Source: https://www.scribd.com/document/62659145/Responsive-Documents-CREW-Department-of-Education-Regarding-For-Profit-Education-8-17-2011-11-00026-F-GE-Release-8-16
Timestamp: 2016-09-24 21:37:33
Document Index: 586964048

Matched Legal Cases: ['art 668', '§ 668', '§ 668', 'art 668', 'art 668', '§ 668', 'art 668', '§ 668', 'art 668', '§ 668', '§ 1002', 'art 668', '§ 668', 'art 668', '§ 1088', '§ 1088', '§ 1088', '§ 1505', '§ 2071', '§ 1088', '§ 1088', '§2071', '§ 2071', '§ 1505', '§ 2071', '§ 1505', '§ 1001', '§ 3730', '§ 3729', '§ 2071', '§ 2071', '§ 1505', '§ 1001', '§ 2071', '§ 1505', '§ 2071', '§ 1505', '§ 1088', '§ 1088', '§ 2071', '§ 2071', '§ 2071', '§ 2071', '§ 1088']

Responsive Documents - CREW: Department of Education: Regarding For-Profit Education: 8/17/2011 - 11-00026-F GE Release 8.16
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Geocgja Chesley, Susan CC: Date: 12/7/2010 2:36:24 PM Subject: 120810 GE draft presentation Exec.pptx Attachments: 120810 GE draft presentation Exec pptx (b)(5) From: Kolotos John To: FinkeL Jessica. Finley. Steve Harris, Nikki Woodward Jennifer CC: Bergeron David Sellers Fred Date: 9/21/2010 2:29:16PM Subject: Comment summary for addition programs, proposed 668.7(g) (b)(5) ~ 1:':1 ~ :§ !3 0.. 0.. I-'· rt I-'· 0 1-1 ::s ~ Pl f-' 1-il 1-il t-O I-'· 1-1
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'< From: Yuan Georgia To.: Canada. June CC: Date: 12/6/2010 6:28:22 PM Subject: FW: 1205IO_GE_draft_presentation v2 dab.pptx Attachments: 120510 GE draft presentation v2 dab pptx l(b)(S) I From: Bergeron, David Sent: Monday, December 06, 2010 4:35PM To: Kvaal, James Cc: Chesley, Susan; Yuan, Georgia; Arsenault, Leigh Subject: 120510_GE_draft_presentation v2 dab.pptx (b)(5) From: Yuan Georgia To: Finley. Steve CC: Date: 12/7/2010 11:02:16AM Subject: FW: 1205IO_GE_draft_presentation v2 dab.pptx Attachments: 120510 GE draft presentation v2 dab pptx (b)(5) From: Bergeron, David Sent: Monday, December 06, 2010 4:35PM To: Kvaal, James Cc: Chesley, Susan; Yuan, Georgia; Arsenault, Leigh Subject: 120510_GE_draft_presentation v2 dab.pptx (b)(5) From: Yuan Georgia To.: Canada. June CC: Date: 12/7/2010 3: 15:06 PM Subject: FW: 120810 GE draft presentation Exec.pptx Attachments: 12081.0 GE draft presentation Exec.pptx l(b)(S) I From: Kvaal, James Sent: Tuesday, December 07, 2010 1:43PM To: Kvaal, James; Bergeron, David; Yuan, Georgia; Chesley, Susan Subject: RE: 120810 GE draft presentation Exec.pptx l(b)(S) I From: Kvaal, James Sent: Tuesday, December 07, 2010 1:36PM To: Bergeron, David; Yuan, Georgia; Chesley, Susan Subject: 120810 GE draft presentation Exec.pptx (b)(5) From: Finley Steve To: Macias, \Vendy CC: Date: 5/27/2010 1030:54 AM Subject: FW: "Socially Destmctive and Morally Bankrupt" Interesting speech From: Woodward, Jennifer Sent: Thursday, May 27, 2010 10:13 AM To: Subject: "Socially Destructive and Morally Bankrupt" Included below the article that Brian sent earlier this morning is the text of the speech by Steven Eisman mentioned in the article. http:/ /www.insidehighered.com/news/20 10/05/27 /qt#228602 High-Profile Trader's Harsh Critique of For-Profit Colleges Steven Eisman, the Wall Street trader who was mythologized in Michael Lewis's The Big Short as that rare person who saw the subprime mortgage crisis coming and made a killing as a result, thinks he has seen the next big explosive and exploitative financial industry --for-profit higher education --and he's making sure as many people as possible know it. In a speech Wednesday at the Ira Sohn Investment Research Conference, an exclusive gathering at which financial analysts who rarely share their insights publicly are encouraged to dish their "best investment ideas," Eisman started off with a broadside against Wall Street's college companies. "Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive and morally bankrupt as the subprime mortgage industry," said Eisman, ofFrontPoint Financial Services Fund. "I was wrong. TheFor-ProfitEducation Industry has proven equal to the task." Eisman's speech lays out his analysis of the sectors enormous profitability and its questionable quality, then argues that the colleges' business model is about to be radically transformed by the Obama administration's plan to hold the institutions accountable for the student-
debt-to-income ratio of their graduates. "Under gainful employment, most of the companies still have high operating margins relative to other industries," Eisman said. "They are just less profitable and significantly overvalued. Downside risk could be as high as 50 percent. And let me add that I hope that gainful employment is just the beginning. Hopefully, the DOE will be looking into ways of improving accreditation and of ways to tighten rules on defaults." Stocks of the companies appeared to fall briefly in the last hour of trading Wednesday, after news ofEisman's speech made the rounds I I I I I I 1++++++++++++++++++++++++ 1 I I I I I I I+++++++++++++++++++ IRA SOHN CONFERENCE Presentation by Steve Eisman SUBPRIME GOES TO COLLEGE May 26,2010 Good Afternoon. I would like to thank the Ira Sohn Foundation for the honor of speaking before this audience. My name is Steven Eisman and I am the portfolio manager oftheFrontPointFinancial Services Fund. Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive and morally bankrupt as the subprime mortgage industry. I was wrong. The For-Profit Education Industry has proven equal to the task. The title of my presentation is "Subprime goes to College". The for-profit industry has grown at an extreme and unusual rate, driven by easy access to government sponsored debt in the form of Title IV student loans, where the credit is guaranteed by the government. Thus, the government, the students and the taxpayer bear all the risk and the for-profit industry reaps all the rewards. This is similar to the subprime mortgage sector in that the subprime originators bore far less risk than the investors in their mortgage paper. In the past 10 years, the for -profit education industry has grown 5-10 times the historical rate of traditional post secondary education. As of2009, the industry had almost 10% of the enrolled students but claimed nearly 25% of the $89 billion ofFederal Title IV student loans and grant disbursements. At the current pace of growth, for- protit schools will draw 40% of all Title IV aid in 10 years. How has this been allowed to happen? The simple answer is that they' ve hired every lobbyist in Washington D.C. There has been a revolving door between the people who work or lobby for this industry and the halls of government. One example is Sally Stroup. She was the head lobbyist for the Apollo Group- the largest for-profit company in 2001-2002. But from 2002-2006 she became Assistant Secretary of Post-Secondary Education for the DOE under President Bush. In other words, she was directly in charge of regulating the industry she had previously lobbied for. From 1987 through 2000, the amount of total Title IV dollars received by students of for-profit schools fluctuated between $2 and $4 billion per annum. But then when the Bush administration took over the reigns of government, the DOE gutted many of the rules that governed the conduct of this industry. Once the floodgates were opened, the industry embarked on 10 years of unrestricted massive growth. [Federal dollars flowing to the industry exploded to over $21 billion, a 450% increase.] At many major-for profit institutions, federal Title IV loan and grant dollars now comprise close to 90% of total revenues, up significantly vs. 2001 . And this growth has driven even more spectacular company profitability and wealth creation for industry executives. For example, ITT Educational Services (ESI), one of the larger companies in the industry, has a roughly 40% operating margin vs. the 7%-12% margins of other companies that receive major government contracts. ESI is more profitable on a margin basis than even Apple. This growth is purely a function of government largesse, as Title IV has accounted for more than 100% of revenue growth. Here is one of the more upsetting statistics. In fiscal2009, Apollo, the largest company in the industry, grew total revenues by $833 million. Of that amount, $1.1 billion came from Title IV federally-funded student loans and grants. More than 100% of the revenue growth came from the federal government. But ofthjs incremental $1.1 billion in federal loan and grant dollars, the company only spent an incremental $99 million on faculty compensation and instructional costs- that' s 9 cents on every dollar received from the government going towards actual education. The rest went to marketing and paying the executives. But leaving politics aside for a moment, the other major reason why the industry has taken an ever increasing share of government dollars is that it has turned the typical education model on its head. And here is where the subprime analogy becomes very clear. There is a traditional relationship between matching means and cost in education. Typically, families oflesserfinancial means seek lower cost institutions in order to maximize the available Title IV loans and grants - thereby getting the most out of every dollar and minimizing debt burdens. F amities with greater financial resources often seek higher cost institutions because they can afford it more easily. The for-profit model seeks to recruit those with the greatest financial need and put them in high cost institutions. Ths formula maximizes the amount ofTitle IV loans and grants that these students receive. With billboards lining the poorest neighborhoods in America and recruiters trolting casinos and homeless shelters (and I mean that literally), the for-profits have become increasingly adept at pitching the dream of a better life and higher earnings to the most vulnerable of society. But if the industry in fact educated its students and got them good jobs that enabled them to receive higher incomes and to pay off their student loans, everything rve just said would be irrelevant. So the key question to ask is- what do these students get for their education? In many cases, NOT much, not much at all. Here is one of the many examples of an education promised and never delivered. This article details a Corinthian Colleges-owned Everest College campus in California whose students paid $16,000 for an 8-month course in medical assisting. Upon nearing completion, the students learned that not only would their credits not transfer to any community or four-year college, but also that their degree is not recognized by the American Association for Medical Assistants. Hospitals refuse to even interview graduates. But let' s leave aside the anecdotal evidence of this poor quality of education. After all the industry constantly argues that there will always be a few bad apples. So let's put aside the anecdotes and just look at the statistics. If the industry provided the right services, drop out rates and default rates should be low. Let's first look at drop out rates. Companies don' t fully disclose graduation rates, but using both DOE data, company-
provided information and admittedly some of our own assumptions regarding the level of transfer students, we calculate drop out rates of most schools are 50%+ per year. As seen on this table, the annual drop out rates of Apollo, ESI and COCO are 50%-100% How good could the product be if drop out rates are so stratospheric? These statistics are quite alarming, especially given the enormous amounts of debt most for-profit students must borrow to attend school. As a result of these high levels of debt, default rates at for profit schools have always been significantly higher than community colleges or the more expensive private institutions. We have every expectation that the industry' s default rates are about to explode. Because of the growth in the industry and the increasing search for more students, we are now back to late 1980s levels of! ending to for profit students on a per student basis. Back then defaults were off the charts and fraud was commonplace. Default rates are already starting to skyrocket. It' s just like subprime - which grew at any cost and kept weakening its underwriting standards to grow. By the way, the default rates the industry reports are artificially low. There are ways the industry can and does manipulate the data to make their default rates look better. But don't take my word for it. The industry is quite clear what it thinks the default rates truly are. ESI and COCO supplement Title IV loans with their own private loans. And they provision 50%-60% up front for those loans. Believe me, when a student defaults on his or her private loans, they are defaulting on their Title IV loans too. [Let me just pause here for a second to discuss manipulation of statistics. There are two key statistics. No school can get more than 90% of its revenue from the government and 2 year cohort default rates cannot exceed 25% for 3 consecutive years. Failure to comply with either of these rules and you lose Title IV eligibility. Lose Title IV eligibility and you' re company' s a zero. Isn't it amazing that Apollo' s percentage of revenue from Title IV is 8 ~ / o and not over 90%. How lucky can they be? We believe (and many recent lawsuits support) that schools actively manipulate the receipt, disbursement and especially the return of Title IV dollars to their students to remain under the 90/10 threshold.] The bottom line is that as long as the government continues to flood the for profit education industry with loan dollars AND the risk for these loans is borne solely by the students and the government, THEN the industry has every incentive to grow at all costs, compensate employees based on enrollment, influence key regulatory bodies and manipulate reported statistics - ALL TO MAINTAJN ACCESS TO THE GOVERNMENT' S MONEY. In a sense, these companies are marketing machines masquerading as universities. And when the Bush administration eliminated almost all tl1e restrictions on how tl1e industry is allowed to market, the machine went into overdrive. [Let me quote a bit from a former employee ofBPI. "Ashford is a for profit school and makes a majority of its money on federal loans students take out. They conveniently price tuition at the exact amount that a student can qualify for in federal loan money. There is no regard to whether a student really belongs in school, the goal is to enroll as many as possible. They also go after GI bill money and currently have separate teams set up to specifically target military students. If a person has money available for school Ashford finds a way to go alter them. Ashford is just the middle man, profiting off this money, like milking a cow and working the system within the limits of what's technically legal, and paying huge salaries while the student suffers with debt that can't even be forgi ven by bankruptcy. We mention tuition prices as little as possible .. th.is may cause the student to change their mind. While it is illegal to pay commissions for student enrollment, Ashford does salary adjustments, basically the same thing. We are given a matrix that shows the number of students we are expected to enroll. We also have to meet our quotas and these are high quotas. Because we are under so much pressure, we are forced to do anything necessary to get people to fill out an application - our jobs depend on it. It's a boiler room- selling education to people who really don' t want it." This former employee then gives an example of soliciting a sick old lady to sign up for Ashford to meet his quota. "The level of deception is disgusting- and wrong. When someone who can barely afford to live and feed kids as it is, and doesn' t even have the time or education to be able to enroll, they drop out. Then what? Add $20,000 of debt to their problems - what are they gonna do now. They are officially screwed. We know most of these people will drop out, but again, we have quotas and we have no choice." ] How do such schools stay in business? The answer is to control the accreditation process. The scandal here is exactly akin to the rating agency role in subprime securitizations. There are two kinds of accreditation-- national and regional . Accreditation bodies are non-governmental, non-profit peer-reviewing groups. Schools must earn and maintain proper accreditation to remain eligible for Title IV programs. In many instances, the for-profit institutions sit on the boards of the accrediting body. The inmates run the asylum. Historically, most for profit schools are nationally accredited but national accreditation holds less value than regional accreditation. The latest trend of for profit institutions is to acquire the dearly coveted Regional Accreditation through the outright purchase of small, financially distressed non-profit institutions and then put that school on-line. In March 2005, BPI acquired the regionally accredited Franciscan University of the Prairies and renamed it Ashford University. [Remember Ashford. The former employee! quoted worked at Ashford.] On the date of purchase, Franciscan (now Ashford) had 312 students. BPI took that school online and at the end of2009 it had 54,000 students. SOLUTIONS While the conduct of the industry is egregious and similar to the sub prime mortgage sector in just so many ways, for the investment case against the industry to work requires the government to do something-- whereas in sub prime all you had to do was wait for credit quality to deteriorate. So what is the government going to do? It has already announced that it is exploring ways to fix the accreditation process. It will probably eliminate the 12 safe harbor rules on sales practices implemented by the Bush Administration. And I hope that it is looking at everything and anything to deal with this industry. Most importantly, the DOE has proposed a rule known as Gainful Employment. In a few weeks the DOE will publish the rule. There is some controversy as to what the proposed rule will entail but I hope that the DOE will not backtrack on gainful employment. Once the rule is published in the federal registrar, the industry has until November to try to get the DOE to back down. The idea behind the gainful employment rule is to limit student debt to a certain level. Specifically, the suggested rule is that the debt service-to-income-ratio not exceed 8%. The industry has gotten hysterical over this rule because it knows that to comply, it wiii probably have to reduce tuition. [Before I tum to the impact of the rule, let me discuss what happened last week. There was a news report out that Bob Shireman, the Under Secretary ofEducation in charge of this process was leaving. This caused a massive rally in the stocks under the thesis that this signaled that the DOE was backing down from gainful employment. This conclusion is absurd. First, of all, inside D.C. it has been well known for a while that Shireman always intended to go home to California after a period of time. Second, to draw a conclusion about the DOE changing its policy because Shireman is leaving presupposes that one government official, one man, drives the entire agenda of the U.S. government.] I cannot emphasize enough that gainful employment changes the business model. To date that model has been constant growth in the number of students coupled with occasional increases in tuition. Gainful employment will cause enrollment levels to grow less quickly. And the days of raising tuition would be over; in many cases, tuition will go down. To illustrate the impact of gainful employment, I've chosen 5 companies, Apollo, ESI, COCO, EDMC and the Washington Post. Yes, the Washington Post, whose earnings are all driven by this industry. Assuming gainful employment goes through, the first year it would impact would obviously be 2011. However, because the analysis is so sensitive to tuition levels per school, it' s best to have as much information as possible. So for analytical purposes, we are going to show the impact on actual results in fiscal 2009 and this year' s estimates under the assumption that gainful employment was already in effect. We employ 2 scenarios. Scenario 1 is static. It takes actual results and then reduces tuition costs to get down to the 8% level. Scenario 2 is dynamic. It assumes the same thing as scenario 1 but then assumes the companies can reduce costs by 5%-15%. Results for each company depend largely on the mix of students, the duration of each degree and the price of tuition at each institution For each company, I show the results under the two scenarios and the cotTesponding PIEs. Needless to say, the PIE multiples look quite a bit different under either scenario. Apollo- In fiscal 2009, the company earned $4.22. The consensus estimate for fiscal 2010 is $5.07. Under scenario 1, fiscal 2009 and the fiscal 2010 estimate get cut by 69% and 57%, respectively. Under scenario 2, it gets cut 50% and 41%, respectively. ESI- In fiscal 2009, the company earned $7.91. The consensus estimate for fiscal2010 is $11.05. Under scenario 1, fiscal 2009 turns slightly negative and the fiscal 2010 estimate gets cut by 74%. Under scenario 2, fiscal 2009 declines by 75% and the 2010 estimate gets cut by 53%. COCO- In fiscal2009, the company earned $0.81. The consensus estimate for fiscal2010 is $1.67. Under scenario 1, fiscal 2009 turns negative and the fiscal 2010 estimate gets cut by 94%. Under scenario 2, fiscal 2009 declines by 79% and the 2010 estimate gets cut by 38%. EDMC- In fiscal2009, the company earned $0.87. The consensus estimate for fiscal2010 is $1.51. Under scenario 1, fiscal 2009 and the fiscal 2010 estimate turns massively negative. Under scenario 2, fi scal 2009 and the fiscal 2010 estimate are also massively negative, just less massively than scenario 1. The principal reason why the numbers are so bad for EDMC is that they have a lot of debt and that debt has to be serviced and cannot be cut. Washington Post - The Post's disclosure of Kaplan metrics is slight. Thus, analyzing the impact from gainful employment is much more difficult and we have confined our analysis solely to fiscal2009. In fiscal2009, WPO earned $9.78. Under scenario 1, a loss of$33.25 per share occurs. Under scenario 2, there is still a loss of$6.19. The principal reason why the numbers are so bad for the Post is that more than 100% of its EBIDTA comes from this industry through its Kaplan di vision. [Let me just add one caveat to our analysis. Implementation of gainful employment could result in a cut in marketing budgets. Given the high drop out rates of this industry any such cuts could tum a growth industry into a shrinking industry. The numbers that I just showed do not assume that the industry shrinks but grows at a slower pace.] Under gainful employment, most of the companies still have high operating margins relative to other industries. They are just less profitable and significantly overvalued. Downside risk could be as high as 50%. And let me add that I hope that gainful employment is just the beginning. HopefuUy, the DOE will be looking into ways of improving accreditation and of ways to tighten rules on defaults. Let me end by driving the subprime analogy to its ultimate conclusion. By late 2004, it was clear to me and my partners that the mmtgage industry had lost its mind and a society-wide calamity was going to occur. It was like watching a train wreck with no ability to stop it. Who could you complain to?- The rating agencies?- they were part of the machine. Alan Greenspan? - he was busy making speeches that every American should take out an ARM mortgage loan. The OCC? -- its chaim1an, John Dugan, was busy suing state attorney generals, preventing them from even investigating the subprime mortgage industry. Are we going to do this all over again? We just loaded up one generation of Americans with mortgage debt they can't afford to pay back. Are we going to load up a new generation with student loan debt they can never afford to pay back. The industry is now 25% of Title IV money on its way to 40%. If its growth is stopped now and it is policed, the problem can be stopped. It is my hope that this Administration sees the nature of the problem and begins to act now. If the gainful employment rule goes through as is, then this is only the beginning of the policing of this industry. But if nothing is done, then we are on the cusp of a new social disaster. If present trends continue, over the next ten years almost $500 billion of Title IV loans will have been funneled to this industry. We estimate total defaults of$275 billion, and because of fees associated with defaults, for profit students will owe $330 billion on defaulted loans over the next 10 years. [Bracketed Sections might be deleted during speech.] I I I I I I 1++++++++ 1 I I I I I I 1++++++++ 1 I I I I I I 1++++++++++4 http :1 I dealbook.blogs.nytimes.com/20 1 0/05/26/li ve-from-the-ira-sohn-20 1 0-conference/?src=busln Hedge Funds Live From the Ira Sohn 201 0 Conference May 26, 20 l 0, 3:28 pm 8:29p.m. I Updated Unlike previous years, this year's Ira Sohn Investment Research Conference didn' t have any blockbuster revelations- certainly nothing on the orderofDavid Einhorn's bet against Lehman Brothers or William A Ackman' s assault on MBIA, the bond insurer. But several themes emerged from the conference, one of the most heralded in the investing world, where top-name executives deliver 15-minute presentations of their top trading ideas. (Or in Mr. Ackman's case this year, a little closer to 30 minutes.) Chief among them was the idea that the credit ratings agencies have yet to face an overhaul that addresses their weaknesses. (For the full rundown, check out my Twitter coverage of the conference.) Mr. Einhorn, the head of GreenJight Capital reiterated his short bet against the Moody' s Corporation. He argued- as did others like Mr. Ackman of Pershing Square Capital Management and Seth Klarman of Baupost the Group- that the credit ratings agencies remain beholden to the banks whose products they are supposed to analyze independently. Nearly every fund manager who spoke at the conference expressed a bearish position on Western economies, arguing that they are simply too over-leveraged and unable to address their liabilities to stay on top. A few executives, including Daniel Arbess of Perella Weinberg Partners, expressed instead a deep interest in China. "We like shaking hands with China," Mr. Arbess said. Gold also proved popular with the likes of Mr. Arbess and Mr. Einhorn, who said he had acquired shares in Afiican Barrick Gold, a spinoff of gold miner Barrick Gold. A memorable bearish bet came from Steve Eisman, the FrontPoint Financial Services Fund founder who gained fame with Michael Lewis' s book "The Big Short." Mr. Eisman devoted much of his presentation to a highly critical analysis of for -profit education companies, showing his hand with the very title of his PowerPoint deck: "For Profit Education: Subprime Goes to College." Original post: DealBook is on hand for the Ira W. Sohn Investment Research Conference, the famous annual meeting of high-profile investors where some of the biggest trades of the year are discussed. (It's where David Einhorn of Greenlight Capital delivered his polemic against Lehman Brothers, for example.) Below is DealBook' s live twittering of the goings on at the conference, being held in Midtown Manhattan. From: Woodward Jennifer To: Thompson. Lauren CC: Date: 9/22/2010 3:15:24 PM Subject: FW: Comment summary for addition programs, proposed 668.7(g) l(b)(5) I -----Original Message-----
From: Kolotos, John Sent: Tuesday, September 21, 2010 2:29PM To: Finkel, Finley, Steve; Harris, Nikki; Woodward, Jennifer Cc: Bergeron, Sellers, Fred Subject: Comment summary for addition programs, proposed 668.7(g) (b)(5) :§: 01 ~ 0.. 0.. I-'· rt I-'· 0 ::s Pl f-' t-O r; 0 1.0 r; Pl ;:1 {IJ
00 ~ Pl r; '< From: Woodward Jennifer To: Kolotos. John CC: Wexler. Rob Thompson. Lauren Finkel, Jessica Sellers Fred Guthrie, Marty McCullough Carney Date: Finley, Steve 9/22/2010 3:57:00 PM Subject: FW: Comments on "Additional Programs" John-
Here are the comments provided by Kaplan and Capella on "additional programs." ](bJ(S) (b)(S) Jennifer From: Wexler, Rob Sent: Wednesday, September 22, 2010 3 :23 PM To: Woodward, Jennifer Cc: Thompson, Lauren Subject: Comments on "Additional Programs" Jennifer, I have attached the comments on "additional programs" from the comments submitted by Capella University and by Kaplan Higher Education Corporation. Department of Education 34 CFR Part 668 Program Integrity: Gainful Employment; Proposed Rule Comments from Capella University on "Additional Programs" NOTE: Capella University had no comments that were directly/explicitly about "additional programs" in 668.7(g). However, comments from Capella University about exempting graduate programs from the regulations potentially have implications for the '' additional programs" provision. See below. Exempt graduate programs from the regulations Capella University Comments related to Proposed § 668.7(g), September9, 2010, See Section II, Page 3, of Capella' s comments: • Second. these comments propose that ttle Department elther exempt graduate progrnrrl$ from rts proposed rl)les or an exempt1oo 1ot Institutions with a history of low cohort default rates. Capella University Comments related to Proposed § 668.7(g), September 9, 2010, See Section VI, Page 10, of Capella's comments: .. In alternative, tne Department could exemptfrom tile regulations graduate programs. CapeUa urges the Department to COrt$ldet this option because graduate tevel students are more likely to acquire higher debt revels and to take advantage of consolidated loans, or roJT41ymr.-nt plans that anew for periods of lrterest..o11Jy payments. It is app.-opriale for such students too take on debt- many of these studentS ate wort<lng adults seeking to advance lheit careers and therefore, their potenftaJ return on investment Is greater. As stated eartier in these commen\5, it is prudent for graduate students to choose loan consolidatfQO.Or omet tepayme:nt plans and they and their instilutrons not be penalized for such choices. 1 Department of Education 34 CFR Part 668 Program Integrity: Gainful Employment; Proposed Rule Comments from Kaplan Higher Education Corporation on "Additional Programs" SUMMARY OF KAPLAN HIGHER EDUCATION CORPORATION COMMENTS ON "ADDITIONAL PROGRAMS": • Redundant because regulated by state agencies and regulatory bodies • Burdensome, leading to increased costs • The number of new programs each year needing review means delay in approval • Employer documentation requirement goes beyond statutory requirement, does not explain the Department's review process and has no objective metrics of review (and therefore is vague and arbitrary), includes no information about verification by the Department of the information submitted, and does not discuss how the requirement will be applied at on-line or national schools. • Having the Department as the "arbiter of postsecondary offerings" won' t best serve students or national economic interests • Frustrates innovation • Should not be required for on-line or other distance learning programs • In applying the GE rules to each program rather than to an institution, the NPRM contravenes the HEA • The proposed GE rules should not apply to degree programs 1 Department of Education 34 CFR Part 668 Program Integrity: Gainful Employment; Proposed Rule Comments from Kaplan Higher Education Corporation on "Additional Programs" KAPLAN'S COMMENTS: Kaplan Comments related to Proposed § 668.7(g), September 9, 2010, See Section II.C, Page 9 ofKaplan' s comments: C. The Proposed Rules Har:na Stud&nts ny Stilling J nnova tion and Discouragutg New Pr ograms. Proprietary schools are at. fordronl nfinnoyation, particularly innovation jn the deli\•c•y of cducatiot\. Tile)' are ol online education and blended academic of the use of data analysis ro support studenl retention, und of new method-; for measuring student learning. See, fot· exnntple, Clayton M. Christen.<K:n, Scott(). Anth{'lny, Erik A. Roth, Seeing What's .Vexl. 'Harvard Business School PresSy at Chapter Five (2004). The Department proposes that it must appl"UVC all new prt>grams and lhat arty such approval would include a gainful t'mploymcnt analysis. See 15 Fed. Reg. 43,624. Tltis costly approval step is redundant a11d unnecessary: State regulatory bodies and accrediting agencies. already require approval of new programs. ln fact. in the June 18, 2010 NPit\.1. tlte DepartJ'tlent proposed to require State rogltlatory bodies to take an added role in program oversight rhc addilional administrative burden chat the approval and affirmation will impose on Department and on schools will result in increased program costs. Kaplan alone implemented scores of new pmgrams over the last year. How will the Department be able efficiently to review the- anticipated numbers of programs with the speed required for educational institutions ro functioo efft:eli vely? lf it cannot, new und needed programs will be iudefinitely delayed. Addilionally, the proposed rull."'S (Q 1 bat schools obtui•l la<;a! bucs.inesscs• support to demonstrate demand for any new program. 75 Fed. Reg. Section 668.7(n)(ii) & (iii). 1 he rl'quiremcnt that au institution must prove that there 11re project-ed job vacancies or thnt employers nre predicting that they will c:xperienee cerutin te""Cis of demand for those occupatioos at their businesses does not fall within any understanding of the statUtory requ1rement that prepare students for gainful cmploymeflt. Not only rhat. the proposed rules do nat adequately explain how the process of croployer affirmation will be conducted or huw the Department will verify or review that affinnati0t1. The rules also do not discuss how this requirement would be applied al Otl·linc or <?ther national schools. Because this requirement lacks any defined objective metric tl'uit the Department must t() determine \\-'hether or not: a program is acceptable, it leaves the Department with vague and arbitrary ultimate power to approve or deny a program. Finally. Lhe proposed rules cOectivel)' make the Department - not the demands of the economy or stt1denrs- the arbilcr of postsecondary offerings. Such a sy$lcm will not only be tQstly and ineff&eient. it afso is not designed to resuh in programs lhat v.ilf best serve srudents our natiMal economic interests. CJearl)', frorn the above, !h<.-sc rules will have signiticanl consequences for miUions of students. for reasons we agnin respectfully urge the Department to reconsider irs approach to trying to limit exeessive student debt .and misleading or Ineffective programs. 1 Department of Education 34 CFR Part 668 Program Integrity: Gainful Employment; Proposed Rule Comments from Kaplan Higher Education Corporation on " Additional Programs" Kaplan Comments related to Proposed § 668.7(g), September 9, 2010, See Section IV.A. 3, Page 16, of Kaplan' s comments: 3-. The Department Should Nut Require }:tnployer For Program&. Or, Espaciall)\ For Online Pr ograms. 'fhe D<;Jlurtment should not adopt rhe employer affirmation rcqu in with ifs ttpproval of ncv.· programs. TI1ese requirements are t>ntmw; and unduly burdensome and wiLL frustrate innO\·ation and increase -costs. At the very least. the Department should make clear th:n local emP"Joycr affirmations are not required whoo sthools are offering Qr1· line or othe.r distance based pt"Ograros. '11'tc local requirement simply no sense in1his conLcxt since onl progmms attra<:r student from across tbt country and around the world. 1 Department of Education 34 CFR Part 668 Program Integrity: Gainful Employment; Proposed Rule Comments from Kaplan Higher Education Corporation on "Additional Programs" NOTE: Below are two comments from Capella University that, although not directly/explicitly about "additional programs" in 668. 7(g), potentially have implications for the "additional programs" provision. Kaplan Comments related to Proposed§ 668.7(g), September 9, 2010, See Section III.C, Page 14, of Kaplan' s comments: C. The Department's Apptictttion Of The Proposed Rules 1'o Eacb P•·ogrtlm, Tbao To Institution, Contravenes The HEA. l'he HCA. d"'es not authorize the Department oo require all programs offered by a pr<)prietary institution of higher to prep:trc students for "gainful ernploymcnf' io a rec-ognized occupation. TI)e Department cites lhc dcflnilion of a proprktary ofhigher edttctnion in sec lion t 02(b) of the HEA as authority for ttlis requirement. See 75 Fed. Reg. 4j,6J9, However, 102(b) proptietar) institutions ofhi.gher education to provide: ""on eligible ptogrttm l)j"irllillillg to prepare students for gaii,ful entpl<>ytnent jo a recognized O«:uparion:• 20 U.S.C. § 1002(b)(t}(a)(i) (emphasis suppHed). Tire provision not require ed.ucattonal training" at a proprietary iJlStitution to prepare students foe- gainft1l employmenL 1'he prt>visron ooly requires "an t.•ligibte progrum oft:rai'ning"- at least one such program. !!urthermon; section r 02(b) estabtishts requirements forM institUlion to quaHfy as a Title IV eligible proprietary jn$tltution. but not separate eligibility requirements for each of the inst illltion 's educationa• Such institutions qualify for Tide tV eligibility because section I02(n){1)(A) deems a proprietary imtittttion Lobe an "institution for purposes ofT1de IV. In tum, section 481authorir..ts'tinstitutionsofhigher education" to participate in the TitJe IV programs ("[ljn order to be an eligible institut1M for the puqroses of any progmm authorized under (Tick IVJ. ID'l inslitution m\lst be an irt$titution ofh;ghcr or eligible institutton and shall ... enter into a program participation agreement,.). None <lfthese provisions establishes separatt. "gainful employmem·· requirements ror each educational and rhc ntlcs requiring schools to meet this standard are inconsistent with the 1 Department of Education 34 CFR Part 668 Program Integrity: Gainful Employment; Proposed Rule Comments from Kaplan Higher Education Corporation on "Additional Programs" Kaplan Comments related to Proposed§ 668.7(g), September 9, 2010, See Section IV.A.l , Page 15, of Kaplan' s comments: 1. 'f l:lc f.mphlyment Rules Should Not Ap))ly To Degree Programs. The proposed rules should not extend to degree programs offered by proprietary schools. The benefits conferred by degree programs. s.uch as high<..·T lifetime earnings, higltel' income growth rJlCS. greater ·ernployabillty, better earecr sdvanc.cmcnt and job do not readily lend thcm.selve:> to a formulaic approach to measuring v.aluc based on early ccrre<:r eamings.. As. meutioned above. a recent B LS report iound that a degree is almost necessary to ensure continurngjob opportunities in tough CCOJl()m{c thocs. The BLS \\-ent on to state xhar. Business run chelr course and the economy goes from t.-xpansion to recession - bul regardless <>f whether the economy is booming or contracting, an inverse te[ationship exists behvccn education and unemplo)-1TleJJL: more education is. associated with less untmploymcnt. Jn 2009, the unemployment rate for workers with eollege degrees lW\S 4.6 percent. The rate fonvorkers without a high school diploma was l 0 points highel". Back lO College?, Ofcollegel bomc.hfm. 1 Department of Education 34 CFR Part 668 Program Integrity: Gainful Employment; Proposed Rule Comments from Kaplan Higher Education Corporation on " Additional Programs" The value of opportunity and stability, in pcr«xls of dowtttum, cmmol be W¢1r quanrificd by lhcsc rules, The Depmmcnt seemingly recognized facLS when it excluded prognnns at non-profit inslitu!Jon<; (com the gainful e:rnploymenl requirement in tlte June 18, 2010 NPRM. 'tbc Department sh.ould not apply the gainful employment nJtes to degree programs in Lhc same mannel"they .apply in the mor·e troditiorull vocational school setting. 1 From: Woodward Jennifer To: Thompson. Lauren Wexler. Rob CC: Date: 9/22/2010 4:08:50 PM Subject: FW: Comments on "Additional Programs" Oh, good. From: Finkel, Jessica Sent: Wednesday, September 22, 2010 4:08PM To: Woodward, Jennifer Subject: RE: Comments on "Additional Programs" From: Woodward, Jennifer Sent: Wednesday, September 22, 2010 3:57 PM To: Kolotos, John Cc: Wexler, Rob; Thompson, Lauren; Finkel, Jessica; Sellers, Fred; Guthrie, Marty; McCullough, Carney; Finley, Steve Subject: FW: Comments on "Additional Programs" John-
Here are the comments provided by Kaplan and Capella on "additional programs." 1
(b)(S) (b)(S) "ffilK"YOlT, Jennifer From: Wexler, Rob Sent \!Vednesday, September 22, 2010 3:23 PM To: Woodward, Jennifer Cc: Thompson, Lauren Subject: Comments on "Additional Programs" Jennifer, I have attached the comments on "additional programs" from the comments submitted by Capella University and by Kaplan Higher Education Corporation. (b)(5) };;> Docket ID: ED-2010-0PE-0012 Gainful Employment in a Recognized Occupation Reference: 34 CFR 668.7, 668.13,668.90 The University embraces the objective of full transparency to encourage students to borrow responsibly. In addition to the clear and intrinsic value of higher education which provides a more broadly and deeply educated citizenry, students obtain a postsecondary education for many reasons: to begin a career, change careers or gain additional knowledge and skills to advance in their current career. In 1976, most proprietary schools offered vocational and occupational training programs leading to recognized occupations at that time. Today, regionally accredited proprietary schools provide higher education in academic programs and confer baccalaureate and post-baccalaureate degrees. If the ultimate objective is to encourage students to borrow responsibly, additional student protections should be debated by Congress and new legislation adopted before any new regulations are proposed. For the reasons outlined below, these proposed regulations are discriminatory, overly complex, non-verifiable with no ability to cure, administratively burdensome, too vague to properly assess the impact or effectiveness, and have many unintended consequences. We are concerned that the rule as currently proposed does not achieve public policy objectives, and we respectfully request the Department to withdraw the regulatory proposal until congressional intent has been revisited and established. The proposed regulation for determining eligibility of programs that lead to gainful employment is: Discriminatory If the Department is truly concerned about high debt and ability to repay, any proposed rules should apply to all students. The recently released loan repayment rate data indicates the problem is not limited to proprietary schools. If the proposed rule applied across all sectors and programs, one third of community colleges, nearly one half of schools with the largest concentration of Hispanic enrollment, and the vast majority of Historically Black Colleges and Universities would fail the loan repayment rate. Sound public policy must achieve consistent treatment of students and schools. Overly complex The Department openly admits the proposed metrics are based on incomplete data because the "current system does not yet track the detailed information". For example, with regards to the proposed calculation of loan repayment, a consolidation loan will capitalize accrued, unpaid interest under certain conditions, causing an increase in the principal balance even if the borrower is making the required regular amortized payment on the loan. Another example is that interest and fees must be paid before principal reduction on the rehabilitation of delinquent loans. These examples demonstrate how, even if a student may be in good standing repaying their debt, they would still be counted against the program's loan repayment ratio. Finally, due to the aforementioned data availability restrictions and because of t he economic recession and combination of recent legislation (ECASLA, FFELP elimination and exclusivity of Direct loans), the vast majority of current students will require loan consolidation, deferment and forbearance entitlements, and/or income based repayment options; all of which are unable to be tracked within the proposed loan repayment calculation. Sensible public policy should be transparent and simple enough that all stakeholders can clearly gauge how they are impacted by the regulation. Non-verifiable with no ability to cure We are concerned about the dependency on Social Security Administration or other federal agency for income verification. The proposal lacks due process because the income data provided by the Social Security Administration is non-verifiable. Additionally, legal uncertainty exists whether or not the Department could obtain confidential income information without a release from the taxpayer. Furthermore, under the proposed regulations, institutions have no ability to view draft rates and challenge the data integrity prior to official public release, as afforded under the cohort default rate regulations. Moreover, the proposed regulation timeframe has a retroactive application with no opportunity for institutions to cure any problem. If the intent of the proposed rule is to reign in debt incurred by students, a longer phase-in period of restrictions and ineligibility may be warranted to enable schools to get programs "into shape". If the intent is simply to get rid of programs, then the proposed implementation schedule is probably effective. Reasonable and prudent public policy implementation should be forward looking to allow corrective action plans to be effectuated. Administratively burdensome Considering the significant economic impact of these proposed regulations, the overall cost benefit analysis is debatable. We believe the Department is significantly underestimating the data collection burden and cost on institutions a
nd the government. For instance, in order to capture the necessary student level loan detail information, the IPEDS file record layout will require extensive modification and technical review. In turn, institutions need to develop new software, customize queries and perform validation procedures to ensure data integrity. The complexity of multiple government agencies capturing and exchanging student specific earnings data with personal identifier information is unfathomable. Unintended consequences The proposed regulation is punitive to certain student populations. Existing research on Pelt grant recipients indicates lower socioeconomic students would be adversely affected by this proposal. By nature, Pell grant recipients are generally at-risk students that challenge all schools {public, private nonprofit and proprietary) with the same issues. These proposed rules are discriminating to students, not the schools they choose to attend. Additionally, ethnic diversity is underrepresented in the sample model, therefore, the Missouri debt-to-income data is not a good proxy for national averages, especially Hispanic and African American groups. The debt to earnings test uses discretionary income on the poverty guideline for a single person yet many non-traditional students are single parent families. Furthermore, the current proposal does not consider personal, family matters by excluding household income in the debt to earnings calculation even though the loan may have a reduced principal balance. Post-baccalaureate, graduate and professional programs seem to fa II outside of the concept of training programs. Many non-degree programs enable an individual to refine their expertise or obtain a specialization associated with a recognized occupation; however, the intent of the program is not necessarily training to move the individual into the job market or basic career field (e.g. teacher's certificate). Therefore, post-baccalaureate degrees and certificate programs should be excluded from these regulations. Congress created many viable alternatives for students facing economic hardship. In fact, the Department encourages loan consolidation and promotes the income based repayment plan. The proposed regulations would have an undesirable effect on students if schools steer students away from beneficial repayment plans, deferments or forbearances because it does not reduce principal balance. The proposed regulation is an impediment to market adjustments by requiring prior approval from the Department for additional programs. The criteria and timeframe for program approval by the Department are vague at best. The proposal provides no guidance for how programs may be evaluated, allows no ability to challenge the rulings of the Department, provides no timing assurances on review periods, and ultimately may disadvantage the American higher education system compared to other countries due to the lack of innovative higher education programs. For example, technology changes at a rapid pace and the business industry mandates adjustments to educational programs to meet these dynamic changes. Also unclear in the proposal are t h ~ expectations of employer affirmations for national and/or global distance-learning academic programs. The proposed regulation will stifle innovation and has a crippling effect on the marketplace agility that could potentially eliminate high quality programs, yet not impact programs of questionable value. Economists have demonstrated it takes well beyond three years after graduation for those with higher degrees to begin to experience the real financial advantage of additional education. Current or future economic recessions are unpredictable and adversely affect the debt to income ratio. Can the value of a program be isolated from temporary economic vagaries? With the national unemployment rate hovering near ten percent, should we risk losing programs because of temporary economic problems when the need for these programs will reassert itself? The proposed regulation has the potential to eliminate access to higher education for many working adults who have no alternative at a time when state budget cutbacks are forcing state financed institutions to turn away students. Although unconscionable, discriminatory, and potentially impermissible under existing federal law and regulation, the most frightening unintended consequence is that institutions may contemplate prior college loan balances as admissions criteria. Too vague to assess the impact or effectiveness The proposed regulation is vague and ambiguous on a number of fronts. For example, areas that need clarity include, but are not limited to: • The treatment of loans for students who obtain multiple degrees from the same school. CIP codes will be used to link specific students with specific programs at an institution. If an institution has multiple programs with the same CIP code, how wi ll the Department perform program-level calculations? • What will be the impact of these rules on traditionally low-paying jobs with existing shortages of qualified individuals that have cost intensive preparation? • Consolidation loans are excluded from loans paid in full, but the proposed rule does not explain how to treat them in reduced principal balance. • The proposal uses the terms "earnings" and "income" interchangeably and each has different meani ngs. • An unaffiliated employer is not clearly defined and, on the surface, certainly not qualified to determine if a program's curriculum aligns with occupations at those employers' business. The proposed regulation is opaque in so many ways. Without further clarification and definition, we cannot determine if the rule is fair and equitable. Public policy should not be created arbitrarily. Recommendation The mission of the Education Department is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access. The core mission of the Federal Student Aid department is to ensure that all eligible Americans benefit from federal financial assistance for education beyond high school. If there are statutory constraints to achieving this mission, the debate belongs in Congress. We recommend the Department withdraw the proposed regulation defining gainful employment until such time that Congress carefully considers an education quality index for higher education that includes learning outcomes. Public comment related to credit hours -----Original Message-----
From: ne.greg09 To.: Finley, Steve CC: Date: 6/1/200910:20:20 AM Subject: FW: Definition ofUSC 20 § 1088 From: White Leeland [ mailtoJ(b)(G) i@yahoo.com] Sent: Wednesday, May 27, 2009 10:36 PM To: negreg09 Subject: Definition ofUSC 20 § 1088 This is a united states statute. It is not the 12 hour rule. 24 semester credit hours, 30 weeks of instruction. The committe must define a semester credit hour as 15 hours of instruction. This is because no one knows that a semester is half of an academic year. Therefore, 20 USC § 1088 must be recoded. See my court case that I am reopening, due to fraud on the court; and why there is a necessity to redefine this rule. For profit schools provide 4 hours of instruction per week for 5 weeks for 3 semester credit hours. However the law states 45 hours of instruction for 3 semester credit hours. What the for profits have done, is they provide 20 hours of instruction for 40 weeks being 800, when the law states 15 x 120 for the average bachelor of science degree program. There is a huge difference between 800 instructional hours at Phoenix vs other Title IV schools that must provide 1 ,800 hours of instruction. The fraud is so bad at Phoenix, that ed pays 1800 hours of instruction for only 800 hours while all non profits must provide 1,800 for the average bachelor of science degree. But revisiting the 800 hours provided by Phoenix. Is not this ·1 00 hours less of an associates degree of 60 semester credit hours, being 800 hours of instruction. See my case that went all the way to the Supreme Court and now I am reopening it due to fraud upon the court for better explaination. See attached. This document may be found in the Western District of Texas, El Paso as 02cv0237DB, document (140] as filed on May 20, 2009 and (141] May 26,2009. What is important here is that ED can collect overpayments without any false claims violations of this act. What is absolutely necessary is 15 instructional hours for 1 semester credit hour as mandated by this l a w ~ and the strict enforcement of this law. Ed can collect overpayments immediately without any kind of Court argument. The reason that the government looks the other way, is that the IRS receives lOO's ofmlll ions of dollars in the form of kick backs from for profits and not a dime from public institutions. Lee White (915) 694-0144 El Paso, Texas 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 I I 02CV0237-TABLEOF AUTHORITIES& EXHIBITS I FED. R. CIV. P. Rule 4 Fetl R Civ. P. SERVICE. Kemp Smith and counsel could not All amendments made by Plaintiff made before service. plead September 5, 2002, there is no return of service to plead on until September 6, 2002. Judge Martinez's unauth01ized falsified service [17] Pleadings: [14] , [15] & [16] and Order (30] lack jurisdiction due to timeliness. Rule 12(a)(4)(B) Fed. R. Civ. P. DEFINITE STATEMENT. - Defendant de-
faulted to Dismiss[42l. Rule 60(b)(3) Fed. R. Civ. P. FRAUD UPON THE COURT- Kemp Smith in collusion wi th Jude.e Martinez. STATUTES 18 usc§ 1505 OBSTRUCTION OF JUSTICE 18 usc § 2071 CONCEALMENT/FALSIFICATION by Marlinez£137] and [171 20 usc§ 1088 ACADEMIC YEAR mandating 15 hours of instruction ver credit hour 20 usc§ 1088 Phoenix providing only 6 hours and 34 min-
utes per credit hour rather than 15 hours as mandated by law. 20 hrs per 3 credit hours providing 20 hours of instruction and charg-
ing Title IV program for 45 hours of instruc-
lion. CASES Herring v. United States, 424 F. 3d 384 Bar in de(lning fraud upon the court Kenner v. C.I.R., 387 F.3d 689 (1968); 7 Moore's Federal • . • A decision produced by fraud upon Practice, 2d ed. P 512, 60.23. the court is not in essence a decision at all a.nd never becomes final . .. USA v. Poindexter, 725 F.Supp. 13: 1989 Concealment, falsi(lcation statute applies to everv_one. USA v. Sciuto, 521 F.2d, 842,845(7th, 1996) A judge who does not recuse is in violation of the due process Clause of the U.S. Con-
stitution. Jude.e B1iones. 18 USC S 1 <;ot;, USA v. Simpson, 460 F.2d 5:15, 1972 (9cir) WILLFULNESS defi ned TABLE OF ExHIBITS Affidavit in confirming original service [13 7] while to/king to Cer- EXHIBIT F - September 6, 2002. Confirming old Ciordano,]r. default date August 26. 2002. Annotated Civil Docket with distorted entry {137}. EXHIBIT B - October 15, 2004. concealed (1371 and falsified (171 used in lieu of. Biography, Philip R. Martinez EXHIBIT I - Establishing Kemp Smith Link -
9/30/2002 Default, Application to Clerk/or Entry of EXHIBIT C - Filed September 5, 2002, Page Number 1 Default, Affidavit in support of Entry. This affidavit establishes ExHIBIT E - September 5, 2002, Page Num-
the existence of the original service felony concealed till October 15, ber 3. Establishes original service date August 2004 5, 2002, Certified Mail7000-1530-0003-3784-
0692. Default date Aue.ust 27. 2002. Default, Entry by the EXHIBIT D - Filed ( received) September 5, 2002. paee number 2 Definitions, Statutes EXHIBITG - 18 USC§2071 and 20 USC_§J088 Fraud Upon the Court, Original service missing and EXHIBIT J -Docket proving concealment of Falsified service [17] never [137] and falsification 17], original docket Fraud Upon the Court, Appearance of Original service EXHIBIT K - Posting [137] 10/ 15/2004-
1137] Orie.inal Service. Recusal, Motion of Philip R. Martinez after Philip R. Martinez EXHIBIT A-1- Docket [35] Complaining received a letter to recuse. about concealment of original servi ce [137] , Oct. 7, 2002 Philip R. Martinez EXHIBIT H- Docket (38] ' page 1 I 3 1-6 1-6 6 5 5 I 2 4 3 3 14 10 17 18 11 13 12 15 19 20 21 7, 8 9 16 1 2 3 IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS, EL PASO 4 1 Leeland 0. White 5 Plaintiff MOTION TO SET ASIDE JUDGMENT 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 vs Apollo Group, Inc., doing business as, University of PhoenixsMJ Arthur Andersen, et al Defendant Rule 60(d)(3) Fed. R. Civ. P. Fraud upon the court Based on Falsification [ 17] and Concealment of the Otiginal Setvice Docket ent1y [137], October 15, 2004 Case No. 02CV0237DB The Motion to Set Aside Judgment should be granted and must be granted. 02cv0237 is an action which indubitably has been plagued by fraud upon the Court committed by culpable party, Kemp Smith, law firm of the Defendant, in collusion with the recused Honorable Judge Martinez, a former partner of Kemp Smith. The Counsel for the Defendant in this matter ac-
cepted the original service [137] (Certified Service 7000-1530-0003-3784-0692 delivered to the General counsel of the Apollo Group, Inc., Lynn Campbell, August 5, 2002 being concealed until October 15, 2004) by its pleading on September 5. 2002, acquiescing to default, without ques-
tion; too late to Motion the Court for a Definite Statement [16]. The day of default was not September 5. 2002 but rather August 27, 2002. The lie of remark is, if the Defendant were not lying it would have ignored the application to the clerk for default entry in its entirety, waiting to the last day to respond being September 26, 2002. Instead Kemp Smith presented itself as being very foolish when the only acknowledging service was the falsified service which was ac-
cepted on September 6, 2002 [17] - a day later. Kemp Smith pleading in a panic move on September 5. 2002 to save John Sperling's billion dollar tower of babble, Phoenix
M is based on the obvious, insider information from Judge Martinez and the opportunity to embellish his coffers. The panic move of Kemp Smith was not necessary nor were it a 91 I protocol. The fal-
sified service by Judge Martinez [17] was initiated when the Defendant were 3 days into default by [137] and if the concealed original service would have not reappeared on October 15, 2004; would have allowed Counsel for Defendant to plead up to September 26, 2002 but not submit a Motion for Definite Statement till at least September 7. 2002. Even Judge Martinez panicked coming down with [30] admitting to the original service. There was one more day of the 20 day service left for the Defendants as well as the Plaintiff to amend. However, the insurmount-
able flaw, that putting aside all the criminal activity, was the granting of the Motion for Definite 1 University of Phoenix
M is the Service Mark of Apollo Group, Inc. No claim is made to the exclusive 32 lright to use, "University" apart from its trade mark logo. MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 1. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Statement which effectively annulled every Pleading by the Plaintiff in the court, including the J three amended complaints by order of Judge Martinez on September 25, 2002. It also pre-
cluded any Final Judgment in the future, especially the one that Judge Briones ruled on. As a fact the Defendants never responded to the Definite Statement [42] on October 7, 2002 the day Judge Martinez recused. Awaiting the mandatory 10 day period for the Defendants to respond to the Definite Statement would be October 21, 2002 proving that Defendant's motion to dis-
miss on October 22, 2002 was untimely and void causing Judge Briones Final Judgment to fail in its entirety on January 30, 2003. There is little citing to go with when identifying Fraud Upon the Court or how to tem-
plate it. This citing is derived on the standard applied in a reopened 50 year old case in United States u. Reynolds, 345 U.S. I , in which the government claimed military secrets of family mem-
bers killed in a B-29 crash. Years later documentation was discovered showing that no military secrets had been compromised. One family commenced a new suit entitled Herring u. United States, 424 F. 3d 384, claiming fraud upon the court. Of little importance is this case, but of sub-
stantial importance is the standard used in defining fraud upon the court. Speaking for the 3rd Circuit Justice Aldisert found, that the bar in defining fraud upon the Court must be set very high, stating that: "In order to meet the necessari{y demanding standard for proof of fi·aud upon the cow't we conclude that there must be: (1) an intentional fi-aud; (2) by an o{f!cer of the cow't; (3) which is directed at the cowt itself; and (4) in fact deceives the cowt," Aldisert wrote in an opinion joined by Circuit Judges Samuel A. AI ito Jr. and Franklin S. Van Antwe1pen. In affirming Herring u. United States, 424 F.3d 384, and Rule 60(d)(3) Fed. R. Civ. P., if1i !applying this standard to 02cv0237 are the following facts: (1.) an intentional fi·aud to conceal [137] by Judge Martinez caught in collusion with for-
mer law Film, Kemp Smith representing Defendant when Defendant had been in de-
fault, for three days [137], August 27, 2002, August 28, 2002, and August 29, 2002 and Judge Martinez a falsified service [17] after Defendant had been in de-
fault knowing the ceJtified 7000-1530-003-3784-0692 had been sitting in his court for 25 days. (2.) by an officer of the courti Judge Martinez, Judge Briones and Pro Se Law Amanda. Knowing the existence of the original seJVice the Cowt did not sua sponte the concealment or the falsification spelled out in the A/fldavit, page number 3 of 5. 2002 and docket [35] Motion to Recuse Judge Ma1tinez. (3.) which is directed at the court itself; felony concealment, falsification 18 USC § 2071 and obstnJCtion ofjustice, 18 USC§ 1505. Original complaint put back in the Cowt, October 15,2004. ( 4.) in [act deceives the cow"t. The Court was unaware of docket [137] and deceived the Court by docket [17-1] for 20 months after Final Judgment of Judge Briones of January 30, 2003 denying the Plaintiff of a default entry. Federal District Court Judge Philip Martinez did, willingly and knowingly, falsify and con-
ceal documents in a United States Court House in violation of United State Statues 18 USC§ 2071 and obstructed Justice pursuant to 18 USC § 1505 to prejudice the outcome of this MOTION TO SET AsiDE JUDGMENT· EP: 0 2 CV0237, Rule 60(d)(3) Fed. R. Civ. P P AGE 2 . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 action. The motive of Judge Martinez was to entertain business for his former law firm Kemp J Smith that represented the Defendant, Apollo Group, Inc., doing business as the University of that went into default on August 26, 2002 [137-1] and by falsifying that service on the 3rd day of default by docket [17] to deny the Plaintiff a default entry. This concealment has cost the United States government billions of dollars every year since the year 2002, which means over 7 billion dollars to date. Defendant violates 20 USC § I 088, which mandates a semester credit hour as 15 hours of instruction in the Title IV Federal Student Loan Program. Because of the mechanical nature of this regulation this case is only an overpayment issue; in which the United States of America could immediately collect without trial. Federal District Court Judge Briones knowingly and willingly continued to conceal the original service in collusion with Federal District Court J udge Martinez, and Law Clerk Amanda proving default. Even though Judge Martinez pathologically lied about his recusal as to recus-
ing perhaps violating 18 USC§ 1001 to Judge Briones; his ProSe Clerk Amanda affirms the lie by continuing on now becoming a conspirator in the [willful] obstruction, concealment and fal-
sification of documents manipulated in the United States Court House and is equally involved. See United States of America vs John Wrlliam Simpson, aka Brother John Simpson, 460 F.2d 515: 1972 (9th Cir), which the Ninth Circuit States, that the statutory requirement of willfulness is satis-
fied if the accused acts intentionally, with knowledge that he is breaching the statute. Both of the accused Federal Judges and the Pro Se Clerk Amanda acted with knowledge that they had concealed [137] on September 5, 2002 as written on affidavit in support of Default Entry, page 13. By October 1, 2002 document [35] informed the Court for the second time. Judge Briones willfully concealed this document till October 15. 2004. When Judge Martinez recused he should have docketed [137] which should have been docket [8] instead he and his ProSe Clerk Amanda anted the count of concealment to obstruct justice. Plaintiff demands a void judgment for the sake of J ustice. Plaintiff demands time to amend the complaint to comply to 31 USC§ 3730, as ordered by Judge Martinez granting the Plaintiff the right to proceed under 31 USC§ 3729. The Court deliberately precluded this action to give an unfair advantage to Defendant's counsel and Judge Martinez's former law firm Kemp Smith (count I, 18 USC§ 2071 - [17 Falsifi-
cation]), when Defendant had been in default since August 27, 2009, docket no. [137] (count II, 18 USC§ 2071 -[Concealment]) and Judge Martinez reserved the Defendant August 29, 2002, to obstruct justice in order to deny a default entry on September 5, 2002, knowing the Defen-
dant was in default since August 27, 2002, willfully knowing the existence of [137-1] or the origi-
nal service not posted to the docket (Count Ill, 18 USC§ 1505, [Obstruction of Justice]. Regardless, it is a given, that Judge Martinez and J udge Briones colluded in conspiracy involving Kemp Smith with its Jeanne C. Collins; and Snell & Wilmer, LLP with its Gerald Gior-
dano, Jr. and James Mackie to entertain business for his former law firm who now represents the Defendant and Judge Briones being fully aware that the Defendant was in default and the origi-
nal service had been removed. MOTION TO SET AsiDE JUDGMENT· EP: 0 2 CV0 237, Rule 60(d)(3) Fed. R. Civ. P P AGE 3 . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 An affidavit made on September 30, 2002, summarizes a conversation with Plaintiff and J Gerald Giordano, Jr. on September 6, 2002, that establishes that the Apollo Group, Inc., through Gerald Giordano, Jr. received the original service on August 6, 2002. This is the same Gerald Giordano who reversed the truth and deliberately violated 18 USC § 1001, lying to a ju-
dicial officer, Judge Briones, in open court, in order to get docket entry [123] into the record during the Void Judgment Hearing enumerated by hyphen [- -] on May 20, 2004. The tran-
script works against the interests of Gerald Giordano as well. Gerald Giordano in admitting that service was made on August 6, 2002 means that the Apollo Group, Inc., was in default by August 26, 2002 . The activity of Judge Martinez is very similar, in part, to the case in United States us John Poindexter, 725 F. Supp. 13; 1989 U.S. Dist. LEXIS 12572; where Poindexter believed he could falsify and conceal with impunity, 18 USC§ 2071; and in the same light obstruct justice, 18 USC § 1505 no different than Judge Martinez colluding with Judge Briones mentioned through out the proceeding of 02cv0237 in which prima facie evidence works against the best interests of both judges. Judge Martinez was caught in the act of entertaining business for a former law partner that represented the Defendant; even a federal district court judge shall be held ac-
countable for "obstruction of Justice" at least by the Plaintiff who believes that truth, justice and the American way is not dead. In Poindexter: The Court determined in its count 1 argu-
endo activity that which parallels the activity of Judge Martinez, to wit: Count 1 Argument, 18 USC§ 2071. Defendant's argument regarding "custody" suf-
fers fi·om similar artificiality. There is no wan·ant for supposing, and no legislative histo1y suggesting, that Congress meant to subject to punishment under section 2071 only those who are the custodians of records in the technical sense, such as clerks or librmians, but to permit others working in a govemment agency who have access to sensitive documents to destroy or alter them with impunity [Judge Marti-
nez]. The obvious pwpose of the statute is to prohibit the impairment of sensitive govemment documents by those officials who have access to and control over them, and no court has euer held to the contrmy. See generally, Coplon, supra, where the defendant was found to have custody of classified documents to which she gained access in the course of her employment as an attorney in the Intemal Security Sec-
tion of the Department of Justice. Not only was she not the official "custodian" of the records, but she had specifical1y been told that she no longer had routine access to them. In addition the striking of factual document [58] by District Court Judge Briones, willingly and knowingly, that it is full of criminal allegations is no different than criminally destroying evi-
dence when the material is true and correct, which it [were]. A Judge does not have the author-
ity to strike a legitimate document especially one reporting remarkable crime committed by Judge Briones; his COHORTS and staff in addition to Judge Martinez. It is evidentiary and factual and a rock solid allegation that Judge Briones obstructed justice, not on one count; but on many counts pursuant to 18 USC§ 1505; and not recusing is an acquiescence to committing the crime of obstruction; and is prima facie evidence that could lead to indictment. MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 4. 1 I Those issues addressing 20 USC § I 088 by the Plaintiff, can be investigated by the United J 2 I States. In case 04cv0452. the United States never specifically investigated 20 USC § 1088 or the 3 I averment of fraud stated with particularity pursuant to Rule 9(b) Fed. R Civ. P. The Court had 4 I imposed a safe harbor sanction pursuant to Rule 1I Fed. R. Civ. P., based on the concealed serv-
5 I ice of this case; and never ever addressed the violation of the Academic Year by Defendant 6 I Phoenix. Judge Briones being compromised by his remarkable temperament allowed the Defen-
7 I dant to steal billions from the Title IV Student Loan Program by hiding his ignorance in doing sim-
8 I ple multiplication. Unfortunately, Judge Briones knows that the University of Phoenix only pro-
9 I vides 800 instructional hours on a 120 semester credit hour BS degree while his University of 10 I Texas at El Paso has to provide 1800 instructional hours or 120 hours x 15 hours of instmction 11 I mandated by law. For example why should Phoenix at $300 a semester credit hour in a 120 se-
12 1 mester credit hour bachelor of science program receive $54,000 (I8000 x $300) when it has only 13 I done $ 24,000 worth of work (800 x $300). The law is 15 hours of instruction for each semester 14 I credit hour course pursuant to 20 USC § I 088. Almost 3 billion dollars in the Title N Student 15 I Loan Program, 2008, last year went to the University of Phoenix! 16 I The Plaintiff intends on amending this complaint, serving the United States Attorney Gen-
J 7 I era! the complaint in camera, seeking an order to seal the case, and changing the captioning to 18 I United States ex rei Leeland 0. White vs the Apollo Group, Inc., doing business as University of 19 I Phoef1ixSM. 20 In light of all the animus of the Court, all sanctions, bonds and penalties against the Plaintiff 21 I should and must be removed. 02cv0237 was a bad day for the United States. The Court chose 22 I the wealth of the Defendant, who acquired such wealth by stealing from the government billions 23 I of dollars per year. It is pathetic that no one except the Plaintiff knows the difference between 24 I 800 vs 1800 hours of instruction as applied to 20 USC§ 1088. 25 I In conclusion and hedging on the truth based on the criminal minds judging criminal 26 I minds and the overabundance of fraud upon the Court in the Federal District Court; the Judg-
27 I ment in this case is a civil one and void and has always been void and must be set aside. The 28 I original service was never timely posted to the docket as a result of a criminal act of falsification of 29 I a second service in violation of the public trust when the Defendant had been in default for 3 30 I days as proven by prima facie evidence; to wit, prima facie docket entry [35] telling the Court that 3 1 I the original service had been concealed. Indeed it was; reappearing two years later as docket 32 I [137). The cmelty applied towards this Plaintiff is a pain long gone. As to Judge Briones, Judge MOTION TO SET AsiDE JUDGMENT· EP: 0 2CV0237, Ru l e 60(d)(3) Fed. R. Civ. P P AGE 5 . 1 I Martinez, Amanda the ProSe Law Clerk, Gerald Giordano, Jr. -counsel for the Apollo Group, J 2 I Inc., James Mackie- counsel for the Apollo Group, Inc., represented by Snell & Wilmer, LLP and 3 I Jeanne C. Collins, Counsel for the Apollo Group, Inc., doing business at the University of Phoe-
4 1 n.ii'M who manipulated Judge Martinez with Kemp Smith, they have forever earned their identity 5 I by their clandestine behavior which neither opens the door by scripture nor closes the door by 6 I the law. Need more be said, they have their rewards. 7 I The disservice by Judge Martinez, the Counsel for Defendant and others requires this 8 I Court to Set Aside the Final Judgment of January 30, 2003. Fraud upon the Court by Judge 9 I Martinez in collusion with Kemp Smith and the Defendant has been proven and perfected as 10 I well as the double-bubble, double trouble criminally concealed document [137], the original 11 I service and the falsified service [17] pursuant to the double-bubble, double trouble law known as 12 I 18 USC§ 2071. Can't have one without the other! 13 I Respectfully submitted, 14 15 16 ]7 Leeland 0. White, Plaintiff 815 La ClUz El Paso, Texas 79902 18 (915) 694-0144 · · lA true and correct copy of this Motion to Set Aside Judgment pursuant to Rule 60(d) (3) Fed. R. Civ. P., was served to 19 ~ e court, May 20, 2009 and mailed to all other parties on May 21, 2009. 20 21 22 23 24 25 26 27 28 29 30 31 32 United States Attorney General, Eric H. Holder, Jr. 950 Pennsylvania Aven, NW Washington, DC The United States District Court 511 East San Antonio Ave, Room 219 El Paso, Texas 7990 I Qui Tam Input Section Attn: Wm Stanley Luke 60 I NW Loop 410, Suite 600 San Antonio, TX 78216 Jeanne C. Collins Jeanne C. Collins, Kemp Smith 221 N. Kansas El Paso, Texas 7990 I Gerald F. Giordano, Jr. Snell & Wtlmer, LLP One South Church Avenue Suite 1500 Tucson, Arizona 85701-1630 MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 6. LEELAND 0. WHITE, Pro Se, } Plaintiff } vs } } .WESTER}-!' DIST .OFTEXAS THE APOLLO GROI..iP dba } UNITED . if(:0'8RT "t•' . UNIVERSITY OF PHOENIX, and '} ARTHUR ANDERSEN, et al, }
1 Defendant1" .· '"EP02CA0237 Docket Number .. , ·- ,.1 , • • • IJ •. > MOTION FOR RECUSM.$<,. . I . 4 OF PHJUP R. MARTINEz". 4t . ··'· .... ,, . Enters the Plaintiff who moves for a re P\lrsuant to Title 28 \ ,..-
' .. USCA 455. A letter for recusal has gone unanswered. This motion is based on several incidences harming Plaintiff in which Judge Martinez's impartiality is reasonably questioned; and by the fact that at one time, the accused, bad ownership as a shareholder into the legal finn . 1, representing as well as speciali7Jng in the matter of conuncrcial litigation, to wit: Kemp Smith Duncan & Hammond law fmn. The Defendant is represented by Kemp Smith Duncan & Hammond Jaw firm. Politically, the judge is an appointee of President Bush, a Republican .. The Law firm of • J, Kemp & Hammond has made political contributions to the campaign electing President Bush, ReM·can Parry, to wit: Jack T. Chapman $1000.00. Margaret A. Christian • .. $500, Jim Chris A. Paul $250.00. The Defendant, and its President John to the Bush Campaign as well . The second highest position in .,. the I:>Tpaltment of Education is occupied prior lobbyist for defendant appointed by President Bush, Sally L. Stroup. Such an shall lead to obvious corruption within the department of education and collusion with defendant. This person has power over student ., • ' >-(1:• .... . ·.;.· "'} ,,. .,::-. .. , .. ..... MOTION TO SET AsiDE JUDGMEI-lT • EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 7. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 I \ : ~ 29 30 31 32 EXHIBITS A- K financial aid issues affecting Plaintiff. It is important for Defendant to quash this complaint, at any cost, as any judicial decision may adversely affect defendant. Judge Martinez is a President Bush appointee. Because Plaintiff entered en forma pauperis, the scope of the judge would be limited to the narrow scopes of the Republican Party. The policy of the republican party stands opposed to anyone who is in a position appearing to be or requiring public assistance. There is no question to partiality in this instance, it is a given. Pursuant to Plaintiff's case is the !mown history based on the record of Judge Martinez's partiality. • On September 5, 2002, instructing the clerk to violate Rule 55( a), obstructing due process and justice, by ordering the clerk to impede Plaintiff's entry of default to preventing the entry from ever getting on the docket The clerk stated that Judge Martinez had given them orders not to sign the default entry. • Most of the communication from Defendant in the form of ex parte. The defendant is not the Plaintiff and should not be courted as such. • Not answering the Motion to Compel the Government to investigate. • Defendant on the record objecting to the letter of recusal • By allowing the untimely denial for the Motion to Compel Discovery, knowing that service by mail were August 12,2002 and that it were untimely, still ruling in favor of Defendant. • Forcing Plaintiff to reconstruct a new complaint by order for a More Definite Statement demeaning Plaintiff to the position of Defendant. MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 8. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 EXHIBITS A· K • Deliberately with holding evidence from the record. As of September 26. 2002 the default entry by the clerk had not been entered by the clerk or inserted into the record. • By allowing entry of Defendant knowing that Defendant had already defaulted • Knowing that all of Defendants material should have been rejected after default • By permitting Defendant to perjure itself in the Objection to the Default Judgment. knowing that the citing were not based on 1.-w but distortion. • By arbitrarily annulling the original summons and proof of service usurping the Plaintiff of its rights. By instructing the clerk, without Plaintiffs permission to send out a new summons and proof of service after the old rcmm receipt had come in on August 8, 2002 • By witholding and not inserting the return receipt August 29. 2002 Plaintiff prays that given the above that the judge should recuse himself and must recuse himself in the interest of justice and impartiality. Respectfully Submitted, ~ ~ Leeland 0. White 815 La Cruz El PMo, Texas 79902 (915) 474-9846 MOTION TO SET Asi DE JUDGMENT· EP: 0 2 CV0237 , Rule 60(d)(3) Fed. R. Civ. P P AGE 9. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 EXHIBITS A- K I02Cv0237DB ANNOTATED DOCKET 7/18/02 7/24/02 7/26/02 8/08/02 8/08/02 8/12/02 9/5/02 9/5/02 9/5/02 9/5/02 9/5/02 9/5/02 9/5/02 9/6/02 I 5 Complaint filed. I.F.P. Motion granted (Pages 9) (aq) [Entry date 7/18/02] 6 Amended complaint by Leeland 0. White. Amending complaint [5-1) (dll) [Entry date 7/25.02) 2 Amended complaint by Leeland 0. White, amending complaint See the initials (aq) [5-1] {Q(lges 7) (aq) [Entry date 7/29/02] 8 Motion by Leeland 0. White to compel discovery Gm) [Entrydate 8/08/02] 137 Return of Service executed as to the Apollo Group on (aq) did the service 8/5/02 Re: document #7 (rna) [Entry date 10/15/04] on this. See return receipt 7000-1530-
THIS IS THE ORIGINAL SERVICE CONCEALED BY JUDGE 003 -3784-0692 and MARTINEZ UNTIL OCTOBER 15, 2004 ESTABLISHING THE the name (aq) anno-
APOLLO GROUP, INC., BEING IN DEFAULT SINCE AUGUST tated on the return 21, 2002 ESTABLISHING THE FACT THAT ON SEPTEMBER S, service addressed to 2002 THE APOLLO GROUP, INC. HAD BEEN IN DEFAULT Lynn Campbell, Gen-
SINCE AUGUST 2 7, 2002 . era! Counsel for the PROOF OF VIOLATION OF 18 USC§ 2071 BY JUDGE MARTINEZ Apollo Group Inc. 9 Motion by Lee land 0. White to compel an Officer of the United States to do his duties (aq) [Entry date 8/12/02] 10 Motion by Lee land 0. White for default Judgment against The Apollo Group, Arthur Andersen (aq) [Entry date 09/05/02] 11 Affidavit by Leeiand 0 . White in support of motion for Defaul t judgment against the Apollo Group. Arthur Andersen [ 10-1] (aq) [Entry date 9/05/02] 12 Notice of filing by Leeland 0. White. Affidavit of Amount Due upon Application for Default Judgment to Clerk (aq) Entry date 09/05/02] 13 Notice of filing by Leeland 0. White. Application to Clerk See Exhibit C - this is an For Entry of Default (aq) [Entry date 9/05/02] Application to Clerk for -THIS IS NOT A NOTICE , THIS IS AN APPLICATION TO THE Enuy of Default and Ex-
CLERK (aq) WHO DID THE ORIGINAL SERVICE [137]; AND AT-
hibit D - with the At-
tached received TACHED TO IT IS AN ENTRY OF DEFAULT THAT (aq) REFUSED Stamped Enuy the clerk TO SIGN I N VIOLATION OF RULE 55(a) Fed. R. Civ. P. was supposed to make , THE DEFENDANT THE APOLLO GROUP, INC, HAD ALREADY Exhibit D. (aq) is the BEEN IN DEFAULT 10 DAYS WHEN THIS APPLICATION WAS one who should have MADE - . It is customary for one in default to take leave before til-
entered the default by ing any documentation upon entry in the Court. The Apollo the Clerk, and (aq) sent Group did not follow the proper procedure and the clerk had the the complaint knowing duty to reject all filings except to file a Motion to set aside defaul t that Phoenix was in de-
fault. entry. 14 Motion by the Apollo Group for James K. Mackie and Gerald F. Giordanto, Jr. To appear pro hac vice (aq) [Entry date 9/06/02] 15 Response by the Apollo Group motion to compel discovery [8-1] [aq] [Entry date 9/06/02] 16 Motion by The Apollo Group for more definite statement (aq) [Entry date 09/09/02] 17 Return of service executed as to The Apollo Group on This is a falsified 8/29/02 (aq) [Entry date 9/09/02 Service - Where did this service come from and why is it not referenced to any Doument number like [ 137]? The reason is simple i t is a falsi-
tied service by Judge Martinez, 18 USC§ 2071, so he could enter-
tain business for his former law firm Kemp Smith, when the Defen-
dant had already been in defaul t for 3 days,and the service in the court for 25 days. MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 10. I E X ~ B r r I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 EXHIBITS A- K LEELAND 0. WIDTE, Pro Se, :Plaintiff vs THE APOLLO GROUP dba UNIVERSITY OF PHOENIX, and ARTHUR ANDERSEN, et al, } } } } } } } Defendants } UNITED STATES WESTERN ELPAS&>,=WXAS · 49 W£'s' ,. • C.·. .. .. TERiv Docket Application to Clerk for Entry of Default The clerk oft he above entitled court will enter default against the Apollo Group, Inc., of America , a corporation, in the above cause, for failure of the said defendant to plead, answer or otherwise plead in said cause, as required by law, and oblige. Page Number 1. Leeland 0 . White, Plaintiff ProSe 815 La Cruz EI Paso, Texas 79902 (91 5) 276-0704 MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 11. I I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 EXHIBITS A- K RECEIVED LEELAND 0. WffiTE, ProSe, SEP 0 5 ZOOZ Plaintiff U.S. DISTiliCl\f&lUAT WESTERN DISTRICT OF TIOXAS sv · · dba UNIVERSITY OF PHOENIX, and ARTHUR ANDERSEN, et al, } } } } } } } UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS ELPASO, TEXAS EP02CA0237 Defendants } Docket Number Entry of Default It appearing that the defendant herein the Apollo Group, Inc. , a Corporation of America, is in default for failure to plead or otherwise defend as required by law. Default is hereby entered as against the said defendant this the day of Clerk Page Number 2. MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 12. I I 2 3 4 5 6 7 8 9 10 ] 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 LEELAND 0 . wmTE, Pro Se, Plaintiff vs THE APOLLO GROUP dba UNIVERSITY OF PHOENIX, and EXHIBITS A -K } } } } } } UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS EL PASO, TEXAS ARTHUR ANDERSEN, et a!, } Defendants } EP02CA0237 Docket Number Affidayit of Failure to Plead or Otherwise Defend in Support of Application for Entu of Default State of Texas } County of El Paso } I, Lee/and 0. White, being duly swom deposes and says: l. That be is the plaintifi: pro se, and has personal knowledge of facts set forth in this affidaviL 2. That the plaintiff herein, on the 22 day of July 2002, filed in this cause his complaint against the defendants herein. 3. That examination of the court files and record in this cause shows that the defendants herein were served by certified mail, 7000-1530-003-3784-0692 with a copy of summons, together with a copy of plainti.frs co.mplaint, on the 5th Day of August, 2002. 4. That more than 20 days have elapsed since the date on which the said defendants herein were served with summons and a copy of the complaint, excluding the date thereof. 5. That the defendants herein have failed to answer or otherwise defend as to plaintiff's complaint, or serve a copy of any answer or other defense which it might have had, upon Leeland 0, White, Pro Se, Plaintiff of record. 6. That this affidavit is executed by affiant herein in accordance with Rule No. SS(a) of the Federal Rules of Civil Procedure, for the purpose of enabling the plaintiff herein to obtain an entry of default against the defendants herein, for their failure to answer or defend as to the plainti.frs complaint. • t • :e• 8tAHCA Y. CONCHA liON\' PUILIC
* STATE OF TEW lty c-.luloft """'" F'fiiiUAIII' 2,, '3h.ttf_(l;l{ Wt'\Ckt . 5, dedd Number 3. MOTION TO SET AsiDE JUDGMENT · EP: 02cv0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 13. I I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 City ofEI Paso Country ofEl Paso State ofTexas EXHIBITS A- K AFFAPAVIT OF LEET.AND 0. WHITE I, Leeland 0 . White, state under penalty of pe!jwy that on Septembcc 6, 2002 I called Tuscon. AriZDna to the Law rum of Snell and Wilmer, LLP. I requested to speak with James K. Mackie, and the person answering the phone stated that James K. Maclcie were out of town. I then asked to speak to Gerald F. Giorano, Jr., disclosed who I was, and I was connected to Gerald F. Giorano, the out of town attorney representing The Apollo Group. 1 talked at length on the telephone over several issues. I then iltfuireJI tiS to whidt dille thilt the Apoflo Group lttul received the SUJrulfOIIS and complilint. Mr. Giorano stilted. tlud he was answering the compuunt disted August 6, 2002. We tallced a little more and then the both of us bung up the phone. It was Friday evening. Signed this _;2Q dayof Jtpt-e;4 q.o 2002 . / Leeland 0. Whlte G c61t(hQ) k 30 aoo.;).. Pip ' f:')(J.I/45 '' A-AkP.. MOTION TO SET Asi DE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 14. I I EXHIBITS A- K 1 2
118 USC § 2071. Concealment, removal, or mutilation generally (Criminal) 3 (a) Whoever willfully and unlawfully conceals, removes, mutilates, obliterates, or destroys, 4 ~ o r attempts to do so, or, with intent to do so takes and carries away any record, proceeding, ap, book, paper, document, or other thing, filed or deposited with any clerk or officer of 5 lany court of the Unjted States, or in any public office, or with any judicial or public officer of 6 f he United States, shall be fined under this title or imprisoned not more than three years, or oth. 7 l(b) Whoever, having the custody of any such record, proceeding, map, book, document, pa-
er, or other thing, willfully and unlawfully conceals, removes, mutilates, obliterates, falsi-
ies, or destroys the same, shall be fined under this title or imprisoned not more than three ears, or both; and shall forfeit his office and be disqualified from holding any office under 8 9 10 F,he United States. As used in this subsection, the term "office" does not include the office · eld by any person as a retired officer of the Armed Forces of the United States. [137] 11 12 0 USC § 1088 Academic Year 13 (a) Academic and award year 14 (1) For the purpose of any program under this subchapter and part C of subchapter I of chap-
15 ~ e r 34 of title 42, the term "award year" shall be defined as the period beginning July 1 and 16 1
ending June 30 of the following year. 11 r(2J 18 1
{A) For the purpose of any program under this subchapter and part C of subchapter I of 19 (chapter 34 of title 42, the term "academic year" shall 20 21 •
(i) require a minimum of 30 weeks of instruction time for a course of study that 22 · I h. l' h measures 1ts program engt m ere(, 1t ours; or 23 24 25 26 27 28 29 30 31 32 (ii) require a minimum of 26 weeks of instructional time for a course of study that measures its program length in clock hours; and (iii) require an undergraduate course of study to contain an amount of instruc-
tional time whereby a full-time student is expected to complete at least-
ill 24 semester or trimester hours or 36 quarter credit hours in a course of study that measures its program length in credit hours; or MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 15. ~ ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 EXHIBITS A- K Case 3:02-cv-00237-DB Document 38 Filed 10/07/2002 Page 1 of 1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN QISTRICT OF TEXAS. ELPASODMSION ~ : J . ,., ' ·) \)• • .J LEELAND 0. WHITE, Plaintiff, 8 '( !! "I"I'>IIT V
v. § § § § § § § § § El'-02-CA-237-PRM THE Al'OLW GROUP, dba, THE UNIVERSITY OF PHOENIX, and ARTHUR ANDERSON, et al., Defendants. ORDER OF RECUSAL On this day, the Court considered Plaintiff's "Motion for Recusal," filed October 1, 2002, in the above-captioned cause. PlaintiffLeeland White filed a Complaint with the District Clerk on July 18, 2002, alleging various fraud claims against Defendants. The case was subsequently assigned to this Court. On October 1, 2002, Plaintiff filed a Motion for Recusal requesting that the current district judge, the Honorable Philip R. Martinez, recuse himself from the case due to his past employment with Defendant's attorneys, Kemp Smith, P.C. Although this Court disagrees with the assertions made in the Plaintiff's Motion, the Court, out of an abundance of caution, recuses itself from this matter. Accordingly, IT IS HEREBY ORDERED that the above-referenced cause be TRANSFERRED to the docket of the Honorable David Briones for final disposition. Pursuant to the most current Order Assigning the Business of the Court, the Clerk shall credit this case to the percentage of business of the receiving Judge. SIGNED this . ~ MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 16. ~ ~ 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 , 29 30 31 32 EXHIBITS A· K USDOJ: OLP: MartinezBio Page 1 of2 c ~ ~ - · ','!: ·---
U.S. Department of Justice ~ ... Office of Legal Policy About Us • History • Functions • Staff Bios Resources • Judicial Nominations • Employment/ Internships . om Homepage [ti-ome I Judici al Nominations I Contact Us I DOl I PhHip R. Martinez Biography Philip Ray Martinez is currently serving his third term as Judge of the 327th Judicial District Court in E'l Paso, Texas. He was first elected to judicial office in November of 1990 as Judge of County Court at Law No. 1 at the age of33. Ten months a.fier assuming office, he was appointed to his current position, a position to which he has been re-elected without opposition on three separate occasions. La<t Upd<ned: l '8102 Judge Martinez is a former shareholder of the Kemp Smith Duncan & Ha..OTtmond law finn where be was a member of the Litigation Dep::.!t:nen! specializing in commercial litigation. As an attorney, he was involved in numerous professional organizations, having served as a Director and Treasurer of the El Paso Bar Association, and as a Director of the El Paso Mexican-American Bar Association. He also served on the El Paso Legal Assistance Society Board cofDirectors, having been elected as Chainnan of the Board in 1986-87. Judge Martinez currently serves as CIU!innan of the El Paso County Juvenile Board and Chair-Elect of the Juvenile Law Section of the State Bar of Texas. He is a past Director of the Texas Center for the Judiciary, having served as Chairman of the lndigent Defense Representation Committee of the Judicial Section of the State Bar of Texas, a past member of the Funding Parity Task Force of the Texas Commission on Judicial Efficiency, and a past Chairman of the Office of Court Administration Strategic Planning Committee. He is a member of numerous professional organizations, including the American Law Institute, the American Bar Association, the Hispanic National Bar Association, the National Council ofFamily & Juvenile Court Judges, the Judiciary Relations Committee of the State Bar of Texas, and the Texas Bar Foundation. Judge Martinez also served as the Local Administrative Judge of the El Paso Council of Judges. He has been instrumental in the creation of the El Paso County Statutory Probate Court, the Juvenile Court Referee position, numerous n e \ ~ state di.stric1 courts, and the Associate Judge position for Child Abuse and Neglect cases. hHn•//o .n..nu tt.:,.:ln; t'fl'\,,/,.,.1n/ ...,...QT"t-1no8-?h;,... ht-rn 0/"Jf\P'liV'\"') MOTION TO SET AsiDE JUDGMEMT • EP: 0 2 CV0237 , Rule 60(d)(3) Fed. R. Civ. P PAGE 17. ~ ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 EXHIBITS A- K USDOJ: OLP: Martinez Bio Page 2 of2 In addition to his professional accomplishments, Judge Martinez has been active in community organizations throughout his life. He currently serves as a member of the El Paso Holocaust Museum and Study Center Board of Directors. Other cornmunjty organjzations in which he has been involved include the Hispanic Leadership Institute, the UTEP Alumni Association, the National Conference of Christians & Jews, the El Paso Cancer Treatment Center, and the Ascarate Junior GolfTouman1ent. Judge Martinez is a frequent author and lecturer at continuing education conferences and has been honored with munerous awards, including the Outstanding Ex at Burges l.Jigh School (2000), the UTEP College of Liberal Arts Gold Nugget Award (1995), the Law Enforcement Achievement Award (1995), and was named El.Paso's Outstanrung Young Lawyer (1992). . Born and raised in El Paso, Judge Martinez received his high school diploma from Burges High S c h o o ~ graduating in the top two percent of his class. He received a B.A. Degree from the University of Texas at El Paso, graduating with Highest Honors. He earned his Doctorate of Jurisprudence Degree in 1982 from Harvard Law School. He is married and bas two daughters. [FOI-A]Privacy and Security Notice I -
ht+n·/Aa.T\lVU/ n<:l'lni Ol"nlin1n/n"''su-t1nP7h1n httn ()non no? MOTION TO SET AsiDE JUDGMEtrr • EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 18. ~ ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 EXHIBITS A- K DOCKET YEAR 2002 Note concealment of Original Service which later becomes [137] after [8] Note [11], Exhibit E, page 13, making Court Aware of Original Service September 5, 2002 Proceedings include all events. 3:02cv237 White v. The Apollo Group, et al INTAPP 6/7/02 6/7/02 1 7/8/02 2 7/12/02 3 7/18/02 4 7/18/02 5 7/24/02 6 7/26/02 7 8/8/02 8 8/12/02 9 9/5/02 10 9/5/02 11 9/5/02 12 9/5/02 13 9/5/02 14 9/5/02 15 9/5/02 16 Case assigned to Judge Philip R. Martinez (aq) [Entry date 06/10/02) Motion by Leeland 0. White to proceed in forma pauperis (jm) [Entry date 06/10/02] Order denying motion to proceed in forma pauperis [1-1) (aq) [Entry date 07/09/02) Motion by Leeland 0. White for reconsideration of motion to proceed in forma papueris (aq) [Entry date 07/12/02) Order granting motion for reconsideration of motion to proceed in forma papueris [3-1) (aq) [Entry date 07/18/02) Complaint filed. I.F.P. Motion Granted (Pages: 9) (aq) [Entry date 07/18/02) Amended complaint by Leeland o. White , amending complaint [5-1) ) (dl1) [Entry date 07/25/02] Amended complaint by Leeland 0. White , amending complaint [5-1] (Pages: 7) (aq) [Entry date 07 /29/02] Motion by Leeland o. White to compel discovery (jm) [Entry date 08/08/02) Motion by Leeland 0. White to compel an Officer of the United States to do his duties (aql [Entry date 08/12/02] Motion by Leeland 0. White for default judgment against The Apol lo Group, Arthur Andersen (aq) [Entry date 09/05/02] Affidavit by Leeland 0. White in support of motion for default judgment against The Apollo Group, Arthur Andersen [10-1] (aq) [Entry date 09/05/02] filing by Leeland 0. White, Affidavit of Am;unt Application for Default Judgment to Clerk (aq) [Entry date 09/05/02) of filing by Leeland 0. White, Application to Clerk of Default (aq) [Entry date 09/05/02] Motion by The Apollo Group for James K. Mackie and Gerald F. Giordanto, Jr. to appear pro hac vice (aq) [Entry date 09/06/02) Response by The Apollo Group motion to compel discovery [8-1] (aq) [Entry date 09/06/02) Motion by The Apollo Group for more definite statement (aq) (Entry date 09/06/02] Docket as of October 21, 2002 1:02 pm Page 2 MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 19. I I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 EXHIBITS A- K Falsified Docket [17] by Judge Martinez, Concealed [137] To make business for Kemp Smith, when Defendant was already 3 days in default. Proceedings include all events. 3:02cv237 White v. The Apollo Group, et al INTAPP 9/6/02 17 9/6/02 18 9/9/02 19 9/9/02 20 9/12/02 21 9/16/02 22 9/16/02 23 9/16/02 24 9/16/02 25 9/16/02 26 9/ 16/02 27 9/17/02 28 9/23/02 29 9/25/02 30 Return of service executed as to The Apollo Group on 8/29/02 (aq) [Entry date 09/09/02) Order granting mot i on for James K. Mackie and Gerald F. Gi ordanto, Jr. to appear pro hac vice [14- 1) (aq) [Entry date 09/09/02] Ex Parte Motion by Leeland 0. White to Correct Clerical Error (aq) [Entry date 09/09/02] Motion by Leeland 0. White to strike Motion for more Definite Statement (aq) [Entry date 09/09/02] [Edit date 09/09/02) Amended Motion by Leeland 0. Whi te to strike Defendant's motion for more definiet statement (aq) [Entry date 09/12/02] Response by Leeland 0. White motion for more definite statement [16-1) (aq) [Entry date 09/16/02} Response by Leeland 0. White (aq) [Entry date 09/16/02} to motion response [15-1} Response by Leeland 0. White motion for James K. Mackie and Gerald F. Giordanto, Jr. to appear pro hac vice [14-1] (aq) [Entry date 09/16/02) Response by The Apollo Group motion to Correct Clerical Error [19-1} (aq) [Entry date 09/17/02] Objection by The Apollo Groupo Plaintiff's Application to Cler k f or Entry of Default and Plaintiff's Motion for Judgment by Default by the Court [10-1] (aq) [Entry date 09/17/02] Memorandum by The Apollo Group in support of motion for mor e defi nite statement [16-1], and Response to Plaintiff's Related Pleadings (aq) [Entry date 09/17/02} Cert ificate o f service by The Apollo Group, regarding The Apollo Group's Combined Objection to Plaintiff 's Applicat i on to Cl erk for Entry of Defaul t and Plainti ff 's Motion for Judgment by Default by The Court (aq) [Entry date 09/17/02) Notice of filing by Leeland 0. White, Protest of District Court Not Rejecting Defendant's Pleading (aq) [Entry date 09/24/02) Order grant ing motion f or more definite statement [16-1) (aq) [Entry date 09/26/02) Docket as of October 21, 2002 1:02 pm Page 3 MOTION TO SET AsiDE JUDGMENT· EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 20. I E x ~ ! B I T I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 ]7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 EXHIBITS A- K Proof of Concealed original service [137], October 15, 2004. However court was aware of document on September 5, 2002 by affidavit [1 1] establishing willful concealment. ...... ·. ; c ' ... .. , .. l.. Proceedi-ngs include all ._
3:02cv237 White v. The Apollo Group, et al \ 6/7/ 02 6/7/02 1 7/8/02 2 7/12/02 3 7/18/02 4 7/18/02 5 7/24/02 6 7/26/02 7 8/8/02 8/8/02 137 8/12/02 9 9/5/02 10 9/5/02 11 9/S/02 12 9/5/02 13 9/5/02 14 9/5/02 15 case assigned to J udge Philip R. Martinez (aq) •., [Bntro; date 06/10/02] ·• 1 • • ,, Motion by Leeland o. White to proceed in forma pauperis (jm) (Entry date 06/10/02) it Order denying motion to proceed in pauperi's ' 1.1-1.] (aq) (Entro; date 07/09/02] •, •... ' Y' " Motion by Leeland o. White for reconsideratH>n· Of motion to proceed in forma papueris (aq) (Entry dat( 07/U/'02) Order granting motion for reconsideration ot motion to proceed in forma papueris [3-1] (aq) (Entr}' date 07/18/02) complaint filed. I.F.P. Moti on Granted [Entry date 07 /18/02] . Amended complaint by Leeland 0. White [5-1) ) (dll) (Entry date 07/25/02] I Pages : 9) (aq) amehding complaint Amended complaint by Leeland 0. White , amending compl aint [5-l] (Pages : 7) (aql [Entry date 07/2-9/02] Motion by Leeland o. White to compel discovery (jm) [Entry date 08/0B/02] Return of service executed as to The Apollo Group on B/5/02 Re: document #7 (rna) (Entry date 10/15/04] Motion by Leeland 0 . White to compel an Officer of the United States to do his duties (aq) [Ent ry date 08/12/02) Motion by Leeland 0. White ttfr default judgment against The Apollo Group, Arthur Andersen (aq) !Entry date 09/05/02] by Leeland o. Whi t e in support of motion for detault judgment against The Apollo Group, Arthur Andersen (10-1) (aq) (Entry date 09/05/02) of filing by Leeland 0. White, Affidavit of Amount Oue upon Application f or Default Judgment to Clerk (aq) [Entry date 09/05/02] Qf filing by Leeland o. White, Application to Clerk for Entry of Default (aq) (Entry dat e 09/05/02] Motion by The Apollo Group for James K. Mackie and Gerald F. Giord4nto, J r . to appear pro hac vice (aq) [Entry date 09/06/02} Response by The Apollo Group motion to compel discovery · 18-1) (aq) [Entry date 09/06/02] Docket as of October 20, 2004 5:06 pm Page 2 ' ,.. ,. MOTION TO SET AsiDE JUDGMEtrr • EP: 02CV0237, Rule 60(d)(3) Fed. R. Civ. P PAGE 21. I I From: Finley Steve To: Macias, Wendy CC: Date: 5/3/2010 4:08:44 PM Subject: FW: Did you see this WSJ article from today? Nonresponsive Tenor OfF or-Profit School Discussion Gets Toned Down By Melissa Kom OfDOW JONES NEWSWIRES NEW YORK (Dow Jones)--This week's sell-off in for-profit school stocks, prompted by a report of a U.S. Department ofEducation official's speech, may have been overblown, some analysts say now that they have read a full transcript of the comments. The sector's shares fell sharply Thursday after trade Web site Inside Higher Ed reported that Robert Shireman, deputy undersecretary for education, spoke harshly of market-funded colleges at a meeting of state school administrators and accreditors Wednesday. The article, citing sources at the meeting, said Shireman compared the schools to Wall Street firms whose actions helped cause the recent financ1al crisis. Inside Higher Ed, which didn't have a reporter at the meeting, attempted to confirm the comments with Education Department officials, who declined comment for the article. Shireman did make that comparison, according to a transcript of his speech, which analysts believe was relatively even-
handed and wide-ranging. He also said regulators could do a better job. Shireman devoted much of his speech, delivered at the National Association of State Administrators and Supervisors ofPrivate Schools meeting, to proposed changes in rules governing all of higher education. The Inside Higher Ed article sparked a nearly universal sell-offin higher-education shares, but some recovered ground Friday. Career Education Corp. (CECO), which fell more than 12% Thursday, was recently trading up 1.1% to $29.59. ITT Educational Services Inc. (ESI), which lost 6.6% the previous day, was off a fraction in recent trading at $102.78. Apollo Group Inc. (APOL), which fell6.1% Thursday, was up 0.4% at $57.98. Analysts who have read both Inside .Higher Ed's report and a transcript of Shireman's speech say the comments were mostly in line with his earlier stance, which has generally accepted the role of for-profit schools in the Obama administration's plan to increase access to higher education. Doug Lederman, editor of Inside Higher Ed and author of the article, said the story "made pretty clear that it was based on accounts from people in the room. There was no question that they interpreted his comments in a certain way." Lederman has heard a recording of the full speech since publishing the article. "Shireman was laying out a case for greater government regulation given increased investments in Pell Grants," Wedbush Securities analyst Ariel Sokol said in an email message after reviewing the meeting transcript. "He seemed amenable to forming bridges with the sector." Shireman commended the schools for "making sure that there was capacity to be able to serve additional students" during the recession, according to a transcript provided by Career Education Review. Shireman cited year-over-year percentage increases in Pell grant funds for 11 publicly traded school companies, including Corinthian Colleges Inc. (COCO), DeVry Inc. (DV), and American Public Education Inc. (APEI). Most for-profit schools derive the majority of their revenue from federal student aid. A Department of Education spokesman reiterated Shireman's comments, saying in an em ailed statement: "For-profit colleges play a critically important role in helping to ensure so many Americans have access to education and training that can improve their job prospects and lives." To be sure, Shireman did liken the relationship between schools and accrediting groups to that between banks and ratings agencies, which have an "inherent conflict ofinterest," as the agencies are paid by the companies they are supposed to regulate. "Are there regulators in the room who feel like you do have the analytical firepower you need to assess what is going on with the entities you regulate in higher education," Shireman asked. "1 don't th.ink we feel we have the firepower we need." Lederman said the speech was "a much stronger indictment of the system of higher education accreditation than of the sector." Trace Urdan of Signal Hill Capital Group wrote in a note to clients, regarding the full transcript, that Shireman's "tone in general is much less severe" toward schools specifically. "He presents as a reasonable person struggling with accountability gaps that he perceives exist in the system." According to the transcript, Shireman devoted a portion of his speech to detailing the process by which the Department ofEducation formulates new rules governing higher education, known as negotiated rulemaking. He stressed that there were productive discussions on many fronts, though he said college representatives weren't particularly constructive when it came to a measure to quantifY how well the schools prepare students for "gainful employment" in a recognized occupation. Concerns over that proposal have upended the for-profit school industry over the past few months, with a trade group estimating the government's early version would di splace hundreds of thousands of students as their programs lose access to federal funds. During a question-and-answer session, Shireman said there is no final proposal yet, and he is open to suggestions to ensure the rule is fair. -By MelissaKom, Dow Jones Newswires; 212-416-2271; melissa.korn@dowjones.com From: Finley Steve To: Macias, \Vendy CC: Date: 5/19/2010 9:28:00 AM Subject: FW: FYI- From the Chronicle of Higher Ed on fight over Gainful Employment Very interesting From: Siegel, Brian Sent: Wednesday, May 19, 2010 9:01AM To: Jenkins, Harold; Marinucci, Fred; Finley, Steve; Sann, Ronald; Wolff, Russell; Woodward, Jennifer Subject: FYI-- From the Chronicle of Higher Ed on tight over Gainful Employment May 19, 2010 In a Fight to Preserve Their Market, For -Profit Colleges Lobby Hard Against a Proposed Rule By Goldie Blumenstyk and Kelly Field For-profit colleges, faced with the threat of program closures, have gone on a lobbying and public-relations blitz, spending hundreds of thousands of dollars in an attempt to beat back an Education Department proposal to cut off federal student aid to for-profit programs whose graduates carry high debt-to-income loads. In the five months since the department offered its controversial "gainful employment proposal ," for-profit colleges and their chief association have spent at least $620,000 lobbying members of Congress, the Education Department, and the Office of Management and Budget, which is reviewing the department's proposed rule (see related article, with tables). The University ofPhoenix, the nation's largest for-profit institution, has taken out ads in major publications, including The Chronicle, defending the sector and arguing against the rule, while for-profit colleges are urging their students to sign on to a petition opposing the plan. For-profit lobbyists and executives are swarming Capitol Hill and federal agencies, pushing an alternative plan that would require programs only to provide prospective students with more information about their graduates' debt levels and salaries. During the Career College Association's annual "Hill Day" in March, members of the organization met with aides from nearly every Congressional office. Their message: The proposal would cost jobs and limit access to college at a time when the president is pushing education as a solution to high unemployment. In an attempt to discredit the proposal, some opponents have tried to paint Robert M Shireman, who as deputy under secretary is the department's top political appointee on higher-education issues, as a rogue actor. But even critics of the plan acknowledge that Mr. Shireman, who is stepping down this summer, was not the sole author of the proposal. Lobbyists for the for-profit sector say the last time there was a lobbying push of this magnitude was in 1992, when the Education Department was crafting rules governing commissions for college recruiters. The fight extends all the way to the top, with the chief executives of major for-profit companies like ITT Educational Services, Career Education Corporation and Corinthian Colleges holding meetings with agency heads. For-profit lobbyists and Congressional aides say Education Department officials have been surprised by the amount of pushback they've gotten on their proposal. "I doubt that when Arne Duncan was planning his 2010 calendar, he thought he'd be spending a lot of time on gainful employment," said Harris N. Miller, president of the Career College Association, which represents more than 1,400 colleges. Backing From Business The for-profits have gotten a boost from the U.S. Chamber of Commerce, which represents both for-profit colleges and the employers who hire their graduates. In recent weeks, Arthur J. Rothkopf, executive vice president of the Chamber's Institute for a Competitive Workforce and a former president ofLafayette College, has met with Secretary ofEducation Arne Duncan and other department officials to voice concerns about the "gainful employment" rule, said Rolf Lundberg Jr., the Chamber's chieflobbyist. "Employers are keenly interested in the continuing ability of the for-profit industry to thrive," he said. Consumer and student groups, meanwhile, have launched a counteroffensive, urging the department to stand firm and issuing briefs challenging the sectors claims about the impact of the proposal. In April, the Career College Association released a report on a study of more than 10,000 for-profit college programs. It estimates that nearly a fifth of those programs would become ineligible for federal student aid and forced to close under the proposed rule, which would bar a program's students from taking on loan payments that exceed 8 percent of the expected earnings for graduates in that program, based on a 1 0-year repayment plan. The association has extrapolated from those findings to predict that more than five million students could be displaced over the next 10 years if the rule is adopted. Supporters of the rule say the study demonstrates that the rule would hardly devastate the for-profit college industry because 82 percent of programs would be unaffected. "What is truly troubling," said Pauline M. Abernathy, vice president of the Institute for College Access & Success, is the Career College Association's response to the study. Rather than fighting the rule, she said, its members should shut down programs that require students to take on more debt than their likely earnings would allow them to repay. The study was conducted by a Jonathan Guryan, an associate professor of economics at the University of Chicago Booth School of Business, along with a colleague from Charles River Associates, a consulting firm with offices around the world. Neither Mr. Harris nor Mr. Guryan would reveal how much the association paid for the research or for the professors trips toW ashington to explain the findings to staff members on Capitol Hill and the Obama Administration. But both insisted that the association had no say over how the study was conducted or in interpreting the results. An Appeal to M:inority Groups Though for-profit colleges are, in the words of one college lobbyist, "leaving no stone untumed" in their effort to build Congressional opposition to the plan, they are particularly targeting minority lawmakers and members with for-profit colleges in their districts. In April, the Career College Association held a briefing for aides to members from the "Tri-
Caucus"-the Congressional Black Caucus, the Congressional Hispanic Caucus, and the Congressional Asian Pacific American Caucus-in which association leaders warned that the proposal would harm minority students attending for-
profit institutions. At the hearing, the association circulated charts showing that for-profit colleges educate, and graduate, more African-American and Hispanic students than public two- and four-year colleges. The sector's effort to appeal to minority groups has met with mixed success. While the League of United Latin American Citizens and the National Black Chamber of Commerce have come out against the plan, members of the Tri-Caucus groups are split over the proposal. In the U.S. House of Representatives, African-American lawmakers Rep. Alcee L. Hastings, Democrat ofFiorida, and Rep. Donald M. Payne, Democrat ofNew Jersey, sent a letter signed by 18 lawmakers to Mr. Duncan warning that the department's proposal would "disproportionately harm nontraditional and lower-income students" and "lead to educational capacity cutbacks in critically important fields." The letter urged the secretary to consider expanding disclosures instead. But other members of the Tri-Caucus groups are suspicious of the sector. At the Career College Association's briefing, some aides to minority lawmakers raised doubts about the value that for-profit institutions are providing students, with one aide calling proprietary colleges "the Toyota" of education, according to an individual who attended the meetings. An aide to one oftheHispanic lawmakers said that roughly seven of the 10 or so questions raised by the two dozen attendees ranged from "somewhat skeptical to very skeptical." "We agree that the colleges provide the access," said another aide to a Hispanic lawmaker. "Our concern is that the quality of the education is not what it needs to be." The aide suggested that the rules should be even stronger, calling the department's proposal "actually pretty wimpy." He called the association's appeal to minority members "cynical." "Minority status is always used to get away with something," the aide said. Lobbying and PR Blitz For-profit colleges have also been hiring lobbyists with ties to the Congressional Black Caucus, the Education Department, and Congressional leaders. Both the Career College Association and the Career Education Corporation have retained the Podesta Group, a powerful lobbying shop led by Tony Podesta, who is a top Democratic fund raiser with longstanding ties to members of Congress. Among the lobbyists working for the colleges are Paul Brathwaite, a former executive director for the Congressional Black Caucus; Lauren Maddox, a former assistant secretary of communications for the Education Department, and former aides to Sen. Richard J. Durbin, Democrat oflltinois and the assistant majority leader, and Rep. A1 Green, Democrat of Texas and a member of the Congressional Black Caucus. During the first three months of 2010, the association and Career Education Corporation paid the Podesta Group about $140,000 in lobbying fees, making the Podesta Group No. 1 among 14lobbying firms hired by the largest for-profit college groups, according to a Chronicle analysis oflobbying disclosure forms. (Podesta Group has represented both for several years.) Another lobbying firm led by Mr. Podesta's wife, Heather, received approximately $20,000 each from Concorde Career Colleges, De VI)' Inc, and Education Management LLC during that time period. Meanwhile, Kaplan Inc. has hired Dezenhall Resources, a Washington-based public-relations firm known in political circles (and a 2006 Business Week story) as the "pit bull of public relations" for its secretive work for interests seeking to undermine environmental groups and advocates for open access to research findings. Kaplan officials declined to comment on Dezenhall's entire role, but did acknowledge that the firm has been helping it to place op-ed articles that question the proposed rule. (One ofthose, by Robert H. Atwell, a former president of the American Council on Education and also a former board member Education Management Corporation, which owns for-
profit colleges, recently appeared as a letter to the editor in The Chronicle.) For-profit colleges are being "undeservedly lambasted" by news media and others and "in situations like this, companies hire outside experts like Dezenhall," said Ronald H. Iori, a spokesman for Kaplan Higher Education, which runs Kaplan University and other for-profit colleges. Calls and e-mails to Dezenhall from The Chronicle were not returned. On its Web site, Dezenhall describes its chief product as "crisis management" and notes that it is "typically brought in during times of intense scrutiny, risk, or competition." In addition to the personal visits to lawmakers and regulators, the colleges and companies have been trying to make their case in the news media, both with op-ed commentaries criticizing the rule, and paid advertisements. This week, for example, the University ofPhoenix, ran advertisements aimed at discrediting the proposed gainful-
employment ru.le as a policy that could "limit access to the education so many Americans desire." One of the ads uses a quote from Mr. Shireman praising the for-profit sector. M The ads will or have run in newspapers widely read on Capitol Hill-Politico, CQ Today, Roll Call, The Washington Post, and The Chronicle. Teni C. Bi shop, executive vice-president for external affai rs for the university's parent company, the Apollo Group, would not say how much the company is spending on the ads. On the other side of the fight over the gainful employment rule are groups representing students, consumers and civil-
rights organizations. They have also held meetings with Congressional aides and agency heads, and, later this week, a coalition of more than 20 groups will announce their support for "strong and effective regulation." "CCA is much louder than we are because they have way more to lose," said Christine Lindstrom, higher-education program director for U.S. Public Interest Research Group, a consumer organization. "They have just been a force on the Hill and in the media," she said. "Now we're feeling the need to amp it up ourselves." Ms. Lindstrom said the association's message, and in particular its argument that it serves min01ity students, is disingenuous. "They keep saying, 'We serve this population. We serve this population."' But the reality is, if you're serving a financially needy population, "then you need to care about debt and defaults and job placement." An association of Florida community-college presidents has already publicly endorsed the proposed rule, calling it "a fair measure' in a letter to Mr. Duncan, and a Texas community-college association is considering doing so. Student Petition One unusual piece of the lobbying effort is the online petition drive from an organization calling itself Students for Academic Choice. For more than two weeks, the self-described organization of "proud students and graduates of private, postsecondary career oriented institutions" has been seeking signatures from at least 100,000 fellow students and graduates for their petition opposing the proposed rule. (As of Tuesday, the counter on the site showed under 32,000 signers.) "This new regulation would treat career-college students as separate and inherently unequal," the petition reads, invoking language of the segregation era. The site was established with the technical and financial help of the Career College Association, and a number of colleges have put up links to it on their own Web sites. At least one of those pages with the link invites readers with questions to contact a Career College Association lobbyist, Bruce Leftwich. Advocates for the proposed rule call the petition a classic example of "astroturfing,"-an attempt by the association to create the appearance of grass-roots opposition. The career college's president, Mr. Miller, said the idea for the petition came from some of the same 150 students who participated in the association's March 11 "Hill Day," an annual event that brings hundreds of college officials to lobby their representatives and senators. The association, he said, helped out at the students' request. "These are not wealthy, middle-class students who have lots of free time," he said. "We make no apologies for assisting the group getting set up." He said the language of the petition was not an attempt by his association to make allusions to the civil-rights battles overturning racial segregation. "I'm not clever enough to use code words," said Mr. Hanis. Another group, the Business Industry Political Action Committee, has created Web sites for tl1e Education Management Corporation that urge the company's 20,000 employees and 136,000 students to weigh in with Congress on the gainful-
employment rule. With the department's decision on the rule expected to affect the stocks of publicly traded for-profits, Wall Street analysts have also been closely watching the debate over the proposal. One of them, Trace A Urdan, an analyst with Signal Hill Capital Group, has even offered for-profits some advice on fighting the proposal: "Embrace the media, control the message," he urged in an April 27 note to clients and others. "Go on cable television (right and left) and make the case for more-rigorous disclosure and student choice over government price controls." He also suggested that the companies appeal to their supporters within the Congressional Black Caucus and to the alternative media outlets that serve minority communities and other interests. "Industry has a great story to tell in terms of expanding educational access within minority communities and in terms of a government policy that seeks to rob these students of choice and condescends to their ability to make informed choices," he said. Congressional Pushback The colleges' arguments appear to be getting some traction in Congress. In addition to the letter sponsored by Representatives Hastings and Payne, at least two Democratic S\senators-Bill Nelson of Florida and Bob Casey of Pennsylvania-have sent letters to the Education Department opposing the proposal. Sen. Lamar Alexander, Republican of Tennessee, has suggested that the department consider applying caps on default rates to for-profit college programs rather than adding another layer of regulation. The existing rules penalize colleges whose default rates over all exceed certain levels. Mr. Alexander, a former secretary of education, and a member of the Senate education and appropriations committees, has warned that he will offer an amendment to withhold funds to put the rule into effect if the department follows through with its original proposal . One senior Republican aide says that the Education Department has failed to make a case for its proposal . Education Department officials have so far refused to provide opponents of the rule with the data they say they used in drafting the rules. "The department hasn't presented a factual case," the aide said. "Before you can legislate, you have to have a factual case." Meanwhile, on the House side, Rep. Robert E. Andrews, Democrat ofNew Jersey, is preparing to offer legislation that would substitute the debt-to-income ratio for a "matrix" of variables used to measure the value that for-profit colleges add. The matrix, he said in an interview, would apply to all colleges, nonprofit and for-profit, and assess four things: job placement in the advertised field, graduation rates, default rates, and success in serving low-income, high-need populations. His goal, he said, is to measure students' "actual outcomes," rather than their "projected incomes." "I think the department has chosen the wrong method to measure value-added," Mr. Andrews said in an interview. "If we want to measure whether people get a job and how much money they make, let's measure whether people get a job and how much money they make." From: Finley Steve To: Macias, \Vendy CC: Date: 6/11/2010 8:37:20 AM Subject: FW: FYI- Articles on CCA meeting from Inside Higher Ed and Chronicle of .Higher Ed FYI -emphasis mine below From: Siegel, Brian Sent: Friday, June 11, 2010 8:26AM To: Burton, Vanessa; Finley, Steve; Jenkins, Harold; Marinucci, Fred; Morelli, Denise; Sann, Ronald; Scaniffe, Dawn; Varnovitsky, Natasha; Wanner, Sarah; Wolff, Russell; Woodward, Jennifer Subject: FYI- Articles on CCA meeting from Inside Higher Ed and Chronicle of Higher Ed Inside Higher Ed Sector Under Siege? June 11, 2010 LAS VEGAS-- The annual convention of the Career College Association was just gearing up for the day Thursday when word started circulating that the U.S. Senate's education committee planned to start a series of hearings this month into the increasing flow of federal student aid money into for-profit higher education. It was a stark reminder --in case anyone here really needed it -- that the rapidly growing college sector faces a level of federal scrutiny probably unmatched since the early 1990s, when Congress approved a set of changes to the Higher Education Act aimed at reining in perceived abuses of the fmancial aid programs by what were commonly referred to as "fly-by-night trade schools." Just how much today's environment felt like deja vu from 20 years ago depended on whom you talked to here. To many financial analysts, investor types and others who focus on stock prices or otherwise take a short-term view, the mood was one of steady-state alarm, focused on the cloud of intensified federal regulation that has loomed over the colleges for the last year. Those in this group believe that the for-profit sector has a target on its back, with a coalition of consumer advocates, short-semng investors (who profit if stock prices fall), and ideological government bureaucrats pushing an aggressive, activist agenda. To some observers who've worked in and around the industry longer, though, the current round of federal scrutiny (in the form of potentially tough new rules)-- while unfair in their eyes-- is a far cry from the 1990s, for a few reasons. First, they argue, for-profit colleges are too embedded in the fabric of higher education, and too essential to meeting President Obama's goals for increasing the country's college completion rates, to be dealt with in a way that would seriously damage their ability to contribute to that effort. Second, during the purge of the early 1990s, for-profit colleges were singled out for scrutiny, with policies put in place that focused specifically on reining them in. This time around, while some federal policy makers clearly have special concerns about for-profit colleges, higher education leaders in all sectors are feeling (and in many cases bristling at) heightened scrutiny from federal , state and other policy makers who see higher education as underperforrning and costing students and taxpayers alike too much. "I don't know anybody in our sector who doesn't think that the the '92 amendments, and all the trauma they brought about, ultimately had a positive outcome and changed the nature of quality assurance in this sector for the better--
though it was clearly something we resisted at the time," said Elise Scanlon, a Washington lawyer who spent nearly 20 years as an accreditor of for-profit colleges. "Right now it's hard to see what could come out of this round that would make things better for us, but it is clearly part of a push for better information about quality in all of higher education, at a time of increasingly scarce resources." Mood of the Meeting By many measures, the advocates for for-profit (or "private sector," as they prefer to call it) higher education who gathered here for the annual meeting of the sector's main advocacy group could be feeling good about where they are. Enrollments in the institutions have grown to nearly 10 percent of all postsecondary students, and the economic downturn of the last year has enrollments booming at the colleges. The exhibit hall at the meeting here was bristling with companies of all sorts seeking to sell their services to the institutions, a reflection of their steady and sturdy growth. Bottom line (as it were), business is booming. And yet, that very same enrollment growth-- and the fact that it is driven in significant part with Pell Grants and federal student loans-- has given new and added urgency to consumer advocates, federal regulators, and others who believe that the for-profit institutions are charging students too much for an education of inferior quality. (A series of critical news media stories have focused on dubious practices.) Those concerns have been at the forefront of the Education Department's push since last winter to consider a new mechanism for ensuring that vocational programs are helping their graduates find "gainful employment," among other rules aimed at bolstering the "integrity" of the federal financial aid programs. The department's favored approach, which would judge programs based on a ratio comparing the incomes of graduates to their monthly payments on their student loan debt, has been vehemently opposed by many career college officials, who say that instituting such a policy could force the closure of many programs and potentially cut off access to college for tens if not hundreds of thousands of students in them. Lobbyists for and leaders of the colleges have been feverishJy opposing the gainful employment regulation (as well as some of the department's other expected rules), arguing that department officials do not have sufficient evidence and/or justification to support the approach and urging the Obama administration to reconsider. They appear to have made at least minor advances in slowing down the department's progress in recent days. On Friday, the Office of Management and Budget placed a cryptic note in the Federal Register concluding that the department's proposed program integrity rules could have a major economic impact, a designation that requires the Education Department to strengthen the evidence it must provide to justifY the need for the regulation. That designation is believed to be a major reason why the Education Department has (according to reports from several sources Thursday, though unconfirmed by department officials directly) decided to hold the gainful employment proposal back from the set of proposed regulations it is expected to release a week from today. Chronicle of .Higher Education June 10, 2010 Pending Federal Rules Are Hot Topic at For-Profit CoiJege Gathering By Jennifer Gonzalez Las Vegas New federal rules that the U.S. Department ofEducation is now expected to propose next week are dominating many conversations here at the annual meeting of the Career College Association, which represents more than 1,400 for-profit colleges. Thousands offer-profit-college operators, financial analysts, faculty members, investors, and companies converged to take part in the three-day national conference being held by the association, which announced Wednesday that it will be changing its name to the Association of Private Sector Colleges and Universities. The rules, which will mostly affect the for-profit-college sector, cover an array of issues, including misrepresentation of consumer information and how to define a high-school diploma. The most-contentious issue has become a proposed rule, known as the "gainful employment" rule, that would withhold federal aid from for-profit programs whose graduates are likely to carry high debt-to-income loads. The department has said its goal is to crack down on colleges that overcharge and underdeliver in training students for jobs right after graduation. Similar issues are also gaining the attention of Congress. On Thursday, Sen. Tom Harkin, the chairman of the U.S. Senate Health, Education, Labor, and Pensions Committee, announced that his panel would hold hearings, beginning this month, to examine "issues related to the growing role of the for-profit higher-education sector, induding the scope and rapid growth of the federal investment in for-profit higher education and the corresponding opportunities and risks for students and taxpayers." Harris N. Miller, the president of the career-college association, said Thursday that the group welcomed the hearings. "The education landscape in America is shifting," he said. "Federal student aid in private-sector education is an incredibly important way to provide postsecondary access for all ." Standing-Room Only Because of the forthcoming federal rules' possible effects on the for-profit sector, it is not surptising that many of the sessions at the conference revolved around legislative and regulatory issues. One session went in-depth into the issue of how to compensate student recruiters without running afoul of the federal ban on paying employees based on how many people they enroll , while another gave attendees an overview of state issues facing for-profit colleges, such as complying with licensure fees and state grant eligibility. It was standing-room only at a session called "Neg Reg 2010: There Is a New Sheriff in Town I" with a number of attendees forced to stand outside the door and listen from the hallway. The panel gave an overview of the 14 rules the federal Education Department plans to unveil. Sharon H. Bob, a higher-education consultant at the Washington-based law firm ofPowers Pyles Sutter & Verville, urged the attendees to take full advantage of the 30-to-40-day comment period that will begin after the department releases its rules to make sure the department understands all the concerns of the for-profit sector. "You want the full weight of the sector on the issues," she said. The panel left the most-contentious issue, "gainful employment," last for discussion. A hush came over the room when the panelists finally started talking about it. The Higher Education Act of 1965 requires that proprietary and vocational colleges, other than those clearly designated as "liberal arts" and vocational programs not designed to lead to a degree, provide "an eligible program of training to prepare students for gainful employment in a recognized occupation." Compliance with the rule is a conrution for those colleges' students to be eligible to receive federal financial aid. The higher-education act does not define "gainful employment" as described by the proposed rule. So the Education Department set out to do that late last year, convening a panel that included consumer advocates, for-profit-college officials, and student advocates to re-examine the rule. At Thursday's session, Elaine Neely, senior vice president of regulatory affairs at Kaplan Higher Education Corporation, said the department has never produced data supporting the need to define "gainful employment." The department's most-recent draft of the "gainful employment" rule would bar federal aid for programs where a majority of the students' loan payments would exceed 8 percent of graduates' expected earnings based on a 10-year repayment plan. In April the career-college association released a report on a study of more than 10,000 for-profit college programs. It estimated that nearly one-fifth of those programs would become ineligible for federal student aid and forced to dose under the proposed rule. Ms. Neely urged for-profit college operators to talk with nonprofit colleges to find out how the rule would affect them. "This is a slippery slope that traditional schools need to be aware of," she said. Another panelist, Lawrence Brown, president of Beam Reach Education, which focuses on acquiring and developing specialized trade schools, said everyone agrees that graduates of a career college should leave gainfutly employed, but he has a problem with the department "picking arbitrary numbers" to define what that means. A lot of heads in the room nodded in agreement. He said if the issue is that much of a problem, then Congress, not the department, should deal with it. Jitters and Advocacy The talk of gainful employment was inescapable at the convention, which, the association said, is set to break records, with an estimated 2,500 attendees. Outside the exhibit hall, financial analysts talked among themselves about the forthcoming rules. Some said they were jittery about the proposals and how they might hurt profits. Talk of the rules spilled into elevators and even the casino, with a conference attendee making a joke about the rules before playing a hand during a poker game. A newly foimed group called Students for Academic Choice says it will represent the interests of career-college students and graduates. At the conference, the group's leaders said their first order of business was to send Education Secretary Arne Duncan a letter expressing their concern about the proposed gainful employment rule. The group said the proposal would adversely affect hundreds of thousands of students. The group has gathered over 32,000 signatures for the letter. Dawn Connor, a student at Globe University in Wisconsin and the group's president, said the proposed rule would take away a student's choice of where to attend college. Ms. Connor said the group plans to put together a full public-policy agenda in the future. She said the voice of students who attend for-profit colleges has been overlooked and unheard on issues and that the new student association wants to change that. Jane A Nickles, an instructor at Le Cordon Bleu College of Culinary Arts in Austin, Tex., says discussion of the proposed federal regulations has just started to trickle down to faculty members. She says some instructors are concerned about how the rules may affect them. However, Ms. Nickles said she planned to attend sessions on faculty development and teaching rather than those dealing with legislative or regulatory issues. She will lead a session on Friday called "Teacher Vs. Twitter" that focuses on how to better engage students in the classroom. She said she is dealing with tech-savvy students with short attention spans and will tell instructors that "We have to be as engaging as video games." From: James Bob To: Finley, Steve CC: Date: 9/24/2010 9:47:36 AM Subject: FW: Higher Ed Watch: Week of September 20- September 24 l"'"'"'po"''" I Robert H. James Liaison for Career Institutions of Higher Education U.S Department ofEducation FAX: 317-257-2098 Call first Cell Phone #202-557-5835 D.C.# 202-377-4301 Indianapolis Office 317-257-2098 8527 Quail Hollow Road Indianapolis. IN 46260-2208 -----Original Message-----
From: Higher Ed Watch [mailto:higheredwatch@newamerica.net] Sent: Friday, September 24, 2010 9:46AM To: James, Bob Subject: Higher Ed Watch: Week of September 20- September 24 NAF Header Below is a summary of items published this week on Higher Ed Watch (www.higheredwatch.org ). If this alert does not interest you, let us know and we'll remove you from our weekly e-mai l list. HEW Logo Higher Ed Watch September 20- September 24 A Name Change That George Orwell Could Have Dreamed Up Stephen Burdi September 23, 2010 Take note Higher Ed Watch readers, it is no longer pol itically correct to call proprietary schools "career colleges." From now on, they are to be referred to as "private-sector" colleges. At least that's the word that has come down from the lobbying organization formerly known as the Career College Association. On Wednesday, CCA officially changed its name to the Association of Private Sector Coll eges and Uni versities. So does this name change portend a major shift in the association's priorities --like, for instance, encouraging their members to reduce their dependence on federal subsidies? Not a chance. In fact, judging from internal CCA strategy documents that Higher Ed Watch obtained this summer, the association appears only to be getting more aggressive in seeking out new sources of federal funding for their institutions. More ... Other Education Posts The Status of the Education Jobs Fund GAO Releases Report on Uses ofEducation Stimulus Funds Proposed Rules Will Shake Up Head Start Questions on the State ofPre-K in the States Dept ofEd Announces 'Promise Neighborhoods' Planning Grantees Guest Post: Gauging Gainful Employment Ben Miller! September 21, 2010 Newspaper readers across the country have been greeted this week with full-page color ads featuring large pictures of smiling nurses, medical assistants, and mechanics under the headline "I don't count? Some in Washington think I don't." The ads warn that new Gainful Employment regulations that the U.S. Department ofEducation has proposed would put 100,000 people out of work and eliminate educational opportunities for up to one million low-income and minority students. This ad campaign is funded by Corinthian Colleges, a for-profit higher education company that could have a lot to lose if these regulations-- which would penalize proprietary schools for saddling students with more debt than they can pay back-- go into effect. So it should come as no surprise to readers ofHigher Ed Watch that the ads' claims are a bit hysterical.I recently conducted my own analysis of the Education Department's proposed gainful employment rule by looking at the pricing, repayment rates, and estimated salary information for over 12,600 proprietary school programs. I found that, under these standards, only a small share of programs would be in danger of being removed from the federal student aid programs. More ... The Washington Post's "Class Struggle" blog recently named Higher Ed Watch and its sister blogs Early Ed Watch and Ed Money Watch to be among the best education blogs in the country . We are grateful for the recognition. Join our Mailing List! Forward email Safe Unsubscribe This email was sent to bobjames@ed.gov by higheredwatch@newamerica.net. Update Profile/Email Address !Instant removal with SafeUnsubscribe ™ I Privacy Policy . Email Marketing by New America Foundation 11899 L St. NW I 4th Floor I Washington I DC 120036 l(b)(S) I From: Macias, Wendy Sent: Thursday, July 16, 2009 9:55AM To: Bergeron, David Subject: Neg reg comment excerpts (b)(5) From: Macias Wendy To.: Finley, Steve CC: Date: 7/16/2009 11:49:30 AM Subject: FW: Neg reg comment excerpts FEC (CHGO) Freedom of Information Act Release Fec (CHGO) FOIA ReleaseResponsive Document – CREW Open Records Request to Texas AG on Mallinckrodt PLC 4-22-16DOC160718-20160718170912CREW Public Records Act Request - Trump University, Trump Foundation (Response) - 2Public Records Act Request - Trump University, Trump Foundation (Response)CREWUSDA 1-24-14 (Bees) ResponseCREWCREWCREWCREWCREWIRS (Public Policy Positions) - Request ExhibitsIRS (Public Policy Positions) FOIATreasury FOIA Response 6-8-11FOIA 2016-61 - Affadavit of Gabriel S. Joseph IIIFL Open Records Request - And Justice for AllFL Open Records Request - AGPublic Records Act Request - Trump University, Trump FoundationPages WithheldAG ResponseAG MemoLegal Support for NSA ActivitiesLegal Review of Stellar Wind
Responsive Documents - CREW: Department of Education: Regarding For-Profit Education: 8/17/2011 - 11-00026-F GE Release 8.16 by CREW31 viewsEmbedDownloadDescriptionOn July 23, 2010, CREW filed a Freedom of Information Act (FOIA) request with the Department of Education seeking records of communications between Education officials and individuals and entities ...On July 23, 2010, CREW filed a Freedom of Information Act (FOIA) request with the Department of Education seeking records of communications between Education officials and individuals and entities prominent in the for-profit education industry and individuals who may have publically criticized the industry for personal financial gain. Recent news reports document the efforts of several individuals to garner support for tighter regulation of the for-profit education industry by the Department of Education while at the same time concealing that they stand to reap personal financial gain from more restrictive regulations. Education just proposed new regulations for the industry and CREW seeks to learn, in part, to what extent Education may have been influenced by the efforts of individuals and entities with undisclosed financial conflicts of interest. On September 30, 2010, CREW sent a Freedom of Information Act Request to the Department of Education seeking documents pertaining to four for-profit education companies in light of Education's decision to postpone issuance of new regulations to seek more outside input. CREW seeks to learn the extent to which Education's proposed regulations and policies in this area have been influenced by either the for-profit or non-profit industries.Interests: Types, Government & Politics, Public NoticesRead on Scribd mobile: iPhone, iPad and Android.Copyright: Public DomainDownload as PDF, TXT or read online from ScribdFlag for inappropriate contentShow moreShow less
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