 New America would like to welcome you to our virtual event. The program will begin momentarily. While we are waiting, I want to review a few housekeeping notes. This event is being recorded and a recording will be posted to the New America events page within 48 hours after the event. Attendees will be in listen-only mode and you will not be able to be seen or heard by your fellow attendees or panelists. Therefore, we encourage you to share your comments and questions in the Q&A and chat features which can be found at the bottom of the screen. Thank you for joining us. We will begin momentarily. New America would like to welcome you to our virtual event. The program will begin momentarily. While we are waiting, I want to review a few housekeeping notes. This event is being recorded and a recording will be posted to the New America events page within 48 hours after the event. Attendees will be in listen-only mode and you will not be able to be seen or heard by your fellow attendees or panelists. Therefore, we encourage you to share your comments and questions in the Q&A and chat features which can be found at the bottom of the screen. Thank you for joining us. We will begin momentarily. You're on, Kevin. 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, you may have heard of similar problems that were solved many 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, and 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, Arnie 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. 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. I've 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. He 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. 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 I started 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 the 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. My thanks to Bob and Kevin for those extraordinarily generous introductions. Welcome back again to New America and the Century Foundation for cosponsoring 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. And I think an obvious question to start with is this. What 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. In part, 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. They don't dream of sending their child to an Ivy League college, the flagship research university in their home state, maybe they're alma mater. But 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. This 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. Next slide. Each year. Good for profit colleges successfully trained 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 your 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. These 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 consumers that government inside and society should place a priority on protecting and from racking up unaffordable debt for a worthless degree or certificate. And since the majority of students at for profit colleges are minority students, how students fair 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. Now, to reiterate what people see on the news. The worst outrage in higher education today is not the operation varsity 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 that hundreds of thousands of non traditional students and low income adults receive a mediocre for profit schools. 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, 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 them. 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. I knew that Bill Bennett was a ferocious critic of for profit schools. Next slide. 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 as the Democrats who had opposed Bill Bennett in the 1980s, folks like Senator had Kennedy and Paul Simon. There's one other more personal reason I kept tabs from a distance on the regulation before profit sector Bob mentioned as part of a mid career transition out of journalism before I went to the department. I had enrolled in a for profit massage therapy school. I earned my certificate, I got license 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. As far as I knew I was the only relatively senior political appointee 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. 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 to strengthen consumer protection. This historical 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 and 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 industry support. Now there's one last big bucket of history here of lessons learned about potential policy remedies for protecting consumers. Conservatives today as well as two 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. The next 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 that a 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 are already vast labor services. And programs to look better than the 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. But what's surprising is that advocates of market based accountability. And this includes former Education Secretary Betsy DeVos. 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. The reality mismatch 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 for profit colleges, know much more about their product than the buyers, the students. So 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 the 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. As a result, there are no competitive pressures to lower prices or improve the quality 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. And finally, education markets themselves are different. Higher education is what's known as a trust market. In 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. But higher education isn't like that. It's a one time purchase. You cannot know until years afterwards, whether your program was a good program and a good deal. 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. 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. After 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 to have zero graduates, zero students placed in jobs in the field of training and have every one of the graduates deep in debt. And 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. Next slide. 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 exposays of deceptive and predatory recruiting practices by school salespeople who were available, unqualified students into signing up for student loans. Stage two is outrage. Congress appoints a select committee to examine the abuses chronicled the news accounts and variably commissions the government accountability office to examine for profit abuses and the waste of government dollars. The committee is action. The newspaper expose 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. The for profit industry claims it is being unfairly targeted for the abuses of a few bad apples. It launches a furious counter attack in Congress and the courts against the new regulations. Stage five is acceptance. New federal legislation and regulation shrink the for profit industry temporarily. In the midst 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. 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. It's 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. The 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 collars magazine reported that the educational provisions of the GI bill had 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. Veterans were using their GI bill benefits to become amateur piccolo players horseback riders. They were using the design art of chicken sexing, so they could distinguish male from female chicks. A week after the collars article appeared Homer Raimi, a Republican lawmaker from Ohio, wrote his own article for collars and complained that for profit owners that establish new school that quote milk the federal treasury of the taxpayers funds without giving any worthwhile return. And three 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. It was a great examination that same year 1952, but more than 640 for profit schools from the two thirds of them used questionable advertising recruiting and billing practices. And then only about 20% of veterans who took courses at the school, even completed their courses. And 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. So this 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. We're furious about for profit schools ripping off their constituents in the Los Angeles area. Next slide. So one of the GOP congressman warned his fellow lawmakers that they were dealing with a quote national scandal of multi million dollars proportions. 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 Paul years 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 GA 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'm going to 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. Let's watch 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 siding 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. In August, 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. 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 equally, 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. Next slide. 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 distinctions between for-profit and non-profit 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 than cars. And the same is true for for-profit and non-profit 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 and 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? It's a great question. There are three laws or regulations that I think worked to curb abuses, one with the 1952 Korean War GI Bill which ended direct tuition payments to schools. And those stopped for the next four and a half a century. They didn't come back until 2008 and the 9-11 GI Bill. And as soon as I came back, we saw an explosion of abuses of veterans by for-profit schools. The second effective regulation was the 1992 Higher Education Act amendments which barred schools with high default rates from receiving federal student aid. And the third was 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 the Trump administration eliminated the rule before it actually took effect. All three of those successful laws and regulations had some common ingredients. The most important was that they dramatically altered reverse incentives in the for-profit sector that undermined providing equality education. All three of those regulations or laws were hard to game, at least initially, although colleges eventually figured out how to game the 1992 over default rate regulations. What's unfortunate, 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. Ineffective law and regulations failed to go far enough and they failed to alter the perverse financial incentives to exploit consumers and there are 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 bore regulation that's filled with leaf holes. One of the other things I think that'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 of for-profit colleges has become a highly partisan issue with a lot of Republicans 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 in the sector. What changed? So there are sort of three theories to explain the GOP flip-flop. The first is what you might call Obama derangement syndrome. I mean, the idea that anything that brought Obama's in favor of conservatives and Republicans must uniformly oppose. The second theory might be called the sort of their leader syndrome. The idea 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 his university was largely a sham. And even though Trump University was never eligible for federal student aid, it's hard to imagine Republicans leading the charge to make for-profit schools more accountable for having decent outcomes with President Trump and the White House. But I think the third and the most important explanation for the Republican flip-flop on accountability is to follow the money theory. After 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 that accounts 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 to the industry. A year into the Trump administration, a lawyer for a big for-profit chain that went on to collapse a couple years later, he actually put to song his appreciation of the Trump administration. He adapted Randy Newman's tune from Toy Story, You've Got a Friend of Me, and with apologies to Randy Newman and to Woody, here's how the tune went. We've got a friend in Trump. He's lifting us out of our slums. We were down and life was rough. Too many rags were way too tough. After so many years, we've just had enough. But now, we've got a friend in Trump. Oh yeah, we've got a friend in Trump. To be full disclosure, I added the oh yeah part there. But I think it's pretty clear that essentially it's pretty rare when you hear the sort of glories of deregulation celebrating the song. Well, thank you for the rendition. I'm sure Randy and Woody from Toy Story appreciate it. You mentioned a lot. 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 how can regulation mitigate some of these incentives? Well, you know, the title of my book is The Prophets of Failure and I didn't use that title just because it was a pity title. I went down the book. There are actually a number of instances where it literally pays off quite handsomely when a for-profit school fails. I'll just cite two examples here. One was the business model of correspondent schools for for-profit schools. 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. So the school's 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 Prophets of Failure is recruiting underprepared students en masse 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 typically 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 have a diploma or a GED. But they can still get federal aid to college if they pass sort of notoriously easy ability to benefit guests. 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 Antonette Flores, the managing director of post-secondary education at the Center for American Progress. And again, Bob Scheierman, the director of higher education and excellence at the Century Foundation. 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 or discarding altogether? Well, I think overall the structure of the gainful employment rule made sense. So 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 reinstitute the 2014 version. That said, we always thought when this whole process started in 2009 that some elements of the industry would sit down with us and work out some compromise, some shared kind of approaches. And as David indicated, instead politically with what he called it 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 approach would be fine. I'm going to pitch this next question over to you, David, actually. For all of the flak, the Obama administration received for targeting for-profit colleges, there was an equal amount of criticism from consumer groups and even the Education Department's 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 some of the IG criticism was fair. And I think there are lessons to learn. One important lesson is to learn, obviously, is not to intervene when it's too late. And there were, the administration didn't have any kind of adequate letter of credit on record. So if the Corinthian 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 an 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 just didn't happen in the Corinthian colleges, for example. Unfortunately, those lessons were unlearned again in the Trump administration, which had its own version of the Corinthian college's collapse that was disastrous with the Dream Center schools and some other for-profit changes that could very roughly. So I will throw this next question over to Arnie. You know, regulations are rendered useless if authorities fail 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 Dave's a little biased. He's a good friend. He did great work together. But he's a master at distilling 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 almost all these things, is 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 desperately begged the industry to self-regulate early on. We didn't want to have this fight. We talked about the American Bar Association, the 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. And so I think 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 having 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-year-olds, 58-year-olds across the country that need retrained, that need retool, and that need skills for the new economy. And the traditional sector isn't large enough or strong enough, it doesn't have the capacity. So I just want to always be clear, this is not an anti-for-profit, speaking for myself at all. It's just an anti-hurting students mentality. And so the Biden administration, any administration could just fight, 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 Tanette, 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 to rein in 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, and 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 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 financial 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 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 preventing the profit motive. The second is, and this is sometimes a part of conversions, but it's also increasingly being used across all sectors, is schools relying on unaccredited 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. It 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 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. So guys, 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 rule were community colleges or private institutions. It basically applied to certificate programs in for profit schools and there are lots of certificate programs outside the for profit sector that where people where the institutions are paying taxes. The answer to 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 unaffordable debt, closing midstream and not providing the transfer route for students and using fraudulent deceptive recruiting tactics. So that's why that's why the for profit college sector has historically always gotten heightened scrutiny than other sectors. And I'll just 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 a on a tax status, but it is actually an accountability status so when you're a non profit, you're 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 to a public entity to elected officials who are not allowed to pocket the money that comes in. 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 nonsensical question because accountability by definition is different at nonprofit public and for profit institutions. And I think it's an interesting question. Can't vigorous oversight of department accreditors actually make a big difference in which for profits can continue. Did the termination of ACICS and 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 wouldn't say that the increased scrutiny of institutions by accreditors is what has led to led some institutions to close. On 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 fight and administration because the problems there have continued. But 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. I think 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. The history of accreditors is that they are feeble overseers of educational quality, particularly in the for profit sector. One more 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. That's 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 a 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. I, I 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. 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.