For Profit - Part 1: The Pain Funnel

Summary

Campus Files: For Profit - Part 1: The Pain Funnel

Episode Overview In the inaugural episode of the three-part series on for-profit colleges and universities, Campus Files delves deep into the murky world of profit-driven higher education in America. Hosted by Audacy, this episode titled "For Profit - Part 1: The Pain Funnel" unpacks the deceptive practices of for-profit institutions, illustrated through the harrowing experience of Mike De Giacomo. The narrative highlights systemic issues, regulatory failures, and the personal toll on students entrapped by misleading promises and overwhelming debt.

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Introduction to the For-Profit Education Crisis

The episode opens with a brief mention of Evan's troubling experience with USC's online social work program, which was secretly operated by the for-profit company 2U. This sets the stage for a broader exploration of for-profit education's detrimental impact on students nationwide.

"For over 30 years, a network of colleges and universities has preyed on America's most vulnerable students, luring them into taking out loans that they'll likely never be able to repay."
— Emma Greed [02:05]

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Mike De Giacomo’s Journey: From Hope to Despair

Mike De Giacomo's story is central to the episode, serving as a case study for the pitfalls of for-profit education. A former US Army supply and logistics specialist, Mike sought to transition into the gaming industry by enrolling in Gibbs College’s animation program.

• Initial Optimism and Deceptive Promises

  Mike was initially drawn to Gibbs College due to its proximity to his hometown and the enticing promise of job placement at Turbine, the company behind the popular game Acheron's Call.

  "It felt like it was meant to be, especially because Mike had attended a specialized vocational high school and already had digital art skills at a time when computer skills were relatively rare."
  — Ian Mott [05:12]

• Financial Misrepresentation

  During the admissions process, Gibbs College marketed financial aid through Sallie Mae, misleading students into believing they were accessing federal loans. In reality, Sallie Mae had shifted to offering private loans with higher interest rates and fewer protections.

  "It's no small monthly bill. But if Mike got a job at Turbine, or got his foot in the door in the industry, it would be worth it."
  — Emma Greed [08:14]

• Academic Disillusionment

  Mike quickly realized that the quality of education at Gibbs was subpar. Classes were basic, students lacked focus, and instructors seemed unprepared, raising red flags about the institution's commitment to genuine education.

  "When the teachers were going over lessons, it just seemed like they were reading from a book or they had no idea what they were talking about."
  — Emma Greed [10:42]

• Broken Promises and Increased Debt

  Promises of internships and job placements were either non-existent or misleading. Mike's supposed internship turned out to be menial tasks with a wedding videographer, contributing nothing to his career aspirations.

  "The animation courses were no better... The internship was a farce. When it came time for graduation, he was told his degree was in graphic design, not animation."
  — Emma Greed [12:27]

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The For-Profit Education Industry: An Overview

The episode transitions into a comprehensive analysis of the for-profit education sector, distinguishing it from public and non-profit institutions.

• Types of Institutions

  Ian Mott explains:
  "In the US there are generally three types of schools. First, we have public state schools... The second type is a non-profit school... Finally, there are for-profit schools."
  [22:05]

• Legal Responsibilities and Profit Motives

  Unlike public and non-profit schools, for-profit institutions are legally obligated to maximize profits for their owners, often at the expense of educational quality and student welfare.

  "For profit schools have owners that they exist exclusively to serve... Their primary purpose is to serve a public good, not to make money. Every major and minor decision they make should be guided by what is best for the educational mission. A for profit school, on the other hand, has the opposite responsibility."
  — Ian Mott [23:30]

• Growth and Regulatory Failures

  The episode outlines how the for-profit sector expanded significantly after the George W. Bush administration rolled back regulations, allowing these institutions to exploit federal financial aid programs.

  "They had spent the George W. Bush years convincing Congress to relax the rules that were supposed to protect students against for profit predatory education."
  — Emma Greed [25:36]

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Aggressive Recruitment Tactics: The Pain Funnel

A significant focus of the episode is on the manipulative recruitment strategies employed by for-profit colleges, designed to exploit students' vulnerabilities and drive enrollment numbers.

• Targeting Vulnerable Demographics

  For-profit schools primarily target low-income students who qualify for federal aid, funneling funds directly to the institutions rather than supporting the students' education.

  "For profit schools target low income students because they qualify for more federal aid money. And that federal aid goes directly to the schools, not to the students."
  — Ian Mott [27:03]

• The Pain Funnel Technique

  This persuasive method involves probing the applicant's personal struggles and leveraging their emotional pain to secure enrollment.

  "All of these schools had playbooks on overcoming objections... They had some variant of something called the pain funnel."
  — Emma Greed [27:01]

• High-Pressure Sales Tactics

  Potential students are subjected to relentless calls, false urgencies, and emotional appeals to sign up immediately, often without fully understanding the financial commitment.

  "They see the promise in you, and if you sign today, you'll be able to come. And if you don't sign, you might not get in. That's always a lie."
  — Emma Greed [28:12]

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Consequences of For-Profit Education: Debt and Disillusionment

Returning to Mike's story, the episode highlights the severe financial repercussions faced by students misled by for-profit institutions.

• Mounting Debt and Wage Garnishment

  Mike's loans ballooned as he accumulated both federal and private debts. His refusal to pay led to wage garnishment, stripping a significant portion of his income and forcing him into financial distress.

  "I had to have, like, $100,000 worth of debt somewhere... I didn't know which way was up at the time, and I was feeling."
  — Emma Greed [31:04]

• Long-Term Impact on Career and Well-being

  The financial strain prevented Mike from pursuing his desired career in animation, leading him to accept unrelated jobs and battle ongoing debt.

  "For the last 20 years, Mike has struggled with not just the financial impact of these loans, but the personal impact, too."
  — Ian Mott [31:48]

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Understanding Accreditation and the Deceptive Facade

A critical examination reveals that for-profit schools like Gibbs and the New England Institute of Art are accredited and recognized by the Department of Education, misleading students into believing they are legitimate institutions.

• False Sense of Security

  Accreditation serves as a veneer of legitimacy, making it difficult for students to discern the quality of education and the true intentions of the institution.

  "Many for profit schools use that fact as part of the pitch. We're accredited just like Harvard. We're accredited just like the University of Idaho."
  — Emma Greed [33:21]

• Complicity of the Department of Education

  The Department of Education’s accreditation process inadvertently supports these institutions, perpetuating their reach and influence.

  "The Department of Education itself is complicit in giving the student the sense that that's a good school that to attend."
  — David Halperin [33:21]

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Conclusion: The Broader Implications and Continuing Struggle

The episode wraps up by emphasizing that Mike’s ordeal is not isolated. Thousands of students annually fall victim to for-profit schools' predatory practices, resulting in lifelong debt and unfulfilled career aspirations.

• Call to Awareness and Action

  The narrative encourages listeners to recognize the red flags associated with for-profit institutions and highlights ongoing efforts by individuals like Ashley Pizzuti to combat the industry's exploitative nature.

  "These stories and more are told in the Hollywoodland podcast where true crime and Tinseltown collide."
  — Ian Mott [36:40]

"Many students enroll in schools in part because the school is accredited and recognized by the Department of Education... That's an assurance."
— Emma Greed [33:56]

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Looking Ahead: Upcoming Episodes

The episode teases the continuation of the series, promising to feature Ashley Pizzuti’s battle against the for-profit education system and further exploration of systemic issues.

"Please don't throw us to the wolves. That's next week on Campus Files."
— Ian Mott [35:17]

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Notable Quotes with Timestamps

• Emma Greed [02:05]: "For over 30 years, a network of colleges and universities has preyed on America's most vulnerable students, luring them into taking out loans that they'll likely never be able to repay."

• Ian Mott [05:12]: "It felt like it was meant to be, especially because Mike had attended a specialized vocational high school and already had digital art skills at a time when computer skills were relatively rare."

• Emma Greed [10:42]: "When the teachers were going over lessons, it just seemed like they were reading from a book or they had no idea what they were talking about."

• Ian Mott [23:30]: "For profit schools have owners that they exist exclusively to serve. This could be a wealthy family, an investment company, or shareholders on the stock exchange."

• Emma Greed [27:03]: "The applicant and their shame and leverage that to get them to buy."

• Emma Greed [28:12]: "They see the promise in you, and if you sign today, you'll be able to come. And if you don't sign, you might not get in. That's always a lie."

• Emma Greed [31:04]: "I had to have, like, $100,000 worth of debt somewhere... I didn't know which way was up at the time, and I was feeling."

• Emma Greed [33:21]: "We're accredited just like Harvard. We're accredited just like the University of Idaho. That's an assurance."

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Final Thoughts

Campus Files effectively sheds light on the dark underbelly of for-profit education, using Mike De Giacomo’s personal tragedy to illustrate broader systemic flaws. The episode serves as a crucial wake-up call for prospective students, policymakers, and educators to address and rectify the exploitative practices that have long plagued the for-profit education sector.

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Additional Resources

For those interested in exploring more about scandals in American institutions, Campus Files recommends listening to seasons 1-3 of Gangster Capitalism, covering topics such as the College Admissions Scandal, the NRA, and Jerry Falwell Jr. at Liberty University.

Contact and Further Information:
For tips or story ideas, reach out to [e-mail]‬.

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Produced By:
Campus Files is an Audacy original podcast, produced by a dedicated team including Ian Mont, Eliot Adler, Margo Gray, and others, ensuring high-quality storytelling and investigative journalism.

Transcript

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[Emma Greed]

Kept telling her how I was insecure financially. She said, you're not going to have to worry, trust me. She said, you just have to accept. I told her how it was advertised to me as number one. She said that that was a lie on the website and that almost all the students are let in. That's Evan. You heard from him a few weeks ago when he shared his experience with USC's online social work program. What Evan, his classmates didn't know at the time was that the program wasn't actually being run by usc. It was being run by a for profit company called 2U. As we were doing research for that episode, it became clear that Evan's story was just one part of a much larger issue. For profit education. It's a topic that we wanted to take a closer look at. These schools, they're notorious.

[Ian Mott]

Federal legislators have known about these shady behaviors for decades. Decades.

[Emma Greed]

For over 30 years, a network of colleges and universities has preyed on America's most vulnerable students, luring them into taking out loans that they'll likely never be able to repay. Anytime you have a program that's the.

[Ian Mott]

Size of the federal student aid program.

[Emma Greed]

It'S going to attract people who see it as a way to make money. While these schools rake in billions of dollars, it's the students who are left saddled with debt.

[Ian Mott]

And so I put together this very.

[Emma Greed]

Extensive Google form and we got just under 500 borrowers to fill it out and we were collectively $70 million in debt. Normally, on campus files, we bring you a new story every week. But this topic is too big to cover in just one episode. So over the next few weeks, we're bringing you a three part story about for profit colleges and universities in America. The series will be written and narrated by my colleague Ian Mont.

[Ian Mott]

I'm Ian Mott. This week on Campus Files for Profit Part one. The Pain Funnel. This story begins outside the classroom in the fantasy world of a video game.

[Emma Greed]

Long ago, a lone sorcerer saved the last of his kind from an unstoppable invasion. Acheron's Call was kind of like a knights and portals and wizardry and spells and archery game. The Empyrean left this world to a race of insects. The Ultho, like, I had a character that was good with swords and a bow. He went on these little advent and it was, it was pretty fun.

[Ian Mott]

That's Mike De Giacomo. Back in 2002, he was a supply and logistics specialist for the US army stationed in Alaska. By day, he jumped out of planes and tracked equipment. But off duty, his world revolved around a video game called Acheron's Call.

[Emma Greed]

It was actually referred to me by some people that played from the barracks. It was very popular amongst the other soldiers that were playing. They always updated it and everybody would rush to try to complete the update to see who could do stuff first or just like hang out with friends or, you know, it was a community thing, so it was fun.

[Ian Mott]

When Mike's time in the military was up, he was ready to leave his job, but not Acheron's Call. He was so hooked on the game that he actually set his sights on working for the company that produced it. But there was just one problem. The military, of course, does not train its soldiers on animation or game development. So when Mike left the army in 2002, he had a pretty good sense of what he wanted to do next. He wanted to be on the team that made Asheron's Call.

[Emma Greed]

It was owned by Microsoft, but ran by a company called Turbine, which was in Westwood, Mass. At the time.

[Ian Mott]

Mike grew up in Massachusetts, just outside Boston, practically next door to the offices of Turbine, the developers behind Acheron's Call.

[Emma Greed]

It was actually made near my house, not even probably two miles from my house. So it was kind of like one of those, like, full circle things. And I was like, oh, well, that'd be cool.

[Ian Mott]

It felt like it was meant to be, especially because Mike had attended a specialized vocational high school and already had digital art skills at a time when computer skills were relatively rare. But there was a hiccup. Turbine only considered applicants with an undergraduate degree, and a portfolio of animation work.

[Emma Greed]

And now, here are three good reasons why you should get off the couch and call Gibbs. Number one, they'll send you a free brochure about programs in graphic design, web design, animation, and multimedia. So my mom had seen the commercial for Gibbs college, or Kathryn Gibbs, as they called it, and she said that they had an animation program based on the commercials there. Doing this can open a door to the kind of future that you've always wanted. I was like, okay, well, that's cool. Let me. Let me look into it. Because as far as I know, I was the first from my family to go to college.

[Ian Mott]

Mike learned that Gibbs college had been teaching graphic design for a while, and they had just introduced a brand new animation program perfect for Mike. The icing on the cake was the location. Newbury street, Right in the heart of Boston's swanky back bay neighborhood. So Mike went in for an admissions interview. He was ready. He knew exactly what to look for and the right questions to ask.

[Emma Greed]

I tell him, basically, I'm looking to end up working in 3D animation, designing for turbine. You know, I used them as the example. And they said, oh, yeah, we have job placement there.

[Ian Mott]

It felt almost too good to be true. An animation program right near his hometown, plus job placement at his dream company. So when the interviewer told Mike they thought he'd be a good fit, he was over the moon. There was just one thing left to figure out. The cost. So he asked the interviewer.

[Emma Greed]

Financial aid said, you know, we have financial aid through sallie mae, our preferred federal lender, which seemed to be a term used a lot back then.

[Ian Mott]

Sallie mae, short for the student loan marketing association, was initially a government entity created to act as a middleman for federal student loans. But right around the time Mike was starting school, they cut ties with the federal government and began offering private loans. The problem with that is that many people still associated Sallie mae with federal aid. Few knew about the shift or the fact that these private loans had far fewer protections and a much higher interest rate. Mike didn't know any of this when he was applying. And why would he? Almost nobody pays attention to the fine print of student loans. Plus, Mike had the friendly staff in the financial aid office to walk him through it.

[Emma Greed]

Well, how much is this going to cost or whatever? Oh, no, we have financial aid, and it'll only be like 100 to 200 bucks a month for financial aid once you're done.

[Ian Mott]

It was no small monthly bill. But if Mike got a job at turbine, or got his foot in the door in the industry, it would be worth it. Plus, as a veteran, Mike had extra GI Bill funding, which could help pay for school without requiring him to take out as many loans. So after some reflection, Mike made the decision to sign up. He registered for classes and stopped by the financial aid office to get set up. With support, he signed a simple promissory note, basically just a legal document agreeing to pay back money in the future. And just like that, he was set up for aid from Sallie Mae. Mike started his first semester. But almost immediately, something felt off.

[Emma Greed]

You know, you're doing the basic classes, like, it kind of felt to me a little bit like I was starting at the bottom again. And I'm noticing a lot of the people that are in there with me are not as experienced or not even focused, so to speak. I remember there was one kid, he would bring stuff to school to sell, like electronics or auto parts, which was wacky.

[Ian Mott]

Beyond the subpar classes and beginner level students, yet another red flag appeared. Toward the end of his first semester, Mike was abruptly pulled out of class.

[Emma Greed]

So basically, they would go to you when you're in class. They would pull you out of class and say, hey, you need to sign up for this. You need to fill out, you know, apply to Sallie Mae or you can't go back to class.

[Ian Mott]

The paperwork was yet another promissory note, like the one he'd signed when he first started at Gibbs. The note, he was told, was just to finalize his financial paperwork for the next semester. Getting pulled out of class felt a bit strange, but he wasn't the only one. Other students were being called out, too, so he didn't overthink it. His focus was on classwork.

[Emma Greed]

When I did work hard, I. I think I hit the honor roll a couple times.

[Ian Mott]

But by the halfway point, Mike still hadn't started any 3D design classes. And after meeting with the department chair, he learned he'd been assigned the wrong class days. The animation professors taught on Tuesdays and Thursdays. He'd been assigned Monday, Wednesday, Friday. It was a pretty big oversight, given how clear he was about wanting to do animation in his admissions interview. But eventually, it was taken care of and he was placed in the right courses. Unfortunately, the animation courses were no better.

[Emma Greed]

When the teachers were going over lessons, it just seemed like they were reading from a book or they had no idea what they were talking about.

[Ian Mott]

What's more, it didn't seem like they were setting him up for success in the workforce.

[Emma Greed]

The program chair and People in there were pushing you towards doing a print portfolio. And I had heard for animation wise, they'd want you to have like a demo reel. I think I got in an argument with the program chair a couple times about it.

[Ian Mott]

Mike was still trying to sort out the demo reel by the time he reached the end of his curriculum. At this point, Gibbs required an internship as a way to get real on the ground experience.

[Emma Greed]

The internship teacher he was all about like, yeah, we're going to get you a paid internship at a TV studio. Which sounded incredible to me. Well, come to find out, when I showed up, it was a wedding videographer. And he said, oh, yeah, and I have this equipment in the truck. Help me unload the truck. So I'm going around doing, you know, these errands for him, and he's nowhere around me. I'm just doing errands. I get back and I guess he had gone mountain biking with his girlfriend at the time or something. And then the equipment, I know it was basically just cardboard boxes. There was laundry in them. So I was moving around his laundry.

[Ian Mott]

At this point, Mike was pretty fed up with Gibbs. He'd been placed in the wrong courses. His internship was a farce. When he asked for the promised help making a demo reel, he was told to do it on his own time. When he inquired about job placement support, they suggested he apply at Staples. And to top it all off, when it came time for graduation, he was told his degree was in graphic design, not animation.

[Emma Greed]

I remember towards the end there, I was actually working in a supermarket. When I found out it was going to be graphic design, I skipped the graduation and mopped floors.

[Ian Mott]

Mike had walked away with a diploma but no real skills in animation, no industry connections and no clear path to his dream job. None of what he was directly promised. But soon an unexpected opportunity would come along and change everything.

[Emma Greed]

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[Ian Mott]

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[Emma Greed]

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[Ian Mott]

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[Emma Greed]

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[Ian Mott]

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[Emma Greed]

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[Ian Mott]

Mike de Giacomo graduated from Gibbs in 2005. He was disillusioned by the whole experience, but he figured he had just been dealt a bad hand.

[Emma Greed]

I felt like that was an isolated school, like it was just one bad school I picked.

[Ian Mott]

So when a friend mentioned another school that might be a better fit, Mike was intrigued. The school was called The New England Institute of Art.

[Emma Greed]

The name alone sounded prestigious because it kind of borrowed from MassArt, which was prestigious, which I had originally looked into.

[Ian Mott]

So Mike gave it another shot. He reached out to the Art Institute and landed an admissions interview. Right from the start, the school felt much more professional than Gibbs.

[Emma Greed]

I got called in and walked through like a gallery. They had, like, student work. I think there was success stories on the wall as well.

[Ian Mott]

And the more he learned about the program, the more it stood apart from Gibbs.

[Emma Greed]

Speaking with the representative, I had asked about the animation program. He had told me, hey, the program director there actually invented the way hair works in animation. Invented that technology.

[Ian Mott]

Finally, some real animation credentials. But Mike was still on guard after his experience at gib.

[Emma Greed]

I was nervous about the job placement situation because my experience at Gibbs, you know, I wanted to make sure I was good to go. When I said my goal, which was working for Turbine, he said, oh, yeah, not only do we have job placement at Turbine, we have job placement at Pixar, you know, and many other companies like that.

[Ian Mott]

Another reassuring difference was the interview itself. Looking back, the Gibbs admissions officers had almost felt too eager, too accommodating, almost like they'd take anyone. But this interview was tough. And while Mike doesn't remember the exact admissions numbers they cited, he does remember they told him it was highly competitive.

[Emma Greed]

When I heard I was accepted, I was over the moon and happy, like, oh, I'm gonna be able to turn my bad experience into an even better one. It was like a huge campus. It felt collegy, if that makes any sense. Gibbs felt like an office building that they just kind of moved into.

[Ian Mott]

But once he got inside the classroom, it turned out the schools had more in common than he expected.

[Emma Greed]

You know, you're in classes like, this is supposed to be a hard to get into program, and you're in with people that could barely draw like a face. There was one class that was like, supposed to be like the history of multimedia or something like that. I think it was. And it turned out to be a guy talking about his DVD collection. It didn't feel like a college class. It didn't feel like I was learning anything in that class.

[Ian Mott]

And once again, Mike found himself being pulled out of class to sign yet more promissory notes authorizing the school to take out more loans in his name. It felt strange, just like it had at Gibbs. But he had no frame of reference. None of his family members had gone to college. Maybe this is just how it works. He might have kept believing that if not for one professor, I was taking.

[Emma Greed]

A digital multimedia class, and I remember I really liked that class because the teacher was a really nice guy. But when he came into the class that day, he told us, you realize you're paying as much to go here as people pay to go to Harvard, and I hope you're getting your money's worth. What he said weighed with me, because he was actually an adjunct teacher who had also been teaching at Harvard. So I took that as a major red flag.

[Ian Mott]

Up until this point, Mike had no real sense how much he owed for Gibbs or the Art Institute. Sure, he knew he'd have loans to pay off, but the financial aid offices had always reassured him that there was nothing to worry about. The idea that his debt could rival the cost of a Harvard education had never even crossed his mind. But soon he was about to find out just how deep into debt he'd sunk. Member week is here at Lowe's. Don't miss your chance to get up to 40% off hundreds of items like paint, outdoor and home essentials and more. Shop our exclusive deals happening in store and online now through May 14th. Not a rewards member. Join for free today and get ready to save more. Lowe's. We help you save loyalty programs subject to terms and conditions. Details@lowe's.com Terms subject to change. She's made up her mind to live pretty smart Learn to budget responsibly Right.

[Emma Greed]

From the start she spends a little.

[Ian Mott]

Less and puts more into savings Keeps.

[Emma Greed]

Her blood pressure low low end credit.

[Ian Mott]

Score raises she's cutting debt right out of her life she tracks her cash.

[Emma Greed]

Flow on her spreadsheet at night Boring money moves make kind of lame songs but they sound pretty sweet to your wallet brilliantly boring since 1865.

[Ian Mott]

Mike withdrew from the Art Institute in 2006, and soon after, his first student loan bills arrived. And with them, a sinking realization. He'd been lied to. We'll hear more from Mike later in this episode, but first we're going to take a step back because Mike's story isn't unique. Every year, thousands of students find themselves trapped in a cycle of debt, paying off loans for schools that promised prosperity and opportunity, but delivered subpar education and a lifelong financial burden. So how did we get here? What exactly is a for profit school? Where did they come from? And how did this industry grow into a multi billion dollar machine? Let's start by defining what for profit schools even are and why that distinction matters. Stick with me for a second because we have to talk about legal responsibility, which I promise Is a key part of this story. In the US there are generally three types of schools. First, we have public state schools. Take the University of California system, for example.

[Emma Greed]

Home of the University of California, one of the largest and finest universities in the country.

[Ian Mott]

The UC system is legally accountable to the people of California. Its primary job is to provide an education as a public service. The second type is a non profit school. Take NYU or mit, for example.

[Emma Greed]

At the Massachusetts Institute of Technology. Perforated tape introduces the data.

[Ian Mott]

Nonprofits are legally responsible for addressing a specific social cause. All money taken in is reinvested into the organization, all to serve the nonprofit's mission, which in this case is education. Finally, there are for profit schools. Ever think you could be part of this?

[Emma Greed]

With the right training, you can.

[Ian Mott]

Not an artist, it doesn't matter. Unlike the other two cases, for profit schools have owners that they exist exclusively to serve. This could be a wealthy family, an investment company, or shareholders on the stock exchange. This distinction of responsibility and ownership is key. While state and nonprofit schools must of course remain financially stable and they set their tuition accordingly. Their primary purpose is to serve a public good, not to make money. Every major and minor decision they make should be guided by what is best for the educational mission. A for profit school, on the other hand, has the opposite responsibility. Their only legal obligation is to generate as much money as possible for their owners and to make more and more money every year. Every major and minor decision they make is driven by profit. Education is secondary.

[Emma Greed]

They have a pressure constantly from investors to report higher earnings. And that gives them a pressure to enroll as many students as they can. So that is bad for students. When someone has to keep going to Wall street every quarter and explaining profits are up, profits are down, it makes them want desperately to bring in new students.

[Ian Mott]

This is David Halperin. He spent most of his career in Washington holding impressive positions like Special assistant to the President for National Security affairs or presidential speechwriter for Bill Clinton. He's become an expert on for profit colleges.

[Emma Greed]

Not much money is spent on education. A lot of the money goes to advertising and recruiting, quite a bit. To paying for TV ads, to paying for Internet ads, to paying third party lead generators to hire armies of recruiters, to hire lawyers to get them out of trouble when they get in trouble for recruiting and lobbyists to try to prevent more strict rules that would make it harder to recruit.

[Ian Mott]

David first encountered the problem of for profit schools sometime around 2009, just after Mike decided to leave the Art Institute. At that time, David was at the center for American Progress, a think tank in D.C. around the beginning of the.

[Emma Greed]

Obama administration in 2009 and 10, I started to learn about the issue of for profit higher education.

[Ian Mott]

And what immediately stood out to David was just how massive yet mostly invisible this industry was.

[Emma Greed]

But what I learned was that this industry had gone crazy. It was getting about 10% of all US college students, 25% of all the federal financial aid, which amounted to $30 billion a year.

[Ian Mott]

The for profit education industry wasn't always this big. It's basically been around since federal funding for education was introduced in 1965. But there were always legal guardrails in place to limit the potential for profit. That was until the George W. Bush administration when lobbyists made major strides in rolling back regulations.

[Emma Greed]

They had spent the George W. Bush years convincing Congress to relax the rules that were supposed to protect students against for profit predatory education. The for profit college industry ran wild in the 2000s. So at its peak, the for profit.

[Ian Mott]

College industry was getting $30 billion a.

[Emma Greed]

Year from the Department of Education grants and loans and getting revenue something like 40, 45 billion dollars a year.

[Ian Mott]

Along with the rollback and regulations, for profit schools have also benefited from refined recruitment strategies. They mostly serve students with no other options and they've become very good at making that sell.

[Emma Greed]

You believe that a real college is interested in you and sees promise in you and can change your life. And this school really cares about it. It's a pretty good pitch if you start to resist. All of these schools had playbooks on overcoming objections. It's too much time. Well, we have flexible hours. I can't afford it. Financial aid is available. I really don't think I can do it. Don't you want your children to be proud of you? Aren't they ashamed? Now that you can't put food on the table, it becomes very manipulative. And many of these schools had some variant of something called the pain funnel.

[Ian Mott]

Where they would poke the pain of.

[Emma Greed]

The applicant and their shame and leverage that to get them to buy.

[Ian Mott]

For profit schools target low income students because they qualify for more federal aid money. And that federal aid goes directly to the schools, not to the students. So the more students they enroll, the more money they rake in. And veterans like Mike are an even bigger prize. In addition to federal loans, they bring in extra GI Bill funding. And these schools can be very aggressive when they try to recruit students.

[Emma Greed]

These schools are really not schools, they're call centers with some kind of a the near of a school attached to it.

[Ian Mott]

Back in November of last year, I Actually put myself on the mailing list for one of these schools. I won't name the school, but it's operated by the same company behind Gibbs, Mike's first school. They called me 46 times. The calls continued for more than four months, sometimes multiple in a day. Historically, these schools will do and say just about anything to enroll a student, including lying about job placement opportunities.

[Emma Greed]

So you treated well. You're taken around, you see some gleaming facilities, and then you're brought into a room and it's similar to when you're buying a used car. You're told this class is filling up, there's only one or two spots left, and that it's hard to get in. They see the promise in you, and if you sign today, you'll be able to come. And if you don't sign, you might not get in. That's always a lie. They'll take anyone, anytime.

[Ian Mott]

While schools rake in taxpayer dollars, students end up stuck with a bill, oftentimes for the rest of their lives. That was Mike's experience at both Gibbs and the Art Institute, both owned and operated by major players in the for profit space. When we last heard from Mike, he had decided to withdraw from the New England Institute of Art, operated by a for profit company called the Art Institutes. Mike withdrew after a professor pointed out that he had taken out enough loans to cover Harvard's tuition. After leaving, Mike found a temp job, ironically as a bill collector at a collections agency. But now that he's not enrolled, he's also no longer under the umbrella of deferment in general. While a student is still in school, loan payments are deferred. But once you're out, whether or not you've graduated, the bills start coming due.

[Emma Greed]

I remember I got a bill from Sallie Mae. It was like, what? Like, had to be 200, $300. It was high enough that I was like, that's high. But you know what I mean. They said it was going to be like that, that's fine, whatever. And I remember I paid it. Later on that month, I got another bill from Sallie Mae. It had to have been between 600 to $800. Plus. It was high enough that I was like, wait, this is more than people paying rent and I can't afford this.

[Ian Mott]

Mike was confused. So he thought back to those promissory notes he signed.

[Emma Greed]

They would slide the paperwork to you to fill out, like the promissory notes, and they would have you leave the amount blank. They say, oh, we'll fill that in for you. That was every Semester, So you didn't really know what you were sign up for. Which back then, you know, I thought it was a normal process.

[Ian Mott]

Completely without his knowledge, Mike had signed up not just for federal loans, but for private loans and a lot of them.

[Emma Greed]

At that point, I had definitely felt played. I just didn't know how to financially handle it. And I remember I disputed and kind of moved on with my life and kind of tried to forget.

[Ian Mott]

Mike refused to pay for the private loans. After all, Gibbs and the Art institute had completely misrepresented the aid he was signing up for. But as it turned out, he had little choice in the matter.

[Emma Greed]

Eventually, it started that they were garnishing me. I don't know if it was 33%, maybe 15%, but it was every single check.

[Ian Mott]

Wage garnishment allows a lender to take money directly from a debtor's paycheck. For the next two years, Mike watched as $10,000 was deducted from his earnings.

[Emma Greed]

It felt like a low point because I didn't know what to do. At one point, you're choosing between food and gas to get to work. You know, you're paying rent. And that garnishment doesn't take that stuff into account. They didn't even have to go to court. It was just like drawing it right out of your paycheck.

[Ian Mott]

Straight out of the army, Mike, in an honest effort to pursue a career that should have been in reach, was conned by two colleges. The cost of attendance was intentionally hidden and misrepresented. And the further he got from his time as a student, the more clear the situation became.

[Emma Greed]

It had to have been, like, $100,000 worth of debt somewhere. I didn't know which way was up at the time, and I was feeling.

[Ian Mott]

So desperate, and there was no help available to Mike. Legally, the debt was his, and it was something he'd have to carry for what looked like the rest of his life. For the last 20 years, Mike has struggled with not just the financial impact of these loans, but the personal impact, too. He was never able to secure a job at Turbine, and he had to find a career completely unrelated to the very expensive education he'd gotten.

[Emma Greed]

I blamed myself, you know, oh, I'm not good enough. And that's why these companies aren't calling me back. Or this is why it's Turbines not calling back, because I did, over a number of years, try to get their attention.

[Ian Mott]

Throughout all our conversations, Mike kept saying how he should have known something was off, how he should have done more research, how he should have seen the red flags. I suspect some of you had the same thoughts while listening. Oh, I feel bad for Mike, but I'd never fall for that. But before you write this off as the story of someone not doing their due diligence, let's take a step back and consider the bigger picture. Gibbs College and the New England Institute of Art weren't some fly by night operation. They were both accredited degree granting colleges. They met the legal standards to receive federal funding. They had all the hallmarks of a legitimate school. Here's David Halperin again.

[Emma Greed]

Many students enroll in schools in part because because the school is accredited and recognized by the Department of Education. The school has a good Housekeeping seal from the department. And indeed, many for profit schools use that fact as part of the pitch. We're accredited just like Harvard. We're accredited just like the University of Idaho. That's an assurance. So the Department of Education itself is complicit in giving the student the sense that that's a good school that to attend.

[Ian Mott]

Put yourself in Mike's shoes for a second. You're the first in your family to attend college and a college presents you with a program that is perfect for your goals. And the icing on the cake is that they have a federal lender to help cover the cost. Honestly, who of us wouldn't jump at that opportunity? Plus, you don't get to see the bill until you're done, so you'll probably stick with it because it feels like a waste to quit. You only get the degree if you stay till the end anyways.

[Emma Greed]

Like I've seen cartoons describing it really good where it'd be like a robber holding up a student loan document to sign and then the bank comes to rob you instead.

[Ian Mott]

Next up on Campus Files, the story of Ashley Pizzuti, a student of another for profit school. I enter my recruiter's office where he.

[Emma Greed]

Is hastily throwing all of his personal items into a box and he is angry and he turns to me and he goes, I am so sorry. These people are liars.

[Ian Mott]

Ashley has fought for years against this industry, working with the White House and legislators from across the country.

[Emma Greed]

We had our press conference and we had 70 other legislators that had signed on to agree that all the four processes, bad actors, should have their loans canceled. We are begging them. Like, do anything.

[Ian Mott]

Please don't throw us to the wolves. That's next week on Campus Files.

[Emma Greed]

Campus Files is an Odyssey original podcast. This episode was written and reported by Ian Mont. Campas Files is produced by Ian Ian Mont Eliot Adler and me, Margo Gray. Our executive producers and story editors are Maddie Sprunkheiser and Lloyd Lockridge. Campus Files is edited, mixed and mastered by Chris Basel and Andy Jaskiewicz. Special thanks to Jenna Weiss Berman, J.D. crowley, Leah Reese, Dennis, Maura Curran, Josephina Francis, Kurt Courtney, Hilary Schuff, Sean Cherry, Laura Berman and Hilary Van Ornam. Original theme music by James Waterman and Davey Sumner. If you have tips or story ideas, write to [e-mail] do you know what went down at the Viper Room the night River Phoenix died? Or how about the mysterious death of Brittany Murphy? Are you aware of how Steve McQueen escaped murder at the hands of the Manson family?

[Ian Mott]

The obsessive killing of Dorothy Stratton?

[Emma Greed]

The real life murder that inspired David Lynch's Twin Peaks? The three conspiracies surrounding Marilyn Monroe's death? These stories and more are told in the Hollywoodland podcast where true crime and Tinseltown collide. Hollywoodland is hosted by me, Jake Brennan, creator of the award winning music and true crime podcast Disgraceland. Follow and listen to Hollywoodland wherever you get your podcasts.