For Profit - Part 3: The Evidence is Clear

Summary

Campus Files: For Profit - Part 3: The Evidence is Clear
Release Date: May 28, 2025
Host: Ian Mott (Audacy)

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Introduction to Borrower Defense

In the final installment of the Campus Files for-profit series, host Ian Mott delves into the critical issue of Borrower Defense to Repayment—a legal provision designed to offer loan forgiveness to students deceived by for-profit educational institutions.

Key Points:

• Borrower Defense Defined: Mott explains that borrower defense acts as a "refund," allowing students to have their loans forgiven if they took them out based on false representations by their schools.
• Historical Context: Introduced in the early 1990s, borrower defense saw minimal use until the expansion of for-profit schools highlighted its importance.

Notable Quote:

Ian Mott [02:52]: "Borrower defense to repayment or more simply borrower defense… if they knew about it, it could have changed everything."

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The Collapse of Corinthian Colleges and Its Impact

The shutdown of Corinthian Colleges in 2015 marked a pivotal moment, thrusting borrower defense into the national spotlight.

Key Points:

• Corinthian Colleges: Once operating over 100 campuses, Corinthian's abrupt closure left tens of thousands of students with substantial debt and worthless degrees.
• Regulatory Scrutiny: Investigations spearheaded by then-California Attorney General Kamala Harris revealed widespread deceptive practices within the for-profit education sector.

Notable Quote:

Ian Mott [05:22]: "As the industry grew, it became a victim of its own success."

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Teresa Sweet’s Journey and the Borrower Defense Process

Teresa Sweet emerges as a central figure in the fight for loan forgiveness, embodying the struggles faced by many students ensnared by for-profit institutions.

Key Points:

• Initial Struggles: Teresa accrued $140,000 in loans, which ballooned to $470,000 due to accruing interest during forbearance periods.
• Discovery of Borrower Defense: Inspired by a Facebook group, Teresa learned about the Borrower Defense provision and submitted her application in 2015.

Notable Quotes:

Teresa Sweet [06:34]: "There's a potential for a lawsuit about the halt in processing borrower defense applications. Would you be interested in talking to them about that?"

Teresa Sweet [08:17]: "I was pretty excited filling it out… bending toward justice."

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The Sweet v. DeVos Lawsuit

As the political landscape shifted with Donald Trump's election, Teresa Sweet became the lead plaintiff in a landmark lawsuit against the federal government, represented as Sweet v. DeVos.

Key Points:

• Betsy DeVos' Role: Appointed as Secretary of Education, DeVos opposed debt cancellation and implemented stricter borrower defense rules, significantly reducing approval rates.
• Lawsuit Progression: Initially aimed at clearing the backlog of applications, the lawsuit evolved to challenge the validity of DeVos' rule changes, especially after discovery revealed intent to deny applications at unprecedented rates.

Notable Quotes:

Teresa Sweet [16:38]: "You made this commitment. This is something that affects tons of people."

Eileen Connor [09:35]: "Betsy DeVos is ideologically opposed to the idea of debt cancellation… appointed senior officials who had very close direct financial ties to the for-profit college industry."

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Discovery and Evidence of Department of Education's Practices

Through the discovery phase, Eileen Connor and the Project on Predatory Student Lending (PPSL) uncovered alarming practices within the Department of Education under DeVos.

Key Points:

• Rapid Application Review: Attorneys were instructed to process applications in approximately 12 minutes each, targeting a 90% denial rate.
• Dismissal of Evidence: Even when departmental investigations found fraud, this evidence was disregarded, making it nearly impossible for deserving applicants to receive relief.

Notable Quotes:

Eileen Connor [19:55]: "We could ask behind the curtain for documents, we could take depositions of people… what we saw really changed the case."

Ian Mott [11:19]: "What Jason failed to mention is that third party applications require a very high standard of proof…"

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Biden Administration and the New Settlement

With the election of President Biden, there was a significant shift in policy and approach towards borrower defense, culminating in a favorable settlement for borrowers.

Key Points:

• Policy Reversal: The Biden administration moved swiftly to reinstate and streamline borrower defense processes, facilitating the approval of applications from thousands of students.
• Settlement Approval: In November 2022, a new settlement was approved, offering substantial relief to borrowers and marking a victory for advocates like Teresa Sweet.

Notable Quotes:

Teresa Sweet [22:00]: "It was a party in the streets… we finally got something that we thought was fair and it was real."

Ian Mott [22:16]: "Whenever I'm having a crappy day… absolutely 100% worth it a million times over."

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The Future of Borrower Defense: Perspectives from Industry

Despite the settlement, the battle over borrower defense is far from over. Industry representatives argue against the current framework, advocating for more restrictive measures.

Key Points:

• Jason Altmeyer’s Stand: As President and CEO of Career Education Colleges and Universities (CECU), Altmeyer asserts that borrower defense policies unfairly target for-profit schools and hinder legitimate students from receiving relief.
• Legislative Challenges: Altmeyer criticizes provisions like group relief and third-party applications, suggesting they can be misused to target schools based on political motives rather than genuine misconduct.

Notable Quotes:

Jason Altmeyer [26:17]: "Our concern… has evolved to be used in a way that it targets for profit schools… allow students who have not been harmed and have not been misled to also have their loans repaid."

Jason Altmeyer [27:56]: "We feel that the worst thing… would have been for those rules to continue and they're going to be struck down by the courts."

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Industry Counterarguments and The Path Forward

Jason Altmeyer and industry representatives continue to challenge borrower defense regulations, seeking to reshape the policies to their advantage.

Key Points:

• Arguments Against Current Rules: Altmeyer contends that borrower defense is weaponized against for-profit institutions and that policies like third-party applications are susceptible to abuse.
• Legal Battles: For-profit schools have successfully challenged Biden-era rules in the courts, with the latest cases potentially reaching the Supreme Court to determine the future of borrower defense.

Notable Quotes:

Jason Altmeyer [29:37]: "We're very optimistic that we're going to get an opportunity to make that case."

Ian Mott [30:45]: "…for borrower defense to be basically destroyed…"

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Closing Thoughts and Personal Reflections

The journey of individuals like Teresa Sweet underscores the profound personal and financial impacts of for-profit educational institutions and the importance of robust borrower defense mechanisms.

Key Points:

• Personal Impact: Teresa reflects on her graduation day, unaware of the challenges to come, and the eventual relief and justice achieved through her relentless fight.
• Ongoing Struggle: Despite significant victories, over 770,000 borrower defense applications remain pending, highlighting the continuing need for reform and support.

Notable Quotes:

Teresa Sweet [37:09]: "I just didn't know what was around the corner."

Teresa Sweet [38:17]: "I'm just glad I got to have that moment…"

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Conclusion

The episode "For Profit - Part 3: The Evidence is Clear" offers a comprehensive exploration of the borrower defense to repayment process, the systemic issues within the for-profit education sector, and the ongoing legal and political battles that shape the future of student loan forgiveness. Through personal stories and expert insights, Campus Files illuminates the enduring struggle for educational integrity and financial justice.

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Notable Contributors:

• Ian Mott: Host and Reporter
• Teresa Sweet: Lead Plaintiff in Sweet v. DeVos
• Eileen Connor: Founder of the Project on Predatory Student Lending (PPSL)
• Jason Altmeyer: President and CEO of Career Education Colleges and Universities (CECU)
• David Halperin: Education Analyst
• Margo Gray: Co-Producer

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For more episodes and to follow Campus Files, visit Audacy’s Campus Files. If you have tips or story ideas, email [e-mail].

Transcript

[Ian Mott]

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[David Halperin]

Not much money is spent on education. A lot of the money goes to advertising and recruiting.

[Emma Greed]

I enter my recruiter's office and he.

[Ian Mott]

Is angry and he turns to me and he goes, I am so sorry. These people are liars.

[David Halperin]

The for profit college industry ran W in the 2000s.

[Ian Mott]

50% of our income went to these loans for many, many years. Gaming borrowers from these schools is by design. It's intentional.

[Eileen Connor]

My experiences with education have been life changing and it was really a surprise to me to find out how how different other people's experiences could be.

[Ian Mott]

That's Eileen Connor. If you've listened to Campus Files for a while, you'll recognize Eileen from our past episode Trojan Course. In that episode we covered how her organization, the Project on Predatory Student Lending, also known as the ppsl, sued USC after they allegedly ripped off students by partnering with a for profit company to offload a chunk of their courses.

[Eileen Connor]

I knew that there were so many resources going into advocating on behalf of schools. It just felt like somebody needed to be the legal resource and like the passion standing up for students because they were the ones who weren't being considered at the table.

[Ian Mott]

In 2015, just a couple years after the PPSL was founded, there was a crisis in the for profit school industry. A crisis which brought attention to a little known law. A law which offered a crucial escape hatch for people like Mike and Ashley who you heard earlier in this series. It's called Borrower Defense to Repayment or more simply Borrower defense. In this third and final part of our for profit miniseries, we're going to take a look at borrower defense, what it is and why it's important. Because it is important. In many ways, the future of for profit schools as a whole are tied to the future of borrower defense. And right now, there's a battle playing out in the courts and the federal government, a battle which may determine the future of this industry for decades to come. I'm Ian Mott. This is Campus Files For Profit Part three. The evidence is clear. Over the last few episodes, you've heard about for profit schools and the ways they've manipulated students, leaving people like Mike and Ashley buried in debt for years. But during all that time, there was a lifeline available, one neither of them knew existed. It's called borrower defense. And if they knew about it, it could have changed everything.

[Eileen Connor]

This provision in the Higher act for borrower defense has been part of the direct lending program ever since it came into being as a demonstration program in the early 1990s.

[Ian Mott]

So what is borrower defense? Well, you can think of it as basically like a refund. The law allows students who take out a loan to have that loan forgiven. If they chose to take it out based on lies and deception, it's exactly what happened to Mike and Ashley. They could have applied to have their loan cancelled, but neither of them knew the law existed. In fact, there were less than 100 students who tried to use the law between 1994 and 2015. And that's because the sort of deceptive practices that borrowed offense was designed for weren't so widespread when the law was created. So it was kind of forgotten about. And there weren't many lawyers focused on the issue at the time. But that would change as for profit schools grew. Here's Eileen.

[Eileen Connor]

Essentially you have these giant behemoth chains of for profit schools sucking in a ton of money, creating a ton of debt, touching the lives of so many people. Over this time, they didn't get jobs, they couldn't repay their loans. It kind of caught up to these schools because their business model really relied on not being honest about what they were providing.

[Ian Mott]

As the industry grew, it became a victim of its own success. Earlier, Ashley told us about a class action lawsuit against her alma mater, the Brooks Institute, that was just one of many similar lawsuits. These stories kicked off investigations from watchdogs including Kamala Harris, who was at the time the California Attorney General. If you remember from our last episode, Harris investigated Corinthian Colleges, a for profit chain that operated more than 100 campuses. In 2015, Corinthian suddenly shut down. Her findings contributed to Corinthian's collapse. And that collapse was a turning point. Suddenly, tens of thousands of students had a mountain of debt and either no degree or a practically worthless one. So this moment brought borrower defense into the spotlight.

[Teresa Sweet]

So I actually learned about it from my good friend Bruce. He said, hey, there's this Facebook group. It's about borrower defense. And so he sent me a link and I went and looked at it.

[Ian Mott]

That's Teresa Sweet. Teresa was actually at the Brooks Institute at the same time as Ashley. And Teresa's story should unfortunately be pretty familiar at this point. She graduated with $40,000 in federal loans and around $100,000 in private loans. And just like Ashley, Teresa set up loan forbearance, which allowed her to pause making payments, but crucially, did not pause interest on her loans. She did that because she couldn't make payments while searching for full time work. So the loans just kept growing in the background. And all this time, Brooks, which had promised her substantial career counseling and connections, provided no support beyond links to Craigslist postings. She stayed in forbearance as long as she could between two or three years because she had no other choice. In that time, her loans grew from $140,000 to a staggering $470,000.

[Teresa Sweet]

At one point, they expected somehow that I was going to make payments that were bigger than what I actually brought home after taxes. I just would tell them, as they say, the math isn't mathing. And so I tried really, really, really hard to get them to work with me on some kind of reasonable payment, because I did want to pay the loans. I didn't want to go into default.

[Ian Mott]

Teresa struggled with that debt for years. So when Corinthian collapsed and everyone started talking about borrower defense, all of a sudden, it was the first moment of real hope Teresa had felt in a long time.

[Teresa Sweet]

I was pretty excited filling it out, because for all the difficulties that I know our justice system has, I was raised by a history buff and that whole, you know, moral arc of the universe and all of that stuff, bending toward justice. I still, to a pretty large degree.

[Ian Mott]

Believed that Teresa submitted her application in 2015. But she didn't realize that time was quickly running out, because in November of that year, Donald Trump was elected to the White House, and he planned to pick Michigan native Betsy DeVos to head the Department of Education.

[Teresa Sweet]

Knowing DeVos from being from west Michigan myself, I knew educators back home who had been dealing with her for decades and the sort of havoc that she was bringing to public education back home. And I just thought, this is going to be a disaster.

[Ian Mott]

Here's Eileen.

[Eileen Connor]

Betsy DeVos is ideologically opposed to the idea of debt cancellation. She stated publicly that she thought it was an attempt by students to raise their hands and get free money. Had herself been an owner of a for profit school chain. Appointed senior officials who had very close direct financial ties to the for profit college industry in her department.

[Ian Mott]

In the final few months of the Obama administration, the Department of education approved some 28,000 borrower defense applications, many from Corinthian students. But it's never that simple. Once the application was approved, they still had to track down each student's lender, actually cancel the debt, issue a refund, all of that. It's a long process and it doesn't end with just the application. Obama's team ran out of time. So when Betsy DeVos took charge, it became her job to oversee loan forgiveness. At first she actually tried to reinstate the loans, but courts ruled her plan was illegal, so she was forced to sign off on forgiveness.

[Teresa Sweet]

When the court finally ordered her to follow through with their group discharge, she actually signed the checks with extreme displeasure.

[Ian Mott]

Betsy DeVos While things didn't go DeVos way this time, that wouldn't stay the case for long. She halted the review of borrower defense applications and started overhauling the process. That was possible because the law that created borrower defense just says it exists, it doesn't spell out how it's implemented. That is left up to the Department of Education. So now Betsy DeVos, who opposed debt relief in general, was in charge of writing the rules and she tightened them significantly.

[Eileen Connor]

That's something that was really striking under the first Trump administration, is that they were clear the same amount of fraud is going to happen. We're just going to rewrite the rules so that 95% of people who apply are going to get rejected. They didn't have a problem with the fraud. They weren't going to do anything to make sure that fraud didn't happen and therefore we don't need borrowed defense. They just wanted to get rid of borrower defense.

[Ian Mott]

The way DeVos tightened the rules is really important. The main thing she did was raise the level of proof required. That may sound pretty sensible on the surface, but think back to when you were checking out colleges for yourself or your kids. Were you meticulously collecting, noting and recording everything a school said about itself? Do you still have the flyers you got in the mail. Can you prove what your tour guide told you while you were on campus? No. Oh well, under these rules, you'd be ineligible for relief even if your school engaged in the most extreme examples of deception. Teresa was in California while all of these changes were taking place, fighting against the rollback.

[Teresa Sweet]

We spoke in committee and I ugly cried and it was horrible. But I did have some legislators come up to me afterward and say I had no idea. Thank you for sharing your story. Please don't give up. At that same meeting we watched, I'm not kidding when I tell you this. The for profits and their lawyers showed up in luxury tour buses and like piles of icky attorneys in shiny suits start coming out and talking about, you know, how they're so wonderful and you know, they're a gift from the heavens because they work with alternative types of students.

[Ian Mott]

By 2019, almost 200,000 people were waiting for a response to their borrower defense application. And one day Teresa was put in touch with someone at PPSL who had been monitoring the situation.

[Teresa Sweet]

There's a potential for a lawsuit about the halt in processing borrower defense applications. Would you be interested in talking to them about that?

[Ian Mott]

So Teresa met with Eileen and the team at the ppsl. She didn't just agree to help, she stepped forward to become the public face of the fight for loan forgiveness. Theresa was about to lead a lawsuit against Betsy DeVos and the US government.

[Margo Gray]

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[Ian Mott]

Quince.comcampus In 2019, Teresa Sweet agreed to become the lead plaintiff in a major lawsuit against the federal government over fraudulent debt from for profit schools. Out of thousands of potential plaintiffs, Theresa was chosen because she'd already been fighting for loan relief. She had an enormous amount of debt, and she wasn't afraid to dive into the complicated details of a lawsuit. The case would bear her name, Sweet v. Devos. But Teresa didn't expect it would make her well known. After all, in most class action cases, the lead plaintiff rarely gets much attention.

[Teresa Sweet]

I figured probably some obscure education journals might follow it. When they told me, you'll probably have to do some media interviews and things like that, I just thought, okay, you know, I'm like a weirdly private person, so I didn't think it'd be a big deal. It was very soon after the lawsuit was filed, they called me and wanted to set up a first interview. And I said, well, who's the interview with? And they said, teen Vogue. And I just went, instant panic.

[Ian Mott]

Teresa had a moment of panic, but it didn't last long. She quickly pulled herself together and decided to use her new platform to keep fighting, not just for herself, but for everyone affected.

[Teresa Sweet]

It sunk into me. You made this commitment. This is something that affects tons of people in the same exact traumatizing way that has affected you. And you agreed to represent the class. And if that's what it takes, then you need to just suck it up and do it.

[Ian Mott]

That commitment was so important to Teresa because there were thousands of people waiting for an answer, and suddenly she represented all of them.

[Teresa Sweet]

There's a group on Facebook. I did not start it. I heard about the group and I went in there, kind of peeked around to be like, what's going on in this group here? And it turned out to just be people who were part of the lawsuit that, you know, were trying to connect and share information. And so that group went from a few hundred people to now it's around 16,000, give or take. So somewhere around 2,000 members. I had to shut off access to my DMs because there was no, literally no way I could respond to everybody.

[Ian Mott]

While Teresa got accustomed to being in the public eye, the lawsuit was progressing along. The goal initially was to get the department to finally process the backlog of applications.

[Teresa Sweet]

I went to all of the in person negotiating sessions, which as a non attorney, it's not how most people would choose to spend an afternoon. You know, I was fascinated because I was also really mad so that this thing had happened to me.

[Ian Mott]

By April of 2020, they had a draft settlement which Devos team had agreed to. They sent the settlement to the judge for his review. The draft agreement had been signed off on by the plaintiffs, including Teresa, and by DeVos team. All they needed was for the judge to approve it. But while they were waiting, Teresa received a letter about her Borrower defense application. It was denied.

[Teresa Sweet]

I remember when I got my denial, I actually rolled my eyes and laughed because I just thought, well, I'm the name plaintiff, they're just retaliating against me.

[Ian Mott]

But Teresa wasn't the only one. Thousands of others got denials at the same time.

[Teresa Sweet]

Seeing how it affected all of the other tens of thousands of people who got denials as well. I was fielding hundreds of direct messages a day and just seeing the heartbreak on people's faces and hearing the heartbreak in the stories that they would tell, you know, it was really upsetting.

[Ian Mott]

The mass denials were a big problem. They had an agreement with DeVos team. This wasn't supposed to happen. And on top of that, the rejection letters made no sense. The agreement required fair and reasoned responses to applications. But now devos was issuing blanket denials with no explanation. So Teresa and thousands of Borrowers were left in limbo, waiting to see what the judge would do.

[Teresa Sweet]

It was a very tense period of waiting. I think that was going to be sort of, I think everyone's first real test and everyone's kind of holding their breath and waiting to see, well, we know this nonsense is happening now. What is the court going to do? And he came up and said how it played out was disturbingly Kafkaesque. I think that was when we knew that the court wasn't going to put up with any nonsense.

[Ian Mott]

In a zoom hearing with more than 500 borrowers, the judge said that Devos had negotiated in bad faith and declined to approve the settlement. The judge then took a somewhat unique step by allowing for discovery. Here's Eileen explaining what that meant.

[Eileen Connor]

We could ask behind the curtain for documents, we could take depositions of people, and I think what we saw really changed the case.

[Ian Mott]

Remember, the lawsuit was initially just asking devos to finally review the applications after they sat virtually untouched for years. But discovery provided an incredible opportunity to see how the department planned to actually handle these applications. Eileen's team learned that attorneys were expected to review an entire application in only about 12 minutes. That the department aimed to deny at least 90% of applications, seven times more denials than under Obama. Attorneys were also told to ignore sworn statements from borrowers, even when multiple applicants from the same school described the same lies and deception. And maybe most frustrating of all, in. In cases where the department itself had penalized a school for misconduct, evidence of that misconduct is ignored. So even if DeVos own investigators find consistent fraud, as happened on multiple occasions, that evidence can't be used. Essentially, the rules of borrower defense were tightened so much that it was nearly impossible to get relief. Armed with this information, the PPSL amended their lawsuit to demand a more fair process. In the midst of this, Trump lost his bid for reelection. But the lawsuit didn't stop just because Trump left office. The applications still needed to be reviewed and to be reviewed in a fair way. When Biden took over the White House in 2021, the change was almost immediate.

[Teresa Sweet]

It felt like the Trump DOJ was very like, it was just standoffish, almost like dismissive. I very much had this gut feeling that they didn't want to work it out, whereas I felt like things changed under Biden, where, yeah, there were still definitely some disputes happening, but I felt like they wanted to get somewhere.

[Ian Mott]

By the middle of 2022, Biden's Department of Education and the PPSL had reached a new settlement. And finally in November of that year, the settlement was approved.

[Teresa Sweet]

All hell broke loose. It was a party in the streets. It was a party on the Facebook page. You know, we had like, posts of dance music threads going and party music. And it just, you know, it was a really good feeling that after all of that, we finally got something that we thought was fair and it was real.

[Ian Mott]

For Teresa, it was a cathartic moment. For years, she'd been the face of this struggle and had heard from hundreds of people about how they were harmed by for profit schools.

[Teresa Sweet]

There's one story that always really stands out to me and it happened about a year and a half ago. I had this gentleman tag me in the Facebook group and say, you know, I know that you don't check your DMs, but could you please, please look for a DM from me? And I went and I looked. He said that he got his discharge that day and he was so happy because he had terminal cancer. And he said I'm lucky because it's a slow one. But now that I got my discharge and I going to get my refund, I get to quit my job and I get to spend the last of my days on earth with my family, I think about that guy all the time. All the time. Whenever I'm having a crappy day, I think about that guy and I know he's not alone. You know, people that know I can get my knee surgery because I can finally afford my co pays or like, oh my gosh, I can get that rotten wisdom tooth pulled, I can buy a house, I can start a family that makes every single bad part that ever came out of this absolutely 100% worth it a million times over.

[Ian Mott]

The settlement was a huge victory for borrowers, but there was still a mountain of applications to Review. More than 770,000 as of 2023. This story isn't over yet because for profit schools weren't going to stand by and let this new process stand.

[Teresa Sweet]

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[Ian Mott]

That'S still more clear.

[Teresa Sweet]

At one year with monthly dosing.

[Ian Mott]

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[Teresa Sweet]

Ask your doctor about eglis and visit ebgliss.lilly.com or call 1-800-lilyrx or 1-800-545-5979.

[Ian Mott]

This episode is brought to you by State Farm. Knowing you could be saving money for the things you really want is a great feeling. Talk to a State Farm agent today to learn how you can choose to bundle and save with a personal price plan. Like a good neighbor, State Farm is there. Prices are based on rating plans that vary by state. Coverage options are selected by the customer. Availability, amount of discounts and savings and eligibility vary by state. The last couple decades have been a time of monumental growth, pushback and conflict over for profit schools. And now in 2025, things are coming to a head in a major way. A case currently working its way through federal courts may permanently change borrower defense, and attempts to dismantle the Department of Education may remove many key guardrails. So before we wrap up this mini series, I wanted to take a moment to talk about what the future may look like for both borrower defense and for students of for profit schools. And to better understand that, I contacted Jason Altmeyer.

[Jason Altmeyer]

Here's Jason I am the President and CEO of Career Education Colleges and Universities. We represent about 800 campuses across America of career and technical schools, mostly for profit schools.

[Ian Mott]

Jason was a health care lobbyist before joining Congress, where he was one of the few Democrats to repeatedly vote against the Affordable Care act or Obamacare. After he left Congress, Jason got a job at a Florida health insurance company. Eventually, in 2020, he took over Career Education Colleges and Universities, a trade group also known by its acronym CECU or cq. I wanted to talk to Jason because now that we have a second Trump presidency, he's really well positioned to help craft policy as he sees fit, including policy around borrower defense.

[Jason Altmeyer]

Our concern on behalf of our members, again mostly for profit schools, is that borrower defense to repayment, usually during Democratic administrations, has evolved to be used in a way that it targets for profit schools and allow students who have not been harmed and have not been misled to also have their loans repaid.

[Ian Mott]

If you follow this issue, you'll hear that argument a lot. Lobbyists and owners of for profit schools complain about how unfair the rules under Democrats are. They'll point to policies like group relief, which Jason says allows a school to be politically targeted.

[Jason Altmeyer]

So rather than go one by one, if you get 200 claims and the department decides that one of those 200 claims has merit from the department's point of view, which of course is subjective, then all of those 200 claims are forgiven.

[Ian Mott]

They'll also point to third party applications, which allows someone to apply for relief for another person.

[Jason Altmeyer]

So you could theoretically go on LinkedIn, find a for profit school, whatever type of school, that maybe you have a political objection to, and find all the students who have an affiliation with that school, graduated, and file claims on behalf of them.

[Ian Mott]

Let's quickly work through these two critiques, starting with group relief. Now Jason says the department can cancel a batch of loans based on one extra persuasive application. In truth, group relief is for cases where a thorough investigation finds consistent and widespread abuse, like what Kamala Harris did with Corinthian. As for the claim that a random person could apply on behalf of students at a school they don't like, well, that's actually true. I went to Emerson College in Boston and we had a completely imaginary rivalry with Suffolk, a school right across the street from us. And as an Emerson alum, I could totally pick some random Suffolk student and apply for borrower defense on their behalf. But just because I can apply doesn't mean anything. What Jason failed to mention is that third party applications require a very high standard of proof, again similar to a thorough investigation like what Kamala Harris did. Nonetheless, Jason argues that these rules are unfair. For profit schools even sued to block the rules.

[Jason Altmeyer]

We feel that the worst thing that could have happened would have been for the Biden rules, which were punitive and political and weaponized against for profit schools. The worst possible thing would have been for those rules to continue and their going to be struck down by the courts.

[Ian Mott]

In any case, the for profits won the case and Biden's rules were blocked. Jason is now able to point to that ruling as proof that Democrats are unfair. But again, it's not so simple. The lawsuit was brought to one of the most profit friendly courts in the country, which tends to reject regulation of any kind. And the whole case becomes even less credible when you find out that this court's rulings are overturned almost 75% of the time. Either way, Biden's rules were blocked. All the extra avenues for relief were closed. But that might not be the end for the case. The next step would be the Supreme Court, which has the power to rule that entire laws are unconstitutional and therefore invalid. With Jason's support, the for profit schools have prepared a case asking for borrower defense to be basically destroyed. If they get what they're asking for, then borrower defense will still exist, but will be so hard to use that it becomes basically useless no matter who's president and no matter what Congress does.

[Jason Altmeyer]

We hope that in the next four years with this administration, we're not just going to overturn everything that President Biden did. We're going to review these issues, come to agreement across the higher education community, do what's in the best interest of students, most importantly, but also schools across higher education. And we're very optimistic that we're going to get an opportunity to make that case.

[Ian Mott]

Ultimately, this all comes down to one central do for profit companies even belong in higher education? Remember in part one of this series where we outlined the three types of schools in the US State nonprofit and for profit. The key takeaway was that both state and nonprofits at their core exist to educate as their sole objective. For profits, on the other hand, exist solely to make money. Jason says that that profit motive is a good thing.

[Jason Altmeyer]

You're only going to make profit if you're providing a high quality product. We offer a type of flexibility in innovation that does not exist in the nonprofit and public system. The ability of a for profit school to look at a problem, to work with employers to offer students a path to career success and use innovation in their programming and in the faculty and in their approach. You don't have the same resources and you don't have the same innovative mindset in some of those other settings.

[Ian Mott]

But it's a little hard to take that idea too seriously given what we've heard over the last few weeks. Here's David Halperin, who you heard in part one of this series.

[David Halperin]

The evidence is very clear that the opposite is true. Look at Ashford University. California Attorney General took that school to trial and showed that the school engaged in fundamentally deceptive behavior, that the quality education was poor. That school was bringing in a massive amount of dollars in taxpayer money. University of Phoenix at one time its online division had a 5% graduation rate. That school was bringing in at one time, $2 billion a year in taxpayer money. The Federal Trade Commission, the Justice Department, other agencies have repeatedly found the University of Phoenix has engaged in deceptive practices and it's made billions of dollars off taxpayers. What's been rewarded in this industry is fooling students, undereducating them and ripping them off. And that makes sense. The less you spend on education and the more you charge, the more profit you will make per student. And the only way to sell something that bad is through deception.

[Ian Mott]

And that deception has a real harm. Studies show students from for profit schools earned less after attending than before and that they are two to three times as likely to default on their loans. Remember what Mike and Ashley went through? Mike had to choose between groceries and gas. Ashley was laughed out of banks when trying to buy a home. While people like Mike and Ashley struggled, the owners and leaders of these schools prospered.

[David Halperin]

CEO of Corinthian Colleges had a fancy home that eventually went on the market. The most beautiful home in the Intermountain west with a children's art barn and other massive amenities. Some of these houses I've seen. The CEO of Globe University had his high school class come to reunion and I was able to see the photos of that massive luxury. The reason he was rich was on the backs of single moms, veterans and other low income people that his school had scammed.

[Ian Mott]

And that brings me to one final detail about this industry. In cases where a student gets a refund because they were lied to, I assume that the school refunds the money. That makes sense, right? But with for profit schools, it's different. Not once has a school ever had to return federal aid money as a result of borrower defense.

[David Halperin]

The for profit schools act as if they're entitled to to the federal financial aid in perpetuity. It doesn't matter what they do, they should be able to keep the money. And that kind of attitude has infected the Department of Education. Whether the President is Democrat or Republican, you have to do something really bad with a mountain of evidence to get kicked out of the federal financial aid program.

[Ian Mott]

Given everything we've heard so far, the future seems bright for for profit schools. But for students, the situation is a bit more complicated. If these schools are allowed to operate without consequences, it's easy to see how that could harm students. But there is a silver lining. Back when Mike, Ashley and Teresa were students, organizations like the PPSL didn't exist. And student debt wasn't discussed so widely that legal support and the work of Mike, Ashley and hundreds of others has made a real difference. Mike, Ashley and Teresa all won student loan forgiveness through borrower defense, in large part due to the Sweet v. DeVos lawsuit. But there are still many thousands waiting for relief. At the start of our interview, I asked Teresa what it felt like to graduate from Brooks back before she knew how bad things would get. She said graduation was one of the best moments of her life.

[Teresa Sweet]

I thought I was going to be there alone. My sister had said she was going to try to come out, but she couldn't afford it. And I had asked my dad and he didn't think he could afford it either. And so one day I'm behind the bar, just working, and all of a sudden I hear my dad say my nickname. And I turn around and I almost jumped over the bar. And, you know, I remember they had all the graduates lined up outside of the theater where we were actually going to walk across the stage and get our diplomas. They had us roped off, and it was no parents allowed talk to your graduate after. And my dad did not care. He lifted up that rope and he ran behind it and gave me a hug and told me how proud he was. Just hearing my family yell and scream when I walked across the stage. It was probably one of the best experiences of my life. I felt like I had accomplished something. I just didn't know what was around the corner.

[Ian Mott]

And at the end of our interview, I asked her how she looks back on that moment, knowing everything that came as a result.

[Teresa Sweet]

So my dad, I'm really glad that he got to have that moment because he passed away before he could see me get out from underneath this. And he was so worried. You know, he saw how I struggled and how I couldn't find housing on my own and I couldn't get a car. And, you know, I had applied for a certain job that, you know, they would run a credit check and I'd get turned down because, you know, I have this $500,000 defaulted student loan sitting on my credit report. And so he knew that in many ways, it ruined my life. And he. He went to his grave not knowing that I was going to be okay. When I look back and I remember just like seeing my tough, grisly old dad, the big tears in his eyes and saying, you know, I'm so proud of you, Risa Bear. I'm just glad I got to have that moment.

[Margo Gray]

Campus Files is an Odyssey original podcast. This episode was written and reported by Ian Mont. Campus Files is produced by Ian Mont, Eliot Adler and me, Margo Gray. Our executive producers and story editors are Maddie Sprunkiser and Lloyd Lockridge. Campus Files is edited, mixed and mastered by Chris Basel and Andy Jaskowicz. Special thanks to Jenna Weiss Berman, J.D. crowley, Leah Reese, Dennis, Maura Curran, Josephina Francis, Kurt Courtney, Hilary Schuff, Shelley, 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].

[Emma Greed]

I'm Emma Greed, and I've spent the last 20 years building, running, and investing in some incredible businesses. I've co founded a multi billion dollar unicorn and had my hand in several other companies that have generated hundreds and hundreds of million of dollars. The more success I've had, the more people started coming to me with questions. How do you start a business? How do you raise money? How do I bounce back from failure? So it got me thinking. Why not just ask the people I aspire to the most? How did they actually do what they do? I'm so incredibly lucky to know some of the smartest minds out there and now I'm bringing their insights along with mine, unfiltered directly to you. On my new podcast, Aspire with Emma Greed. I'll dive into the big questions everyone wants to know about success in business and in life. Through weekly conversations. You'll get the tangible tools, the real no BS stories and undeniable little hacks that actually help you level up. Listen to and follow Aspire with Emma Greed An Odyssey podcast available now wherever you get your podcasts.