huge sums of money when pieced together that amounts to one of the most gigantic ripoffs in the country. There was a GAO report in that era too. It found that 75% of veterans failed to complete their correspondence courses, and only 6% found gainful employment in their field of training. I could go on and cite virtually identical findings from investigative news reports, congressional committees, the GAO from federal officials in the 80s and early 1990s from the last decade. We obviously don't have time today to review all that history. But I assure you, it's a carbon copy of earlier years. We'll scratch the surface about outrageous recruiting abuses over the last 75 years. Next slide for profit schools have recruited and enrolled individuals at homeless shelters, halfway houses for institutionalized mental patients, county jails, drug rehab centers, public housing projects, welfare offices that cater to seasonal migratory farm workers and service and servicemen that oversees army barracks, including signing up veterans with traumatic brain injuries who didn't know what course they were taking. Perhaps the biggest outrage was what is known as Greyhound therapy. In 1989, the Houston Chronicle discovered that two local for-profit schools were actually busing the homeless from shelters in Dallas, San Antonio and New Orleans to Houston to sign them up for student aid. While they were on the bus, the homeless men and women signed their student loan commissory notes. And the Houston School dumped the homeless back into shelters and cheap hotels until the schools received their loan money. So you can't read the history of regulation and scandal and walk away thinking that the problems of the sector are just the problems of a rare bad apple. Next slide. The problems and abuses are far more systemic than that and are driven by the perverse economic incentives that for-profit schools have to cut corners in educating students to generate more profits. Consistently, there are three big problems that are far more common in the for-profit sector than anywhere else in higher education. Next slide. For-profit schools, first, are far more likely than other schools to close abruptly, leaving their students stranded midstream in their studies and often with no other program to which they can transfer. Second, they're far more likely to engage in deceptive advertising, boiler room recruiting tactics, and fraudulent misrepresentation than other schools. And finally, they are far more likely to leave their students saddled with unaffordable debt for worthless degrees. So, how should federal officials and lawmakers address the problems in the sector? The last chapter in the book lays out a series of actions that would better protect consumers. I'm not going to get down in the policy weeds here except to make one last point. For most of the last two decades, conservatives and industry spokespersons have maintained that the primary guiding role of federal regulation should be to treat all sectors of higher education equal to create a level playing field for all institutions. Well, that sounds like a goal that everyone should support, but even a little bit of forethought would show that it's a kind of faux equity standard. No matter what the Supreme Court says, corporations are not people, and for profit colleges are not students. It is critical that students and subgroups of students be treated equitably, but not that institutions be regulated in a uniform manner. In fact, it's impossible to create a level playing field in higher education regulation without rewriting vast swaths of the tax code securities law and consumer protection statute. Because the law already draws far ranging distinction between for profit and nonprofit energies. But even if the law treated all colleges and universities identically. Differential regulation for very different college sectors with different missions makes sense. In this country, we regulate trucks and cars very differently. Even though both are motor vehicles trucks are regulated differently because they are inherently less fuel efficient and they present different safety problems in cars. And the same is true for for profit and nonprofit colleges. And so to those of you in the policy world, I would urge you to stop treating universal regulation of all institutions as a kind of holy grail for higher education regulation. It's not. And with that, I'd like to turn this over to Danielle for discussion. Thank you, David. Thank you so much for having me here. And thank you for this very thorough book and explanation history of the for profit sector and regulation. So David, you document the long history of regulations designed to clean up abuses in the for profit college sector, and how those efforts are undermined. What historical examples of that cycle do you find most instructive in forging ahead with regulation today. Great question. There are three laws or regulations that I think work to curb abuses. One with the 1952 Korean War GI bill which ended direct tuition payments to schools, and those stopped for the next year and a half a century. They didn't come back until 2008 and the 911 GI Bill and as soon as I came back and saw the explosion of abuses of veterans by for profit schools. The second effective regulation with the 1992 higher education act amendments, which barred schools with high default rates from receiving federal student aid. The Obama administration's 2014 gainful employment rule, which had a big preemptive impact in getting for profit programs to close their worst programs, even though Trump administration eliminated rule before it actually took effect. Now all three of those successful laws and regulations had some common ingredients. The most important was that they dramatically altered the reverse incentives in the for profit sector that undermine providing equality education. All three of the right those regulations are laws were hard to game, at least initially although colleges eventually figured out how to game the 1992 over default regulations. What's fortunate Danielle is that it's what's far more common are ineffective laws and regulations. And those are really the mirror image of effective law and regulations of ineffective law and regulations failed to go far enough and they failed to alter the reverse financial incentives to exploit consumers and then lots of leaf holes. So, I guess I'd say history tells us that the Biden administration ought to be looking at ambitious regulation that alters those big and bad economic incentives in the industry, and not trying to just sort of advance the traditional small board regulation that's filled with loopholes. One of the other things I think it's really fascinating is in documenting this history, you really show how much kind of the political support has changed for for profit colleges and you know regulation for profit colleges has become a highly partisan issue with a lot of conservatives being staunch defenders of the industry these days, but your book shows in great detail that that certainly was not the case for much of the 20th century, when conservatives often drove the push for accountability and sector, what changed. So there are sort of three theories to explain the GOP flip flop. But you might call Obama derangement syndrome. I mean the idea that anything that Barack Obama is in favor of conservatives and Republicans must uniformly oppose. The second theory might be called the sort of your leader syndrome. And that Republicans must follow Donald Trump in lockstep and everyone knows Trump founded a for profit university in his name, and he defended the school from lawsuits and some pretty damning evidence that the university was largely a sham. When Trump University was never eligible for federal student aid. It's hard to imagine Republicans leading the charge make for profit schools more accountable for having decent outcomes with President Trump, with the president Trump in the White House. But I think the third and the most important explanation for the Republican flip flop on accountability is the follow the money theory. In 2000 many for profit chains became not only giant publicly traded companies with hundreds of millions of dollars. They also became some of the biggest money givers to Republican lawmakers. So the fact that Republican lawmakers had already started to abandon any real effort to hold for profits accountable before Obama got into office makes me think that it's really the power of the for profit lobby. And that's the balance for the GOP flip flop. And remember, virtually all lawmakers have a for profit school in their district. I do want to say one thing. The Trump administration was really extreme in its support of for profits it was basically a mouthpiece the industry. A year into the Trump administration, a lawyer or big for profit chain that went on to collapse a couple years later. He actually put the song to his appreciation of the Trump administration. He adapted Randy Newman tune from Toy Story. You've got a friend of me. And with apologies to Randy Newman and to wedding. Here's how here's how the tune went. We got a friend in Trump. He's lifting us out of our slum. We were down and life was rough. Too many raids were way too tough. After so many years, we've just had enough but now we've got a friend in Trump. Oh yeah. But I think it's pretty clear that that essentially it's pretty rare when you hear the sort of glories of deregulation celebrated the song. Well, thank you for the rendition. I'm sure Randy and Woody from Toy Story appreciate it. You mentioned a lot. Are you talk a lot about in the book as well as within your remarks about perverse incentives to cut corners and educating students at for profit colleges. Can you give us an example and and how can regulation mitigate some of these incentives. So the title of my book is the profits of failure and I didn't use that title just as a busy title. I went on the book there are actually a number of incidents where literally literally pays off quite handsomely when a for profit school fails. And I'll just cite two examples here. One was the business model of correspondent schools before profit school these mail order schools would have had to close if all or even most of their students exceeded because they never would have had enough staff and resources to run quality programs for tens of thousands of students. The business model actually depended on having most of the people sign up pay for their course and then drop out without ever completing the course. Another example of the profits of failure is recruiting underprepared students on mass to enroll in school and take out federal loans, even if there's little or no chance they're going to complete the program. And other schools have done that by recruiting what's known as ability to benefit students. These are students who have dropped out of high school and don't ever diploma or GD, but they can still get federal aid to college if they pass sort of notoriously easy ability to benefit test. So those are two examples. So with that actually let's welcome some of our panelists into this conversation. As previously mentioned we have with us today former Education Secretary Arne Duncan, who is now a managing partner at the Emerson collective. We have with us and to net Flores, the managing director of post secondary education at the Center for American progress and again brought Bob Sherman the director of higher education and excellence at the Century Foundation. Thank you all for joining us. I will pitch the first question off to Bob but for the rest of the panelists please feel free to reply whenever Bob is done and that goes for all of the questions we have today. So Bob, you know there's a lot of discussion in David's book about the gainful employment rule to ensure graduates of career training programs don't wind up with unmanageable student debt. The Trump administration have rescinded the Obama era rule and President Biden has promised to revive it. What features of the regulation are worth keeping revising are discarding altogether. Overall, the structure of the game for employment rule made sense of the 2014 rule by looking at the question of how much is borrowed generally by students and what kind of earnings do they have in the future. So I think it would be perfectly appropriate for the Biden administration to to reinstitute the 2014 version. That said, the, the, you know, we always thought when this whole process started in 2009 that some elements of the industry would sit down with us and work out, work out some compromise some shared kind of approaches and as David indicated, instead politically with the Obama derangement syndrome, it just became this huge political fight to the death. And I would hope that maybe things have changed and that maybe some elements of the industry could sit down and talk through approaches that might address concerns that they have about the way the 2014 rule worked. But that said, I think, going forward with that with with that approach would be fine. I'm going to pitch this next question over to you David actually for for all of the flak the Obama administration received for targeting for profit colleges. What lessons can the equal amount of criticism from consumer groups and even the education departments inspector general that the administration did not go far enough fast enough to prevent the collapse of Corinthian colleges. What lessons can the new administration glean from that case. I think I think some of the IG criticism was fair. And I think there are lessons to learn. One important lesson is learn obviously is not to intervene when it's too late community. And there were the administration didn't have any kind of adequate letter of credit on record so if the printing when Corinthians college failed there wasn't any protection for taxpayers as a result of those losses. The creditors also need to do a much better job of supervising troubled institutions particularly preparing teach out plans so if the institution closes, there's a realistic plan that can be put into action pretty quickly to make sure those students can transfer to another institution and that I just didn't happen in the printing colleges example. Unfortunately, those lessons were unlearned again in the Trump administration which had its own version of the printing colleges collapse that was disastrous with the dream center schools and some other for profit changes that chains that So I will throw this next question over to Arnie, you know regulations are rendered useless if authorities failed to enforce them. And David's book has shown that the Education Department has a history of giving institutions a multitude of chances to redeem themselves before facing sanctions. What can the Biden administration do to strike a balance to achieve fair and effective oversight. First I just want to thank David this is just an unbelievable amount of hard work, very complex subjects and days of little bias is a good friend with a great work together but he's a master so they're just stealing hard truths from complex situations I think that's what he's done here. So I think at the end of the day what I personally believe, I agree with David on, you know, almost all these things that this is not a bad apple syndrome. You have a structure that is broken he calls it a market failure. I think that is accurate. That's something that's not going to self correct. That's not something that transparency is going to fix. He may remember we, we desperately begged the industry to self regulate early on we didn't want to have this fight we talked about that, you know, American Bar Association American Medical Association lots of examples of industry self regulating. The last thing we wanted to do was get into this space but they proved and honestly admitted to us offline they were incapable of self regulating. So I think what what the Biden administration, any administration has to do is just put in place those guardrails, so that you don't have desperate people ending up in a worse position than they started there's just something not just education but morally bankrupt about that. And I said that I want to be clear, I actually want a thriving for profit sector, if they're doing good work, we have so many people 18 year olds 38 years 58 years across the country, the need retrained and need retool and the need skills for the new economy, and the traditional sector isn't large enough or strong enough to have the capacity. So I just want to always be clear this is not an anti for profit speaking for myself. It all it's just an anti hurting students mentality and so the Biden administration any administration could just fight you know continue to fight for students to stand that gap. And if you had less folks taking advantage of people and more people actually delivering high quality education that helps people climb the economic ladder. Honestly, I hope they grow and thrive. And to net you have done a great job of keeping an eye on the regulations of the for profit sector, as well as accreditation and all of the ways in which these things kind of work together to create this regulatory regime. Where do you see the largest holes in the regulatory regime created terrain and abuses in the for profit college sector. And how would you address them. Thanks Danielle and I also want to say thanks to David I found your book incredibly insightful. It includes every nugget of history you didn't know you needed in order to understand both where we've been oftentimes more than once and where we're going so definitely a great book to dig into if you're interested in this topic, but the biggest holes right now are all of the areas that were deregulated under the Trump administration. But there are two in David mentions these in his final chapters. There are two that where for profit colleges are transforming and growing in part to circumvent existing regulations. And so they're the biggest holes because regulations haven't even begun to contemplate them yet. The first is the emerging emerging trend of for profit colleges transitioning to nonprofit status and Bob Sherman is the expert here so I would point you to his work but the challenge is that for some of these conversions there's still a profit motive where owners are maintaining a stable stake in the school. And you're not really fundamentally changing the way that the school operates so it's essentially a wolf in sheep's clothes clothing. One of the things that apartment can do here it has very broad authority to both approve the conversions conduct monitoring and it can set the terms and put restrictions on conversions to ensure that schools are meeting specific criteria so for example like the second is, and this is sometimes a part of conversions but it's also increasingly being used across across all sectors is schools relying on an accredited for profit online program management companies. And these companies vary a lot in what they offer for some it's just the technology platform for others and includes everything from marketing and recruitment to managing the school content training professors and these companies are collecting large sums in many cases of tuition revenue from the students it's not clear to students enrolling that they are enrolling in a school and being taught entirely by someone else. There's a regulatory loophole here that allows some of the more concerning practices and it in regulation. Regulation should prevent colleges from using recruiters for things like admission and enrollment or financial aid it's supposed to prevent high pressure recruiting tactics which is a big part of the history that David highlights. But the guidance related to the regulations allows a carve out for third party providers like online program managers so changing the rules there is a really great place to start. I'm going to emphasize with the last few minutes that we have I'm going to open it up to some audience questions that our folks here have been cultivating so let me check these out now so one of the questions is why should there be different accountability standards depending on the tax status of the institution. We all know plenty of so called nonprofit colleges that are very revenue driven and aren't doing a very good job of serving students in terms of graduation rates, or the kind of debt that they wind up with after college. And anyone can feel free to address this one. I just want to mention that the gainful employment rule didn't apply to colleges based on their tax status. About a third of the programs covered by the community colleges were private institutions they basically applied to certificate programs in for profit schools and lots of certificate programs. And that's the for profit sector that where people where the institutions are paying taxes. The answer that question is really what I stated in my near the close of my remarks that there are three big problems that are just far far more common in the for profit sector than any other sector of higher education and those are leaving students with debt, closing midstream and not providing the transfer for students and using fraudulent deceptive recruiting tactics. So that's that's why that's why the for profit college sector has historically always gotten heightened scrutiny than other sectors. And I wanted to add to that that the term tax status is misleading because it makes it sound like the differences are like between being, you know, married versus single on on a tax status, but it is actually an accountability status so when you're legitimately a nonprofit, you are accountable to a board that is not the money makers, they were prohibited from being the money makers. Same thing with a public institution you're accountable to a public entity to elected officials who are not allowed to pocket the money that comes in. So the accountability itself is different in a nonprofit or versus a for profit entity when they are legitimate. And so it's so so at you know, asking and I think David makes this point in his book you know asking for for the regulations to be the same is a consensical question because accountability by definition is different than nonprofit public and for profit institutions. So another audience question, can't vigorous oversight of department accreditors actually make a big difference in which for profits can continue. So the combination of ACICS and the consequent greater oversight by other for profit accreditors cause some of many of the low performing for profits to close. Should this be the primary focus of the department going forward. I can weigh in there a little bit. I would say that the increased scrutiny of institutions by accreditors is what has led to led some institutions to close. On the contrary, ACICS is still in the system, the Department of Education restored their recognition and so that's one of the considerations that will come up under the Biden administration because the problems there have continued. Last year the Department of Education also dramatically rolled back many of the regulations around its own oversight of accrediting agencies and what it expects of accreditors. And so if we're hoping for that to be a place where we see reform. We need to completely rethink their role because in many cases they're not well suited to conduct some of the oversight that is needed and these changes have to happen in conjunction with stronger federal oversight. You know the history of accreditors is that they are feeble overseers of educational quality, particularly in the for profit sector. I think we have time for one more question, one more audience question that is, and one of our audience members wants to know is there a difference between corporate publicly traded for profits and the smaller individually owned entities in terms of performance and accountability. Well one one difference is that publicly traded for profits have a fiduciary duty to maximize profits for their shareholders. A little less of a fiduciary obligation in a smaller non publicly traded company. Some of the better for profits are family owned family run and there's some bad ones too in that category but some of the better ones are in that sort of category of having history of providing good career training. I don't know about Bob do you have any thoughts on that. I would agree I mean most of the, the, the biggest problems in terms of numbers of students and just how large the problem that the collapse can be has happened at the publicly traded companies or in some cases now kind of private equity funded but you know aiming, aiming for a be a public company eventually, and you know you do want to college that is thinking in the long term. And there's a, because at least think theoretically that a family owned company that is thinking for the long term they want to pass the company on to their, to their children perhaps etc. And so I think that's why we have seen some good for profits that are that are family owned. It's not an absolute but I, but, but certainly the biggest problems have been at the publicly traded big companies that guys I think we are actually at time a little overtime but I thank you all for joining us today David thank you for this wonderful conversation to all of our panelists. This is a quite a read. I got through all 500 pages. And you'll feel educated after, after having done so so thank you for that. Thank you again to New America Foundation as well as the Century Foundation for hosting this. And thank you guys for joining us. That's it. I wanted to say my, add my thanks and to appreciation to Danielle to New America Century Foundation, all the panelists, the books available on paperbacks available on Amazon, if you'd like to read it. And thanks for everybody who tuned in today.