1

         UNITED STATES DEPARTMENT OF EDUCATION

           OFFICE OF POSTSECONDARY EDUCATION

                     PUBLIC HEARING

               San Francisco, California

             Wednesday, September 16, 2015

        Public Hearing, held at the Courtyard

  Marriott, 299 2nd Street, Second Floor, San

  Francisco, California, beginning at 9:04 a.m. and

  ending at 4:00 p.m., on Wednesday, September 16,

  2015, before United States Department of Education

  Deputy Undersecretary Jeff Appel, reported by Chris

  Te Selle, Certified Shorthand Reporter No. 10836.

  PAGES 1 - 141

  U.S. DEPARTMENT OF EDUCATION STAFF PRESENT:

  JEFF APPEL

  Deputy Undersecretary

  ANNMARIE WEISMAN

  Director of the Policy Coordination Group

  Policy, Planning and Innovation

  Office of Postsecondary Education

  JOHN DiPAOLO

  Deputy General Counsel

  Office of the General Counsel

  Present:

  Sparky Abraham - HERA

  Nick Akers - California Attorney General

  Kara Alba - EBCLC East Bay Community Law Center

  Mark Anderson - AFT

  Dewayne Barnes - California College of the Arts

  Nick Campins - California Department of Justice

  Katherine Lee Carey - Cooley LLP

  Scott Cline - California College of the Arts

  Debbie Cochrane - TICAS

  Amy Costa - California Department of Finance

  Nancy Ann Dooley - FSA

  Sanders Fabares

  Rachelle Feldman - University of California/HELC

  Juliana Fredman - Bay Area Legal Aid

  Monica Henestroza - California State Assembly

  Present (Cont'd):

  Katrina Hess

  Kay Lewis - HELC

  Dawn Lueck - self/debt collective

  George Miller

  Abby Norris - Norris Policy Consulting

  Angela Perry - Public Advocates

  Dexter Rappleye - Public Counsel

  Anne Richardson - Public Counsel

  Joe Rideout - Consumer Action

  Mark Seymoroski - DeVry Education Group

  Pete Smith - Center for Responsible Lending

  Kelly Suk

  Megumi Tsutsui - HERA

  Jennifer Webber - self/TICAS

  Aaron Washington

  ASL Interpreters:

  Beth Abdallah

  Mary Wisbey

                         INDEX

  OPENING REMARKS                                 PAGE

  DIRECTOR ANNMARIE WEISMAN                          5

  DEPUTY UNDERSECRETARY JEFF APPEL                   6

                    PUBLIC COMMENTS

  SPEAKER                                         PAGE

  DEBBIE COCHRANE                                   12

  ANNE RICHARDSON                               17, 36

  DAWN LUECK                 23, 59, 90, 106, 115, 122

  DEXTER RAPPLEYE                                   31

  NICK CAMPINS                                      38

  JOE RIDEOUT                                       43

  KAY LEWIS                                         48

  MEGUMI TSUTSUI                                    53

  KATRINA HESS                                      61

  SANDERS FABARES               66, 112, 128, 133, 137

       LUNCHEON RECESS:  10:54 a.m. to 1:06 p.m.    71

  ANGELA PERRY                                      72

  PETER SMITH                                       77

  JULIANA FREDMAN                                   81

  MARK ANDERSON                                     87

  RACHELLE FELDMAN                                  95

  KARA ALBA                                        101

  SPARKY ABRAHAM                                   117

  San Francisco, California, Wednesday, Sept. 16, 2015

                       9:04 a.m.

              TRANSCRIPT OF PUBLIC HEARING

       MS. WEISMAN:  Good morning.  My name is

  Annmarie Weisman.  I am the Director of the Policy

  Coordination Group within Policy, Planning and

  Innovation in the Office of Postsecondary Education

  with the Department of Education.

       I'm pleased to welcome you to this public

  hearing and to thank you for your interest in this

  very important topic.  I'm joined today by two

  colleagues.  On my far right, and your far left, I'd

  like to introduce John DiPaolo, Deputy General

  Counsel at the Department of Education, and I would

  also like to introduce to you our Deputy

  Undersecretary Jeff Appel, who will provide some

  brief opening remarks.

       I will then provide you with some logistical

  information about how the hearing will go, and then

  I will open the meeting up to you.

       Jeff Appel is the Deputy Undersecretary, who

  oversees postsecondary student aid policy

  initiatives.  Jeff first joined the Department in

  2011 as a senior policy adviser for Higher Education

  and Student Financial Aid in the Office of Planning,

  Evaluation, and Policy Development.

       From 2007 to 2011, Jeff worked for Congressman

  George Miller, leading numerous student aid and

  higher education efforts, including several

  significant pieces of legislation.

       Jeff also worked as Assistant Director of the

  Government Accountability Office, responsible for

  managing much of GAO's research concerning student

  aid and other postsecondary education issues.

       Jeff holds a bachelor's degree in finance from

  the University of Arizona, and a master's in applied

  economics from Johns Hopkins University.

       MR. APPEL:  Thank you, Annmarie, and good

  morning.  Thank you for being here.  I'm pleased to

  welcome you to this public hearing.

       This is the second of two hearings that we are

  convening to gather input in preparation for

  negotiated rulemaking regarding borrower defense to

  repayment of a federal student loan.  We also seek

  suggestions for additional issues that should be

  considered for regulatory action by the negotiating

  committee.

       College remains the best investment students

  can make in their future, and students deserve a

  fair and honest value.  While many colleges play a

  critical role in helping students succeed in their

  educational and training pursuits, some of America's

  colleges are failing to provide the education and

  training promised to advance students' careers.

       Rather than providing students with the

  opportunity for a solid education that leads to a

  good job, some of these institutions have left

  students with lots of debt and few job prospects due

  to the institution's acts or omissions, putting both

  students and taxpayers at risk.

       President Obama's Administration is committed

  to changing that through actions to hold

  institutions accountable for their actions and to

  assure Americans are protected from unscrupulous

  colleges that deny students meaningful educational

  opportunities and leave taxpayers holding the bag.

       Current federal law and regulations provide a

  defense to repayment, or borrower's defense, that

  allows borrowers to seek loan forgiveness if their

  schools' actions give rise to a cause of action per

  state law.

       This provision has rarely been used in the

  past.  However, we have seen an increase in borrower

  defense claims and believe the regulations need to

  be further refined.

       Over the past six years, the Department of

  Education has taken unprecedented actions to

  establish federal regulations to prevent misleading

  claims by career colleges.  We've issued gainful

  employment regulations which will help to ensure

  that students at career colleges don't end up with

  debt they cannot repay.

       We've also cracked down on bad actors through

  investigations and enforcement.  Education Secretary

  Arnie Duncan has directed our team to ensure that

  students who have been defrauded by their college,

  or whose schools have closed down, receive every

  penny of the debt relief to which they are entitled

  as efficiently and easily as possible.

       That need has grown pressing in recent months

  because of the wind-down and ultimate collapse of

  Corinthian Colleges, Incorporated, which you may

  know by the brand names Heald, WyoTech, and Everest,

  following enforcement actions by this Administration

  and scrutiny by other enforcement entities.

       Earlier this year, we announced a series of

  steps to support students who attended Corinthian

  schools.  We are now extending our commitment to

  ensuring accountability and to continue working

  aggressively toward reforms that ensure that schools

  are held responsible for their actions.

            We are committed to ensuring that every

  student has access to an education that will put

  them on solid footing for a career, and we will hold

  schools accountable for illegal practices that

  undercut their students, and taxpayers, and, where

  students have been harmed by fraudulent practices,

  we are fully committed to making sure they receive

  every penny of relief they are entitled to under

  law.

            After considering the public comments

  submitted, and listening to the hearing testimony

  today, the Department will draft a list of topics to

  be considered by one or more rulemaking committees.

  The negotiators will be asked to work to reach

  consensus on which acts or omissions of an

  institution of higher education a borrower may

  assert as a defense to repayment of a loan made

  under the Federal Direct Loan Program, and the

  consequences of such borrower defenses for

  borrowers, institutions, and the Secretary.

            We will also consider the suggestions

  received for additional issues that should be

  considered for regulatory action by the negotiating

  committee.  We anticipate that any committee

  established after the public hearings will begin

  negotiations in January 2016, and a Federal Register

  notice seeking nominations for negotiators will be

  issued in advance of that date.

            Again, thank you for dedicating your time

  and expertise to this very important process.  We

  appreciate your willingness to share your

  perspectives, and know we will be better informed

  and have a more robust conversation as a result of

  today's participation.  Thank you.

       MS. WEISMAN:  A number of people have already

  signed up to speak today.  We also have a number of

  time slots open.  Please see Aaron Washington at the

  registration table if you would like to sign up for

  a time to speak today.

       Each speaker is allotted about five minutes.

  At the end of five minutes, I will ask you to wrap

  up your comments, and, if there is time remaining,

  we will take additional comments and allow speakers

  to return again, if possible.

       Whether you speak or not, you may supply your

  comments in writing.  Written comments that you

  provide to us will also be made public and will be

  posted to the Regulations.gov website.

       If we continue to have open time slots, we may

  extend our scheduled breaks, but I will also invite

  the audience to speak, if desired.

       The hearing will be transcribed.  The

  transcript will be posted on our website within the

  next few weeks.  Keep in mind, also, that as this is

  a public hearing, members of the public may also be

  recording your comments either using audio or video

  recording.

       I mentioned breaks.  We will take a break at

  approximately 10:30 to 10:40, we will break for

  lunch from 12:00 to 1:00, and we will also have a

  short break in the afternoon from 2:30 to 2:40.

       A couple of other logistical items: restrooms

  are down the hall.  If you go out this first door,

  take a left, and then an immediate right, and there

  will be signs to direct you outside, as well.

       If you need other assistance, please, again,

  see Aaron Washington at the registration desk, and

  he will either assist you or direct you to someone

  who can assist you.  He also has a WiFi password, if

  you need access to WiFi.

       When it is your turn to speak, I will call your

  name.  Please, also, though, state your name and

  organization, just to be clear, when you come to the

  podium.

       We may be taking some speakers a little out of

  order, as there are some traffic congestion issues

  due to a very large local conference, so, if someone

  is not here to speak, we will certainly delay their

  time until a little bit later; that may also affect

  the schedule just a little bit.

       For our first speaker, we have Debbie Cochrane

  from TICAS, The Institute for College Access and

  Success.

       Is Debbie here yet?

       DEBBIE COCHRANE:  I am.  Catch my breath.

       MS. WEISMAN:  Catch your breath and come up

  when you are ready.  Thank you.

          SPEAKER COMMENTS BY DEBBIE COCHRANE

       DEBBIE COCHRANE:  Hello.  I'm Debbie Cochrane,

  with The Institute for College Access and Success,

  and I -- excuse me.  I'm a little out of breath.

  Not only did we have horrible bridge traffic, but we

  put the wrong address into the GPS, so, just did a

  little exercise for the last couple of blocks.

       Anyway, I would like to start by welcoming you

  to California.  This, of course, is the home of the

  vast majority of the students affected by the abrupt

  closure of Corinthian Colleges, as well as the vast

  majority of the potential beneficiaries of the

  expedited process that the Department has set up for

  certain Heald students.

       In many ways, California is ground zero for

  some of the issues that we're here to talk about

  today, so I want to share an aspect of that that's

  harder, probably, for you to see from D.C.  That

  aspect is that many of the harmed Corinthian

  students are currently unable to get relief, because

  they need help, and legal services providers in the

  state are tapped out.  Legal aid groups across the

  state have long waiting lists for former Corinthian

  students seeking help, and many are just turning

  students away without even putting them on a waiting

  list.

       Some of the providers are doing what they can

  to help Corinthian students, but that means that all

  of their other clients, like those facing evictions,

  are just being put on the back seat.

       So, I want to start by sharing that, because I

  think it underscores the importance of making the

  process and the rules for borrowers as simple and

  straightforward as possible.

       It also underscores a need for the Department

  to do whatever it can now, under current

  regulations, to improve access to relief for the

  students who have already been harmed, in addition

  to developing improved regulations.  Borrowers can't

  and shouldn't have to wait to receive the relief

  they are already entitled to under the law.

       One of the two most meaningful steps the

  Department can take to ensure meaningful access to

  relief is to make all federal loans eligible for

  discharge under current and proposed regulations.

  The request for comments, which we are all here

  responding, refer to only direct loans, but all

  federal loans are eligible for relief.

       As we detail in our written comments, which we

  will be submitting later today, the Department has

  previously and repeatedly made clear that both DL

  and FFEL borrowers have borrower defenses, so

  denying borrowers relief from FFEL loans would have

  a devastating effect and deny students relief they

  are entitled to.  More than 90 percent of the

  federal loans disbursed to Heald students in 2009-10

  were FFEL loans.

       The second of the two most meaningful steps the

  Department can take is to provide automatic group

  discharges to students where the Department has

  access to documented evidence of fraudulent or

  relevant illegal acts.  Department rules already

  provide for automatic group discharges to certain

  borrowers without individual applications.

       Since 1999, federal rules have allowed for

  closed school discharges without a borrower needing

  to apply for them, and for false certification

  discharges without an application since 2000.

       In explaining the extension of this provision

  to false certification discharges, the Department

  stated in the Federal Register on August 3, 1989, we

  or a guaranty agency occasionally learn of

  information that strongly suggests that all

  borrowers in a certain category will likely qualify

  for a false certification discharge.  For example,

  we might determine that all students at a specific

  school, during a certain time period, have incorrect

  ATB determinations.  In the interest of assisting

  those borrowers, many of whom may be unaware of the

  possibility of receiving a loan discharge, the

  committee decided that it would be appropriate to

  discharge those loans without an individual

  discharge request from each borrower.

       So, the rationale provided by the Department

  for changing the false certification rules and the

  closed school rules before it is the same one that

  we provide for borrower defenses.  When the

  Department has documentation that a group of

  students has been affected by unlawful school

  practices, those affected students, many of whom, as

  the Department states, may be unaware of the

  possibility of receiving a loan discharge, be able

  to receive relief without needing to apply for it.

       Importantly, discharge eligibility under both

  false certification and closed schools rules can be

  and is established for groups of students at a time

  already.

       Later today, as I mentioned, we'll be

  submitting much more detailed comments on these

  issues, as well as several others.  Among the most

  critical of the others is to add to this rulemaking,

  updating the current outdated false certification

  rules which complement the DTR regs.

       We urge the Department to curb the manipulation

  of cohort default rates and 90/10 rates, and to

  prohibit mandatory arbitration clauses and class

  action bans from enrollment agreements.

       Also, while we strongly agree with the

  Department's goal of strengthening accountability

  for schools that defraud students, it's crucial that

  such accountability provisions not be designed to

  pit students and schools against each other, the

  result of which would be to effectively ensure that

  students' defenses to repayment are unsuccessful.

       Once it's clear to the Department that

  borrowers have been defrauded, the relief to which

  they're entitled should not be subject to or have to

  wait for the legal maneuverings of unscrupulous

  schools to conclude.

       Thank you.

       MS. WEISMAN:  Next, we have Anne Richardson,

  from Opportunity Under Law.

          SPEAKER COMMENTS BY ANNE RICHARDSON

       ANNE RICHARDSON:  Good morning.  My name is

  Anne Richardson.  I'm the associate director of

  Public Counsel's Opportunity Under Law.  We provide

  pro bono legal services to low income communities,

  including students, former foster youth, and many

  people who have been affected by the for-profit

  colleges.

       Thank you for the opportunity to provide

  comments regarding the Department's negotiated

  rulemaking with respect to borrower defenses to

  repayment.  We believe this rulemaking is overdue.

       For decades, students who have had bona fide

  defenses to repayment of their student loan debt

  have not been given a process by which to assert

  these defenses, students like Aeyla Admire, a client

  of ours, who grew up in poverty, the child of a

  single mother.  She couldn't always afford to pay

  the electric bill when she was a child growing up;

  her mother could not afford that.

       Remembering the times when the electricity

  would just shut off, Aeyla told us that although she

  desperately wanted to become a mother, she would not

  put her kids through what she went through as a

  child.

       Therefore, she went to Everest College in

  Reseda, hoping to pull herself out of poverty, to

  someday have a job that pays enough that her own

  children would not suffer from financial insecurity.

  The recruiter showed her glossy brochures filled

  with starting salaries and placement rates that had

  nothing to do with reality.

       We all know what happened next.  Now Aeyla owes

  over $17,000 in student loan debt, struggling to

  make minimum payments while keeping afloat working

  at Cost Plus World Market.  Her degree is worthless

  to her, and she has not started a family yet.

       Aeyla has submitted a request for defense to

  repayment.  She deserves to have every cent

  discharged, having suffered the exact same kind of

  misrepresentations that we now know were part of a

  calculated scheme at Corinthian to lure in students

  through aggressive sales tactics.

       In the brief time I have, I will focus on a few

  issues, and we will be submitting detailed written

  comments, as well, and my colleague, Dexter

  Rappleye, will also provide a few more comments.

       Number 1, there must be a process for automatic

  classwide defenses to repayment to be made in a

  cost-effective and administratively efficient manner

  in the numerous instances where the Department

  becomes aware of a classwide violation of state or

  federal law.

       Many schools have instituted deceptive

  marketing practices that permeate an entire

  recruitment process.  Such evidence is available to

  the Department of Education, whether based on

  audits, investigations, student complaints, consumer

  advocates, not to mention law enforcement or other

  actions against the schools.  However, it must not

  be dependent upon judicial findings, because public

  proceedings that actually end in a determination are

  so rare.

       Number 2, such relief must be given

  automatically.  It should not be an opt in process.

  Because the Department is collecting on the debt, it

  knows which students attended which schools, and it

  has their student addresses and contact information.

       The discharge provided to certain former Heald

  students, by contrast, really is an empty promise to

  most students.  Even what the Department views as

  simple forms that it provided in June for these

  students, we are being inundated with students who

  are confused about whether the relief applies to

  them, how to fill out the forms, whether they can

  even download the forms.

       And, often, they do not have the documentation

  or information requested.  There are thousands more

  who never even hear about it, so relief must be opt

  out, not opt in.

       Number 3, arbitration clauses.  The Department

  of Education we know does not have sufficient

  resources to adequately investigate each and every

  school to confirm whether they have engaged in

  misconduct; neither do the states attorneys general

  or the other governmental agencies, but, because so

  many of these schools have arbitration clauses,

  students are often forced to bring claims, when they

  bring them, in secret, one-sided proceedings with

  limited discovery.

       The Department should follow the lead of

  agencies such as the Department of Defense, which

  has banned the use of forced arbitration clauses on

  credit products that are offered to U.S. service

  members.

       The Department of Education can similarly limit

  participation in its title IV programs to

  institutions that do not have mandatory arbitration

  clauses and class action waivers in their enrollment

  contracts.

       Ending forced arbitration clauses and class

  action waivers may be the only way to make sure that

  schools are not artificially shielded from liability

  for years, only to declare bankruptcy, as happened

  recently with the collapse of Corinthian.

       Other issues that should be on the agenda

  include ensuring that there is no statute of

  limitations on the defense to repayment; ensuring

  that FFEL, Perkins, and consolidated loans are

  included in the defense to repayment regulations;

  amending the regulations to stop the manipulation of

  cohort default rates and 90/10 calculations;

  updating the requirements for existing categories of

  false certification discharges; reinstating Pell

  grant eligibility.

       There is a California bill currently on the

  governor's desk that would reinstate eligibility for

  a similar Pell grant program, and we know that most

  of our clients want to continue their education,

  once they realize their degree is worthless, but

  they are penalized that they cannot access the

  grants that were wasted on their prior school.

       Next, ensure that any discharge of debt is

  nontaxable and that the students' credit scores are

  restored; ensure that the standard is based on

  federal law, as well as state law, to ease the

  administration by the Department of Education and to

  ensure fairness to students from all 50 states; and,

  finally, to ensure that the procedures for

  recovering money by the Department of Education from

  the schools does not interfere with a timely relief

  for the students.

       While the Department should clearly promulgate

  rules regarding recruitment of money from the

  schools, but the Department should also take pains

  to make sure that any such rules do not create any

  perverse incentives for schools to take actions that

  will hold up on getting students the debt discharges

  they are entitled to.

       Thank you so much.

       MS. WEISMAN:  Next, we have Dawn Lueck, from,

  organizer with the Debt Collective.

             SPEAKER COMMENTS BY DAWN LUECK

       DAWN LUECK:  Hi, everyone.  I'm actually here

  to just represent myself.  I am -- did somebody

  leave their glasses?

       You can see me better.

       So, I'm the former finance manager for Heald

  College.  I worked for them 2009 to 2012.  I was

  with ITT Tech for 10 years, starting in 1999.

       I am a student.  I attended ITT Tech,

  University of Phoenix, also some college here in

  college -- doesn't matter -- but I've been in this

  industry for a long time.

       I'm also a borrower.  I have $117,000 in

  student loan debt.  So, I am here representing the

  voiceless, representing the students that are not

  being heard.  No matter how many times we put them

  in front of the Department of Education, their

  stories still fall to the wayside.

       So, I would like to, at this public hearing, I

  would like to comment on the issues that we all, I

  mean, in truth, we all are really facing -- it's not

  just the Department of Education -- as it relates to

  borrower discharge.

       I also want to talk about the failed leadership

  of the Department of Education and the role of the

  suggested committee that they are going to put

  together starting early next year.

       First off, I would like to say that the

  Department of Education really needs to stop with

  all the propaganda that they are using to suggest

  that they actually have this figured out and are

  actually ready to do the right thing for the

  students impacted the most by this crisis.

       When I look at the language, when I look at the

  public announcements that are released, when I read

  articles where any member of the Department of

  Education is cited, the language is just half-assed

  attempts to communicate with the borrowers, but it

  doesn't actually communicate with the borrowers.

       It's not saying what it actually needs to say.

  The Department of Education does not clearly state

  things that they need to state and define what they

  mean.  One example that I'll use is, in a lot of the

  announcements, they keep talking about taxpayers are

  really important in this process.

            Well, I would just like to say that

  student borrowers are taxpayers, too, but it kind of

  swings the conversation to the general population

  reading it, and skipping over the fact that I'm a

  taxpayer.  I have student loan debt.  I'm part of

  that category, too.  So, I think statements need to

  be broader and more clear, especially when it's

  going out to the public.

            The other concern I have with the language

  and the communication with the Department of

  Education is their attempts to actually notify

  students affected by these issues.  We know that,

  and my numbers may not be perfect, they could be a

  few weeks older, but we know that there's at least

  over 4,000 borrower defense claims.  We know that

  over 40,000 Heald students are eligible, but yet

  only 2,000 have actually applied.

            In August, the Department of Education

  sent out information in PDFs to eligible Heald

  students, but didn't take into consideration that

  given the economic hardship of these students, most

  of them don't have Internet.  They don't have

  computers.  They're using their smartphones to

  access applications that can't be accessed.

            So, this causes another obstacle that the

  students have to face when they are actually

  legitimately trying to access the really important

  forms and stuff that they need to apply for this

  process.

            As of August, the Department of Ed has

  also received over 7,800 closed school claims.  Not

  even half of them have been approved yet.  Every day

  that goes by in these students' lives matter.

            As two of the individuals here today have

  already mentioned, the stories of the students, it

  doesn't get any harsher than what we're seeing.

  They are being evicted, they are not able to rent

  homes, and this goes beyond just the fact that they

  can't even get the jobs that they were promised when

  they were in school.

            So, as the clock ticks on, the

  Department's failure to actually do something that

  you guys have the legal authority to do, is just, it

  perpetuates this crisis that we're facing.

            This committee is great -- thank you guys

  for putting this together -- but it doesn't change

  the fact that you guys already have the legal

  authority to offer classwide discharges.  Arnie

  Duncan could sign a paper today, and there could be

  a lot of discharge that would benefit thousands and

  thousands of individuals.

            The language, so, the committee, I

  believe, for the record, I believe that the

  committee really needs to focus on the language that

  the Department of Education uses, as we go forward

  with this process.

            As somebody that's been in financial aid

  and higher education for many years, it does get

  complicated, and there's a lot of terminology that

  could be left to interpretation.  And, if you are

  not a trained attorney, or a trained financial aid

  expert, it leaves a lot of students out of the

  conversation and really understanding these high

  level processes.

            We could change the language, bring it

  down to a level where people can actually join in in

  the conversations and participate more so that the

  students actually understand what decisions are

  being made on their behalf.  So, again, that's

  something the committee should be tasked with.

            The Department of Education has just

  really been unprepared in handling a process that's

  been on the books since, I believe, 1994.  And I

  just, I mean, I don't even know what to say about

  the fact that you guys would even possibly consider

  not including all loans.

            2010 is not the mark of these issues with

  for-profit schools.  I've been working for them

  since 1999.  I've seen the recruiting practices

  change.  I've seen tuition increase.

            I've seen these schools be investigated.

  I mean, I'm sitting in my office in Henderson,

  Nevada when ITT Tech was investigated, and the units

  came in to seize documents.  So, you guys cannot put

  out there that you guys have not known of what's

  been going on.  And it dates back far beyond 2014

  with the collapse of Corinthian and far beyond 2010.

            So, the committee really needs to, I

  think, really keep their finger on the pulse with

  this as far as how far back you guys are willing to

  go when it comes to defense to repayment.

            Classwide discharge has already been

  brought up this morning.  That's an easy.  That's a

  given.  There is no reason why we would

  individualize this process and place the burden on

  students where, hello, they did not go to law

  school.  I'm so sorry.

            Even some of these processes I read

  myself, and it just, I, I mean, it takes a group of

  us to sit down and really brainstorm to understand

  and then come up with ideas and tactics, so, to

  individualize this process and require evidence and

  proof is absolutely absurd.

            The other thing is, over the years, one of

  the ways these for-profit schools has cut costs is

  they've expedited the process by using electronic

  signatures.  Okay, I don't know how many times

  students came in, they signed electronically, and

  they did not leave with a printout, right?

            We're trying to be tree-earth friendly,

  and schools weren't necessarily printing documents,

  so to place the burden on them that they need to

  come up with documentation of proof when you guys

  have it, because you guys have been investigating

  them, attorney generals have been investigating

  them, enough evidence is there.  Classwide

  discharge.

            Even, even in the reports from the BDSM,

  he's even stated in his reports that the evidence

  should not have to come from the students.  So,

  that's a sign of hope there.  Let's just say hello

  to that.

            The other thing that I want to speak to

  before I finish is, in your guys' public

  announcement, you guys suggest that you really want

  this committee to be diversified.  I want you guys

  to define what does diversification look like to you

  and this branch of the government, because, in my

  experience so far, I haven't seen much diversity

  amongst the groups that you guys put together.

            Usually, you guys get some powerful

  attorneys, probably some representation from these

  for-profit schools, but what we are calling for is

  to be guaranteed and ensured that students from

  these schools will be represented not just on these

  little silos of committees that you guys want to

  create, but in all committees.  Every committee that

  is going to influence your decision, the students

  must represent themselves.

            They must be given the agency to speak on

  their own behalf, because, I will say right now, the

  Department of Education is not somebody I would

  trust, as a student borrower, to speak on my behalf.

  I would also not trust a for-profit school

  representative to speak on my behalf if I was a

  student looking for defense to repayment.

            I'll wrap it up.  Thank you, guys.  Take

  care.

       MS. WEISMAN:  Next, we have Dexter Rappleye,

  from Opportunity Under Law.

          SPEAKER COMMENTS BY DEXTER RAPPLEYE

       DEXTER RAPPLEYE:  Thank you for giving me the

  chance to comment today.  I work with Anne

  Richardson, who spoke a moment ago, at Public

  Counsel Opportunity Under Law.  We are an impact

  litigation team whose mission is to identify and

  attack root causes of economic inequality and lack

  of opportunity.

       This was one of the first issues that attracted

  our attention.  The pattern that we see is typically

  the same.  Schools advertise to, they locate and

  advertise to unsophisticated young people, tell them

  that they can get a real career, if they enroll, and

  the students wind up a couple of years later working

  in the same types of minimum wage jobs they were

  doing before, only with tens of thousands of dollars

  in loans to pay off.

       The students don't realize until well after

  they've left school that they were lied to.  These

  schools' sole function is to continue receiving

  federal money, as long as they can continue

  convincing students to sign on the dotted line,

  which is, honestly, not that hard.  It doesn't

  matter what happens to the students when they finish

  school.  There is no accountability, and there is no

  justice coming at any point in the process.

       The dangers posed by con artists like those in

  the for-profit college industry are not new in our

  economy.  There are effective mechanisms for

  combating these practices in most sectors of the

  economy.

       However, for decades, the legal regime

  governing federal student loans has protected these

  schools from having to meet even a minimal standard

  of accountability, and it is denied students any

  opportunity for relief, even in the worst of cases,

  even when it is widely acknowledged that their

  rights have been violated.

       This rulemaking presents an opportunity to

  change this trend by finally providing students with

  the right to start over, or some remedy.  In

  addition to laying the groundwork for a fair

  approach to student claims going forward, this may

  also be our last opportunity to do what we can to

  address some of the wrongs of the past.

       However, in order to accomplish these goals,

  the negotiators must take care to create a process

  that is accessible to students and that broadly

  confronts the harms that students have suffered.

       Here are some of the issues that should be

  included in the negotiations to ensure that this

  proceeding is effective.  First, the process should

  address past as well as future wrongs.

       The negotiators must ensure that the process

  allows students to assert defenses to repayment not

  only of Direct loans, but all other types of federal

  student loans, including FFEL and consolidation

  loans.  It would be unfair for students who suffered

  the exact same harm to be treated differently simply

  because one student borrowed prior to 2010 under the

  old FFEL regime, while another borrowed under the

  new regime.

       The Department has consistently maintained that

  students have the same rights to assert defenses to

  repayment of FFEL and Direct loans, and the time has

  come to clarify those rights and make them

  applicable to all federal student loans.

       The negotiators should further clarify that

  state law statutes of limitations do not bar

  students from asserting defenses to repayment.

  Thousands of students would have asserted defenses

  over the last few decades if a meaningful process

  had been available to them.  It would be

  unacceptable to deny relief to all of those students

  because of a statute of limitations when there was

  no way for them to assert their defense at the time

  of their injuries.

       The next point I want to get to is that the

  negotiators must consider whether to allow students,

  should consider implementing a uniform standard in

  addition to using state law as a basis for defenses

  to repayment.

       The Department's own regulations regarding

  misrepresentations to students, as well as the FTC

  Act and FTC's regulations and the practice of the

  FTC and CFPB in pursuing predatory businesses and

  protecting consumers could serve as appropriate

  guides to how to formulate a standard for when

  students can assert defenses to repayment of their

  federal loans.

       This standard would relieve the administrative

  burden on the Department of having to review state

  law claims from students around the country under

  the laws of 50 different states, and it would also

  ensure a measure of basic fairness, because it would

  be inequitable to deny relief to students under a

  federal program simply because they live in a state

  with weaker consumer protection laws, when the

  Department has full authority to manage the student

  loan program.

       The last thing I'm going to touch on -- there's

  a lot of points, but I can't get to all of them --

  is that the process should be tailored to provide as

  much relief as possible to eligible students, which

  means going beyond simply discharging the loans.

       The negotiators should consider what steps are

  within their power to make students whole, beyond

  simply discharging their loans.  Most of the

  students that we've worked with, most of the

  students that we've talked to, to my surprise,

  rather than swearing off higher education for good,

  which is what I may have done if I had had the

  experiences they had, they simply want the same

  thing they've always wanted, a chance to open up new

  opportunities in their lives through education.

       In order to allow them this chance to start

  over, the Department should, at a minimum, reinstate

  their eligibility to receive Pell grants.

       Further, the negotiators should consider what

  steps are within the Department's power to

  compensate students for the loss of other benefits

  that may be necessary for them to pursue education,

  such as state benefits, veterans assistance, and

  things along those lines.

       The existing regulations already clarify that

  the Department has the authority to grant further

  relief, as it deems necessary, so it's important to

  think of what steps can be taken to make students

  whole as much as possible.

       Thank you very much.

       MS. WEISMAN:  Next listed to speak is Krystle

  Powell.  Krystle was a student from Heald College.

  Krystle is not available to speak this morning, and

  so she has someone who will be speaking on her

  behalf.

      FURTHER SPEAKER COMMENTS BY ANNE RICHARDSON

       ANNE RICHARDSON:  It's me again.  I'm Anne

  Richardson, from Public Counsel Opportunity Under

  Law, and one of our clients is named Krystle Powell,

  and she was unavailable today because she has

  bronchitis, so she asked that we read her statement

  for her.

       My name is Krystle Powell.  I am a 30-year-old

  former student of Heald College, San Francisco.  I

  attended Heald from August 2011 to December 2013.

       When I first stepped into Heald College, I was

  automatically bombarded with promises of lifetime

  job placement, 85 percent graduation rate for my

  program, and also a certificate of phlebotomy when I

  completed my two year program for medical assistant

  applied science degree.

       Of course, at that point in my life, I was

  ready to believe in people to get to my ultimate

  goal of finishing school and starting my career.

  Well, to my disbelief, I was flat-out lied to and

  told it was my fault that I didn't further

  investigate and read the fine print.

       I was eventually pushed out after I was told by

  financial aid that my federal loans are all spent,

  and I would need to open another private loan and

  pay out of my pocket monthly.

       In the beginning, I was told my federal loans

  would cover my entire two year program, and now I am

  staring at my withdrawal form from Heald, and

  completely crushed inside, knowing that I spent two

  whole years of Heald, and now I am unable to finish

  because the lie Heald told was finally on Front

  Street, and the students were starting to see what

  was going on, how we were being scammed, and now

  we're left with nothing to show from Heald.

       It has been two years since that fateful day

  which I had no choice but to withdraw.  Heald has

  since closed, and now thousands of students are out

  of luck, with thousands of dollars in student loan

  debt.

       This is the problem with education, funding

  schools that have no interest in their students, no

  interest in helping these students succeed, just out

  to swindle every last bit of money.

       I will not pay back a fraud of a school that

  did nothing for me and for the thousands of students

  who are left with nothing but a bill.  This should

  not be happening.

       Now it's a big fight with Department of

  Education to get these student loans discharged,

  when it has been stated by the Department of

  Education that Heald did commit a fraud, but,

  somehow, it has been left to the students to figure

  that out for themselves.

            This cannot continue.  Help these students

  get their lives back.  Discharge these student

  loans.  Corinthian broke the law.

       MS. WEISMAN:  Next, we have Nick Campins, from

  the Deputy Attorney General from the California

  Department of Justice, the Office of the Attorney

  General.

            SPEAKER COMMENTS BY NICK CAMPINS

       NICK CAMPINS:  Good morning.  Good morning.  My

  name is Nick Campins.  I'm here today to testify on

  behalf of the California Department of Justice, the

  Office of the Attorney General.

       I want to talk a little bit about the

  importance of streamlining the defense to repayment.

  I'm the lead Deputy Attorney General assigned to my

  office's case against Corinthian Colleges and its

  subsidiaries that operated Heald, Everest, and

  WyoTech.

       As that litigation demonstrates, providing debt

  relief to students in cases involving alleged state

  violations is the appropriate and the just action to

  take in the face of widespread allegations of

  misconduct.

       We allege, among other things, that Corinthian

  misrepresented the job placement rates; they

  advertised for programs that they did not even

  offer, for example, advertising for ultrasound and

  X-ray tech programs that were not even in their

  catalogs; they unlawfully used the official United

  States military seals in advertising; and that they

  misrepresented the transferability of credits.

       These alleged misrepresentations go to the very

  core of someone's decision to attend college.  This

  education that they were promised was for a very

  steep price.  For example, at Heald College here in

  San Francisco, they charged $39,510 in tuition and

  fees and $3,500 in books and supplies for an

  associate of applied science degree in medical

  assisting.

       These students who attended the schools were

  from a very vulnerable population.  As we allege in

  paragraph 3 of our complaint, they were near the

  federal poverty line.

       Many, they were also, according to internal

  company documents, targeted because they were

  isolated, impatient individuals with low self-esteem

  who had few people in their lives to care about

  them, and who were stuck and unable to see and plan

  well for their future.

       The Department needs to develop simplified and

  streamlined procedures to help vulnerable students

  who have been the victims of unlawful activity, and

  it needs to do so on an urgent basis.  That is why

  we strongly support the Department's simplified and

  streamlined procedures to help vulnerable students

  who have been victims of unlawful activity, and we

  believe that the attorney generals should be

  represented as negotiators and should play an

  important role in the negotiations.

       I next want to talk a little bit about the

  critical role that is played by the attorney

  generals in this space.  While AG's are not the

  primary regulator, we are in a position to respond

  to and investigate the most egregious cases.

       The Department's streamlined approach to the

  adjudication of many Heald students' claims

  demonstrates the power and efficiency of looking to

  prove wrongdoing on a systematic basis and working

  together with AG's.

       Our office was the first to bring litigation

  against Heald in October 2013, and our

  investigations served as the first salvo in what

  would ultimately prove to be historic action by the

  regulatory community, including the Department of

  Education.

       As that matter demonstrates, AG's can and will

  provide evidence and material support to the

  Department in adjudicating wrongdoing.  AG's have

  practical experience in understanding the interplay

  between defense to repayment and state law

  violations, and we have concrete ideas about how the

  process might be streamlined.

       AG's understand false advertising.  We

  understand unfair competition laws and how they

  apply to for-profit schools, experience and

  knowledge that will prove invaluable in the

  negotiations.

       Our office has leveraged its awareness to lead

  an unprecedented effort to assist students,

  including a dedicated website, interactive tool, in

  collaboration with legal aid organizations, to help

  secure legal advice and assistance.  In fact, more

  than 12,000 students have visited our website, and

  nearly 5,500 of those students have completed our

  online interactive tool.

       Again, AG's offices should be included in the

  negotiations as negotiators.  The AG community is

  already very engaged in this issue.  The attorney

  generals of Massachusetts, California, Connecticut,

  Illinois, Kentucky, Maryland, New Mexico, New York,

  Oregon, Pennsylvania, and Washington State, and

  others, all plan to submit a joint written comment

  concerning the proposed rulemaking.

       As noted, the current decisive factors in the

  defense to repayment are proof of a state law

  violation, which we are, by definition, in a great

  position to opine on.

       We understand what it takes to prove the case,

  and how difficult it can be for individual students

  to do so in the context of well financed schools and

  in the limited legal recourse given to them, given

  the proliferation of arbitration clauses in

  enrollment agreements.

       We also bring a unique perspective.  We

  understand both the interest of protecting students

  and the interests of regulators in the government.

       AG's have been in this space for decades, and

  we have the breadth and depth of experience

  necessary to understand these issues and contribute

  meaningfully to the negotiated rulemaking.  We hope

  that you will have AG office negotiators on the

  committee.

       Thank you very much.

       MS. WEISMAN:  Next, we have Joe Rideout, from

  Consumer Action.

            SPEAKER COMMENTS BY JOE RIDEOUT

       JOE RIDEOUT:  Good morning.  My name is Joe

  Rideout, and I'm here speaking on behalf of Consumer

  Action.  Consumer Action empowers low and moderate

  income and limited speaking and often

  under-represented consumers nationwide to

  financially prosper through financial education,

  community outreach, and issue-focused advocacy.

            (Reporter clarification.)

       It has been over a year since Consumer Actions

  joined other advocates in requesting the Department

  of Education free students and their families from

  their debt burdens as a result of being deceived and

  mislead by the illegal practices of Corinthian

  Colleges.

       As the department of Special Master Smith

  established a rulemaking committee to prepare

  proposed regulations for the federal student aid

  programs, he would like to formally identify

  criteria that are essential to a fair and just

  process in the borrowers moving forward.

       Number 1, all federal loans are currently

  eligible for discharge under defense to repayment,

  and the negotiated rulemaking should address all

  types of loans, include Federal Family Education

  Loans, Perkins, and consolidation loans, as well as

  Direct loans, regardless of when they were issued.

       The Department has previously made clear in the

  1995 Federal Registry notice that it has the defense

  to repayment authority for all types of federal

  loans.  Additionally, defense repayment is in the

  master promissory note Federal Family Education

  Loans.

       Number 2, automatic discharges should be

  applied when the evidence warrants it, as is the

  case with Corinthian Colleges.  Borrowers should not

  be required to submit, nor should they be judged on

  individual application for a loan discharge.

       The current process is often confusing and too

  technical to be completed correctly on its own.

  Instead, we urge the Department to grant relief on

  an entire group of borrowers when it applies to an

  institution's proven violations at the federal and

  state levels.

       Full loan discharges should then be applied to

  all borrowers covered by a group process who

  establish a defense to repayment, including a refund

  of any amounts paid on the loans, and removal of all

  information regarding the loans from the credit

  reports.

       We also urge the Department of Education to

  initiate an investigation whenever it has evidence

  suggesting that a group of borrowers may be entitled

  to defense to repayment relief, especially in the

  case of non-Heald Corinthian campuses.  It should

  notify borrowers of its investigation and grant

  automatic discharges where appropriate.

       Number 3, add false certification regulations

  to the committee's agenda.  Under false

  certification, the Department is able to discharge

  borrower's obligation to repay a Direct loan if the

  school falsely certifies the eligibility of borrower

  to receive a loan.  This is certainly the case with

  Corinthian Colleges, which was fined $30 million

  earlier this year by the Department of Education for

  falsifying job placement rates.

       Number 4, make regulatory changes to stop the

  manipulation of cohort default rates and strengthen

  the 90/10 rates.  Some schools have admitted to

  artificially keeping their default rates down during

  the period when they are held accountable.

       The Department can prove the integrity of

  cohort default rates and protect borrowers by

  immediately taking the following actions:  Cracking

  down on cohort default manipulation through

  administrative actions and strengthening regulations

  in the upcoming negotiated rulemaking; eliminating

  defaults from borrowers' records if the Department

  is eliminating those defaults from schools cohort

  default rates due to improper servicing, and

  strengthening the 90/10 rule by closing the loophole

  that allows schools to count GI Bill funds and

  Department of Defense tuition assistance as private

  rather than federal dollars.

       For-profit colleges should not be funded solely

  by federal taxpayers, and federal taxpayers should

  not be propping up low quality schools.

       Thank you for the opportunity to speak on

  behalf of low and moderate income students and their

  families who are burdened by the debt of worthless

  degrees obtained from schools that knowingly

  defrauded them.

       This is a vital opportunity for the Department

  of Education to help borrowers who have suffered

  from the fraudulent acts of for-profit schools, and

  also to protect those who may be victimized in the

  future.  We urge you to consider our suggestions and

  recommend that the Department implement them as soon

  as possible.

       Thank you.

       MS. WEISMAN:  Next, we have Katrina Hess, who

  is a former Heald student.

       MEGUMI TSUTSUI:  She sent me a message saying

  that she was running a little bit late, and so

  she'll be here around 10:30.

       MS. WEISMAN:  So, with Katrina running late, we

  do have some space for her later.  We do not have

  any additional speakers right now.  We do have

  someone on the agenda later, Kay Lewis from Higher

  Education Loan Coalition.

       Is Kay present at this time?

       KAY LEWIS:  Yes.

       MS. WEISMAN:  Kay, would you like to speak now?

       KAY LEWIS:  Sure.

       MS. WEISMAN:  Thank you.

             SPEAKER COMMENTS BY KAY LEWIS

       KAY LEWIS:  Good morning.  My name is Kay

  Lewis, and I speak to you today on behalf of the

  Higher Education Loan Coalition, a grass roots

  organization comprised of schools dedicated to the

  continuous improvement and strengthening of the

  federal student loan programs.

            (Reporter clarification.)

       Its members are practicing financial

  professionals working at participating institutions.

  I would like to thank the Secretary for the

  opportunity to provide the Department of Education

  with comments on federal student loan programs that

  may be addressed in the negotiated rulemaking

  process early next year.

       I was encouraged to see that defense to

  repayment will be the primary topic of negotiations,

  as the protection of our student borrowers is the

  coalition's greatest concern.  To ensure that the

  federal loan programs continue to be a strong, vital

  source of loan funding for students, I wish to speak

  to defense to repayment regulatory issues and other

  regulatory issues, as well.

       Defense to repayment regulations need to be

  strengthened and broadened to more accurately

  reflect the types of situations that borrowers face

  when inadequate educational programs and possible

  wrongdoing at the institutional level did not

  prepare the borrower for the degree or educational

  credential.

       Our federal loan programs are in agreement

  between the Federal Government, postsecondary

  institutions, and the student borrowers, that they

  will receive the education they sought to prepare

  them for employment in their chosen field.  It is

  essential that negotiators consider the following in

  providing adequate protection to our student

  borrowers.

       First, defense to repayment should apply to all

  federal loan programs.  FFEL, Direct, and Perkins

  loans should be eligible for inclusion in this

  process.  All government loan borrowers should be

  treated consistently, regardless of the loan

  program.

       In the past, the Department has been clear that

  it has the authority to implement defense to

  repayment for all of these loan programs, and we

  encourage the Department to exercise this authority.

       Second, when evidence suggests that the abuse

  or wrongdoing was program or campus-wide, then a

  simple proactive process should be in place to

  automatically grant defense to repayment status to

  students.  In these situations, defense to repayment

  should not be an individual process.  The case will

  have already been made, and putting students through

  unnecessary processes and lengthy delays is not in

  the borrowers' or the government's best interest.

       Third, explore with negotiators the use of

  false certification provisions as a means of

  discharging loans, when appropriate, instead of

  using defense to repayment.  This may simplify the

  process for students and avoids complexity with

  state laws.

       Four, schools should be held accountable for

  any wrongdoing with the defense to repayment

  process, and ultimate debt relief should not be

  delayed while enforcement proceedings are ongoing at

  the institutional level.  The student borrower needs

  to be made whole, regardless of what happens at the

  school level.

       Beyond defense to repayment, negotiators should

  also consider eliminating interest capitalization.

  Regulations allow for but do not require interest

  capitalization each time the borrower changes

  status, beginning with the end of the grace period

  and under certain circumstances and income-driven

  repayment plans.

       Interest capitalization increases the principal

  amount of the loan and the total cost of borrowing,

  since future interest accrues on capitalized

  interest.  Elimination of capitalization will help

  borrowers reduce their cumulative debt, which could

  affect the amount of their monthly payment and their

  ability to participate in other economic activities,

  such as home purchases or retirement investments.

       Capitalization is not required under federal

  law.  It's a holdover from the previous Federal

  Family Education Loan program.  It's not necessary

  to charge borrowers additional interest, and we urge

  the Secretary to consider elimination of this

  practice in the federal student loan programs.

       Negotiators may also want to consider

  supporting efforts to limit borrowing.  Current

  statutes allows aid professionals to limit the

  amount a student may borrow on a case-by-case basis.

       However, the Department has strongly cautioned

  against restricting borrowing, since the Federal

  Direct Loan Program is an entitlement program.  Some

  schools no longer participate in the federal loan

  programs because they fear their students will

  over-borrow, and they have no options to restrict

  borrowing.  This forces students at these schools

  into more expensive private loan programs.

       With the counseling tools now available to

  inform students about the consequences of borrowing,

  a professional should be given an opportunity to

  develop programs that would not unnecessarily

  restrict borrowing, but educate borrowers and help

  students borrow responsibly.

       We are not advocating for more loan counseling.

  We are advocating for aid officer discretion to

  build programs and inform borrowers, with the

  authority to limit borrowing when it is not in the

  best interest of the student, the institution, or

  the taxpayers.

       In closing, I would like to thank you again for

  the opportunity to present this testimony on behalf

  of the Higher Education Loan Coalition.  Many of our

  members were the first schools to implement these

  very loan programs over 20 years ago and have years

  of expertise in operational and policy issues, as

  well as compliance with the regulation for the

  program.  The coalition looks forward to

  participating in the negotiated rulemaking process

  that will occur in 2016.

       Thank you.

       MS. WEISMAN:  At this time, we have no other

  speakers present.

       Is there anyone who is in the audience who

  would like to speak now?

       MEGUMI TSUTSUI:  Sure.

       MS. WEISMAN:  Thank you.  If you can just speak

  a little bit louder into the microphone.

       MEGUMI TSUTSUI:  Yes, sure.

           SPEAKER COMMENTS BY MEGUMI TSUTSUI

       MEGUMI TSUTSUI:  My name is Megumi Tsutsui, and

  I'm an attorney at Housing and Economic Rights

  Advocates, also known as HERA.  HERA is a nonprofit

  organization dedicated to promoting economic justice

  and protecting consumers against financial abuse.

       We have held several workshops in conjunction

  with Bay Area Legal Aid and East Bay Community Law

  Center to address the Corinthian disaster and to

  help students navigate the aftermath, and we are

  working with numerous students who went to

  Corinthian and other predatory schools and whose

  best recourse is to have their loans discharged

  under defense to repayment.

       I'm here to share one story in particular, that

  of Mario Campa.  Mario Campa immigrated from Mexico

  in his twenties and has very limited English

  proficiency.  He saw an ad for WyoTech and brought

  his girlfriend with him to the recruitment meeting

  so she could help translate for him.

       Mario Campa was told that if he signed up for

  WyoTech's HVAC program, he would be guaranteed a job

  upon graduating, making, at minimum, $15 per hour as

  an apprentice.  After five years, he would become a

  journeyman and make at least $45 per hour.

       The subject of his English proficiency never

  came up.  Mario Campa struggled through his

  English only courses.  At some point, one of his

  classmates told him that he needed to have a GED in

  order to graduate, so he took the GED in Spanish and

  presented it to his school.

       When he graduated, it became clear that

  everything WyoTech had told him was a lie.  They did

  nothing to help him find a job.  When he tried to

  find a job in his field, he was told by employers

  that they don't take students from WyoTech because

  they are poorly trained.

       He finally got someone he knew to hire him at

  $10 an hour, and, since he graduated from his

  program in 2007, he has never been able to find a

  job paying him even $15 an hour.  As a result, he

  has had to declare bankruptcy, and he has defaulted

  on his Federal Family Education Loans, his FFEL

  loans.

       His story is awful and, also, all too common.

  Since we started helping Corinthian students just a

  couple of months ago, we have spoken with six people

  who attended this WyoTech HVAC program in Fremont

  from 2006 to 2015, who all shared similar stories.

       We have spoken with about 170 former Corinthian

  students altogether in just a couple of months, the

  vast majority of whom would only be eligible for a

  discharge through defense to repayment.  They, too,

  share strikingly similar stories to that of Mario

  Campa.

       In light of Mario Campa's experience, and other

  students' stories we've heard, I'd like to make four

  points about the Department's negotiated rulemaking

  agenda.  First, there needs to be a clear and

  transparent process that is easily accessible for

  students eligible to receive a discharge of their

  loans under defense to repayment.

       This process should also have language

  accessibility.  In our joint workshops with Bay

  Legal and EBCLC, we saw hundreds of students who

  potentially were eligible for defense to repayment.

       They all attended Corinthian schools, which

  were known to have been shut down for their

  misconduct, which has been going on for years.

  While some students had heard that their loans might

  be eligible for discharge, virtually none of these

  students knew how to access that process.

       Many of the students had seen the Department's

  website describing the application process, though

  virtually none had submitted an application, because

  they didn't understand the process and thought it

  was too complicated.

       Second, all federal loans should be eligible

  for defense to repayment discharge and should be

  discussed in the negotiated rulemaking.  It should

  not be limited to Direct loans only.  Mario Campa

  should not be treated differently for having FFEL

  loans, while someone else in a same situation is

  eligible for a discharge because she took out direct

  loans.  The Department should address all federal

  loan borrowers equally.

       Third, automatic group relief should be given,

  where warranted.  Individuals who attended schools

  and programs known to be predatory should not be

  forced to submit complicated or individual

  applications to have their loans discharged.

       This should be the case where state attorney

  generals and federal law enforcement agencies have

  already done the Department's job and amassed the

  evidence of widespread misconduct for certain

  schools.  This should also be the case where the

  Department receives evidence from students

  themselves documenting repeat patterns of fraud over

  time.

       The Department should also have a process for

  investigating complaints and determining whether a

  school is falsely marketing its program or falsely

  certifying the eligibility of students for federal

  student loans.  This will ensure that bad schools

  are caught early, that harm to students is

  minimized, and that taxpayers are not stuck footing

  the bill for misconduct by predatory schools.

       Where the Department is in receipt of school

  misconduct, it should proactively identify students

  impacted by predatory schools and programs and

  automatically discharge their loans.

       Finally, false certification and other

  discharge regulations should be revisited and

  expanded alongside defense to repayment discharges.

  In Mario Campa's case, the school falsely certified

  his eligibility for federal financial aid.

       There is no way that Mario, having very limited

  English proficiency, could have benefited from an

  English only course without any ESL support, despite

  having passed a GED test.  Yet, for false

  certification, there is only one ability to benefit

  for him that does not apply in his situation,

  because he received a GED while enrolled in his

  program.

       It would serve both the Department and students

  to revisit regulations for false certification and

  other discharges to provide an additional and

  simplified avenue for relief for students who

  attended schools that not only defrauded them, but

  also defrauded the Department by falsely certifying

  students' eligibility for federal loans.

       Thank you again for allowing me to testify on

  behalf of HERA's clients.

       MS. WEISMAN:  We do not have any additional

  speakers at this time.  We would like to have

  Katrina Hess, the former Heald student who was

  originally scheduled earlier, to speak at 10:40,

  after our scheduled break.

       Is there anybody else who is in the audience

  who would like to speak at this time before we take

  a break until 10:40, or, if there is anyone who

  previously spoke this morning that would like to

  speak again, to return for additional comments?

       If you could please give your name again.

         FURTHER SPEAKER COMMENTS BY DAWN LUECK

       DAWN LUECK:  Hi.  Dawn Lueck.  So, one of the

  things that I want to point out doesn't directly tie

  into the negotiating rulemaking, but, again, I want

  to go back to language that the Department of Ed

  uses, and I just, again, I continue to be so

  disturbed by your guys' language.

       One of the things I want to speak about is this

  new position you guys have created with a Special

  Master.  I cannot even begin to say how perverse

  that title is.  To even think that you guys would

  use the term, Special Master, aka, the BDSM, the

  borrower defense Special Master, is just sickening.

       Well, when I hear those terms, what it makes me

  think is, the Department of Ed must really think we

  are indentured slaves.  They really must be thinking

  that these students need a Special Master to oversee

  this process of debt that legitimately needs to be

  discharged.  So, I wanted to testify on that and get

  it on the record that I think it's absolutely sick

  and disgusting.

       I wish Special Master Smith the best of luck.

  I don't think that this is anything personally

  directed towards him.  I'm sure he's going to do a

  fantastic job, but you guys really need to take a

  step back and think about the verbiage and the

  language that you guys use moving forward, and be a

  little bit more sensitive to the people, to the

  public, to the history of this nation.

       I mean, again, it's sickening, disturbing, and

  I will say, as a student, I'm not alone, and I am

  not your indentured slave, and we will continue to

  refuse to pay back our loan debts until you guys

  actually acknowledge the rights that we have to

  education.

       It should not be a privilege, it should be a

  right, and everybody should be allowed equal and

  affordable opportunities to get an education without

  having to be captured by this system, this crisis

  that we are having around debt.

       Thank you.

       MS. WEISMAN:  Is there anyone else who would

  like to speak or to return to podium?

       We will adjourn until 10:40 this morning.

  Thank you.

            (Recess:  10:08 a.m. to 10:40 a.m.)

       MS. WEISMAN:  Good morning, again.  We'd like

  to resume, and our speaker will be Katrina Hess, a

  former Heald College student.

            SPEAKER COMMENTS BY KATRINA HESS

       KATRINA HESS:  Hi, my name is Katrina Hess, and

  I'm a graduate from Heald College in the pharmacy

  technician program.  Heald led me to believe that I

  was wronged by the university school system that I

  attended previously, and that I needed to remarket

  my skills, and that without Heald, I wouldn't be

  able to reach any of my goals in life.

       I was laid off in my career as a regional

  retail manager in 2008, along with much of the

  American workforce.  For two years, I was unemployed

  and unable to find work, repeatedly told I was

  either too experienced or not experienced enough.

       Depending on government benefits and relying on

  others, I struggled to make ends meet, and I was

  desperate for a break to get a chance to make my

  life back together.  I contacted Heald after

  watching a television commercial.  And, one day,

  they told me I was like the other students they had

  enrolled, and their other students successfully

  changed their lives.

       They practically guaranteed me a job, saying

  they had a proven record that of one in three

  students became enrolled in their major, by

  graduation, and that I would be able to get this job

  by attending their program and having access to

  their inside connections with companies offering

  lifetime job placement and security.

       The Stockton Heald student recruiter pushed me

  into enrolling in the pharmacy technician program.

  As she claimed, it was one of the best programs in

  the school.  She said that because of the upcoming

  Obamacare initiative, the demand for pharmacy

  technicians would increase by 30 percent by 2013.

       The market was in desperate need of qualified

  individuals who were professionally trained and were

  not just off the street.  She said that in order to

  get that secure type of employment, I would have to

  go to Heald.

       My experience differed from what Heald promised

  me.  For starters, I was enrolled and attending

  courses before being told what it would cost for the

  program.  After enrolling, I was told that my

  financial aid application was denied, and I had to

  pay out-of-pocket, take out loans, both from the

  school directly, as well as from the Department of

  Education.

       They lied to me, and they lied to you.  Heald

  Stockton had designated financial aid workshops that

  their students would attend.  They would fill out

  the financial aid applications for the students and

  have the students sign them.

       I attended Heald Stockton for two quarters

  while witnessing my fellow students have the same

  financial issues, delinquency letters, missing

  tuition checks and being pulled out of class because

  they owed money to the school.

       When I transferred to Heald Hayward, I was sent

  multiple delinquency letters from Stockton telling

  me that I owed over $11,000 for my education time

  with them.  I was also told they weren't counting my

  Department of Education loans, because they never

  got them, even though I was paying monthly loan

  payments for federal loans while I was enrolled.

       By the time I was supposed to graduate Heald

  Hayward, I was told in order to graduate I had to

  take out another loan directly with the school.

       Two months after graduation, I received another

  delinquency letter from Heald saying that they had

  messed up my financial aid records and that I owed

  more money.  They made me take out another loan

  directly through them to clear it all up.

       You see, they never told me how much it would

  cost when I started school.  I had to fill out a

  FASFA form for every quarter, and each quarter cost

  a different amount, depending on how they felt.  I

  never knew how much it would cost, and it's

  ridiculous to believe that they don't owe back those

  costs for their lies.

       I witnessed other students go through the same

  strife that I went through.  Heald didn't pick and

  choose which majors to lie to.  They didn't choose

  June of 2010 to start lying to their students.

       What happened to me happens to all of the

  students enrolling in the program and in the school.

  We were loaded with student loan debt, promises were

  broken, and we ended up in jobs that are not related

  to the careers we went to school for.

       It is unfair to me to be stuck holding the bag,

  as I was lied and duped by Heald and their

  affiliates.  They have been allowed to wash their

  hands of these crimes that they have committed and

  pass the cost on to their victims.

       I want justice for all Heald students.  We

  should not have to go and submit a complicated

  individual defense to repayment application for the

  well-documented lies and fraud that happened to

  nearly all students who attended my program and

  attended my school.

       Please take all these facts into consideration

  and grant automatic group discharges for those who

  attended the pharmacy technician program at Heald in

  Stockton or Hayward at any point in time.

       Thank you.

       MS. WEISMAN:  We do not have any additional

  speakers scheduled for the morning.  Our next

  speaker is scheduled for 1:00 this afternoon.

       If there is anyone present who would like to

  speak now that maybe signed up for a later time,

  please, let me know.

       If there is anyone from the audience who would

  like to speak who is not currently scheduled for a

  time, please, let me know.

       If you could please introduce yourself as you

  approach the microphone.  Thank you.

       THE WITNESS:  Absolutely.

          SPEAKER COMMENTS BY SANDERS FABARES

       SANDERS FABARES:  Hello, my name is Sanders

  Fabares, and I'm a former student of the Art

  Institute.  My name is Sanders Fabares, and, though

  I'm not a student of Corinthian, I am a victim of

  Education based fraud.  I am ashamed to say that I'm

  a 2006 graduate of the Art Institute of San Diego.

       When I first heard about the Corinthian

  closures a year ago, I took it upon myself to learn

  more about the whistleblower cases towards

  Corinthian, the Art Institutes, and other for-profit

  schools.

       After reading the cases and the personal

  stories of students who attended, like myself, and

  comparing them to my own, I considered the

  for-profit college scandal to be just a modern form

  of fabricated servitude, a clear scam that takes

  advantage of people who want a better future.

       Students who attend the for-profit chains are

  victims of predatory marketing tactics.  We were

  given false statistics on graduation rates, hustled

  into taking on high interest loans, and misled by

  grossly inflated job placement statistics.

       Now, if those statistics reflected the truth, I

  know I would never have attended AI, but they

  didn't.  I received a subpar education that was

  nowhere near what was needed to work in a related

  field.

       My life has been put on hold as I struggle to

  pay the debt.  I've been paying in order to preserve

  my credit, but I do not intend to pay any longer.

  I've paid enough, more than enough for a worthless

  degree from a fraudulent school, and I will not be

  enslaved by inescapable debt for a degree that I've

  never once benefited from.

       I originally graduated with 32,000 in debt from

  federal and private loans.  To this date, I have

  paid 24,000 towards them.  However, I still owe

  26,000 towards principal.  I was forced to use

  deferment forbearance due to economic hardship after

  graduation, but I have never defaulted.

       My wife, who also went to AI, is much worse

  off, borrowing around 80,000 because they refused to

  accept general ed classes that she took at a

  community college.

       Together, we pay about 1,000 a month, but for

  what?  How am I supposed to validate this huge

  monthly expense as anything legitimate?

       I will not give them the rest of my life.  The

  stocks of Art Institute parent company EDMC have

  been bottoming out for a while now, but, when the

  Federal Government sued EDMC for fraud, the

  government got their money back, $11 million worth,

  yet, students, the victims of the fraud, still

  attempt to pay their loans or suffer the

  consequence.

       I find it very disconcerting that a company

  that has been accused multiple times of fraud

  continues to enroll new students to this day.  This

  past summer, the Art Institutes held open houses

  almost every other weekend across the country,

  desperately trying to entice more students into

  their programs.

       Every student that signed up, if we truly care,

  we should feel the weight of this on us.  We are

  allowing this to continue.  We need to stop these

  debt factories from enrolling future students until

  all of the pending lawsuits against them are

  resolved.  I'd bet those court cases would be

  allowed to proceed tomorrow if this weren't the

  case.

       The Department needs to accept responsibility

  for its failure to monitor these schools and make

  debt cancellation as effortless as possible.  They

  have the opportunity to step up and finally protect

  students' interests.

       Do this by initiating blanket cancellation for

  all the outstanding debt for fraudulent schools.  We

  cannot expect students to act as their own lawyers

  throughout an arduous individualized process.

       At this point, schools such as Corinthian, the

  Art Institute, ITT Tech, and the University of

  Phoenix have all been involved in major cases

  accused of fraud and deceptive marketing tactics.

  The loan providers Navient, Sallie Mae, AES, and

  Nelnet have all been involved in major cases

  investigations, as well.

       The only party in this situation who can claim

  any sort of innocence is the student, and it is

  unfair to expect people who have already been

  victimized by a broken system to now place their

  trust in another complicated system which may or may

  not be in their best interest in life.

       For-profit colleges should have no

  representation in this committee, since they have so

  widely shown their adherence to using lies as a

  common practice.  I find it extremely hard to

  believe that they have ever put the student's best

  interest first.

       You need to give students a greater presence on

  the rulemaking committee if true democracy is to be

  served; not a singular student, but multiple

  students representing a variety of different

  schools.

       We, the students, are the victims of the

  system.  We are the affected.  We are the defrauded.

  We, too, are taxpayers who have been paying into the

  Pell grants to further support this ongoing fraud we

  are victims of.  I want to emphasize, all remaining

  loans, not just direct loans, should be cancelled

  when the degree that they've paid for was one built

  upon fraud.

       Blanket cancellation needs to be the way that

  we do this.  We cannot afford to slow this process

  down, going loan type by loan type, student by

  student, school by school.

       How many more generations of students have to

  default and cost taxpayer dollars?  How many more

  people will, in desperation, be taken in by debt

  relief scams?  How many more students will consider

  suicide as the only escape from this debt?

       In spite of their belief that a higher

  education is a worthwhile pursuit that will lead to

  a brighter future, right now, higher education is a

  high risk gamble that carries the potential to

  destroy lives of students and their families.

       Be transparent.  Be accountable.  Be better.

  Be a champion for the students.  Regain our trust.

  Stop blaming the victims.

       Thank you.

       MS. WEISMAN:  Is there anyone else who would

  like to come forward to speak?

       At this time, then, we will do an early lunch

  break and resume promptly at 1:00 p.m.

             (Luncheon recess:  10:54 a.m.)

           A F T E R N O O N    S E S S I O N

                      (1:06 p.m.)

       MS. WEISMAN:  We'd like to resume our afternoon

  testimony.  We do have speakers scheduled from 1:00

  until about 2:00.  If you are not on the schedule to

  speak, please, see Aaron at the table in the back,

  and he will get you registered.  We'll also call for

  comments from the audience if anybody would like to

  come up after that.

       We do only have one other person scheduled for

  later in the afternoon at 3:45 so, if we don't have

  extensive speakers ready to speak, we will have an

  additional break.  Otherwise, we do plan to take a

  break from about 2:30 to 2:40.

       Is Angela Perry present?

       Thank you.

            SPEAKER COMMENTS BY ANGELA PERRY

       ANGELA PERRY:  Good afternoon, and thank you

  for the opportunity to testify.

       My name is Angela Perry, and I'm a law fellow

  with Public Advocates, a nonprofit law firm and

  advocacy organization that's challenged the systemic

  causes of poverty and racial discrimination for over

  40 years so that all Californians can have the

  building blocks to thrive.

       Public Advocates has been working with Legal

  Aid and advocacy organizations to improve state

  oversight of these education businesses, as well as

  institutional compliance with federal-state

  authorization requirements for the past three and a

  half years, and we've made great strides in

  California, closing regulatory loopholes and

  creating robust disclosures for prospective

  students.

       Unfortunately, during the same time period,

  we've seen our governmental agency focusing its

  efforts on assisting institutions, rather than

  students, and we have seen story after story of

  education businesses in California leaving their

  students with insurmountable debt and broken dreams.

       Despite the fact that many of these companies

  have used deceptive recruitment practices to earn

  billions in profits from federal aid programs, these

  students are left with crushing debt burdens and do

  not qualify for federal student loan relief under

  current federal regulations.  As a result, they face

  a lifetime of student loan debt, which all too often

  prevents students from getting a fresh start in

  their lives.

       As a result, and in light of the recent closure

  of Corinthian Colleges, which affected 13,000

  students in California, Public Advocates recommends

  that the Department of Education take the following

  steps to ensure that a borrower defense program is

  accessible, understandable, and protects borrowers

  victimized by unscrupulous education businesses.

       First, the Department should ensure that all

  federal loans are eligible for discharge; second,

  the Department should use existing findings to grant

  automatic group relief to borrowers; and, third, the

  application for relief should be simple and

  accessible, with as little burden placed on

  struggling borrowers as possible.

       First, the Department should ensure that all

  federal loans are eligible for discharge, including

  FFEL, PLUS, Perkins, direct, and consolidated loans,

  regardless of when the loan was issued.  We also ask

  that the Department provide comprehensive relief to

  students, including tax free forgiveness of student

  debt, and the reinstatement of Pell grants.

       There is legislation pending in California, for

  example, AB 573, which would restore up to two years

  of Cal grant eligibility to impacted students at

  Corinthian Colleges, and the Department should

  consider following that example.

       Unscrupulous for-profit institutions like

  Corinthian have hurt and continue to harm students,

  and, even if the Department adds defense to

  repayment procedures for FFEL loans to the

  rulemaking agenda, many borrowers may still have

  difficulty accessing a defense to repayment claims

  process.

       For this reason, it is critical to create a

  fair and efficient defense to repayment process that

  provides some cohorts of borrowers with automatic

  relief, particularly in cases where there are state

  or federal findings of widespread wrongdoing.

       Second, the Department should use existing

  findings to grant automatic group relief to

  borrowers.  The Department has the power to grant

  automatic defense to repayment relief to groups of

  students where there is substantial evidence that

  the institution has engaged in a pattern of

  misconduct and/or fraud.

       If a school is closed, or in the process of

  shutting down, and/or if a school has been found

  guilty of fraud, all students should have their

  loans discharged without needing to go through the

  complex process of applying for the discharge.

       Student loan repayment is a difficult process,

  and current forms and procedures for relief include

  far too many barriers for students deserving of

  restitution.

       Lastly, the application for relief should be

  simple and accessible, with as little burden placed

  on struggling borrowers as possible.  The

  application for relief should be simple and clear,

  and the burden on borrowers should be minimal.

  There should be no legal expertise required on the

  part of the borrower, and the application should use

  plain language.

       The Department should make one single universal

  form for borrowers, instead of state-specific forms,

  and should seek to simplify the application process

  wherever possible.  The Corinthian closure

  highlights the needs for a simpler, more

  consumer-friendly application process.

       In the case of Corinthian, the Department did

  take steps to simplify the process, but, as we've

  seen in California, the state with the most

  Corinthian students impacted, students still require

  access to legal aid in order to be able to complete

  the process.

       AB 573, which I mentioned earlier, seeks to

  provide funding to support legal access to legal aid

  in California, but more needs to be done on a

  national scale to simplify the process.

       Further, borrowers should not be required to

  produce written proof of fraud, as many describe

  similar verbal recruitment techniques that were

  misleading and deceptive.  Students were discouraged

  by some institutions from keeping records

  altogether, and the Department should have internal

  records that are sufficient to verify students' form

  complaints.

       Public Advocates looks forward to working with

  the Department and the Administration as it moves

  forward with plans to create a borrower defense

  program to assist students who attended failing

  schools, and ensure that they receive the full

  relief they deserve.

       Thank you very much for the opportunity to

  testify on behalf of struggling students.

       MS. WEISMAN:  Peter Smith, from the Center for

  Responsible Lending.

            SPEAKER COMMENTS BY PETER SMITH

       PETER SMITH:  My name is Peter Smith, and I am

  a senior researcher for the Center for Responsible

  Lending.  CRL is a research and advocacy

  organization based in Durham, North Carolina, and we

  also have offices in Washington, D.C., and in

  Oakland, California.

       We're affiliated with Self-Help, a network of

  credit unions with over 130,000 members nationwide,

  with a mission of preserving and creating family

  wealth for underserved people and businesses through

  responsible lending and economic development.

       We welcome the Department's efforts to provide

  relief to for-profit college students defrauded by

  their colleges.  A well-constructed defense to

  repayment rule would be a crucial backstop for the

  integrity of a federal student loan program.  It

  would ensure that students do not bear the risk of

  fraud, and would provide an efficient path for the

  Department to provide relief to eligible borrowers.

       At CRL, we believe in the power of well made

  loans to help build financial success, including

  taking loans out for college.  But, for too many

  for-profit college students, the title IV program

  has turned into a source of harmful predatory loans

  that can never be discharged in bankruptcy.  A

  robust DTR rule could help mitigate the harm caused.

       The collapse of Corinthian Colleges

  demonstrates the need for new, clear rules

  protecting borrowers from the disproportionate risk

  of consumer protection violations they've faced when

  they enroll in for-profit colleges.  No student who

  has taken out student loans due to the

  well-documented consumer abuses in the for-profit

  sector should remain liable for the loan.

       Many of the students most likely to be fraud

  victims are low income students and/or students of

  color.  A strong DTR rule would prevent the title IV

  program from becoming the source of additional

  financial harm to the borrowers who can least afford

  it.

       The new DTR rule should have the following

  basic characteristics:  It should be based on a

  broad, general standard of federal and state

  consumer protection law; consider a broad range of

  evidence to show consumer protection violations;

  give heavy weight to actions by state attorneys

  general and federal consumer protection authorities;

  provide cohort-based relief, whenever possible; give

  cohort members opt-out, automatic relief, rather

  than requiring individual applications and showings

  of reliance or harm; and be applicable to all

  federal loans, with no time limit -- Direct, FFEL,

  and Perkins.

       In formulating the DTR rule, the Department

  should take into account the realities of life for

  low income borrowers.  Creating high barriers to

  relief by requiring that they fill out lengthy,

  legalistic forms may mean that they are shut out of

  relief.

       The Department has the information and the

  power to simply automatically forgive loans when it

  determines that a group of borrowers has been

  defrauded.  It would be unfair for the Department to

  continue collecting these loans just because a

  borrower moved and did not receive the form, or

  because they were unable to complete it adequately.

       In addition to DTR, the rulemaking agenda

  should be expanded to include revised regulations

  for closed school and false certification

  discharges, a ban on forced arbitration, and

  amendments to the cash management rule that would

  better prevent institutions from mishandling federal

  funds that could otherwise be used for borrower

  relief.

       Thank you very much for the opportunity to

  provide this testimony.  We've also provided some

  written testimony.  We're grateful for the

  Department's continued efforts to protect students

  from harmful student debt.

       Thank you.

       MR. DiPAOLO:  Thank you.

       MS. WEISMAN:  Thank you.

       Alyssa Picard, from AFT Higher Education.

       Alyssa does not seem to be here.

       Is Juliana Fredman from Bay Area Legal Aid

  present?

       Thank you.

          SPEAKER COMMENTS BY JULIANA FREDMAN

       JULIANA FREDMAN:  Good afternoon.  My name is

  Juliana Fredman.  I'm a consumer protection attorney

  at Bay Area Legal Aid.  Bay Legal serves seven

  counties throughout the Bay Area.  Our clients are

  all individuals living in poverty.  We also run

  eight regular clinics each month for pro per

  debtors, and so we see a lot of borrowers dealing

  with a lot of debt collection matters.

       For our client population, student loans are

  far and away one of the biggest issues that we see,

  both with our clinic participants and in our regular

  intakes.

       A huge proportion of the students that we see

  attended for-profit schools that often sold them

  what have turned out to be worthless degrees and

  certificates, with promises of near universal

  employment, well paid employment, and many of them

  have never been able to obtain any employment in

  their field of study.

       People often come to us years later after years

  of frustration, and, oftentimes, the trigger for

  coming is that they finally get a low wage job, and

  their payment is being garnished, or their Social

  Security, disability, or retirement is being offset

  to pay student loans.

       So, it's often years later that we hear these

  stories about these schools and what happened there.

  Oftentimes, the schools no longer exist.  So, this

  is not just an issue of indebtedness, but also

  broken dreams, and, really, lost time, for a lot of

  students.

       Since the Corinthian closure, we have been

  inundated with students who attended one of the five

  schools in our service area, and, together with

  other legal services organizations, we've held

  numerous additional legal clinics to explain these

  students their rights, which has been a difficult

  task, at times, because so many of them are not

  clearly defined, which is why we really, really

  welcome this process, to clarify that.

       The students and former students who've come to

  us via the Corinthian clinics and our intakes tell

  remarkably similar stories of very high pressure

  sales tactics, promises of near universal job

  placements, promises of high wages, externships that

  never materialized, false representations about the

  transferability of their credits to four year

  institutions.

       And, to a person, they describe extremely hard

  pressure sales tactics, so, you called to inquire on

  Friday, you're in class on Monday, and you've signed

  loan documents over the weekend, taking out

  thousands of dollars in loans.

       The tales we hear, to our ear, many would

  likely be actionable under our state unfair business

  practices laws, under the California Consumer Legal

  Remedies Act, and common law misrepresentation; in

  some cases, fraud, also, but we wouldn't have the

  capacity to do complete claims of those types for

  every single student we've seen.  We've seen

  hundreds of students.

       As you know and why we're here is that there is

  no general form or application for borrowers seeking

  discharge based on school misconduct, but, as you

  also know, there has recently been a streamlined

  form created for certain Heald students, based on

  their program of study and when they enrolled.

       But the distinction that we've seen between

  students who are eligible and those who aren't for

  that streamline discharge highlights the need for

  further process, because it becomes so arbitrary.

  You'll have students with almost identical facts,

  but, one student, for example, who may have enrolled

  in one of the named programs six months earlier, but

  describes the same job placement numbers, or the

  same kind of misrepresentations, can't use the form,

  or somebody who doesn't remember four years ago

  exactly what they saw on paper, but they remember

  what they were told -- they remember those oral

  misrepresentations -- they cannot use those forms.

       So, I have students who have identical

  situations enrolled from 2008 to 2013, a program

  that's listed, graduated, looked for work, was never

  able to find anything, was promised 90 percent job

  rates, was promised a salary within a certain range,

  and is still working the same low wage retail job

  that she was when she enrolled.

       In terms of the procedures we'd like to see,

  I'll just go over a couple, and a few key factors

  that we think are important for the client

  population we serve, who are among the most likely

  to be victimized by for-profit institutions engaged

  in fraudulent practices.

       So, I mean, much of what we'd like to see

  involve this being minimally burdensome on the

  students, and we'd like to see automatic loan

  cancellation for cohorts of borrowers who are

  covered by government findings of wrongdoings.

       So, where states attorney generals, oversight

  agencies, or federal agencies have reported findings

  and evidence that a school's established has

  violated federal or state law, regulation, there

  should be a process for group discharge of loans

  within that cohort.  They should not be required to

  individually apply when the Department is aware of

  widespread and pervasive wrongdoing.

       And I think that the number, the low numbers of

  eligible students who apply for closed school

  discharges support the contention that unnecessary

  applications where the Department has the necessary

  information serve as barriers for students to obtain

  relief that they are entitled to.

       And, often, the students who do not submit

  applications are among the most vulnerable, so they

  may be limited English speakers, they may be

  disabled, or have other kinds of barriers that are

  preventing them, many homeless, preventing them from

  completing the necessary documentation.

       Where application is required, any burdens of

  proof should be fair to the borrowers.  Paper

  documentation should not be dispositive or required.

  Sworn declarations should be considered evidence,

  establishing eligibility for relief.

       Again, often, by the time the student realizes

  the extent of the misrepresentation, a lot of time

  has passed, and the school may have closed, or, in

  some cases, seems to have evaporated completely, and

  it's no longer possible to gain access to supporting

  documentation.

       And, finally, as I think I was hearing from

  previous speakers, applying for a borrower's defense

  to repayment should not require legal expertise.  It

  should be straightforward and should allow students

  to attest to the facts that would underlie a claim

  without requiring them to be able to frame these

  facts as legal claims.

       And, again, we also would like it clarified

  that this discharge would be eligible to all

  borrowers in federal loan programs; Perkins, Direct,

  and FFEL loans, and those who have consolidated

  their loans.

       A more comprehensive discussion of each of

  these points was provided.  We signed onto joint

  comments that were submitted in response to docket

  number ED-2015-ICD-0076, so I would urge you to

  review those in your discussions of this for more

  kind of comprehensive discussions of our thoughts on

  this.

       Thank you.

       MS. WEISMAN:  Did Alyssa Picard arrive?

       Mark Anderson, from American Federation of

  Teachers.

           SPEAKER COMMENTS BY MARK ANDERSON

       MARK ANDERSON:  Good afternoon.  My name is

  Mark Charles Anderson, and I have the privilege of

  being an adjunct professor of health education at

  the San Diego Community College District.  I have

  been doing that for 22 years.

       During that time, I have also taught at other

  state and private institutions of higher education.

  I am also a trustee elected to the San Diego County

  Board of Education.

       I'm a board member of the California County

  Boards of Education, and a member of the House of

  Delegates of the California School Board

  Association.

       Education is my life, my avocation, and when I

  hear the tragedies of these students being impacted

  by the overwhelming financial burden, it breaks my

  academic heart in a lot of ways.

       I am here today as a representative of the

  American Federation of Teachers and our 1.6 million

  members.  I want to thank the Department for the

  opportunity to speak today and to hear these comment

  from myself and others.

       Financial burdens of the types incurred when

  people are enrolled in colleges and technical or

  trade schools that do not have the best interests at

  heart of the student are a chronic disability for

  the recovering student.

       In looking at the possible remedies, the AFT

  supports your efforts to help these individuals get

  out from under an enormous and, often, a

  quality of life threatening burden.

       The AFT believes, to quote the Special Master's

  report of 3 September 2015, to develop a system that

  is fair, transparent, and efficient.  If the loan

  was originally made under fraudulent circumstances

  on the part of the educational program, it should be

  discharged.  Period.

       Relief should be as broad-based and as easy to

  access as possible.  The negotiated rulemaking

  should address all types of loans, and regardless of

  when the loans were issued, as all loans are

  eligible for defense to repayment discharge.  This

  includes the Federal Family Education Loans and the

  Perkins loans.

       Automatic group discharges should be granted

  where the evidence warrants it.  Students should not

  have to apply on a case-by-case basis where there is

  documented systemic wrongdoing on the part of the

  educational program.

       If the DTR authority cannot offer the broadest

  relief, the Department of Education should add other

  authorities to the negotiated rulemaking agenda.

  And, finally, the federal DTR standards should not

  preempt any stronger state law.

       These issues adversely impacted too many

  students for too long.  The American Federation of

  Teachers encourages the Department of Education to

  proceed as fast as bureaucratically possible to

  allow these people to achieve a quality of life

  without the overwhelming financial burden that has

  been incurred.

       Thank you.

       MS. WEISMAN:  Makenzie Vasquez?

       DAWN LUECK:  So, she's not here, but we can

  read another student's statement in place.  I don't

  know if she's going to make it.

       Or, do you just want to move forward?

       MS. WEISMAN:  If you have her statement, or --

       DAWN LUECK:  We don't have hers, but we have

  another student's.

         FURTHER SPEAKER COMMENTS BY DAWN LUECK

       DAWN LUECK:  Hi, there.  So, my name is Dawn.

  I'm going to read on behalf of some students we were

  able to get some additional statements for today, so

  I'm going to be reading on behalf of Niki Howland.

       All right.  So, in June 2000, I was 18.  I knew

  nothing about credit or lending, as I come from a

  poor family.  I myself was unemployed at the time,

  and my mom was a single mom working as a waitress

  making $2.13 per hour, plus tips, while supporting

  three kids.

       I called ITT Tech recruiter after seeing a

  commercial.  Her name was Claire Levitt, from ITT

  Tech, Albuquerque, New Mexico.  She immediately

  rushed me through the loan process.  I was told the

  school would cost me around 18,000, with my Pell

  grant.  Shortly after recruiting me, Claire left the

  school.

       I have kept all documentation, and I have proof

  of everything.  Even after all these years, I have

  my old student ID.  I didn't know back in 2002 to

  2004 that the recruiter pulled my credit, my mom's

  credit, and now my ex-husband's credit, until

  recently, when I submitted evidence to the CFPB to

  file a complaint.

       All of our credit was denied, but ITT Tech

  still found a way to fund me by means of predatory

  lending.  I had no idea I would have high interest

  rate private loans with accruing interest while I

  was attending ITT Tech.

       I had no idea I would even have private loans

  on top of the multiple federal student loans.  I

  discovered about 11 federal loans and three private

  loans six months post grad.

       I was actively trying to find work in my field.

  ITT Tech stole my Pell grant as it was applied to my

  debt.  I was so determined to break the cycle of

  poverty in my family, and I was promised a great job

  and a bright future by ITT Tech.  I was sold hopes

  and dreams, which I later found out to be all lies.

       Now, all I have is a revolving door of high

  interest rate debt with a useless piece of paper ITT

  Tech calls my associate degree in computer science.

       I was one of those statistics likely to

  default.  I have never defaulted, but I'm stuck in a

  cycle of revolving debt.  I ended up with 11 federal

  loans totaling 22,000 after I graduated.

       Interest accrued and compounded.  I had no idea

  I would have three high interest private loans with

  accruing interest while I was attending the school.

  All three private loans totaled $6,074 not including

  the 13.25 percent interest rate with a 10 percent

  origination fee on all three loans charged to me

  when Bank One ITT Tech sold my loans to Sallie Mae,

  now Navient.

       The amount of 6,000 seems payable, right?

  Well, after paying for nearly 12 years, my balance

  as of September 2015 is $4,047, which means I've

  roughly paid $2,000 in 12 years.  Navient randomly

  compounds interest every time I make a payment.

       No bank will touch these private loans held by

  Navient.  My payments go directly to interest.  This

  is true for my federal loans, as well.  As of

  September 2015, I owe Navient more today on two

  FFELP loans, one subsidized, and unsubsidized.

       I had multiple seemingly small Stafford loans,

  which I later consolidated under FFELP.  How is it

  that I've made these payments, and I owe more in

  federal loans than I did in 2004, when I graduated?

  I have been paying for 12 years.  My student loans

  totaled 33,000 when I graduated.  I now owe 33 and a

  half thousand.

       It's the biggest debt I have.  I have

  absolutely nothing to show for it, except for a

  piece of paper on my wall with zero value in the job

  market.  At this rate, I'll be paying it off for the

  rest of my life.

       I've never used my degree.  I was promised job

  placement, but the only thing ITT career service

  gave me was a half-inch packet with printouts from

  Monster.com and other employment websites.  I

  visited career service about nine times while I was

  a student, and about four times post grad.

       Each time I visited, I was given a packet of

  printed-out jobs listing for my, quote, field.  I

  had already been applying for work throughout my two

  years, and well after.  I finally found a job

  working for a phone company in Florida in 2005,

  which had nothing do with my degree of applied

  computer science.

       I fix phone lines, and I install DSL in small

  businesses and homes.  I was a blue collar worker,

  driving around in the hot sun running cable.  I went

  from phone box to phone box to troubleshoot static

  on the phone lines.

       The education was poor.  I don't know how I

  even passed trigonometry or algebra.  I have no idea

  how to do that math.  I even have old homework that

  I saved.

       I went to school for a computer networking

  systems of applied science associate's degree.  I

  still have no knowledge of how to administer

  networks.

       It should have been noted that I had no formal

  education in middle school or high school.  I

  received my GED equivalent from an unaccredited

  Scientology classroom called Dennison Academy at the

  age of 14 in 1998.  I've never studied for it.  I

  paid $500 for a fake piece of paper saying that I

  have my GED equivalent.

       The student debt crisis ruins lives.  Even if

  you don't default, like me, you will be paying for

  the rest of your natural life.  My student debt

  affects the lives of my children, my husband, and

  myself.

       If the school is defunct, the degree is null

  and void, and so should be our debt.  I am fighting

  for classwide student debt discharge for all victims

  of defunct for-profit colleges.  The student debt

  crisis needs bipartisan reform, and our debts

  eradicated.  Thank you for listening to my story.

  Niki Howland.

       MS. WEISMAN:  Did Alyssa Picard arrive yet?

       Rachelle Feldman, from UC Berkeley.

          SPEAKER COMMENTS BY RACHELLE FELDMAN

       RACHELLE FELDMAN:  I'm Rachelle Feldman.  I am

  here representing the University of California,

  where I am the Director of Financial Aid and

  Scholarships at the Berkeley campus, and, for full

  disclosure, I'm also an executive board member of

  the Higher Education Loan Coalition.

       The University of California serves nearly

  250,000 undergraduate, graduate, and professional

  degree students, and graduates a very high number

  and proportion of low income students.

       Federal loans, although we've heard some horror

  stories, are an integral part of assuring access to

  a high quality education for our many needy

  students, and I'd like to thank the Secretary for

  the opportunity to provide the Department with

  comments on loan repayment issues that may be

  addressed in the next negotiated rulemaking process

  early next year.

       The defense to repayment regulations are a very

  important protection for student borrowers and need

  to be strengthened and aligned to the current real

  world types of situations that some borrowers face.

       These borrowers may have attended schools where

  institutional wrongdoing occurred, or the

  educational quality of degree or certificate

  programs was lacking.  These student borrowers were

  then unable to obtain their degree or educational

  credential, or the one they did obtain was not

  enough to make them ready for post-graduation

  employment or for repayment.

       It's essential to the strength of our loan

  programs that we minimize the defense to repayment

  claims in the future and ensure that institutions

  are providing borrowers the education that they

  sought and expected to receive.

       To that end, we would like to encourage the

  Department to strengthen the enforcement and

  evaluations of the requirements for title IV

  eligibility of institutions.  Accreditation and

  program participation evaluation should help ensure

  that bad actors and bad programs are not eligible

  for federal lending or borrowing.

       Potential students should feel confident in the

  quality of education they receive.  Preventing the

  awarding of loans for inadequate programs will

  lessen the need for discharges based on defense to

  repayment and help safeguard borrowers and taxpayers

  alike.

       In addition, institutions are required to have

  adequate administrative capability to be eligible

  for federal aid funds.  I don't know why I can't

  talk today.  Negotiated rulemaking could address

  defining benchmarks or minimum standards of capacity

  to receive or maintain eligibility for federal loan

  programs.

       Institutions that do not demonstrate sufficient

  controls to detect and prevent fraudulent behavior

  on a widespread scale should not be entrusted with

  federal dollars.

       Prevent manipulation of key data by

  institutions.  The Secretary should engage

  negotiators to discuss and determine how to

  strengthen regulations in order to prevent

  manipulation of success indicators, such as the

  cohort default rate and the 90/10 rule at for-profit

  institutions.

       While the University of California feels it's

  very important to prevent these types of fraud and

  misrepresentation that lead to defense of repayment

  claims, it is also vital to protect borrowers that

  have been misled, or who face a sudden school

  closure and are unable to complete their degree.

       If there is widespread evidence of fraud or

  misrepresentation at a school or program, the

  Department should implement a simple process to

  automatically grant defense to repayment status for

  a group of affected borrowers.

       In these situations, borrowers should not be

  forced to individually apply for relief.  All

  efforts should be made to avoid creating individual

  hurdles and delays in resolving the situation.

       In particular, resolutions for borrowers and

  students should not be delayed by enforcement

  proceedings for wrongdoing against the school or

  school officials, although we do think those should

  occur.

       In either group or individual cases, when a

  borrower applies for discharge of loans under

  defense to repayment, their loan should be put in an

  automatic forbearance, and no payment should be due

  while their situation is being investigated by the

  Department of Education.  This should apply to all

  types of federal loans.

       Explore with negotiators the use of false

  certification provisions as a means of discharging

  loans, when appropriate, such as false certification

  of ability to benefit, which I think we've heard

  about today.

       This may simplify the process for students, and

  avoids complexity with taxability of the relief, and

  with the 50 different state laws.  Negotiators may

  help identify appropriate situations for the use of

  false certification in these cases.

       Discharge of student loans due to school

  misrepresentation or fraud should be an exceptional

  case and should be treated as such by the

  Department, yet, at the same time, both widespread

  and individual cases must be undertaken with the

  utmost seriousness and with the greatest protections

  and considerations for the defrauded borrower.

       Other topics that you might consider to reduce

  discharges and strengthen the federal loan programs

  include supporting institutional efforts to

  appropriately limit individual borrowing.  Current

  statute does allow aid administrators to use

  professional judgment to limit individual amounts a

  student may borrow on a case by case basis.

       However, aid administrators have been strongly

  cautioned against this by the Department, as the

  Direct loan programs are an entitlement.  With more

  advanced counseling tools available, negotiators

  might discuss frameworks by which the Department

  could give guidance on appropriately limiting

  borrowing when it is not in the best interest of the

  student, school, or taxpayer to take additional

  debt.

       Could also decouple eligibility for loans and

  Pell grants so that some schools who no longer

  participate in the federal loan programs because of

  fear that a high cohort default rate, for instance,

  some community colleges drop out of the federal loan

  program and point their students towards much more

  expensive and risky private loans in order to retain

  their Pell grant eligibility.

       Another thing that could be negotiated is

  elimination of the interest capitalization to reduce

  overall debt.  Current statute allows for but does

  not require interest capitalization every time the

  borrower changes status, beginning with the end of

  the grace period, and, under certain circumstances,

  in income-driven repayment plans, or when changing

  plans.

       This capitalization increases the principle

  amount of the loan and the overall cost of

  borrowing, as future interest occurs then again on

  the capitalized amount.  As it is not required, we

  encourage the Department to consider eliminating

  capitalization of interest in these cases.

       In closing, I'd just like to thank you again

  for the opportunity to speak and testify on behalf

  of the University of California and the 250,000

  students we represent.

       MS. WEISMAN:  Thank you.

       MR. APPEL:  Thank you.

       MS. WEISMAN:  Tiffany Johnson.

       Since Tiffany is not here, is Kara Alba

  present?

       KARA ALBA:  Yes.

             SPEAKER COMMENTS BY KARA ALBA

       KARA ALBA:  Hello.  My name is Kara Alba, and

  I'm an Equal Justice Works Fellow at the East Bay

  Community Law Center, a nonprofit organization and

  clinical program of Berkeley School of Law, which

  provides free legal services to low income residents

  of Alameda County in multiple practice areas,

  including consumer law.

       We have provided a written comment in

  conjunction with the National Consumer Law Center,

  and other organizations, which makes additional

  recommendation for agenda items for the upcoming

  rulemaking, but today I will focus my brief comment

  on two recommendations that result directly from the

  experiences of our clients.

       First, the Department should update the false

  certification forgery category to also provide

  relief to borrowers harmed by electronic fraud.  Our

  office assisted one student in submitting a false

  certification discharge application after she began

  to have her wages garnished for a defaulted loan

  that was taken out in her name in 2010.

       This client applied for a loan discharge with

  the Department several times, but was denied each

  time, despite submitting a notarized written

  declaration about what happened, a police report, a

  bank statement showing her address at the time the

  loan was taken out was different than that on the

  promissory note, and numerous versions of her

  handwritten signature.

       In her denial letter, the Department stated

  that because the loan was signed electronically, in

  order to discharge the loan, she must have a court

  judgment which finds her to be the victim of

  identity theft and identifies the names of the

  individuals who committed the crime.

       Because she is unaware of who specifically took

  out the loan, and does not have the ability to

  obtain such a court judgment, our client will

  continue to have her already very low income further

  reduced through garnishment for a loan that she

  never authorized.

       Second, the Department should certify, clarify

  eligibility standards and criteria for disqualifying

  status discharge.  The Department appears to require

  that a borrower with a felony conviction show, among

  other things, that a licensing statute prohibits

  their employment.  This ignores the reality that

  criminal records prevent employment in many

  occupations, including those with no licensing

  requirement.

       Our office has assisted several students who

  otherwise qualified for disqualifying status

  discharges, but, because no license is required to

  work in the particular field, the current

  regulations prevent their discharge under

  disqualifying status.

       For example, one client attended WyoTech for

  HVAC studies.  Before enrollment, he informed the

  school that he had three previous DUI convictions,

  and that he was concerned that he would be unable to

  obtain employment.

       The school assured him that others in the

  program had DUIs, and that it would not affect his

  job prospects.

       He finished the program and was offered two

  different jobs.  However, each offer was withdrawn

  after the employer discovered his convictions,

  because, practically speaking, HVAC workers need to

  drive to their job sites.

       However, because there is no licensing

  requirement for HVAC work, he is not eligible for

  discharge under the current disqualifying status

  regulations and is left with a large amount of

  federal student loan debt, and no job prospects in

  his field of study.

       Another client also attended WyoTech, where he

  studied automotive mechanics.  Before he enrolled,

  he informed the school that he had a criminal

  record, but the school assured him that they had

  network connections in high end dealerships, such as

  Porsche and BMW, where he could find work.

       After completing the program, he has been

  unable to find any work in the industry, and was not

  aided by the school, because auto dealerships are

  particularly concerned with criminal records.

  Because mechanic positions do not require a specific

  license, this client was also ineligible to apply

  for a disqualifying status discharge.

       With these experiences in mind, we urge the

  Department to consider updating and revising the

  current false certification discharge regulations.

       Thank you for this opportunity to comment on

  the upcoming rulemaking agenda and on behalf of the

  low income students assisted by the East Bay

  Community Law Center.

       MR. DiPAOLO:  Thank you.

       MS. WEISMAN:  Calvin Anderson.

       Did Tiffany Johnson arrive?

       Alyssa Picard.

       We will try them again in a few minutes.

       Is there anyone else that would like to speak,

  or speak on someone else's behalf?

       DAWN LUECK:  Thank you guys.  We have several

  student statements.

         FURTHER SPEAKER COMMENTS BY DAWN LUECK

       DAWN LUECK:  My name is Dawn Lueck.  I'm

  reading on behalf of Amy Schneider.  Let me know if

  I go five minutes; this one looks really long.

       My name is Amy Schneider.  I attended the

  Illinois Institute of Art, AI, in Schaumberg,

  Illinois, between the years of 2007 to 2010.  When I

  was in high school, I was in the National Arts Honor

  Society.  I made really good grades and even took

  classes in summer school so that I could finish my

  required coursework ahead of time in order to take

  as many art classes as I could for my senior year.

       I graduated as the most accomplished senior

  artist during 2004 school year.  I applied and was

  accepted at a prestige art school, in Chicago, but,

  due to my family's circumstances, I decided to get a

  job and move out and live on my own instead of

  attending college right after graduation.

       I began working in the MIS Department of a

  leading Midwest courier company, who had paid

  vacations and paid holidays, as well as the option

  for medical through their carrier.  I was only

  making $10.50 an hour after a few years, and the

  raises were normally only 25 cents an hour, once per

  year.

       Due to my desire to better my position in life,

  and to create a career for myself, instead of a

  dead-end job with no opportunity for advancement, I

  decided to look once more into attending college.  I

  wanted to work while I was in school and retain my

  current position, so I looked into local schools.

       One of the first schools I looked into was the

  Illinois Institute of Art.  I already knew that

  Columbia was expensive, and my job was in the

  suburbs, along with my apartment, so I thought it

  would make sense to check out the closest art

  school, to make things easier on myself.

       They never asked for a portfolio, but were

  encouraged by my love of art.  That should have been

  the first red flag.  They had no idea if I had an

  ounce of talent to back up an application.

       I was also shown falsified job placement rates,

  which greatly influenced my decision to attend.

  These placement rates showed that the entire school

  had over 90 percent placement rates for all students

  who graduated.

       This really made it seem like the money I was

  paying for would pay off and be well worth it.  I

  was also told that with my background and passion, I

  could expect to make $60,000 a year.

       I was shown the facilities and told that

  graduates would have access to the studios as well

  as equipment after graduation, because they had a

  great alumni connection for former students.

       I was also told that they had many contacts

  already in the industry who provided internships to

  their students, which was a requirement for

  successful completion of the program.

       I was told that my education would be

  equivalent to what Columbia's curriculum entailed.

       I told them I wanted to work in a magazine like

  Rolling Stones, because music was another passion of

  mine, and I would love to be a rock photographer.

       I was assured that this was a possibility.

       The admissions representative also told me that

  since the school is very close to my home, I would

  be able to save on housing costs, which, she stated,

  on average, ran about 60,000 for the duration of the

  average American education.

       That was also another huge selling point.  I

  thought I would be saving money.  I would be getting

  an amazing education that I would have a very high

  chance of successful job placement, if I worked

  hard.

       The admissions representative were extremely

  high pressure and played a lot to my insecurities.

  I was the first to attend college in my family, and

  she asked if I wanted to remain in a low wage

  dead-end job forever.

       Her tactics worked, and we began the admissions

  process.  Much of the financial information was sped

  through.  They told me that I qualified for grants,

  and that my mother could take out a pair of PLUS

  loans, since my income was too low to qualify for

  many of the loans.

       We never received any sort of education about

  the loans, and we never received counsel about the

  way the loans would compound after graduation.

       My mother and I did not even realize that we

  were taking out multiple loans with high interest

  rates, because they never explained that there were

  caps to those loan amounts.

       Once enrolled, the loans were again quickly

  signed without explanation.  They would pull you out

  of class, already in session, and have you come down

  to a window next to the student store, bring you a

  piece of paper to authorize your loans to be

  transferred to the institution, without actually

  explaining that some of these were new loans.

       Once enrolled, I started to realize how bad the

  decision was.  I quickly learned that alumni did not

  actually have access to the studios post-graduation,

  and we also were not permitted to rent equipment

  after graduation, either.

       We had to take almost a year and a half of

  fundamental courses before even starting the classes

  within our major.  Once you get to that point,

  however, you realize how far you are in and how hard

  it is to get out.

       The credits from AI do not transfer to most

  schools.  They have a different accreditation, but

  fail to mention that during admissions.  I also

  learned how oversaturated not only our department,

  but the industry was, and realized my job prospects

  were not as great as I was led to believe.

       I was also unable to transfer out of the school

  and go to Columbia once I realized AI was not a real

  school, because the credits did not transfer.

       There were a wealth of issues within the

  photography department.  First and foremost, we had

  rarely been able to get into the studio for

  projects, or even classes, because they enrolled too

  many students for an adequate amount of facilities.

       The same issue occurred within the equipment

  cage, where we rented equipment from.  The cameras

  were always booked out, and where the lens and

  photo-specific lighting, I frequently had to use

  static lighting for film in place of photographic

  lighting, which contributed to me having low

  knowledge of correct photo light equipment.

       We're going to wrap it up.  Let me get to the

  last paragraph.  Thank you.

       So, she hasn't found work.  She hasn't been

  able to work in her field.  She is still strapped

  with a lot of debt.

       There is a ton of documented evidence that

  implicates a huge fraud scheme.  There is more than

  enough evidence to implicate entire programs and

  schools run by EDMC.  We deserve classwide

  cancellation of our loans.

       It is unacceptable to expect students to

  individually file for cancellation when they've been

  defrauded.  Some students will not even realize they

  are eligible for cancellation, which is a travesty

  when you consider the fact that their lives are

  being held back by insurmountable student loan debt.

       I feel this is a way to avoid paying for the

  damage that has been inflicted.  Cancellations for

  entire group of students is needed, and it's the

  only answer.

       Thank you.

       MS. WEISMAN:  Did Calvin Anderson arrive?

  Tiffany Johnson.  Alyssa Picard.

       We do not have anyone else scheduled, then,

  until 3:45.

       Are there others who would like to speak who

  have not yet spoken?  If there is someone else who

  would like to speak, then.

       Speak again?

       SANDERS FABARES:  Yes.

      FURTHER SPEAKER COMMENTS BY SANDERS FABARES

       SANDERS FABARES:  My name is Sanders Fabares,

  and I have a story here from another AI graduate,

  this one from AI Santa Monica, from, her name is

  Sunshine Literas Lamb.

       So, hello.  My name is Sunshine Literas Lamb,

  and here is my version of my time with the Art

  Institute.  Way back in 1997, the Art Institute

  opened its first campus in Santa Monica.  We were

  told that when the school would be fully set up by

  the time our classes started, but this was not the

  case.

       The first day of class, we saw that the

  classrooms were not set up, and we had to assemble

  our own computers.  In two years, we had three deans

  in charge of the school.  The first was found to be

  stealing money, the second was accused of touching

  female students, and the third lasted and promised

  to fix issues.

       At the time, their idea of job placement

  success was The Gap.  The career services department

  had no idea how to place anyone.  Alas, I graduated

  with an associate of science.

       Years later, when I started to look into

  getting a higher education, I was told that to start

  from square one.  My credits and degree did not

  transfer to any other school, and so I was forced to

  go back to the Art Institute to be able to even use

  them.

       Now the campus looked amazing, and the

  equipment was new.  The Department head I spoke with

  at the time assured me that this was a whole new

  school, that the entire problem that they had at the

  school had been fixed.

       I again signed.  After my first quarter there,

  the department head left the school, and we had a

  new one.  I started to panic.  Every quarter after,

  the required class list changed.  This happened so

  often that it was impossible to graduate on the time

  specified.

       Not only that, but then you would not be given

  a credit for the class that they felt was no longer

  needed for your degree you took already.

       So, as a result, I was in the finance

  department constantly filling out forms and taking

  out loans that at the time I thought were grants,

  only to find out that I am now in so much debt, I

  can no longer pick my phone; over 100K in loans.

       In the end, there was no job placement

  assistance.  Eventually, I had to find my own job.

  In the time I was there, I was constantly in the

  face of directors about changes and the poor

  teaching.  I remember even handing out petitions to

  students to have an instructor removed.

       The amount of fraud that I've witnessed

  firsthand and become aware of is absolutely

  hysterical, almost beyond belief.  My friends were

  charged full price for student housing, while

  sharing it with three other students who were paying

  the same.

       I was charged lab fees for online classes I

  took from my own home.  There were multiple refunds

  that were never credited back to my account for

  dropped classes.

       So, I have 120,000 in debt, $120,000 just to be

  told that if I were to remove the school from my

  resume, I would have a better chance of finding

  industry level work.

       MS. WEISMAN:  Thank you.

       MR. DiPAOLO:  Thank you.

       MS. WEISMAN:  Is there anyone else who would

  like to come forward to speak?

       Anyone else who would like to return to speak?

         FURTHER SPEAKER COMMENTS BY DAWN LUECK

       DAWN LUECK:  We have more.  I'm going to be out

  of here soon, because I have a train to catch, so

  this might be one of my last ones.  So, Dawn Lueck.

  This statement is DeAnda Wiley, Pilot Point, Texas.

       I attended Everest Online and earned my degree

  in paralegal studies in 2011.  Like everyone who

  goes to college, I wanted a real education and a

  fulfilling career.

       Everest said they would help me find a job, but

  things didn't turn out like they promised.  I never

  met a fellow student or teacher during my time at

  Everest.  My education was completely online.

       College is supposed to be a place where

  students study and learn in supportive and

  intellectually stimulating environments.  I did not

  get that experience at Everest.

       Though I studied hard and took my education

  seriously, high grades seemed easy to come by.  I

  began to wonder if the teachers were real, or if I

  was getting money -- sorry.  Let me start over.

       I began to wonder if the teachers were real, or

  if getting money out of me was the only real goal.

  Now I can't start over at a new school because I

  already owe more than I can ever repay.  I owe

  $76,000 in federal loans, and several thousand more

  in high interest rate private debt.

       I feel that I was robbed of the education that

  I hoped for and that I deserve.  The Department of

  Education should cancel my debt and the debt of all

  Corinthian students.  We should also get free

  tuition and a real college paid for by the people

  who profited from our dreams.

       Until our demands are met, I won't pay these

  unjust debts.

       Thank you.

       MR. DiPAOLO:  Thank you.

       MS. WEISMAN:  Is there anyone else who would

  like to come forward to speak?

           SPEAKER COMMENTS BY SPARKY ABRAHAM

       SPARKY ABRAHAM:  Hello.  My name is Sparky

  Abraham.  I am an attorney at Housing and Economic

  Rights Advocates.  I am an Equal Justice Works

  Fellow there, sponsored by Pillsbury Winthrop Shaw

  Pittman.

       You heard from my colleague, Megumi Tsutsui,

  earlier today.  I think that she gave an overview of

  what the organization does, so I will skip that.

       I'm here reading on behalf of my client Calvin

  Anderson, who unfortunately could not make it today,

  but I'm going to read the statement that he put

  together.

       Good morning, or afternoon, as the case may be.

  My name is Calvin Anderson.  I am 51 years old, a

  veteran of the U.S. Army, and a new father.

       I'm testifying today because I was lied to by a

  vocational school, misinformed by debt collectors,

  and now I owe $45,000 because of an eight week word

  processing course I took more than 20 years ago.

       The school was Business Computer Training

  Institute, or BCTI.  I was unemployed in Washington

  State, doing day labor.  BCTI recruited me, telling

  me the fact that I was unemployed meant I would

  qualify for grants, and that doing an eight week

  word processing course would help me get a

  well-paying job.

       They did not tell me I was applying for any

  loans.  They didn't even tell me how much the

  program cost; only that grants would cover it.

       Contrary to what BCTI told me, I was not able

  to get any job afterward, let alone a well-paying

  job, after finishing the course.  I continued to do

  day labor and stayed unemployed.

       Approximately a year after I finished the

  course, I received a call from a debt collector.

  They told me I had to make a payment on my student

  loans by the end of that week, or they would go into

  default.

       I told them I didn't have any loans, but they

  insisted that I did.  I could not afford to make a

  payment at that time, and my loans went into

  default.

       Over the following years, I was contacted

  several times by debt collectors.  They never gave

  me any options, other than payments I couldn't

  afford.  They told me I had to consolidate to get

  out of default, which I did, but then I couldn't

  afford the payments.

       I told them multiple times what happened to me,

  but no one ever told me about any other options or

  discharges.  I only found out about student loan

  discharges because of what happened with Corinthian.

       Once I started researching, I learned that BCTI

  had been subject to multiple state enforcement

  actions for its unfair and deceptive practices in

  Oregon and Washington State, as well as two large

  student class action suits that settled for more

  than $20 million.

       My story was not unique.  BCTI had lied to

  everyone.  My BCTI student debt has now grown to

  over $45,000, all for an eight week course.  I

  rehabilitated my loans, and now I'm making

  income-based payments, but it's still very difficult

  to afford payments and provide for my family.

       I've learned that the loans BCTI signed me up

  for were FFEL loans, and that now I owe on the

  Direct consolidation loan.  I'm testifying here

  today to make clear that Corinthian is not the only

  problem.  I want you to know that this has been

  happening to students for years, and that it has

  been difficult or impossible until very recently to

  get information on what options you have as a former

  student.

       The Department of Education is aware of this

  problem, and has been for a long time, and it has

  failed students in its oversight of this industry.

  Those failures have resulted in the Department's own

  gains and profits at the expense of the students.

  The Department of Education should accept

  responsibility for its failures.

       I want to make the following recommendations,

  which, based on my own experience, I think would go

  a long way in helping students get relief and

  avoiding these problems to begin with:

       Full refund if enrollment was procured as the

  result of any misrepresentation in advertising

  promotional materials of the school, representations

  by the owner, or a representative of the school;

       Full refund required within a reasonable period

  of time in the event of dissolution of the school,

  or in the event of any justifiable claims for

  refund;

       Full refund required if the school has

  substantially failed to furnish the training program

  agreed upon in the enrollment agreement;

       State tuition recovery funds for defrauded

  students;

       Cooling off periods that give students the

  right to cancel contracts with for-profit schools.

       It's time for the Secretary of Education to

  broaden the student loan discharges through

  regulations that protect the student and that

  provide relief for all students who have already

  suffered harm from schools that lied to their

  students and violated the law.

       My school lied to me about nearly everything.

  They violated state laws.  They were shut down

  because of their lies, but I'm still here, still

  buried in debt, and I'm not alone.

       When you're deciding how to handle debt from

  schools that violated state laws, whether there

  should be limits on what types of loans can be

  discharged, or how long students have to apply,

  please, remember my story.

       I was lied to by my school and then misled by

  debt collectors for many years.  Please make sure

  students like me have options.

       Protecting students requires aggressive action

  by the Federal Government and states.  For too long,

  they have ignored the problem.  Stakes are high.  Do

  the right thing.

       Thank you for your time.

       MS. WEISMAN:  Is there anyone else who would

  like to come forward to speak?

       DAWN LUECK:  I just have one more.

       MS. WEISMAN:  Okay.

         FURTHER SPEAKER COMMENTS BY DAWN LUECK

       DAWN LUECK:  All right, this is it.  Dawn

  Lueck.  I'm speaking on behalf of Andrew Sabourine.

  I hope I pronounced that correctly.  It's S A B O U

  R I N E.  He lives in Tamarac, Florida.  He attended

  the Fort Lauderdale, Florida campus, and I'll tell

  you what school in a second.  He was at ITT Tech.

       During my last week of high school in 2004,

  there were ITT Tech recruiters there talking to

  people and trying to convince them to check out ITT

  Tech's campus in Fort Lauderdale.

       I knew all about ITT Tech, as I had seen their

  commercials and knew of a few people going there.  I

  figured since I am a techie kid, I should go and

  check it out and see if that's the career path I

  really wanted to choose.

       A few days after graduating high school, I went

  to ITT Tech in Fort Lauderdale, Florida, for a tour.

  I was feeling extremely ambitious about furthering

  my education, and wanted to start college

  immediately.

       I could already tell that multimedia was the

  path I wanted to choose.  I skipped summer break and

  decided to continue my education immediately so that

  I can keep up to date on current technologies.  I

  decided to go in for a tour and didn't know that I

  would be pressured into signing up for classes on

  the spot.

       As soon as I walked into the front door at ITT

  Tech, someone was waiting for me.  It was Terry, the

  recruiter from my high school, and I felt pretty

  comfortable.  Terry acted very cool and down to

  earth, like he was my friend, and so I trusted him.

  I trusted him to give me all of the information I

  needed to make the right decision.

       Looking back, everything Terry told me was

  either an outrageous lie or a major stretch of the

  truth.  Being an impressionable 18 year old,

  straight out of high school, I looked up to them and

  thought that they would have my best interests at

  heart.

       After touring the school for a bit and

  answering a few of my questions about the program,

  he brings me to the exam room.  It's just a regular

  office with cubicles and a computer in it.

       They give you 15 to 20 minutes to take a short

  test with a bunch of math problems.  I've always

  been terrible at math and thought I may not have

  passed the entrance exam.

       To my surprise, Terry came back in and informs

  me that I passed the exam.  ITT Tech has been known

  for passing anyone on the entrance exam, even if

  they fail it.  They were caught in doing this when

  secret shoppers went into the school and purposely

  flunked the entrance exam.  They passed and were

  admitted into the school.

       I believe this happened to me, as well.  Being

  18, and naive, I believed him when he told me I

  passed, and I was really excited that I would have

  the opportunity to further my education and open my

  future to financial security and success.

       We entered an extremely uncomfortable high

  pressured room where the contracts are to be signed.

  I didn't feel pressured or uncomfortable at the

  time, because I really didn't know any better, but,

  looking back now, at the age of 30, it makes me

  cringe.

       Terry brought out the paperwork that I would be

  signing and tried to explain everything to me.  He

  does a very poor job of explaining the loan

  situation, how much it would cost, and never

  mentioned having to take out private loans.

       I was just a kid.  I didn't know anything about

  the loans and interest rates, let alone the insane

  terms of the contract.  Private loans were never

  once mentioned at all in the entire meeting, nor

  throughout my entire enrollment there.

       All they would tell you is that you needed to

  fill out this form in order to continue your

  schooling.  They tell you that if you do not fill

  out the form, you will be pulled out of class and

  will not be able to continue.

       I thought I was still receiving federal loans,

  because I had never heard the word, private loan,

  until after I graduated.  To read through the entire

  contract would take at least a week of studying it,

  and a lawyer to interpret it, but they wanted you to

  sign with them right there in the office.

       They make sure to include an arbitration clause

  in the bottom of the contract, stating that you can

  never sue ITT Tech for any reason.  They tell you

  that if you don't sign today, you might miss out on

  being admitted to the school, and will have to wait

  until the next available semester.

       Terry knew at that point that I wanted to start

  college as soon as possible after high school, and

  he used that against me.  He kept asking me if I

  really wanted to work at Hot Licks forever, or do I

  want a real job.

       I signed the papers because I wanted to start

  right away.  I wanted to get my associate's degree

  in multimedia, and a bachelor's in video game

  design.

       Unfortunately, for me, halfway through the

  multimedia course, ITT Tech pulled the video game

  design course and no longer offered it.  Basically,

  I took a bunch of prerequisite courses to prepare me

  for a video game design course, but absolutely for

  no reason.

       I spent countless hours a month of time

  learning -- I'm going to skip the classes he

  describes.  Let me just jump ahead.  ITT

  Tech response -- let's see.

       I had to drop out of the program, because I

  couldn't keep up with not having taken the required

  prerequisites.  ITT Tech's response was, you,

  indeed, were taking bridge work associate level

  courses to continue to prepare for the bachelor

  level ISS program coursework.

       I was actually pretty shocked by the response,

  because it makes absolutely no sense.  Why would I

  be taking an associate level course while enrolled

  in a bachelor program?

       I was taking these classes alongside the

  bachelor level courses, so I felt that I was set up

  for failure.  I won't bore you with all the details.

       Let's get to his last paragraph:  I didn't get

  what I paid for.  I didn't get what I was paying for

  or what I was promised by ITT Tech.  They've been

  sued and accused of fraud on multiple occasions,

  which has ruined their reputation, and, ultimately,

  my degree from them.

       Employers don't want to hire someone who

  attended such schools, and it doesn't look good on

  my resume.  Employers see ITT Tech on my resume and

  assume I didn't get a proper education, and they

  question my choices.

       I hope to see some sort of loan forgiveness for

  me and the thousands of others for the major damage

  they have caused all of us.  I'm not alone, and it

  can be proven by doing a simple Google search for

  ITT Tech reviews.  It's hard to find a legitimate

  positive review about them.

       And I'll just stop there.

       Thank you.

       MS. WEISMAN:  Thank you.

       MR. DiPAOLO:  Thank you.

       MS. WEISMAN:  Is there anyone else who would

  like to speak at this time?

       We do not have another speaker scheduled until

  3:45.  Would anyone like to consider speaking at

  this time?

       SANDERS FABARES:  All right, I will go again.

  It's a good one.

      FURTHER SPEAKER COMMENTS BY SANDERS FABARES

       SANDERS FABARES:  All right.  Again, I'm

  Sanders Fabares, and this comes from Leanne Moore,

  who was a student of AI.

       Let me begin by telling you about myself.  My

  name is Leanne Moore.  I was born and raised in

  North Carolina, home of the 2012 Democratic National

  Convention, and I'm the only child and a spitting

  image of my father.

       Both my parents are disabled, my dad more so

  than my mom.  I'm a proud redhead and an avid lover

  of Lucille Ball.  I'm also a victim of fraud.

       I'm a 2007 graduate of the Art Institute of

  Charlotte, owned by EDMC.  I earned a four year

  bachelor of arts degree, with a focus in graphic

  design, in three years.  Prospective employers have

  told me this degree is worthless.

       This degree has cost me nearly 200,000 in

  college loan debt.  These loans have fallen into

  default, because I cannot make the 1,000 plus a

  month payments.

       Since graduation, I've actively tried to find

  work in my chosen field.  While I've landed some

  work, the field is highly competitive and

  oversaturated.

       At the time of enrollment, I was promised a 96

  percent placement in a high paying job in my field

  by a recruiter.  I'm currently working in a contract

  position for a online retailer that pays 800 a month

  while I'm trying to gain freelance customers.

       This is hardly enough to make ends meet.  I am

  currently living with my parents, helping to take

  care of my dad.  My check is already spent on bills

  before it's earned.

       What little money I have left is to help my

  parents out around the house.  A few years ago, I

  filed for Chapter 7 bankruptcy to try and help ease

  the load of my money owed.

       While it eased some of the burden, I am now

  left with these unforgivable student loans.  I'm now

  in Chapter 13, after being served papers and

  receiving other collection threats.  While I

  understood Chapter 13 didn't get rid of any of the

  debt, it did help make my payments manageable, and

  brought me some peace from collectors and the

  harassing tactics.

       As my lawyer explained to me, severe student

  loan debt was forgivable before 1998.  Student loan

  debt has ruined many lives, like mine, as well as

  brought down the national economy.  I find this

  unfair.

       The school I attended was unknowingly a scam.

  The for-profit EDMC Company has been sued many times

  for fraudulent practices and accepting anyone into

  their schools, as long as they could sign their life

  away with loans that could not be paid back.

       These loans were funded through Sallie Mae,

  another company under fire for harassing and

  threatening collection tactics.  As I mentioned

  before, I was lured in with high placement rate by

  recruiter I never saw again two weeks after my

  classes began.

       The school appeared to have a high turnover

  rate of recruiters.  They never seemed employed very

  long.  I was pressured to lock in my rate because

  spaces were filling fast after my tour.

       They played into my insecurities about my not

  fitting in a state university and being known as a

  number by informing me of small class sizes and the

  availability to provide personal attention to each

  student.

       The school also provided students with a career

  services center, a place I frequented, looking for

  leads, which ended up being from CareerBuilder,

  Craigslist, Indeed.com, and other places which I was

  already exploring, until I was told it was my fault

  for not having a job, and I was not trying hard

  enough.

       Towards the end of my time at this business,

  classes became crowded, and equipment and programs

  became outdated as we were sold top of the line

  technology upon recruitment.

       Using the computer labs became nearly

  impossible.  As a student worker, I can verify there

  was hardly ever enough equipment to go around for

  student use, another promise of my recruiter.

       Because of the sneaky practices of EDMC, I am

  unable to achieve the American dream.  I will never

  own a home.  I will never enjoy the smell of a new

  car.  I have suffered undue stress, anxiety, and

  depression as a result of this.

       As I have come to understand, companies do not

  want to hire graduates from the Art Institute due to

  the school's persona.  To be fair, I did meet some

  great friends and faculty members who feel we

  students were cheated.  The faculty members who

  spoke out have since lost their jobs due to supposed

  budget cuts.

       AI's enrollment is plummeting because of the

  campuses to close.  They have been removed from

  NASDAQ and were steps away from bankruptcy before

  being bought out by Goldman Sachs.

       In closing, I've become familiar with the work

  you've done to help the students who attended

  Corinthian schools.  While this doesn't affect me

  personally, I would like to thank you for your

  efforts.  I feel this is a stepping stone for some

  resolution for my friends and myself.

       As you continue your fight for student debt

  relief, please take my story and many others like

  mine into consideration.  Should victims of the Art

  Institute become qualified for defense to repayment,

  I feel the executives of the for-profit schools,

  lenders, and creditors should be held responsible,

  instead of Joe and Jane taxpayer having to foot the

  bill.

       Executives and board members are paid when the

  loan is issued and are not required to refund the

  money from their coffers if the student leaves

  school or defaults on the loan.  I feel if it

  doesn't create some sort of hurt, a lesson can't be

  learned.  For-profit institutions are debt factories

  that need to be stopped.

       Thank you.

       MS. WEISMAN:  Is there anyone else who would

  like to come forward at this time?

       We do not have another speaker until 3:45, so,

  at this time, if no one else would like to come

  forward, we will take a break until 3:45.

            (Recess:  2:18 p.m. to 3:47 p.m.)

       MS. WEISMAN:  Good afternoon.  Our 3:45 speaker

  is not yet here.

       Is there anybody else who would like to speak

  as we wait?  We will be here until 4:00.

       Okay, thank you.

      FURTHER SPEAKER COMMENTS BY SANDERS FABARES

       SANDERS FABARES:  This one is from my wife,

  actually, who just sent this.  Her name is Jay

  Fabares.

       MS. WEISMAN:  Would you repeat your name again,

  as well.

       SANDERS FABARES:  Yes.  I'm Sanders Fabares,

  and this is from my wife, Jay Fabares.

       My name is Jay Fabares, and I'm a 2006 graduate

  of the Art Institute.  I was one of the naturally

  gifted students who attended AI.  I got good grades.

  I put in a lot of effort outside of class.  I

  thought going to AI would then open doors for me.

       AI offered six months of assisting in job

  placements.  I was given links to job boards and

  Craigslist postings, stuff I could easily find on my

  own.  I managed to find small freelance jobs through

  Craigslist while working part-time in food service.

       I applied to at least 50 plus studios without

  help from the school.  Any professional will tell

  you, it's not the school you went to, it's the

  portfolio.  If you can do the work, well, I thought

  my portfolio would show my potential.

       I never heard back from those studios.  I have

  talent.  I went to school.  I had good

  opportunities.  Why can't I find work?

       I believe that my school has a reputation of

  producing graduates with poor quality work.  When

  recruiters see AI on my resume, there is already a

  stigma of poor quality.  There is no contest between

  a student who studied at CalArts and one who went to

  the Art Institute.

       After graduating with 80,000 in debt, I

  reworked my portfolio and job hunted during the day

  and worked nights in food service.  I was doing

  everything I could to put myself out there.  I went

  on many interviews, applying for any position I

  could find, just to find a better paying job,

  because the grace period to pay the loan was coming

  to an end.

       My husband and I had fought constantly over our

  finances when we had to start paying back our loans.

  We fought over loan payments versus health

  insurance.

       We were often only able to get by on the

  charity of friends and family.  We never went out

  together with our friends.  We had a justice of the

  peace marriage.  Never even had a honeymoon.

       We have lived very meager lives.  To say that

  this debt has been a strain on our relationship and

  quality of life is putting it lightly.  It's hard

  trying to explain to someone who hasn't lived

  through this desperation the debt brings.

       I wanted to stop trying to find artistic work

  and just find anything, anything to pay the bills.

  Eventually, I even thought about divorce being an

  option to save my husband from my larger debt

  burden.

            My first fulltime art job came four years

  after graduating.  I found an ad on Craigslist for

  $16 an hour.  I'm forever grateful for that first

  opportunity, because at that point I was losing hope

  in myself as an artist.

            Most of the paycheck goes toward paying my

  loans, as well as my husband's, this inescapable

  feeling of no matter how much I make, it's still not

  enough to pay this debt off and live a happy life.

  No matter the success that I have found, all I do is

  work to pay this debt, and it is barely affecting

  it.

            Depression has replaced desperation.  I

  live in constant anxiety for fear of losing my job

  that is supporting myself and my husband.  I was

  always told to go to college to better my future.

  This is not the future I had thought going to

  college was going to give me.

            After learning about others and the

  similar school experiences, the lack of training,

  the same overwhelming debt, the fraud, the lack of

  job placement help, I realized that this was a

  bigger problem and issue than what we had.

            There are people who attended my school

  who didn't have a natural talent, who were brought

  in and pushed through to make room for the next

  student.  This school is a debt factory.

            Any credible school has standards for

  attending.  This school took anyone with a pulse,

  fed them false promises of guaranteed job placement

  and adequate training.

            The for-profit schools have lied and

  robbed us of our future.  Cancel the debt.  This is

  not buyer's remorse.  This is righting a wrong.

            Thank you.

       MS. WEISMAN:  Thank you.

       MR. APPEL:  Thank you.

       MR. DiPAOLO:  Thank you.

       MS. WEISMAN:  Is there anyone else who would

  like to come forward to speak, or to speak again?

       We will remain here until 4:00.

       We have one last speaker.

      FURTHER SPEAKER COMMENTS BY SANDERS FABARES

       SANDERS FABARES:  I just got this short one in.

  My name is Sanders Fabares, and this is a short one

  I just got in from Joshua Bailey, who is a graduate

  of the Art Institute of Pittsburgh Online.

       I enrolled, like most, thinking I would get a

  degree at a school that promised to help find good

  jobs post-graduation, so, why not, I thought.

       Little did I know that once I finished, I'd be

  50,000 in debt and only have a minimum wage job that

  has absolutely nothing do with my degree.

       While in school, I had three instructors that

  rather than help me, told me things like, you should

  do self-taught learning, as well, Google it, teach

  yourself.

       And, apparently, this was more than acceptable

  by the school.  Rather than try to fix the issue of

  instructors not teaching online, I was hounded about

  furthering my academic career and enrolling in more

  classes.

       If I had known I'd be literally teaching myself

  in every single class I took, just to have an

  instructor grade my work and point out what's wrong,

  and not what was done well, I'd have told these

  people that I wouldn't go there in the first place.

       Since graduating, I've been hounded by phone,

  e-mail, et cetera, to further my academic career and

  enrolling back into the same scam school.  I cringe

  every time I see one of the multitude of lie filled

  commercials and ads now.  It makes me sick to my

  stomach to know that I fell for their trap, and now

  I'm buried up to my neck in debt.

       Their joke of a career center that helps you

  find jobs consists of a so-called career counselor

  sending me e-mails and telling me over the phone to

  use sites like Indeed, Monster, Jobs.com, and so on,

  to find jobs, and using key words like photography,

  photo editing, et cetera.

       Who would have ever guessed you'd need to pay

  50,000 for some fool on the phone to tell you key

  words to use on a job website?  What awesome career

  placement.

       The best part, I complained about how there

  were no close jobs around me on these sites, and the

  counselor's only feedback or help was to use

  different keywords.  Now I'm constantly hounded by

  student loan forgiveness scam companies that want me

  to pay them 600 just to do the paperwork that might

  get my student loans reduced and forgiven in 30 to

  40 years.

       Right now, I simply cannot afford to pay the

  600 a month on loans that are based on terrible

  education from a predatory, fraudulent school.  I

  have placed them in forbearance due to economic

  hardship, but the interest just continues to grow.

       Debt from this fraud needs to be forgiven.  The

  Department needs to actively work to salvage

  students' future trust in the system.  If I had one

  word to summarize my experience with higher

  education, it would be this:  Imprisoned.

       Thank you.

       MS. WEISMAN:  Thank you.

       MR. DiPAOLO:  Thank you.

       MS. WEISMAN:  At this time, as it is 4:00, I'd

  like to thank you for being here for our public

  hearing, and to close the hearing out.  Remember

  that written testimony can be submitted through

  Regulations.gov, and the comment period does end

  today, so, please, get your submissions in by the

  end of the day today.

       Thank you for being here.

                (Time noted:  4:00 p.m.)

       I, the undersigned, a Certified Shorthand

  Reporter of the State of California, do hereby

  certify:

       That the foregoing proceedings were taken

  before me at the time and place herein set forth;

  that any witnesses in the foregoing proceedings,

  prior to testifying, were duly sworn; that a record

  of the proceedings was made by me using machine

  shorthand which was thereafter transcribed under my

  direction; that the foregoing transcript is a true

  record of the testimony given.

       Further, that if the foregoing pertains to the

  original transcript of a deposition in a Federal

  Case, before completion of the proceedings, review

  of the transcript [ ] was [  ] was not requested.

       I further certify I am neither financially

  interested in the action nor a relative or employee

  of any attorney or party to this action.

       IN WITNESS WHEREOF, I have this date subscribed

  my name.

  Dated: 9/28/15

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                                CHRIS TE SELLE

                                CSR No. 10836