From: Shi reman, Bob

Sent: Saturday, May 01 , 201 08 :04 A M

To: Shelton, Jim
Subject: RE: Touching Base

,, _. (b)(6)
(b)(6)
In stead of
meTrylngTo exPTal n wnat I sai d or what I mea nt , pro bably the best thing would be f or you to
li sten t o my speec h and t hen we can t alk . Yo u can f ind it her e:
h t tp : / /do c s . google . c om/le af ?id ~aB x E eRDh60 k a_M2U2MGZkYWUt ZmMaMy0aNjJjlTgxNGltN2ElOThhMmY20GU4&
hl ~ en
- Bob

From: Shelton, Ji m
Sent : Sat ur day, May al, 2010 6: 57 AM
To: Shi reman, Bob
Subj ect : Tou ching Base
11 _" n _L

(b)(5)

Best,

Ji m

---_._------ -------- --- ---

Sent us ing Bl ackBerry

63
 From :
Sent :
To:
Subject:
(b)(5)

From : Joanne Weiss [joanne@gourdinfamily . com]

Sent : Monday, May 03, 2010 9:04 PM
To: Ka nter, Mart ha
Cc: Wei ss, Joann e
Sub ject : FW: Checki ng I n

Another conc er ned friend in the f or -pr of i t higher educat ion space. How shoul d we rep l y?
Joanne

From : Hugh son, Willi am [mailto :whughso n@devry . edu]

Sent : Friday, April 30, 2010 10:57 PM
To: j oanne@gourdinfamily . com
Subject : Ch ecki ng In

Hi , Joanne

Hope al l 's well with you and t hat you' r e enj oying your new j ob!

It' s been quite a wh i rlwi nd for me, moving to Chicago and get t ing set t led into my new j ob.
My two l i t t l e girls, now aged 3 Yo and 1 Yo are both doing wonderfully, and are the joy of my
life .

The arti cle below, about Bob Shi r eman's remark s t o state education r egulators , i s quite
concer ni ng t o me . Why does Bob th ink we serve our st udents poo rly? No one s eems t o think
t hat For d' s or Ap ple ' s increasi ng market share means t hat t hey are cor r upt or se rvi ng t heir
customer s poorly. In fa ct, quite to t he contrary, I t hi nk that most of us assume t he rea son
is that they are doing a bet t er j ob of appealing t o consumers who ha ve compl et el y fr ee cho ic e
as to whose product s t o purcha se . The f act t hat our Pell grant s ar e growing ref lects t he
same under ly i ng reality : that st udent s have free choi ce, and t hat they are choos ing us.
Why? For the same r eason t hat they are choos i ng Ford and Apple pr oduct s : we pr ovi de a great
educ at ion , in f ormat s whic h r ecogn ize the complex r ealities of our st udents ' lives, combi ned
wi t h outsta ndi ng st udent ser vi ces - in cl udi ng career serv ic es .

I have spen t a great deal of my f irs t seven mont hs with DeVry touring the 29 campuses whic h
re port t o me . At each campus, I st r es s t he impo r tance of pr ovid i ng outs tandi ng education and
outstanding st udent ser vic e . I also empha si ze t he i mport anc e of adheri ng str ic t ly t o our
regulatory compl iance gu idel i nes . I spend hour s spea ki ng wi t h st udents, fa culty and
admi ni strati on. About half of t he hundreds of students I have s poken wi t h t ol d me t hat t hey
chose DeVry because a boss, col league , fri end or famil y member r ecommended us . What better
evi dence coul d there be t hat we are se r ving our student s wel l ?

Our "competition" - primarily public institution s - j ust don't serve their students all that
wel l . All of us wis h t hey woul d, becaus e t hat would be better for soci et y . But they don' t.
I t seems to me t hat ED ought to be mor e conce r ned wi t h helping publi c inst itutions t o provi de
48
good education and service to t hei r st udent s t ha n wi t h gett ing mad at us beca use we do. Th e
sit uat ion seems very compa rable to t he pu blic sc hoo ls and t he teachers ' un i ons who get mad at
As pi re. Rat her ,t han waste t hei r t ime gett i ng mad at Aspi re, t hey ought t o s pend their t i me
and resources f i gu r in g out how to provid e better educat ion th emselves . If t hey did a good
job i n t he fi rst place, As pi re woul d never have come to be . The same is t r ue of privat e -
secto r post- secondary education.

I would very mu ch val ue your i nsights i nto t his, becaus e it is very conce r ni ng to me and my
col l eagues.

Th ank s!

Bill Hugh son

President, Heal thcar e Group
DeVry I nc .
3005 Hi ghl and Pa rkway
Downers Grove, Il 60515
Direct: 630-515-3138
Mob ile : 331-645 -3906

Our Purpose : Empowering our st udent s t o ac hieve t heir educational and career goals .

From: Ja mie Morley [mai l t o :jmorley@u sedu cat i oncor p. com]

Sent : Friday, Apr il 30, 2010 2:35 AM
To: Montgome ryX, Geo rge; Hu gh son , Wi lliam; Th omas Bloom; Jeff Ake ns
Subject: FW: In side Hi gher Ed: Shi rema n's contempt fo r accreditors

Thi s was forwar ded fr om ACr CS' r egu l at ory department . I high l i ght ed t he r efer ence t o DeVry .

Ja mie

Jamie Morley, ph. D.

Vice Pre s i dent , Academic Affairs

U. S. Ed ucat ion
1001 Mena ul Blvd. NE
Al buque rq ue, NM 87107
505 -353 -3931 phone/ f ax
505-514-6901 blac kberry
j morley@used ucat ioncorp.com< ma i lto:j mor ley@used ucationcor p. com>

Thi s mess age and /or any at tac hments cont ai n confident ial, non- publ ic in f ormation. Thi s
message should not be f orwar ded exc ept t o t hose per sons wit h a need to know s uc h i nforma tion
f or l egi t imat e pu rposes . If you are not the inte nded r eci pi ent s , please notif y se nde r and
delete th i s message from you r syst em.

From : Ant hony Bieda [mailto:ABieda@a ci cs.org]

Sent : Th ursday, April 29, 2010 7:25 AM
To: Director s
Cc: Commiss ioners
Subje ct : In sid e Higher Ed: Shi reman's contempt fo r accreditors

FYI . looks li ke we have some addit iona l out r eac h to do wit h fol ks i n hi gh places.

Anthony S. Bieda
AC ICS Direct or of Ext ernal Affairs
750 1st St r eet NE, Sui t e 980
49
Wa shington , DC 28882
282. 336.6781
202. 905 .6845 (ce l l)

"Empowering Workforce Edu cati on: 2818 ACICS l eadership Confe re nce & Meeti ng"
June 8th and 9t h - Pala zzo Reso r t , las Vegas Comp aring Hi gher Ed t o Wall St reet Apri l 29,
2010

Whenever worried l eaders of for - profi t col l eges have i mp l ied in r ecent months t hat the u .s .
Edu cati on Department is gunning for the instituti ons . of f ic ia ls of the f ederal agency have
di s couraged such t alk. <http: / /www.in sidehigh ered . com/news / 2999/86/16 / cca> of fe r i ng evenhanded
rh etori c about treating al l sectors t he same i n the ir push f or i nc reased accountability .

The wor ds have provided littl e reass ura nce t o the colleges , s i nce th ey haven't alway s seemed
t o square with the aggr essive app ro ac h<htt p://www. i ns i dehigher ed .com/ news/ 2919/84/21/gai nf ul>
t he Obama admi nistrat ion is taki ng i n rew riting federal r ules governing vocational and ot her
program s .

On Wedne sday, in a s peec h to st ate regulat ors who oversee f or - pr of i t col leges . the chief
arc hi tec t of th e Edu cati on Department ' s st r ategy , Robert Shi r eman, offe red a mu ch more
cr i t ic al as ses sment of the pri vat e secto r institutions than he has i n hi s publi c comments t o
date , according t o accounts given by severa l people who we re in th e r oom. He compared the
i nst it ut ions r epeatedly t o the Wal l St reet firms whos e behavi or l ed to th e f inan cial meltdown
and cal led them out indi vidu ally, one by one, fo r the vast and qu i ckly i ncreas i ng s ums of
f edera l st udent aid mon ey t hey are drawing down .

Wh ile Shi reman 's comments we re aimed most dir ectly at t he f or - pr of i t colleges themselv es ,
they may be most noteworthy f or hi s i ndictment of accreditat i on. higher educat ion 's system of
inst itut i onal peer r evi ew . In Shi rema n 's narr at i ve befor e t he annual
meet ing<http : / /www .nasasps . org/ con f erence/regi strati on-materials > of the National As sociation
of Sta te Admi nist r at ors and Superv iso rs of Pri vate Schools , the accredi ting agenci es are to
t he f or-prof it col leges what t he Wa l l St reet rati ngs agenci es were t o t he mi sbehavin g
fi nanc i al fi r ms : entit i es charged wit h r egula ting an in du stry th at has grown t oo qui ckly and
t oo complex f or th em t o cont rol , and that have an "inh erent conflic t of interest" becau se
t hei r existe nce depends on fin anci al cont r i but i ons from t hose t hey r egul at e .

Acc reditors la ck t he "fi repower" t o regul ate t he fo r- profi t sec to r. and the st ates and th e
f ederal gover nme nt don' t neces s arily have al l th e t ool s t hey need to do it eit her , Shi reman
sa i d. acco r ding to the not es of seve ra l in th e audience. That , he s ugges t ed, is why th e
Ed uc ation Department mu st toughen i ts rul es in the way it is now proposing .

Shirema n coul d not be reac hed for comment . and an Edu cati on Department s pokes man s ai d i ts
officia ls did not wis h to comment on t his art ic le.

To seve ra l people i n t he audience , Shi reman 's comments r e presented a mu ch more ca ndi d ( and
critica l ) appra is al of t he for -pr ofit sector th an he has off ered publ i cl y si nce he became
deputy und er sec ret ary of educa tion almost exac t ly a year
ago< http://www.i nsi dehighered .com/ news/2999/04/ 21/shi r ema n> . Ma ny s uppo rte rs of t he educat i on
companies f eared his appoi nt ment because they beli eved his tra ck r ecord as an advocate f or
l ow -income st udent s and a f oe of st udent debt woul d r esult i n a crac kdown on t he
i nstit ut ions . whose s t udents are di sproportionat ely needy and di sproportionat ely go i nto
heavy de bt <htt p: / / www .in sidehighered. com/news /2919/94/27/debt > t o fin ance their educat i ons.

But with Wa l l St r eet analyst s hangi ng on hi s eve ry

word< ht t p://www. i nsi dehighered .com/ news/2999/96/91/qt #299115> l ooking f or sni ppets t hat mi ght
t hrea t en t he publ icly traded companies ' stoc k prices. Shi rema n has oft en seemed t o go out of
hi s way t o avoi d si ngl i ng th e i nstit utions out fo r crit ic ism.
50
A typi cal quotat ion, f ro m last summer: <http: / /www . i nsidehighered. com/ news/ 2ee9/e6/ 16/cca>
"Our overall goa l at t he Depar t ment of Edu cat ion i n pos tsecondary education i s to make s ure
t hat st udents ... have the i nformat ion they need to make good choi ces , and t hat t hey have
good qual ity post secondary education that ser ves bot h t hem as st udents and taxpayers as
well, " Shireman said . " .. . I f the re i s not qua lity, we want to know about it and i f we can, we
want to do somet hi ng about it . Whet he r that i nvol ves a pub l i c i nstit ution, a nonpr of i t , a
for -pr ofit, a two -year, a f ou r -year , a trade program, whateve r type or sector of i ns t i t ut i on,
we want to do all we can to ma ke sure that we have good qualit y . "

Different Tone

I n hi s comme nt s Wednesday, Shi r eman laid out t he cont ext under l ying the Obama
admi nistration' s elevation of hi gh er educat i on as a cent r al focu s of its domest i c policies.
The economi c slide cr eat ed in part by t he collapse of t he cr edi t market s has s ent Americans
st r eami ng back t o college i n r ecor d number s, and has made it mo re imper at i ve t han ever t hat
more Americans get a hi gh er education to st r engt hen t he count r y 's economic base fo r the
fu tu r e , Shi reman sai d.

The admi nis tration has poured tens of billions of dollar s i nto Pell Gra nt s and r estru ctu r ed
the fe deral st udent l oan programs to t ry to en sure t hat America ns have access t o higher
educ at ion, Shireman s ai d Wednesday . Many publ i c institutions , f aci ng cuts i n t heir state
f undi ng, have had to l imi t or even cut their enrol l ment s, r educi ng t heir abi lity to meet t he
i ncreasi ng demand f r om st udents .

The for -profit col leges, by cont r ast , have stepped up , seeing t heir enrollme nt s expl ode --
and wi t h t hem, t he amount of Pe l l Grant money t hat f ollows t he st udent s to the i nstit utions,
Shireman s ai d . Anyone i n t he audie nce f r om Cori nt hian Col l eges? Shirema n as ked t he assembled
audience Wednesday.

A hand went up. The Califor nia -based f or- profi t hi gher ed company has seen its r evenue fr om
Pe l l Grant s grow by 38 percent in th e fir st t hree quarters of t hi s fi scal yea r compar ed t o
t he l ast one, he sai d. Anyone from DeVry? Forty-two percent inc rease, Shi r eman sa i d. ITT ?
St r ayer ? One by one, he ticked th r ough a li st of pub licly traded compani es, point ing out t he
i ncr ea s i ng amount s of fe deral money t he instit utions were collecti ng ("It wa s like fo urt h
grad e, with a teac her sc ol di ng st udent s over their grades, " sai d one perso n who wa s i n t he
room ) .

What are taxpayer s and st udents gett i ng in return fo r t hat investment ? Shireman asked. I t ha s
hi storically been up t o t he "triad" -- the t hree - headed r egul at ory sc heme i nvolvi ng t he
f eder al governme nt , st at e govern ment s and acc rediti ng age nci es -- to ensure acc es s, qua lity
and integrity i n hi gh er edu cation, he sai d.

But i s t hat regu latory system up t o th e job? To dr aw a par allel, Shi r eman noted that as t his
meeting wa s un f ol ding in St . Paul, politicians back in Was hington we re debati ng possi ble
r eforms of Wall St reet , to t ry to fix t he "fl awed" r egula t ory proces s t hat all owed Goldma n
Sachs and ot her pur veyors of subpr i me mor t gages to engage i n mi s behavi or t hat hel ped
devastate t he economy.

One major r eason t he process was f lawed, Shi reman s ai d, was because the bond rating agencies
t hat were s upposed to be judging t he r i ski nes s of t he fi na ncia l i nstrument s were s uppor t ed i n
l arge part by f ee s from the compani es th at were aski ng the agencie s to rate t he fi nancial
i nstr ument s - - "a clear, i nherent conflict of i nt erest, " Shi reman s ai d, accordi ng t o t he
accounts of seve r al in t he room.

On top of that i nherent conflict, t he ra ti ng s agencies have been st r uggl i ng to keep tabs on
i ndustri es t hat gr ew quic kly and adopted i nc r eas i ngl y compl ex practices, Shirema n said,
51
sugges ting t hat t he rati ngs agenci es l acked the "firepower" t o regu late the fi nancia l
markets .

In case anyone missed i t , Shireman drove hi s point home, point ing out th at higher educa t ion
accrediti ng agencies are made up of ( and f i nanci al l y support ed by) t heir member col leges, and
see it as t heir mis s i on both t o help t he instit uti ons "i mprove" and als o to ensur e, in what
i s essenti all y a subcont ract f rom t he f ederal gover nment, t hat t hey are of s uf f i cient
qual i ty . They are nonprof it , unli ke t he ra ti ngs agenci es , but they ar e run by the
inst i t utions t hey regul ate, in ways t ha t t he cr edi t age nc ies aren ' t .

The peer review natu r e of hi gher educat ion accreditation has an inherent conf l i ct of i nter es t
s imi l ar to the r atings agencies , Shireman sai d. Given t hat , he suggested , i t i s cr uci al fo r
state and federa l agencies, as the othe r two par t s of the t r i ad, t o ste p up the ir ro le i n
regulat i ng hi gher educa t ion .
But do st at e r egul ator s t hi nk t hey have t he "fi r epower" to keep t abs on t he big, growing and
compl ex pr i vat e market col lege sect or ? Shi reman asked the st ate of f i ci al s i n t he r oom . The
r esponse wa s underwhelming. "I don' t t hin k we fe el we have th e fi re powe r we need , " Shirema n
sai d, r eferri ng t o t he fede ra l gover nment ' s own powers , accor di ng t o member s of the audi ence .
The bot t om li ne of Shi reman's t al k, he said, was that "federal and st at e gov ernment s cannot
rely on accredit or s to ass ur e th at consumers and taxpayers ar e protec t ed to f ul l extent that
they need t o be . All three l egs" of the th r ee-legged s tool of hi gher education quality
assurance need t o be oper at i ng effectively, he said .
Shi r eman went f rom there i nto a r evi ew of the department ' s proposed new approaches t o
ensur i ng integr ity i n the fi nancia l aid programs , such as r equ i r ing most for- profit col leges
and non-degr ee vocati onal progr ams at non profi t col leges t o show t hat they are prepari ng
st udent s for gainful emp loyment ,

Sever al people who heard t he speech sa id t hey viewed it as a mu ch more st r i dent crit ique of
for - prof it col l eges , and of hi gher educat i on acc r edi t at i on, t han Shi r eman has del i vered
bef or e. But David Dies, who heads t he Wi s consin Ed ucational App rova l Board and j ust f i nished
a ter m as president of the nat i onal group of st at e regul at ors, didn ' t hear it quit e t hat way .

"I think Bob wa s expl ain ing why we need s t at e regulati on and [Education] Department over s i ght
to be par t of th i s t hree -legged st ool , not j ust accr editat ion, and why we all need t o wor k
toget her, " said Di es. "He was poi nti ng out some limi t ation s of accreditation, but I didn ' t
r eally see i t " as highl y cr i ti cal of accreditor s or f or-profit colleges .
- Doug Lederman<mai lt o :doug. l ederman@i ns idehi gher ed , com>
Comment s on Comparing Hi gher Ed t o Wall St reet

• Accr edi t ati on agencies are set up to be corrupt

• Post ed by St even D. Aird on Apr i l 29, 20 10 at 7:45am EDT

. Shirema n is cor r ect about the accreditation agenc i es . Even accr editation agenci es
fo r pu bl i c i nstit ut i ons are mi r ed in a gi gant i c conf l ict of i nt er est. They rece i ve money from
t he school s t hey accredit . They ar e ru n by f or mer admi ni st rat ors of var i ous i nst it ut ions .
They con trol access to fede r al f und s ; however , they are anyth i ng but t r ansparent, and they
are beyond t he r each of th e Freedom of In f ormati on Act . Th e f ederal government needs t o
cha nge thi s immediat el y. Everyt hi ng t ha t t hese agenc ies do or f ai l to do shoul d be
di s coverab l e.

• Shireman not immune to inher ent confl i ct s of i nt er est

• Posted by Glen S. McGhee, Dir . , at Flor i da Higher Edu cation Accountabi lity Pro ject on
Ap ril 29, 2010 at 8 :45am EDT

. Shi r eman pi cks easy ta rget s , but mi sses t he l oomi ng mel tdown caused by f urt her
aggravat i ng cr edent i al i nf lat i on .

52
The entire pus h f or accessi bilty will only succ eed i n creati ng even worse credent ia l
i nflation than what we now have.
No one -- not even Shi r eman -- has the courage and fore sight to begin a discu ssion on rampant
credent ia l ism and oversc hool i ng in the cont ext of wh at it t akes t o creat e conf l ict s of
interest in accreditation and the institutional field itself, as well as cr edent i al markets.
Thi s i s the worst conf l i ct of inte re st. one which not even Shireman is i mmune t o .
My con cer n i s not so muc h fo r the taxpayer, but f or those st udent s that lose out i n what
amount s to a ma ssi ve gamble t hat t he bubble won't burst bef or e t hey graduate .

• Saf eguar di ng St i mul us vs . J udgi ng Qualit y

• Posted by Tra ce Urdan • Res ear ch Analyst at Signa l Hi ll on April 29, 2010 at 8 :45am EDT

. The conf lat ion of th e need t o safegua r d St imul us dolla r s with t he accrediting
agencies ' job of judging academic quali t y i s clever but ult imat el y just a r het or i cal devi ce
designed t o provide cover f or t he fac t t hat the administrat ion has no actual dat a t o suppo r t
th e need f or new "gainful employment .. regulations . So i nst ead of defend ing the r egul ations on
the basis of a identifiable problem regarding graduate empl oyment , now it turns out the rule s
ha ve been designed f or St i mul us prot ect ion .

If the new r ules are des i gned to protect Stimul us dollar s by ty ing those dolla r s t o outcomes ,
why is th e f ocus on t he cost of the programs and not the quality of the empl oyment? And why
i s t he Pel l s pendi ng at trad it ional sc hools not being safeguarded by the new measu res . The
l ogi c of th e rul es seems t o be t hat it hardl y mat t ers how effec tive a progr am i s i f it i s
priced low enough.

The fa ct i s t hat t her e i s already a r igo r ous overs i ght r egi me f or prot ecti ng Pel I dollar s and
i t is no l ess effec ti ve based on the amount of dol l ars fl owi ng t hrough the system. Over sight
f or progr am i nteg rity - - ar e the st udent s ' eligi ble? and are t hey act i vel y enrol led in a
proper l y-accredit ed program? -- rests squarel y wi t h t he Departme nt of Education . not wit h the
accredi t i ng agenci es . Furthermore the Depart ment has enor mous aut hor i ty t o come down hard on
any institution gui l ty of fraud or mal f eas anc e and ha s shown no re luctance t o use that power
i n the past .

Congress has ves t ed t he accredit i ng agenci es with the r es ponsi bi l i t y not fo r judgi ng t he
integr ity of t he Ti tle I V progr am but f or ens ur i ng a suff i cient l evel of academi c qu ality .
The accr edi t i ng agenc i es may or may not be out - manned in t hi s t ask and they may or may not be
conf l i ct ed. But t hey are no l ess out- ma nned or conf l icted i n j udgi ng the quality and purpose
of tradition al pu blicl y- fund ed and not -for-profit col leges and uni versi t i es. In t erms of the
association wi t h r at ings agencies, t he compar i son is an unf ai r one . Rati ngs agencies are f or-
prof it compani es wi th an int er est i n gr owth . Accredi ti ng agencies are s leepy not -f or - pr ofit
f irms whose f undament al work is accompl ished by academic professionals and col l ege pres i dent s
who of t en are j ust as biased aga i nst fo r -p r of it sc hools as Mr . Shi r eman seems to be .

Mr . Shireman i s a politicall y- appointed l obbyi st and f ormer Congressional staf f er who managed
t o s l i p into a created pos i tion that ha s turn ed out t o be t he most important role in the
Obama admini stra tion relati ve t o post - secondary educat ion. without f aci ng Senat e
conf i r mat ion. But as br ight and well -i nt entioned as he may be , he is no more equi pped t o
judge academic eff ect iveness than I am . And i f he i s deci ded to s econd- guess the wo r ki ng
academic prof ess i onal s who actua lly provide the over s i ght over academic institutions, at some
point he wi l l have t o answer to Co ngr ess.

* Tr ansparent , sear chabl e , account able

* Posted by Robert Al brecht , Pr of essor /En gl i sh and Humaniti es at Al f r ed State Co l lege on
Ap ril 29, 2919 at 9 :90am EDT

• Steven D. Aird is hal f r ight : all a ccreditation processes and r ecords f or all
inst itut i ons shoul d be tran spar ent and searc hable; the out come will be accountabilit y.
53
But t he cha rge that accredi t at i on agenci es are set up t o be corrupt i s mis leading,
in accur ate, and fin ally, I believe, wit hout evidence. I cannot speak for al l r egional
commissions , but I do know that the Middle States Commission on Higher Education is not only
far from corrupt , but that it f unct ions with great i ntegrity and careful al legiance to i ts
documents . Peer review, wh ile del i berat e and painstaking and t ime consuming, f ina l l y involves
some three dozen inst itutions in most accreditat i on dec is ions -- comprehensive by any
standard s. Fur t her, it s accreditat ion act ions are ava i l able to the public t hrough i t s web
s ite .

Robert Shireman i s right to asse rt that accred i tat i on agencies see as one of their
obligations t o "help" i nsti t uti ons in tr-oubke . And he i s r ight tha t the agencies are not
current ly f ul ly set up to f ulfill a more r i gor ous regul atory r ole. However, good r egulations
and peer eva l uat ion should ha ve "helping" as a common purpose. The dema nds of regional
accredi t or s for s pecif ic evidenc e, data col lected over t i me , and atte nt ion t o planni ng and
asses sment , on one hand, and the r equirements of wi s e regu lations from any gover nment body,
on t he ot her , need not conf lic t . Cl ear l y r egion al acc r edi t ors mu st l ook i nward - - qui ckl y --
to promote greater tran sparency and accountab i lity, and i ndeed thi s wi l l change t heir ro le
and r elation ship with member insti tutions . But "corrupt" ? Show us the data.
[ci d: i mage001 . png@91CAE770 .DBCE0240] <ht t p: / / www. i ns i dehi gher ed. com/ l ayout / set / pr i nt / news/ 2010
/ 04/ 29/ shi r eman>
[cid : i mage002.gif@el CAE 770.0BC E0240]

• Contact Us<http: //www.i ns idehighered .com/ contact_us>

• Our Staff<http : / /www .insidehighered.com/about_us /who>
• About Us <http : / /www . ins idehighered.com/about_us>
• Work For Us<http : / /www.insideh ighered .com/workforus>
• Press Releases <htt p: / / www.insidehi gher ed . com/ pr ess r eleases >
• Rights and Permi ss i ons <ht t p: / / www .insidehi gher ed. com/ permi ss i ons >
• Pri vacy< ht t p: / /www .insidehighered. com/ privacy_statement>
• Adver tise< ht t p: / /www . ins i dehighe red. com/advertise >
• Partner s <http : / / www . i nsidehi ghered . com/p artner s >
• Testi mon ials <http : / / www.i nsidehighered. com/testimonials >
• RSS<http: / /www . i nsidehi gher ed. com/r ss /li st >
• l i nks <ht t p: / / www. i ns i dehi gher ed. com/ l i nks >
• Blog Roll <ht tp : / /www.in s idehi ghered . com/blogroll >
@ Copy r ight 2010 I nsi de Hi gher Ed

54
From : Stack, Kathryn B. [Kathryn_B._Stac k@omb.eop.gov]
Sent : Wednesday, Ju ne 30, 20 10 5:56 PM
To: Kvaal, James
Subject : RE: Agenda for RESCHEDULED: Follow-Up Meeting: Student Loan Meeting with OMS

Friday AM is fine if ED is t alkin g int ern ally about how t o d o t his. If an OMB pro d wo uld be hel pful, I could sent a note t o
t he group.

From : Kvaa l, James [mailto:James.Kvaal@ed.gov]

Sen t: Wednesday, June 30, 2010 4: 13 PM
To : Stack, Kathryn B.
Su bj ect: RE: Agenda for RESCHEDULED: Follow -Up Meet ing: St ude nt Loan Meet ing w it h OMB

We are meet ing t omorrow at 9 am, so either aft er 5 t oday or else Frida y AM

From: Stack, Kath ryn B. [ mailto:Kat hry n_B._Stack@omb.eop.gov ]

Sent : Wednesday, June 30, 2010 3:44 PM
To: Kvaal, James
Subject: Re: Agenda for RESCHEDU LED: f ollow -Up Meet ing : St udent Loa n Meeting w it h OMB

Should we touch base on this before f riday morning, or just talk then about pushing this along?

Fr om: Stack, Kathryn B.

To: 'James.Kvaal@ed,gov' <James.Kvaalgaed.qov>
Sent: Thu Jun 2411 :17:15 2010
Subj ect : Re: Agenda for RESCH EDULED: Follow-Up Meet ing: St ude nt Loan Meeti ng with OMS

Yes. Dan is great fo r this. Tom W eko will be an important co ntributor too 1assu me.

From : Kvaal, James <James.Kvaalcped.qov>

To : Stack, Kathryn B.
Sent: Thu Jun 24 10:38:16 2010
Subj ect: RE : Agenda for RESCHEDULED: Follow-Up Meeting : St ude nt Loan Meeting w ith OMB

We are likely to ask Dan to coo rdinate th is wo rk w hen he ret urns t o his perma nent role, w ith representation f ro m t he
five offices you suggest. M ake se nse?

From : Stack, Kathryn B, [ma il to : Kathryn~B , ~Stac k@ om b .eo p ,gov]

Sent: Wednesday, June 23, 2010 7:13 PM
To: Walizer, Lauren; Graham, William; Skelly, Thomas; Martin, Carmel; Smit h, Zakiya; Campbell, Neil; Gordo n, Robert M,;
Rowe, David; McNeece, Erin; Lee, Nicholas c.: Lyberg, Sara h A.; Taggart, Bill; Hurt, John; Arsenau lt, Leigh ; francis,
Lishaun ; Gebhard, Margaret M.; Weko, Tom; Kvaal, James; Shireman, Bob
Cc: Emanuel, Elizabet h N.
Subject: RE : Age nda for RESCH EDULED: Follow-Up Meeting : St udent Loan Meeting w ith OMB

Just wanted t o loop back wi th eve ryone abo ut yeste rday's ve ry const ruct ive meeting. I spo ke briefly w it h Zakiya t oday
afte r a Hill meeting and t hink w e have general agreeme nt on t he following:

1
 (b)(5)

From: Stack, Kathryn B.

sent: Monday, June 21,2010 6: 16 PM
To: Walizer, Lauren; Graham, William; Skelly, Thomas; Martin, Carmel; Smit h, Zakiya; Campbell, Neil; Gordon, Robert M.;
Rowe, David; McNeece, Erin; Lee, Nicholas C.; Lyberg, Sarah A.; Taggart, Bill; Hurt, John; Arsenault, Leigh; Francis,
Ushaun; Gebhard, Margaret M.
Cc: Ema nuel, Elizabet h N.
s v btecn RE: A enda for RESCHEDULED : f ollow-U
(b)(5)

From : Walizer, Lauren [ mailto:Lauren.Walizer@ed.gov ]

sent: Monday, June 21, 20102 :13 PM
To: Graham, William; Skelly, Thomas; Martin, Carmel; Smit h, Zakiya; Campbell, Neil; Gordon, Robert M.; Rowe, David;
McNeece, Erin; Lee, Nicholas Co; Lyberg, Sarah A.; Stack, Kathryn B.; Taggart, Bill; Hurt, John; Arsenault, Leigh; Francis,
Lishaun; Gebhard, Margaret M.
Subject: Agenda for RESCHEDULED: Follow-Up Meeting : St udent Loan Meet ing w ith OMS
2
See attached the agenda f or t omorrow' s discussion.

Meeting to continue di scussions between OMB and ED on the st udent loan model, costing methodology and assu m pt io ns, and other
issues.

The meet in g will be held in the Dept of Ed ucation building, ro om 7C100.

If you are not able t o attend in person, please not ify t he o rganize r of the m eeti ng (Lau re n walizer) and she w ill send call-in
information.

This is a resched uled m eet ing tha t w as originally to be held 6/17 at 2pm.

3
 From : Stac k, Kathryn B. [Kathryn_B._Stack@omb.eop.gov]
Sent: Thursday, June 24, 2010 11:17 AM
To: Kvaal, James
Subject: Re: Agenda for RESCHEDULED: Follow-Up Meeting: Student Loan Meeting with OMS

Yes . Dan is great for this. Tom Weko will be an important contribu tor too I ass ume .

From: Kvaal, James <James.Kvaal@ed.gov>

To: Stac k, Kath ryn B.
sent: Thu Jun 24 10:38: 16 2010
Subj ect: RE: Agenda for RESCHEDULED: Follow-Up Meet ing: St udent Loan Meeting w it h OMB

We are likely t o ask Dan to coordinate thi s work w he n he return s to his per manent role, w it h representation from the
five offices you suggest. Ma ke sense?

From: Stac k, Kat hryn B. [ mailto: Kat hryn_B._Stack@omb.eop.gov]

Sent : Wednesday, June 23, 2010 7: 13 PM
To: Walizer, Lauren; Graham, William; Skelly, Thomas; Martin, carmel; Smit h, Zakiya; Campbell, Neil; Gordon, Robert M.;
Rowe, David; McNeece, Erin; Lee, Nicholas c.: Lyberg, Sa rah A.; Taggart, Bill; Hurt, John; Arsenault, Leigh ; Francis,
Ushaun; Gebhard, Margaret M.; Weko, Tom ; Kvaal, James; Shireman, Bob
Cc: Emanuel, Elizabeth N.
Subject: RE: Agenda for RESCHEDULED: Follow-Up Meeting : Student Loan Meeting with OMB 1
(b)(5)

From : Stack, Kath ryn B.

sent: Monday, June 21, 20106: 16 PM
To: Walizer, Lauren; Graham, William; Skelly, Thomas; Martin, Ca rmel; Smit h, Zakiya; campbell, Neil; Gordo n, Robert M.;
Rowe, David; McNeece, Erin; Lee, Nicholas c.;
Lyberg, Sara h A.; Taggart, Bill; Hurt, John; Arsenault, Leigh; Francis,
lishaun; Gebhard, Margaret M.
Cc: Emanuel, Elizabeth N.
Su bject: RE : Agenda fo r RESCHEDULED: Follow-U p Meeting: St udent Loan Meet ing w it h OMB

6
(b)(5)

"

From: Walizer, la uren [mailto :lauren.Walizer@ed .gov]

Sent: Monday, June 21, 20 10 2:13 PM
To: Graham, William; Skelly, Thomas; Martin, Carmel; Smit h, Zakiya; Campbell, Neil ; Gordon, Robert M.; Rowe, David;
McNeece, Erin; l ee, Nicholas c.:
Lyberg, Sarah A.; Stack, Kathryn S.; Taggart, Bill; Hurt, John; Arsenault, Leigh; Francis,
Lishaun; Gebhard, Ma rgaret M.
Subject: Agenda fo r RESCHEDULED: Follow -Up Meeting: Student Loan Meeting with OMS

See attached the agenda fo r t om orrow' s di scussion .

Meet ing to continue discussions between OM B and ED on th e stu dent loan model, costing methodology and assumptions, and ot her
issues.

The meet ing w ill be held in the Dept of Education buildin g, room 7(100.

If you are not able to attend in perso n, please not ify the organizer of the meet ing (l auren W alizer) and she will send call-in
info rma t io n.

This is a rescheduled meet ing t hat w as origi nally t o be held 6/ 17 at 2pm .

7
 From :
Sent:
To:
Subject:
(b)(6)

From: Pauline Abernathy (mailto: pabernathy@ticas.orgl

Sent: Wednesday, June 16, 2010 6:28 PM
To: Kvaal, James
Subject: What's your phone number these days?

Pau line Abernathy

Vice President
The Institute for Co llege Access & Success
www.ticas.org and '!N'NW . ~e cto nstud e ntde bt.o rg
TICAS: 510.318.7900 Direct: 510.318.7903

10
 From: Martin, Phil
Sent: Tuesday, Ju ne 01,20103:18 PM
To : Shireman, Bob
Su bj ect: FW: Today's Call
Attachment s: HEFT S_2P9_060110.pdf

FYI - ta lking t o morgan Sta nley t od ay t o learn more, they se nt across these bullets w ith their own proposal. (includes
f inancing DL through different mechanism, treasury does n' t suppo rt/like the idea, just wa nted to make sure you had it.]

W ill let yo u know if we learn anyt hing good on the call.

F ro m : Brown , Michaelll(b
,,~)~(6~)~~~~ ~~_I-
Sent: Tuesday, June 01';'2010 2:57 PM
To: Martin, Phil; aaron. klein@do.t reas,gov; John.Bellows@do.treas.gov
-
Cc: Graham, William; Wilson, James
Subject: RE: Today's call

Gentlemen-

Please see the attached t -paqe summary of the strategy t hat we wou ld like to discuss on today's ca ll.

Michael Brow n, Manag ing Director

Morgan Stanley I Global Capital Markets
1585 Broadway I Floor 04
New York, NY 10038
Phone: +1 212 76 1· 2110
Fax' +1 212 507. 5086
l(b)(6)

From: Martin, Phil [mailto:PhiI.Martin@ed.gov]

sent: Tuesday, June 01, 2010 10:04 AM
To: Brown , Michael (GCM); aaron.klein@do,treas.gov; John .Bellows@do.treas.gov
Cc: Chavers, Kevin (FlO); Graham, William; Wilson, James
Subject: RE: Today's Ca ll

Loopi ng W ill iam Graham and Jam es W ilson w ho w ill be on t he call for ED.

From: Brown, Michael LI(b_)~(6~)~~== _

Sent: Tuesday, June 01, 2010 10:01 AM
To: Martin, Phil; aaron .klein@do.t reas.gov; John.BeHows@do.treas.gov
Cc: Chavers, Kevin
Subject: Todav's call

Gentlemen-

I just wanted to check in to see if you have specific questions or topics that you wou ld like covered on today's call.

Best-

Michael Brown , Mana ging Di recto r

Morgan Stanley I Global Capital Markets
1585 Broadway I Floor 04

19
 New YOfk. NY 10036
Phone: +1 2 12 76 1-2 110
Fa x' +1 2' 2 507_5086
l(b)(6) rOfQanstanlev.com

NOTI CE: If received in error. please destroy. and octlfy sender. Sender sees oct inleod 10 waive confidential., or prMIege. Use of this email is prohibi ted....nen
received i1 error. We may morulor and store emalls to the extent permuted by applicable~ ,

NOTICE : "received in error. please destroy. and octlfy sender. Sender eoes oct inleod 10 waive confodenliahty or privilege. Use of this email is prohibite<l..nen
received i1 error. We may monitor and slore ema~s 10 the e d en! permitted by applicable ~

20
(b)(5)
(b)(5)
 From :
Sent :
To:
Subject:

(b)(5)

From: Shireman, Bob

Sent : Friday, May 21, 2010 11:00 AM
To: Tobin, Katherine
Subiect: RE: REMINDER: Bam Senior Staff Meetin Tomorrow -- Materials for those on the phone
(b)(5)

From: Tobin, Katherine

Sent: Friday, May 21, 2010 10:35 AM
To: Shireman, Bob
Subject: RE: REMI NDER: Bam Senior Staff Meeting Tomorrow -- Materials for those on the phone

Fascinating meeting....thanks for the informat ion below. I was on t he telephone and thi s helped me follow.

Tha nks, Bob !

Katherine

From : Shireman, Bob

Sent: Friday, May 21, 2010 7:53 AM
To: Haro, Adrian; Myers, Sam; Yale, Matt; Cunningham, Peter; Miller, Tony; Wha len, Ann; Martin, Carmel; Smith,
Marshall ; Snyder, Jason; Shelton, Jim; Ali, Russlynn; Anderson, Jo; Darnieder, Greg; Groff, Peter; Jupp, Brad; Waldo,
Eric; Muenzer, Melanie; Weiss, Joanne; Rose, Charlie; Cummings, Glenn; Sepulveda, Juan; Jennings, Kevin; Gomez,
Ga briella; Wilson, John ; l ee, Andrew; Immerman, Suzanne; Jones, Jacqueli ne; Easton, John; Vadehra, Emma; Horwich,
lloyd; Duran, Maribel; Borders, T ie : Arsenault, l eigh ; Sprow, Stephanie; Melendez, Thelma; Waller, Jen ; Barrett, Tarik;
Secretary's Conference Room (OS Managed ); Dann-Messier, Brenda; Kanter, Martha; Hamilton, Justin; Abrevaya, Sandra ;
Tobin, Katherine; Posny, Alexa; Shelton, Betsy; Bissonnette, Michelle; Cator, Karen ; Laitinen, Amy; Dunbar, Adrienne;
Uvin, Johan; Ahuja, Kiran; Wurtzel, Judy; Andersen, Susie; Chong, Frank; Lamb, Michael ; Spellma n, Rene; Harris, Carl;
Aylward, Rayna; l agdameo, Christina; Solomon, Cathy
Subject: RE : REMINDER: 8am Senior Staff Meeting Tomorrow -- Materials for those on the phone

21
(b)(5)
(b)(5)

- --
From : Hare, Adrian
Sent: Thursday, May 20, 2010 5:32 PM
To: Myers, Sam; Yale, Matt; Cunningham, Peter; Miller, Tony; Whalen, Ann; Marti n, Carmel; Shireman, Bob; Smith,
Marshall ; Snyder, Jason; Shelton, Jim; Ali, Russlynn ; Anderson, Jo: Darnieder, Greg; Groff, Peter; Jupp, Brad; Waldo,
Eric; Muenzer, Melanie; Weiss, Joanne; Rose, Charlie; Cummings, Glenn; sepulveda, Juan; Jennings, Kevin; Gomez,
Ga briella; Wilson, John; Lee, Andrew; I mmerm an, Suzanne; Jones, Jacqueline; Easton, John; Vadehra, Emma; Horwich,
Lloyd; Duran, Maribel; Borders, Tia; Arsenault , Leigh; Sprow, Stephanie; Melendez, Thelma; Waller, Jen; Barrett, Tarik;
Secretary' s Conference Room (OS Managed); Dann-Messier, Brenda; Kanter, Ma rtha; Hamilton, Justi n; Abrevaya, Sandra;
23
Tobin, Katherine; Posny, Alexa; Shelton, Betsy; Bissonnette, Michelle; Catoe, Karen; lait inen, Amy; Dunbar, Adrienne;
Uvln, Johan; Ahuja, Kiran; Wurtzel, Judy; Andersen, Susie; Chong, Frank; lamb, Michael; Spellman, Rene; Harris, Carl;
Aylward, Rayna ; lagdameo, Christina; Solomon, Cathy
Subject: REMI NDER: Sam Senior Staff Meeting Tomorrow

Dear all :

A quick reminder abo ut to morrow s 8am Senior Staff M eeting. Bob Shireman will give a presentation o n program
integrity. Dial-In info rmation is list ed be low . Than ks.

Dial-In Informat io n:
Number: 877-93 7-6173
Participant Code: 7243925#

Best,
Adrian

24
From : David Hawkins
l(b)(6) b nacacnet.org]
Sent : Monday, May 17, 2010 4:0 5 PM
To: Pauline Abernathy; Margaret Reiter; Amanda Modar; Angela People s; Barmak Nass irian;
chris.lindstrom @pirg.org; Connie Myers; Deanne Loonin; Debbie Frankie Cochrane; Ja mes
Simpson; jstudley@publ icadvocates .org; Laure n Asher; Liz Baldwin; Luke Klipp; Margaret
Reiter; Steve Burd; Susan Le hr; Edie Irons
Cc: Michelle Rodriguez; Luke Klipp; Laura Szabo-Kubitz; Da nnenberg, Michael; Shirem an, Bob
Subj ect: Chronicle letter

The Chronicle published a letter I submitted in response to an article they published on state authorization a few weeks
back.

httD:llchronicle.com/article/De bate-Over-Proposed-Rule/6 55621

David Hawkins
Director of Public Policy and Research
Natio na l As sociation for College Admission Counseling
1050 North Highland Street, Suite 400
Arlington, VA 22201
Ph. (703 ) 836-2222 xl09
Fax (703)373-2369
NACAC on the Web: WW'N.nacacnel.org

28
 From: Shireman , Bob
Sent: Friday, May 14, 20104:32 PM
To: McFadden, Elizabeth
Subject: Re: Gainful Calendar
(b)(6)
I'll be on t he phone .

- - - - - Origi nal Message --- - -

Fr om: Mc Fadden, Eliza bet h
To : Shirema n, Bob
Sent : Fri May 14 15: 27 :13 2010
Subject: RE: Gainful Ca lenda r

I will bri ng th em to t he 5 :00 meeti ng.

Georgia was referri ng to t he one -page s ummar y you di d.

-- - - -Origi nal Me ssage- ----

From: Shirema n, Bob
Sent : Friday, May 14 , 2010 4 :20 PM
To : McFadden, Eli zabeth
Subject : Re : Gainf ul Calendar

Elizabet h, please s har e t he EDMC metrics when you have a chance.

When Georgia refer red to my calendar, did s he mean the one - page s ummar y I di d?

-- - - - Original Mes sage ---- -

From: Yua n, Georgia
To: Mi l ler, Tony; Shi r eman, Bob; Bergeron, Davi d; McFadden, Elizabet h; Finley, St eve ;
Madzelan, Da n
Sent: Fri May 14 14:01:48 2010
Sub;ect: Ga i nf ul Ca lendar
(b)(5)

'G eor gi a

29
 From: Glickman, Jane
Sent: Friday, May 07,2010 8:27 AM
To: Manheimer, Ann; Arsenault. l eigh
Cc: Babyak, Stephanie
Subject: FW: Bob Shireman remarks

Ann or l eigh - - Hechinger In stitute person i s as ki ng ( see below)

can you confirm t hat we ar e aimi ng fo r a Nov . 1 Fi nal Rule and ca n we say the NPRM i s
expected, therefore, some t i me t hi s summer?
Thanks - - Jane and Steph

-----Origi nal Mes sa ge - - jeb)(6)

From : Wi llen, Eli zabeth ,,"',,'"";<"0., - - - - - ----- - - - - - -
Sent: Thursda y, May 06, 2010 5:45 PM
To : Babyak, Stepha ni e
Cc : Glickman, Jane
Sub j ect : RE: Bob Shi reman remarks

Woul d it be possi ble t o get an on t he r ecord comme nt from any of you or from Bob about WHEN
the new rules and regul ation s f or f or-profit schools are expected to be r el eased?

li z Wi llen

Associate Di rector

Hechi nger Ins ti tute on Ed ucati on and t he Medi a

Teachers Col lege , Columbia Uni versity

Phone: 212 -870 -1086

Fax : 212-870-1074
l(b)(6)

' Promoting f ai r , accurate and insight fu l r eporti ng on educ at ion s i nce 1996'

Fr om : Babya k, Ste phan ie Imailto :Stephanie . Babyak@ed.govl

Sent: Wednes day , May 05, 2010 4 :07 PM
To : Will en. Eli zabet h
Cc : Gli ckman. Jane
Subj ect : Bob Shi r eman r emar ks

Ms . Willen. Bob Shi r eman spoke fr om note s, not a prepared t ext, and we do not have a
t r ans cript . Sorry .
35
36
 From: Shireman, Bob
Sent: Thursday, May 06, 2010 8:46 PM
To: Miller, Elise
Subject: RE: Quick question for you
(b)( S)

Robert Shireman
Deputy Undersecreta ry
U.S. Department of Education
(202) 260-0 10 1

Fr om: Miller, Elise

Sent: Thursday, May 06, 2010 7:24 PM
To: Shireman, Bob
Subj ect: QUick quest ion for you

If you are available for a quick question, can you give me a call o n my wor/( #: 202-502-73187 " Ube here pretty late. Thanks!
Otherw ise, I'll touch base wi th you in the morn ing. t'
Eli se Mil ler
Progra m Directo r
Post secon dary I nst itutiona l Stud ies Program
Natio nal Center f or Edu cat ion St at ist ics
1990 K St reet, NW
Roo m 8 113A
Wa shingto n, DC 20006
Elise. MiIler@ed .g ov
( 20 2) 502 -7318
( 20 2) 21 9 -7079 (Fax)

38
39
From: Mayes. Edgar
Sent: W ed nesday, May 05,20105 :05 PM
To : Arsenault. Leigh
Subject : FW ; Request to direct inqu ire to Program other than OIG and FS L
Attachments: Leiter to Secretary Duncan 05-04-10.pdf

Leigh -

I actuall y just spoke with him and he sent the following e-mai l in reference to the attached .

Thanks,
Edgar

From : Manuel P. AsenSiO-GarCia~mill rOCkllc.comJ

Sent: Wednesday, May 05, 201 :
To: Mayes, Edgar
Subject: Req uest to direct inquire to Program other t han OIG and FSL

Our co ncerns are potential con f licts and/ or deficiencies in t he fact discovery and application of law by the OIG, and t he
OIG's discretion in conducting audit reviews and co nverting these in to investigat ions, and in making decis ions on
referrals to t he DOJ, and how these adversely affect t ho se individual charged w it h providing offici als in t he Federal
St udent l oan w it h information to use in negot iation s w it h large, sophist icate d, and we ll fu nded, public companies w it h
aggressive legal and lobbying representation .

The very poor results that t hese legacy de fici encies and conflicts generat e are visible in the prior administ rat ion' s
enforcement record.

It is not po ssible t o receive fa ir comment f rom t he OIG and FSl, and w e respectfully req uest t he view and comments o f
t he Sectv or Und ersecty.

Thank yo u.

From: Lorena Uivfchuzca

Sent: Wednesday, May OS, 2010 4:02 PM
To: Manuel P. Asensio-Ga rcia
Subject: FW: Letter to Secretary Duncan from the Alliance for Economic Stability, I nc.

From: Mayes, Edgar [mailto;EdQar.Maves@ed.gov] On Behalf Of Duncan, Arne

Sent: Wednesday, May OS, 20 10 8:34 AM
To: Lorena Uivichuzca
Subject: RE: Letter to Secretary Duncan from the Alliance for Economic Sta bility, I nc.

Dear Ms. L1 i vichuzca :

40
Thank you for forwarding Mr. Rodri guez' s letter to Secretary of Education Arne Duncan. We appreciate
hearing from you.
His letter has been forwarded to the appropriate stafT membcr for revi ew.

Thank you again for con tacting us.

Sincerely,

Edgar Mayes
Director of Correspondence and
Communications Control Unit
Office of the Secretary
U.S. Department of Education
Washington, DC 20202

Fro-;;-l orena L1iVichuz~\,;(b"')(n6A)==...J~mjIJroddlc.coml

Sent: Tuesday, May 04, 2010 4:07 PM
To: Duncan, Arne
Cc: oeter.cunniingham@ed.gov : Bergeron, David; Sorensen, Howard; Aspling, David; Tighe, Kathleen S.; Shireman, Bob
Subject: letter to Secretary Duncan from t he Alliance for Eco nomic Stability, I nc.

Dear Secretary Duncan,

Please find atta ched a letter f ro m th e Allia nce for Economic Sta bility, Inc. regarding Bridgepo int Education, Inc.

lorena M. lIivichuzca
747 Third Avenue, 25th Floor
New Yor k, NY 10017
Tel. (212) 702-8805
Fax (2 ·3465
Email: (b)(6) mil1 rockllc.com

ThiS message is lor the intended recipient's use only. It is not to be retran smitted with out the express witten consent of the sender. This e-ma il may
con tain confiden tial. propnetary Of' legalty privileged Inl onnatioo. II you receive this m essage in error , please immediately delete it and notify the sender .
You must rot. directly or indirectly , use, disclose. distribute. print. Of cop y any part of this message il you are not the inleocled recipient.

Copies of 'Mitten communcancos (ioduding e-ma~s) may be kept and archived indefinitely. This may iodude this e-mail. and any e-mail reply made to it

41
 Alliance For Economic Stability, Inc.
747 Third Avenue, 25th Floor
New York, New York 10017

May 4, 20 10

Arne Duncan. Secretary

U.S. Department of Education
LBJ Education Building
400 Maryland Avenue, SW
Room II 7W3 11
Washington, DC 20202

Dear Secretary Duncan:

W e believe that Bridgepoint Education. Inc. is operating counter to the intent and expl icit provisions of
current U.S. Jaw covering post-secondary educational institutions receiving funds as pan of Title IV of
the Higher Education Act of I % 5, as reauthorized (the " I lEA').

As you may be aware, Bridgepoint owns Ashford University and the Unive rsity of tbe Rockies. though it
is Bridgepoint 's administration of Ashford University that is of particular concern. In 2004, Bridgepoint
was started by a Wall Street private equity fu nd in partnership with former executives from Apollo
Group. Inc . In 2005, Bndgepomt acquired the Franciscan University o fthe Prairies, a relig iou s-a fftl iated
institution with approximately 300 students, with revenues estimated to be less than SIO million.
Bridgepoint renamed the institution Ashford University, and drove enrollment throug h Ashford ' s online
program to a reported 65,78 8 students as of M arch 31 , 2010. with revenues ofS526 million in the last
twelve months .

This g rowth ha s come not from educati onal performance but from an incenrivized sales force of o ver
1,400 salespersons equa l to o ne for every 44 students, and growing . As tonishi ngly, the vast majo rity o f
this sales personnel g ro wth occurred while the Office of Inspector Genera l (" D IG") of the Department of
Education (" DOE''} was supposedly work ing to remediate Bridgepoint's use of taxpayers' funds to pay
sales personnel in violatio n of DOE regulations .

See Table I, wh ich shows the g ro wth in Bridgepoint 's student enrollment, and Table 2 , wh ich sho ws th e
growth in Bridgepoinr ' s revenues.

Our foremost concern about Bridgepoint is that the company is directly v iolating DOE regulations
su rrou nding " Sa fe Harbors" for incen tive compensa tion payments to employees . Bridgepo int employees
who enro ll stude nts a re compensated sol e ly an d exclus ively for their sales work .

Bridgepoint 's bu siness reli cs upon paying its massive sa les force for enro lling ind ividuals ....h e have little
to no ability to evaluate their alternatives or the c ost and benefit of a Bridgepoint educatio n.

Bridgepoint sets its tuition fees to be significantly lowcr than other large, publicly-traded companies
operating for-p rofit o nline universities . The tuition fees of Argo s)' Unive rs ity, the Uni versity of Phoenix,
Secretary Duncan
May 4, 20 10
Page 2 of2

and DeVry University are 37% to 55% higher than those of Bridgcpoint' s Ashford University. See Table
3.

Even with signifi cantly lower tuition fees, Bridgepoint consistently spends more tuition revenue on
marketing than on actual instruction. See Table 2 . Bridgepoint spent more than $44 million on marketing
and promotions in the quarter ended March 3 1. 2010. This was nearly triple the amount that Bridgepoint
spent for the same period of 2008. This increase was during the time of the compliance audit of Ashford
University conducted by OIG.

Bridgepoint also devotes a far lower portion of its tuition revenue to providing instruction than similar
companies. See Table 3. Bridgepoint devotes a far, fur lower portion of tuition fees to instruction than
more traditional and reputable not-for-profit educational institutions.

While other companies operating for-profit, online universities have been able to obtain deferential
treatment from the DOE, we believe that Bridgepoint ' s abuse of regulations surrounding Title IV fu nding
and of the intent of the HEA is far more egregious than even any of its for-profit counterparts.
Bridgepoint evidences aggressive enroll ment tactics, illegal incentive compensation, and an incredibly
low portion of tuition devoted to instruction. Even in an industry built on abuses of a government
program, Bridgepoun's irregularities stand out.

The DOE has the authority not only to pursue typical sanctions, but to conduct a more broad-based review
of abuse by Bridgepoim of DOE regulations and of the intcnt of the HEA and to issue sanctions more
much more severe than the sanctions the DOE has typically imposed upon for-profit, onl ine education
providers. The DOE' s past sanctions offor-profit education providers have fa iled to rcmediate hann and
have had the contrary effect of providing incentive to engage in the abuses discussed above.

On a personal note, for over a decade, I have been an adjunct professor of business at various community
and four-year colleges, and I know fi rsthand the effects that a lack of financial aid has on students' ability
to obtain a college degree within a reasonable amount of time. Many students find themselves working
full-time or pa rt-time jobs j ust to fun d a portion of their higher education. Tbe enrichment of these
private enterprises at the expense of American students who arc this country's future is deplorable.

cc: Peter Cunningham, Assistant Secretary Robert Shireman. Deputy Undersecretary

Office of Communications and Outreach Office of the Under Secretary

Kathleen S. Tighe, Inspector General David J. Aspling, Assistant Special Agent in Charge
.Off lcc of the Inspector General Office of the Inspector General

David Bergeron, Director of Poli cy, Howard Sorensen, General Counsel

Planning and Innovation Office of Inspector General
Office of Postsecondary Education

Enclosures
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Table 3
Tui tion Fees Per Un dergradu ate Credi t Hou r for BPrs Ashford University and Comparables

University Uickerl Tuitio n Fee % above (below) Ashford

Ashford University (BPI) 372

DeVry Un iversrty {DV) 575 55%

University of Phoeni~ (APOl) 530 42%
American InlerConti nenlal University {CECD) 390 5%
Strayer Un iversity (STRAt 353 -5%
Argosy University (EDMC) 5" 37%

Averag e Tuition 455 22%

1: The American InterContinental Universily tuition fee listed is for non-degree students laking undergraduate level classes.

2: Strayer charges $1 .590 per course for undergraduate part-time students: all courses are 4.5 credit hours.

• CPLA and APEI are not included. as Capella has a complicated fee structure, varying by undergraduate course level. and APEI caters more to the military community than Title IV
recipients.

Prepared 4119110
From: Shireman, Bob
Se nt: Tuesday, May 04 , 20 10 4:05 PM
To: Cunningham, Peter; Hamilton, Justin
Subject: FW: THE SUB-PRIMING OF STUDENTS: WHAT YOU NEED TO KNOW BEFORE
EN ROLLING
Attachments : Sub-prim ing for studente-e financial crisis in education .doc

Fro;;;Lehr, Susan M.I(b)(6) ~fscj.ed 1

sent: Tuesday, May 04, 2010 3:30 PM
To: Sellers, Fred
Subject: FW: -mE SUB·PRIMING OF STUDENTS: WHAT YOU NEED TO KNOW BEFORE ENROLUNG

Th ought you might like to see w hat we have don e!

Susan

From: Corby, Michae l E.

sent: Tu esday, May 04,20 10 3:10 PM
Subject: -mE SUB-PRIMING OF STUDENTS: WHAT YOU NEED TO KNOW BEFORE ENROLUNG

Media Advisory
Marketing and Com munications

M EIlIA ADVISO RY May 4, 20 10

Media contact:
1\.1 ichael Corby
904-632-3310

TI l E SUB-PR IM ING OF STUDENTS: W HAT YOU NEED TO K NOW BEFOR E ENRO L LI NG

"College. Inc.•" FRONTLINE May 4 broadcast sheds light on/or-profit educational instinaions

There' s trouble at the intersection of Wall Street and Co llege Avenue of Dreams. Tw o Florida State
Co llege at j acksonville administ rators want 10 help students-eny studc nts-c-steer clear of a serious fi nanci al
crisis in education.
In a May 4 airing of Frontline, Public Broadcasting System affiliates, including WJCT in Jacksonville
(Comcast ch. 8 and ch. 440 at 9 p.m.), will explore "Co llege, Inc.," a report on government funding offor-profi t
colleges and universities. From the PBS Frontline press release:
"Higher education is a $400 billion industry fueled by taxpayer money. One of the fastest-growin g--and
most controversial-csecto rs of the industry is the for-profit colleges and universities. Unlike trad itional co lleges
that raise money from wealthy alumni and other donors. many for-profit schools sell shares to investors on Wall
Street. But what are students gelling out of the d eal? Critics say a worthless degree and a mou ntain of debt ..."
Data released by the Department of Education seems to support that stance . As reported in the May 3
Chronicle of lligher Education, the default rate wa s higher for borrowers who attended for-profi t schoo ls {at

45
 11.9 percent) than for borrowers who attended public colleges (at 6.2 percent) or private co lleges (at 4.1
percent).
The two Florida State College administrators. Vice President for Government Relations Su san Lehr and
Associate Vice President for Workforce Development Jim Simpson, have followed the money rigorously and
add their perspectives. with some startling facts about the path that money takes. Their interest stems from the ir
Co llege' s involvement as a state leader in workforce development. The reality is that many oft he fa ntast ic jobs
and salaries promised by the for-profit schoo ls never materialize, and as Lehr explai ns:
"The way it works is this: The student is recruited . The student comes. they sign them up for loan s. the
tuition is paid. the school gets its money. the student gets the debt. and when the student defaults. the taxpayer
has to pay that."
In a comparison of the origins of Jacksonville student loan defaults. the facts are alarming. Accord ing
to Simpson' s calculations. for-profit schools account for 8.7 percent of post-secondary enrollments in
Jacksonville. Yet they account for 48.4 percent-nearly half-of student loan defaults. More than one in seven
of their students, or 14.4 percent of the ir enrollment, end up in default on their loans. Compare that wit h 1.24
percent of the total enrollment of students in public institutions who default on their loans.
For Lehr and her Co llege, it' s not about competition for students. Enrollment increased 35% over the
past three years at Florida State College at Jacksonville.
There are other concerns tied in with this very comp licated issue, but it' s primarily an issue o f
consumer awareness.
"The student needs to understand what it is they're seeking.... said Lehr. "What kind of training, docs mat
training have specifi ed types of accreditation? The other thing they need to look at is cost. ... is it an amount
they can affo rd? If something isn't affordable. it's not very good access:'
Lehr and her colleague Jim Simpson have spent weeks listening and talking to legislators in Tall ahassee
and on Capitol Hill. They have amass ed fa cts and details about costs; accreditation issues that affect students'
ability to transfer credits to another school or degree program; job placement and employment opportunities;
and de fau lts on student loans. What 's their pu rpose?
"Our concern is that students are being inappropriately enticed into believing that they're go ing to get
something that they may or may not get. and it's costing them a fortune." Lehr explained. "Wh en that
happens. the students oft en end up on our doo rstep , and a lot of times we can't help them. They've maxed out
on federal financial loans and they have no more capaci ty for loans. It happens quite often."

l\I EDIA OPPORTUNITY: S usa n Lehr and Jim Simpso n are ava ila ble for interviews. CG s are
attached from DVD of interviews with Lc hr a nd Simpson a nd copies of the DVIl are available 10 med ia
as well. A cur r ent student who discovered too late that credits from he r former college would not tr a nsfer
to a state school, is a lso wtlllng to talk to medi a, upon request.
-30-
FlOrida State College at Jacksonville is accredited by the Commission on Colleges 01the Southern Association of Colleges and Schools 10
award the baccalaureate degree aod the associate degree . Contact the CommiSSion on Colleges at 1866 Southern lane. Decatur, Georgia
30033-4097; or call 404-679-450 1 for coestcos about the accreditation of Flofida State College at JacksonviMe .
LI NKS:

4'
Chronicle of Higher Education : http:U chronicie .com/ art icte/ Oefault· Rates-for-Student/ 65387/

Front line: htt p:U www.pbs.org/wgbh/pages/ front line/ collegeincl

47
H f a c e s on vut e Media Advisory
Marketing and Communications

MEDIA A DVISORY May 4, 2010

Med ia contact:
Michael Corby
904-632-3310 desk; 904-608-0415 cell

TIlE SUR-PRIMING OF STUD ENTS: WHAT YOU NE ED TO KNOW IIEFORE

ENRO LLING
"College. Inc.. " FRONTLINE broadcast sheds light on/or-profit educational institutions

There' s trouble at the intersec tion of Wall Street and College Avenue of Dreams. Two
Florida State College at Jacksonville ad ministrators want to help students-carry students-steer
clear of a serious financial crisis in education.
In a May 4 airi ng of Frontline. Public Broadcasting System affiliates, including WJCf
in Jacksonville (Cc mcast ch. 8 and ch. 440 at 9 p.m.), will explore "College, lnc.," a report on
government fundi ng of for-p rofit colleges and universities. From the PBS Frontline press
release:
"Higher education is a $400 billion industry fueled by taxpayer money. One of the
fastest-growing-end most controversia l- sectors of the industry is the for-profit colleges and
universities. Unlike traditional co lleges that raise money from wealthy alumni and other
donors, many for-profi t schools sell sha res to investors on Wall Street. But what arc students
getting out of the deal? Critics say a worthless degree and a mountain of debt .. ."
Data released by the Department of Education seems to support that stance. As
reported in the May 3 Chronicle of 11igher Education, the default rate was highcr for borrowers
who attended for-profit schools (at 11 .9 percent) than for borrowers who attended public
colleges (at 6.2 percent) o r private colleges (at 4 .1 percent).
The two Flo rida State College administrators, Vice President for Government Relations
Susa n Lehr and Associate Viee Preside nt for Workfo rce Development Jim Simpson, have
followed the money rigo rously and add their perspectives, with some startling facts abou t the
path that money takes. Their interest ste ms from their Coll ege's involvement as a state leader
in workforce development. The reality is that many of the fantastic jobs and salaries promised
by the for-profi t schools never material ize, and as Lehr explains:
"The way it works is this: The student is recruited. The student comes, they sign them
up for loans, the tuition is paid, the school gets its money, the student gets the debt, and when
the student defaults, the taxpayer has to pay that."
 In a comparison ofthe origins of Jacksonville student loan defaults, the facts are
alarming. According to Simpson' s calculations, for-profit schools account for 8.7 percent of
post-secondary enrollments in Jacksonville. Yet they account for 48.4 perc ent- nearly hal f--af
student loan defaults. More than one in seven of their students, or 14.4 percent of their
enrollment, end up in default on their loan s. Compare that with 1.24 percent of the total
enrollment of students in public institutions who default on their loan s.
For Lehr and her Co llege, it' s not about competi tion for students. Enrollment increased
35% over the past three years at Florida State College at Jacksonville.
There are other concerns tied in with this very complicated issue, but it' s primarily an
issue of consumer awareness.
"The student needs to understand what it is they're seeking," said Lehr. " What kind of
training, does that training have specified types of accred itation? The other thing they need to
look at is cost. ,., is it an amount they c an afford? If something isn't affordable, it's not very
good access."
Lehr and her colleague Jim Simpson have spent weeks listening and talking to
legislators in Tallahassee and on Capitol Hill. They have amassed fact s and detai ls about costs;
accreditation issues that affect students' ab ility to transfer credits to another school or degree
program; job placement and employment opportunities; and defaults o n student loans. What' s
their purpose?
"Our eoncern is that students are being inappropriately enticed into believing that
they're going to get something that they mayor may not get, and it's costing them a fortune,"
Lehr explained.....When that happens, the students often end up on our doorstep, and a 101 of
times we can't help them. They've maxed out on federal financial loans and they have no
more capacity for loans. It happens quite often."

!\l EOlA OPPORT UNITY: Susan Lehr and Jim Simpson are available for
int erviews. CGs a rc attached from DVD of interviews with Lehr and Sim pson and copies
of the DVD are available 10 media as well. A current student who di scovered too late that
credits from her former college would nollransfer 10 a state school, is also willing 10 talk
to media, upon r equest.
-30 -

Florida Sta te College at Jad<.sonvine is accredited by the Commission on Colleges of the Sou\tlem Assodation of Colleges
and SChools to award the baccalaurea te degree and the associate degree. Contact the Commission on Colleges a11866
Sou \tlem l ane. Decatur, Georgia 30033-4097; or ca tI 404-679- 45Q1 lor cuesuoos about the accredaancn 01 A oriCa State
Coll ege at Jack sonville.
LINKS:
Chronicle of Higher Education: http:U ch ronicle.com/article/Default-Rates-for-Studen t/65387/

Frontline: http://www.pbs.org/ wgbh/pagesLl ro"! I!nelco lIege!nct

eGs:
• Susan LehrN P. Government Relation s/Florida State College
• Jim SimpsonfAVP, Workforce DevelopmenUFlorida State College

Susan Lehr's log sheet:

"Hello. I am Susan Lehr, Vice President for G overnment Relations for Florida State College at
Jacksonville.-

"The US Department of Educa tion is writing a new set of rules that govern the higher education
act which governs all of the institutions of hig her education in the nation. The focus of these
particular ru les relates to federal financial aid and the amount of money that students may
borrow to go to college. W hile this affects all institutions, it really has the most dramatic effect on
the for-profit industry because the regulations don't touch degree programs in public institutions
and not-for-profit institutions."

"Congress first authorized for-profit institutions to have access to federal financial aid , under the
condition that they prepared students for gainful employment. That's in the law fo r the for-profit
institutions and for institutions that do training for less than a degree. For example, Florida State
College at Jackson ville has a lot of vocational progra ms that are non-degree programs . A ll of
those programs are im pacted by this negotiated rule that the Department of Edu cation is just
about to put out."

'There was no definition for gainful employment. There really never has been . So, there's a
tremendous difference between the public sector - at least in Florida - and the for-profit sector.
The public sector in Florida has third-party verification of employment. The for-profit sector is
welcome to participate , but choose not to. A very small percentage of for-profit schools
participate in third-party verification of employment and how much the person ea rns."

' The for-profit industry is self-reported. So they report whether or not a person goes to work,
they report how much a person earns; whereas in Florida, in the public sector, the state verifies
how mu ch a person is earning and indeed whether or not they're working at all. "

"How we got interested in it is... a number of students cam e to our institution that have already
graduated or completed credits or certificates from som e of these for-profit schools but they
don't have a job and they have a lot of debt. They come to our college hoping they can either
transfer those credits into our programs or get a credential that will allow them to get a good-
paying job."

"One of the differences between our institutions and the for-profit institutions has to do with
remed iation. As you know, I think it's approaching 70 percent of the students that go to post-
secondary school have to have remediation. Well, there's a reason that they need remediation
in order to do upper level work. Most of the for-profits don't offer remed iation. Frankly, a lot of
the students, they buy the quick- and-easy. Quality educa tion isn' t quick-and -easy. It requires
some preparation and work on the students' behalf. A lot of times, students are looking for the
short cuts , and it costs them a lot of money."
"When the debt becomes so big and the student can't earn enough to make the payment s, it
goes into default. The student cannot discharge, except in very rare circumstances, they cannot
discharge that debt through bankruptcy. It will follow them their entire lives. They cannot go
back to school until those debts are paid so it really stops their education and it straps them
financially. A lot of times they can't afford to buy a car. Very often the payments on these loans
are the size of a mortgage so they can't buy a house or really participate in the economic
recovery of the nation:

"It's very much like sub-prime mortgages, where the pitch was, 'Oh you deserve this wonderful
home. Don't worry about your salary, I am sure you're going to make more money in the future;
we're going to get you into this mortgage really inexpensively, and... Sign here.' People buy that
American dream of owning their own home . That's exactly what's happen ing; in fact it's called
the sub-priming of students. What happens is the for-profit companies, corporations and schools
recruit these students, they sell the dream . 'Come here, we're going to help you get a great
ca reer, you're going to earn lots of money, don't worry about the size of this loan because you're
going to make this money in no time in your new career.'

"We have a treme ndous increase in stude nts at Florida State College at Jacksonville. We really
don't need to go out and recruit more students. Our concern is that students are being
inappropriately enticed into believing that they're going to get something that they may or may
not get, and it's costing them a fortune. When that happens, the students often end up on our
doorstep, and a lot of times we can't help them. They've maxed out on federal financial loans
and they have no more capacity for loans. It happens quite often."

-It's called OPPAGA, Office of Policy, Planning and Governm ent Accountability, OPPAGA, did a
study between the for-profit institutions that do vocational traini ng and the public institutions, and
they identified programs that were offered in both types of institutions, and what they found was
that the public institutions have a much higher probability of being accredited in the different
disciplines. Even when you count the state subsidy that the legislature provides to public
institutions, even when you add that plus the students' tuition, it is still costing the state less
money - certainly less for the student."

"The student needs to understand what it is they're seeking, what kind of training, does that
training have specified types of accreditation? The other thing they need to look at is cost. The
amount of money it's costing them to go to whatever school they choose to go to, is it an
amount they can afford? Access and afforda bility go hand in hand. If something isn't affordable,
it's not very good access:

Jim Simpson log sheet:

"Hello. I am Jim Simpson, Associate Vice President, Florida State College at Jacksonville."

"Susan Lehr and myself were negotiators for the Title IV Program Integrity Rules that were
being negotiated at the US Department of Ed.·

"One of the issues that we have in this country is an extremely high default rate on student
loans. For example, in Florida, we have about 1.2 million students in post-secondary education.
These are students enrolled in private institutions, for profit, and public institutions. Of those
students, about 167,000 take out loans. Of those, about 15 percent or over 25,000 students
default on those loans."

[In response to the question "Some for-profit schools claim that the legislation would limit access
to education for many students. Is that the case?"] :
"Actually, that's not the case. Even the US Department of Education's own analysis indica tes
that only six to eight percent of the programs in the United States would be impacted. Basically,
what they're trying to do is go after programs that really are abusing students - what they call
the bad apples."

"To give you a case in point. here in Jacksonville, we have three for-profits that only account for
just about 4 percent of the total post-secondary enrollments in Jacksonville, but they account for
over 41 percent of the defaults. Now think of it - three institutions whose enrollments are less
than 17 times the enrollments of UNF and Flo rida State College at Jacksonville. 17 times
smaller, yet the total defaults that those three institutions are greater than the defaults at the
University of North Florida and Florida State Colleg e:

' T hose institutions account for 4.6 percent of the total post secondary enrollment and 40.7
percent of all defaults."

"Think about that. If their product is defective, would you go out and buy an automobile if you
knew that the automobile would blow up? Sho uldn't it have some sort of regulation to protect the
consumer, if one in seven is going to default?"

"First and foremost. students should look at education as any consumer product they're going to
purchase. They should look around. They should shop, There's a vast different between what it
costs to rece ive an education at any of the institutions that are located in Jacksonville. That
goes for the for-profits, that goes for the publics:

"The highest level of accreditation is regional, not national. That causes confusion with student.
so they should ask, are you regionally accredited? If not, my advice is to tum around and walk
out the door:

-
 From : Cu nningham . Peter
Sent: Friday. April 30. 2010 12:11 PM
To: Shireman. Bob: Hamilton. Justin
Su bject: RE: interview requ est from dan goldenlbloomberg news
(b)(5)

From: Shi reman, Bob

Sent: Friday, Apri l 38, 2818 9:28 AM
To: Hami l t on, J ust in
Cc : Cunni ngham, Peter
• 1: 1. , . • ... _
gol de n/ bloomberg news
(b)(5)

From: DAN GOLDEN, BLOOMB ERG/ NEWSROOM : (b)(6)

Sent : Thur sday, Apri l 29, 2819 11 : 37 ~.----------------------~
To: Shireman, Bob
Subj ect : RE: i nt erview reques t from dan gol den/bl oomberg news

Bob,

Once I get t he speech (or even if I don ' t f or some reason), would you also be availab le
t o chat further about it? Perhaps we could talk (on backg r ound if you prefer) about why you
decided to be stronger in your public comment s on th i s i s sue , whether it ref lects a s hi ft in
department strategy, etc .
I al so must confe s s a bi t of fr ust r at ion on one mat t er (fo r wh ich you 're not r espons i bl e
in any way I know; I 'm grateful for your cooperation wi t h my stor i es) . I' ve been r equesting
an i nterview wi t h Ar ne Du ncan on for -prof i t col leges fo r mon th s wit hout success .
Now I under stand he t alked t o Frontli ne . Given th at I and Bloomberg have devot ed so much
time , energy and space t o expos i ng probl ems i n t hi s sect or , and t hat Front li ne (a very hi gh-
qualit y oper at i on t o be sure) appea rs to have basical ly fol lowed my stor ies and intervi ewed a
bun ch of people I quoted, I t hi nk I deser ve at l east equal treatment and access t o t he
sec reta ry . Any good wo rd you coul d put i n f or me would be much appr eci at ed .

Yours ,

Dan

-- -- - Or i gi nal Me ssage -- - --
Fr om: Bob Shi r eman <Bob. Shireman@ed . gov)
To: DAN GOLDEN ( BLOOMBERG! NEWSROOM :)
Cc : Justin .Hamilton@ed .gov
At: 4/29 11 :99 :47

Justi n:
Please note Dan 's r equest (and t i ming of hi s pi ece , f or whic h I wa s int erviewed) .
- Bob

Robert Shi reman

De puty Undersecret ary
48
U. S. Depa rtment of Education
( 202 ) 260 -0101
=-_=c-::::=::-= = = - : - : : ==
From : DAN GOLDE N, BLOOMBERGI NEWSROOM :
:-:- I(b)(6) I~bloomberg . net ]
Sent : Thursday, Apri l 29, 2010 10:01 AM
To: Shireman, Bob
Subject : RE : interview request f r om dan golden /bloomberg news

Hi Bob,

Thanks very much f or your help wi t h t he homel es s stor y. whic h i s i n the i s sue of Busi ness
Week on the stands tomor row .
I understand (f r om r eading I nside Hi gher Ed) t hat you gave a great speech about the f or-
profit sector yester day. Woul d you mind sendi ng me a copy as soon as pos s i bl e ? We ' d like t o
do a news story on it.

You r s ,

Dan

--- - - Or igi nal Mes sage - - ---

From: Bob Shi reman <Bob. Shi r eman@ed . gov)
To: DAN GOLDE N (BLOOMBERG / NEWSROOM: )
At : 4/09 14: 28 : 26

87% (y ea r ending Dec . 31. 2007)

Drake Col l ege of Busines s

Elizabeth
NJ
Ful l y Certifie d
12/ 31/ 2007
87 .19
3,366,489
6,629,924

-- - --Original Mes sage---- -

Fro m: DAN GOLDEN, BLOOMBE RG/ NEWSROOM:
l(b)(6) I
@bl oomber g . net }
Sent: Frid ay, April 99, 2919 19 : 59 AM ~.

To : Shirema n, Bob
Subject : RE: i nt er vi ew r eque st f r om dan golden /bloombe rg news

Hi Bob,

How are you? Hope all's well. I know you 're very busy - - were you able t o check t he 99/ 19
percentage of that New Jer sey sc hool , Drake Col l ege of Busines s ?
Also, a Wall Street anal yst wrote a r eport yesterday ci t i ng "industry chat t er " that DOE
will seek more authority over academi c quality, dimini shing the accrediting bodies. If
ther e's any truth t o the chat ter , Bloomberg would be very interested in a s to ry about it ,
since my piece about buying accreditation got a l ot of notice . So I' d very much l i ke t o chat
about that at some point .

Your s ,

Dan

--- - - Ori gi nal Message -- -- -

49
Fr om: Bob Shi r eman <Bob.Shi r eman@ed. gov )
To : DAN GOLDEN (B LOOMBERG! NEWSROOM: )
At : 4/ 06 11:43:16

Targeti ng vul ner able populat i ons who are not li kel y to benef it is one exampl e of over zealous
r ecruit i ng t hat can be dr i ven by paying re cr uit er s based on enr ol l ment numbe r s .

--- - -Or i gi nal Message- - - - - !(b)(6) I

Fr om: DAN GOLDEN , BLOOMBERG/ NEWSROOM: --'~bl oomberg . net ]
Sent : Tuesday, Ap ril 06, 2010 11: 21 AM
To : Shi r eman, Bob
Subj ect : RE: i nter view request f r om dan gol den/ bloomber g news

Hi Bob.

One qui ck f ollow -up question . Whe re you s ai d t hat "incentive compensation can dr i ve
r ecruiters t o be over -zealous I " is it al so f air to say it's possibl e that r ecr uiti ng t he
homel ess cou ld be one exampl e of t hat? I t ake your poi nt that if th e prog r am does provide
quality trai ning i t may be a good opt i on, wh i ch i s why I say it ' s possible and coul d be.

Your s,

Dan

-- - - - Or i gi nal Mes sage -- - - -

From : Bob Shi reman <Bob.Shi reman@ed. gov)
To : DAN GO LDEN (BLOOMBERG! NEWSROOM :)
At : 4/0 5 22:47: 15

Tr y me around 11 a . m. t omorrow .

Robert Shi reman

Deputy Undersecreta r y
U. S. Department of Educat ion
(282 ) 268 -818 1

Fr om: DAN GO LDEN, BLOOMBERG! NEWSROOM: (b)(6) @b loombe rg . net ]

Sent : Monday, April 05, 2010 8 : 18 PM
To: Shi r eman, Bob
Subj ect : interview r equest fr om dan golden/ bl oomberg news

Hi Bob,

How are you? For the past f ew weeks I' ve been r es earchi ng a s tory about f or-profit
col l eges rec r ui t i ng the homel ess. The i ss ue of course is t hat t he homeless ar e not onl y a
vul nerable population (high rates of menta l i ll ness , subst ance abuse , etc .) but al so need
fe deral aid t o pay the relatively high t uition. I f they default on l oans, their homelessness
may be pr olonged becau se publi c housi ng authori ties and private l andl ords want tenant s with
good credi t .
I ' ve gathe red qui t e a few exampl es of f or - prof i t r ec r ui t ers actua l ly goi ng t o s helte r s
and making pitches. It appears to be a pr et t y common practice.
I'd l i ke t o chat wit h you about th i s and di scuss t he poss i ble lin k t o broader pol i cy
i ssues. es peci ally in cent i ve camp. I wonder, i f r ecruit ers wer en't pai d on t he bas i s of how
many student s can t hey enrol l , woul d they st i l l be haunti ng t he shel te rs ? Ot her cont empl at ed
changes s uc h as gai nfu l empl oyment mi ght per t ai n al so .
Would yo u have a f ew minut es t o tal k about t hi s t omor r ow (Tues day) or Wednesday? I would
r eal ly appr eci at e it .
50
Yours,

Dan Gnl de n

51
 From : Shireman, Bob
Sent : Friday, April 30, 2010 10:39 AM
To: Hamilton, Justin
Subject: FW: Arne's Frontline interview today

(I was not interviewed on camera for Frontline).

From: Shireman, Bob

sent: Friday, April 30, 2010 10:00 AM
To: Rogers, Margot; Kanter, Martha; Rose, Charlie; Miller, Tony; Martin, Carmel; Gomez, Gabriella
Cc: Cunningham, Peter
Subject: FW : Arne's Frontline interview today

Peter asked me to forward this again. t-ly notes on Arne's responses are at the BOlTOM.
-Bob

From: Shireman, Bob

sent: Wed nesday, March 24, 2010 10:14 PM
To: Cunningham, Peter; Rogers, Margot; Kanter, Martha; Miller, Tony; Martin, Carmel; Rose, Charlie; Yuan, Georgia;
Gomez, Gabriella; Madzelan, Dan
Cc: Manheimer, Ann
ubi • ,' e:
(b)( 5)

52
(b)(5)

53
From : I
Williams. Gena (b)(6) !@b1ankrome.coml
Sent : Tuesday. April 27, 2010 2:49 PM
To: Shireman, Bob; Yuan. Georgia
Cc: Andrews, Dwayne
Subject: Meeting request on behalf of the Charleston School of law and Blank Rome Government
Relations

Good Afternoon,

I am writing to request a meeting on behalf of the Charles ton School of Law r CSl ") to discuss the impact that the
reported draft regulations defining "gainful em ployment" w ill have on proprietary law schools like CSl. CSL would like to
discuss some mod ifications that it thi nks will address its con cerns. W e wou ld like to have this discussion as soon as
possible, and depending on the timing a sen ior mem ber of CSl 's leadersh ip tea m w ill attend, as well as Dwayne Andrews
and Michael Cioffi from Blank Rome .

Thank you for your co nsideration . Please feel free to co ntact me if you have any questions or concerns abo ut this
mee ting request.

Gena Wi lliams I Secret ary t o Dwayne And rews. Principal 1Bl ank Rome Government Relations lLC
Watergate 600 New Hampshire Avenue, NVI/ 1war hinoton y 20037
Phone; 202.944 .35111 Fax: 202.772 .5858 1 E m a ~ { b)(6) BlankRome.com,

-----_._---_ -._- _._._--_._- - - - - -_.

T his message a nd any attachme nts ma y contain confidential or privileged infor mation a nd a r e on ly for t he use of the Intended
recipient of this message. If you arc not th e intended recipient, please nolif)' th e sender b)' re tu rn email, and delete or destroy
t his and all copies of Ihis message a nd all attachments. Any unauthorized di sclosu r e, use, distr ib ution, or re prod uction of t his
message or an y a ttachments is prehibltcd a nd may be unlawful.

............................._ .
Any Federal tax advice contained herein is not intended or writte n to be used, and cannot be used by
you or any other person, for the purpose of avoiding any penalties that may be imposed by the
Internal Revenue Code. This disclosure is made in accordance with the rules of Treasury Department
Circular 230 governing standards of practice before the Internal Revenue Service. Any written
statement contained herein relating to any Federal tax transaction or matter may not be used by any
person without the express prior written permission in each instance of a partner of this firm to
support the promotion or marketing of or to recommend any Federal tax transaction(s) or matter{s)
addressed herein.

***************************************************************************

62
From : Pauline Abernathy [pabernathy@ticas.org)
Sent: Sunday, April 25. 20 10 3:42 P M
To: Pauline A r thy~ Deanne Leon in; Margaret Reiter "(b)(6) @fsg .edu; ,.".
(b)(6) gmail.com ~usstudents.org (b)(6) nacacnet.org;
b 6 publicadvocates.orQ ;tauren Asher; Barmak Nassirian; Chris Lindstrom ; SIeve Surd;
Connie Myers ; Luke Klipp; Michelle Rodriguez; Edfe Irons
Cc: Manheimer. Ann; Arsenault. l e igh
Subject: AG investigations

FYI The article below indicates that the AGs in IL and OR are investigating EMC s art instit ute schools for t heir
relat ionships btwn the schools and t he providers of loa ns t o st udents at the schools (it was di sclosed on EMC fil ings wit h
the SEC) .

Another downtown for-profit school: httD; lIwww.jso n li n e . com/blQg s/ bu s i ness/9 1 ~254Q9 .htm l

And this article suggests the OH AG may be opening an investigat ion into Delta Caree r Education Corp and its Miami
Jacobs Ca reer College: http ://www.middl etownjournal.comLnews/middletown-news/ miam i-jaco bs-students-share-their-
frustrations-669850 .html?showComments-true&oost ingld - 669939&imw - y

The WSJ is reporting t hat the CCA commissioned report helped drive fo r-profit stocks down this week, despite enrollment
growth over 20% and profit growth over 50% : http ://on line,wsj,Com/a rticle/ BT-cO-2Ql QQ423-
711672.htrn l?mod-WSJ Iatestheadfines

64
From : Jamienne S. StudleYI(b)(6) !@publicadvocates.org]
Se nt : Thursday, April 22, 2010 10:1 9 AM
To : p
Cc: b 6 gmail.com; dloonin@nclc.org; Debbie Fra~kle Cochrane;
(b)(6) fscj.edu; Manheimer, Ann; Arsenault, LeighYb)(6) @nacacnet.org;
(b)(6) newamerica .net;[(bH6l @publicadvocates.0.LQ
Subject: Re: ITT Educational services lawsuit

My plane is about to leave; if someone can do that review of the case, great, ifnot Michelle Rodriguez in my
offi ce may be able to get someone to do a fast overview, contact her directly

Sent from my iPhone

On Apr 22, 2010, at 4:49 AM, "Pauline Abernathy" <pabcrnathy@ticas.org> wrote:

Nb this new laws uit alleges fa lsification of j ob placement figures . Would be worth reviewing the suit to see what
evidence is offered as to how ere. Article also cites the CA AG settlement.

----- Original Message -----

From: Google Alerts < googlealerts-noreplyCiVgoogle.com>
To: Pauline Abemathy
Sent: Wed Apr 21 11:55:40 20 10
Subject: Google Alert - ITT Educa tional services

Google News Alert for: ITT Educational se rvices

ITT Educational Changed Test Scores , Ex-Employee's Suit Says

<http://www.google.com!url?sa- X&g-http://www.bus inessweek.com/news!20 I 0-04-2 I/itt-educational-changed-
tcst-scores-ex employee-s-suit-
says.html& ct- ga&cad-l :2:0&cd- oOzNINoaRIU&u sg- AFOjCNEbmguX uyoArAT iTwG fgG xdEWVcVO>
BusinessWeek
By John Lauerman April 2 1 (Bloomberg) -- ITT Educational Services Inc., a for-prolit educat ion company, changed
app licants' test scores to allow them to ...
Sec all stor ies on this topi c
<http://ww w.google.com!url?sa X&g hnp://news .goo gle.com!news/s tory%3Fncl%3Dhttp ://ww w.businessweek.co
mJnews/20 I 0-04-21 Jitt -educational-changed-ces l-scores-ex-employee-s-suit-
sa ys.htm l%?6hl%3 Den&c l ga&cad 1:2:0&cd oOzNINoaRlU& usg AFOjCN FS2M9 8wuZj kbUVka jE6oEc70X8x
A>

This once a day Google Alert is brought to you b y Goo gle.

Remove <hnp:llwww. google.comJalcrtsJremove?s- AB2Xq4g0 RiN wcIDFz9-

8Z7 D~1HI2PB u OhgdOK8&hl-- en&gl us& source- ale rtsm ail&cd- oQ?NINoaRlU&cad - I :2 :0> this alert.
Create <hn p:llw ww.google.comJalerts?hl e n&g l· -us &sou rcc-a.lertsmAil&cd-oOzN I Noa R IU~c ad - I : 2: 0> another
alert.
Manage
<http://www.google.com!alcrts/manage.?hl- en& gl- us& source-- ale rtsmail&cd - oO zN INoaRIU&cad- }:2:0> your
alerts.

65
From : Shireman, Bob
Sen t: Thursday, April 22, 201 0 7:56 AM
To: DAVID BAIME
Subj ect: RE: Hoping to schedule

Toda y would be better - w e could ta lk t his afternoon. Ot herwise, work with leigh.arsenault @ed.govto fin d a t ime next
w eek (but she is out today).

From: DAVID BAIME l(b)(6) Waacc.nche.eduJ

Sent: Thursday, April 22, 20106:24 AM
To: Shireman, Bob
Subject: Hoping to schedule

a ten minute call w ith you early next week. Two topics, gainful employment and the TAA program.

I f you can do this how would I arrange it?

David

This email has been scanned for all viruses by the MessageLabs Emai l
Security System.
From: DAVID BAIMEI<b)(6) /e:aacc.nChe.edU]
Sent: Thursday, Apri 22, 20 06:24 AM
To: Shireman, Bob
Subject: Hoping to schedule

a ten minute call with you early next wee k. Two topics, gainful employmen t and the TM program .

If you can do this how would I arrange it ?

David

This email has been scanned for all viruses by the Me ssageLabs Email
Security System.

67
 From: Jordan, Stacey
Sent: Thursday, April 22, 2010 6:12 AM
To: Shirem an, Bob
Cc : Honeysett. Adam
Subject: Re: CCA outreach to Mayors against gainful employment

Ok l et us know if we can hel p i n anyway

- - - - - Or i gi nal Message -- - - -
Fr om: Shi reman, Bob
To: Jordan, Stacey
Sent: Wed Apr 21 21:52: 58 2el e
• ...... .. rr.

(b)(5)

Robert Shirema n
Deput y Undersecreta ry
U. S. Department of Educat io n
( 282) 268 - 8181

From: Jordan, St acey

Sent : Wednesday, Apr il 21, 2818 1:48 PM
To : Shirema n, Bob
Subj ect : RE: CCA out r each t o Mayors against ga i nfu l emp loyme nt
(b)(6)
U. S. Department of Educ ation

From: Shi reman, Bob

To : Ritsch, Mass ie
Sent : Tue Apr 20 14:54 :31 2010
Subject : FW : CCA outreac h t o Mayors agains t gainful employment If we wan ted to send somet hi ng
to Mayors , how would we do that?

From: Pauli ne Aber nathy Imailt o: pabernat hy@ti cas .orgl

Sent: Tuesday, April 20, 2010 3: 45 PH
To: Ma nheimer , Ann; Ar senaul t , l eigh; Gomez , Gabr i el l aj Kva al , James R. j Shireman, Bob
Cc: Debb ie FrankI e Cochrane
Su bject : CCA out r each to Mayors aga i nst gai nf ul emp loyment

FYI-- I j ust got t he emai l below from a f orme r col league i n t he Phi l adelphia Mayor ' s of f ice .
As you' ll see, EDMC has hi r ed a f irm t o get l oca l elect eds and ot hers t o send let t er s t o
Senato rs Casey and Specter aski ng them t o oppos e the gai nful employme nt r egulation and to
ur ge ED t o l et "Congr ess hand l e t hi s i ssue i ns tead. " Mayo r Nut ter wi ll not be s i gni ng t his
l et t er but it woul d be wo r t h the Admini stration r eachin g out to th e confere nc e of mayors and
other sta te and local elec ted assoc i at ions on th i s i ssue .

Text of ema i l sen t to mayor ' s of fice :

We are working as l ocal consul t ant f or EDMC, the parent company of t he Art I nst i tute of
Philadelphia The US Department of Education has proposed a rule t hat would make ent ire
programs ineligible for federal Title IV ai d ( l i ke Pell grants) if they fail to meet a
certain debt -to-income rat io for s t udents upon graduation . I t ' s a bit wonky, but what it
boil s down to is concern that programs like those offered at the Art Institute of
Phi ladel phia cou l d be impacted if this rule goes through and coul d limit access f or st udents,
and adul ts swi t chi ng or starti ng car eer s to obtain degrees in suc h ca ree r t r acks lik e graphic
and fa shion des i gn , culinary arts, f i lmmaki ng and phot ography and more .

We're seeki ng to bu i ld s uppor t f r om i ndi vidua l s and organi zat i ons t hat can attest t o t he
i mpor t ance of t hese progr ams f or career t ra i ni ng and educ at ion i n t he Philadel phi a region and
th e import ance of t hese careers t o ou r l ocal economy . We 're aski ng f or a s how of support i n
t he fo r m of written l et t ers to our Pennsyl va ni a Senato rs , Arlen Specte r and Robert Casey
about t hi s iss ue , expressing suppor t f or AI Ph i l adelph i a and it s programs , expla i ni ng how
impor ta nt t hey are f or t hose seeki ng to st ar t ca ree rs in the afo rement ioned arenas, and
aski ng Se nators Casey and Specter t o contact t he Dept of Ed t o oppose t hi s rule and have
Congress handle th is i ssue i nst ead .

Pau line Abernathy

Vice President
The Institute f or College Access & Success
510.883.7 303 www .tica s .org<f ile : / / / \ \www .ticas .org >

69
From : Tina Milanol(b)(6) ~csPOhjo.orgl
Sent: Wednesday, Apri121 . 2010 10 :45 AM
To: Shireman, Bob
Cc : Damied er. Greg
Subject: Going Ahead
Attachments: imageOO4.jpg; image005.jpg; image006.j pg

Bob, just read your comments in the Going Ahe ad with Gainful Employment article in Inside Higher Education . I applaud
your stand and the work you are doing. Ju st, fyi, at CSP w e have ended our awards for students who elect to attend
proprietary schools. Keep up the great work in DC ... we continue to count on you . Let me know if there is anything I can
ever do to help.

Warm regard s,
Tina

Christina R. Milano
CEO
Cleveland Scholarship Programs

70
 •

From : Shireman , Bob

Sent: Wednesday, April 14, 201 0 5:45 PM
-
To:
.
(b)(5).(b)(6)
Arsenault, Leigh; Yuan, Georgia
c•.

-- - - - Or igi nal Me s s age -- - --

From : A rse n a ult~ Lei gh
To : Shi reman, Bob
Se nt: Wed Apr 14 16 :07 :09 2010
Sub j ect : FW: Can I get a t ime wit h Bob?

FYI- - I have n' t r e s ponded yet . Want ed t o chec k wit h you f i r st .

-- - - -Or i gi nal Mes s age - -- - -

Fr om : Ca riel l o, Denn i s M. [ma i l t o :dca r i e l l o@sonnen s chein . com]
Sent : Tuesday, Apr i l 13, 2810 7 :42 PM
To : Arsenault , Le ig h
Subjec t : RE: Can I get a ti me wi t h Bob?

l e i gh ,

I j us t want ed t o f ol l ow up - any s hot at gett i ng a meet ing wi t h Bob i n t he comi ng wee ks ?

Denni s

Dennis M. Ca r i e l l o
Sonnensc hei n Nat h & Rose nt hal l lP
Two World Fi nanci a l Ce nt e r
New Yo r k, NY 10281
Direct : 21 2 . 398 . 7636
Cell : 917- 61 3- 3235
Fax : 212.768 .6800
dca riel lo@sonnen s chein .com
www.sonnensc hei n.com

---- ------------------------- ------ ---------- ----------- ------ ---------

CONF IDENTIAL I TY NOTE:
This e -ma i l and any attac hments are confi de nt i al and may be pr ote cted by l ega l priv i l ege . If
you are not t he i ntended re cipient , be awa re th at any di s clos ur e , copyi ng, di stribution or
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To compl y wi th r eq ui reme nt s imposed by the I RS, we inf or m you t hat any U.S . fe de r al t a x
advice conta ined he r e in (i nc l udi ng any att a c hme nts) , unle ss s pec if ica l ly sta t ed otherwis e, is
71
not intended or writ ten t o be used, and cannot be used, for the pur pose of ( i ) avoiding
penal t i es under the I nter nal Revenue Code or (ii ) promoti ng. marketing or recommending any
t r ansact i on or matter addressed herein t o another party .

- - - - -Original Message--- - -
From: Cariello. Dennis M.
Sent: Monday, April 12, 2919 11:44 AM
To: Arsenault. leigh
Subj ect : Can I get a t ime wit h Bob?

l ei gh .

I hope you are doi ng wel l . I wanted to see if Bob had any date s this week to t al k about
gainf ul employment? I represent I nf i l aw , a sy stem of f or -profi t accredi ted law sc hoo ls
(i .e., Fl or i da Coas ta l l aw Sc hool ) t hat have some thought s about the proposed rule .

If poss ibl e , t he Undersecretary and Georgia Yuan woul d be helpful i nv itees as we l l. I will
also be tryi ng to meet with Tony Miller al so - so i f it makes s ense for him to come, that
would be great . Otherwi se I can meet wit h him separ ate l y.

Thanks .

Denni s

-- - - -Original Message -----

From : Ar senault, leigh [mai lto : lei gh .Arsenault@ed.gov)
Sent : Friday, February 26 , 2919 4 : 12 PM
To: Cariello, Dennis M.
Subject : RE: How are you

Hi Denni s ,
Unf ort un at el y Bob was out of the off ice on t hese days. Pl ease l et me know Bre nt wil l be
t rave li ng to DC in the near f ut ure - -wi l l be happy to accommodate.

l eigh

Offic e of the Und er Secret ary

u. S. Depart ment of Education
leigh .ar senau lt@ed.gov

-- -- -Or i gi nal Mess age - - - - -

Fr om : Cari ello. Denni s M. 1~(b"')"'(6"1-----------'@sonn en s c he in . com )
Sent : Monday, Februa r y 22 , 2919 8 : 18 PM
To: Smi t h, Zakiya
Cc : Arsena ul t , l eigh
Subject : Re: How are you

Thanks so much f or get ting back t o me - and congrats on the move !

l ei gh- t hanks i n adva nce f or considering thi s request . I f you'd l i ke t o ta lk, I ' m at 917 -
613 -3 235 .

72
 Th anks ,

Den ni s

Denn i s M. Cariello
Sonnen s chei n Nath & Rosent hal LLP
Two Wor l d Financi al Center
New Yor k, NY 18281
Di r ect: 212.398 .7636
Cell : 917-613-3 235
Fax: 212. 768 . 6888
[(b)(6) @sonnenschei n . cOll!'''
www . sonnensche in .com

----------- -- --- ---------------------------------------_. _-------------

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penalties under t he I nt er nal Revenue Code or (ii) pr omot i ng, market ing or r ecommending any
t r ansacti on or matter addres sed herei n t o anot her par t y .

-- - - - Ori gi nal Mes sage ---- -

Fr om : Smi t h, Za kiya <Zaki ya . Smi t h@ed . gov>
To: Cariel l o , De nni s M.
Cc : Arsenault , Lei gh <Lei gh. Ar senaul t@ed . gov>
Sent : Mon Feb 22 18 :58:24 2919
Subject : Re : How are you

Hi Dennis -
In th e time that you 've been gone, I ' ve act ua l l y moved over to OPEPD.
Lei gh (copied here) i s now wo r ki ng with and keeping track of Bob these days .

Sent fr om my iPhone

On Feb 22, 2919, at 7 : 24 PM, "Ca riell o, De nnis M. " <dcar i ell o@sonnens cliei n. com > wr ote :

> Zakiya,
>
> I hope you are well . I t 's been t oo long see we l ast connected .
>
> I had a questi on f or you. Br ent Ric hardso n, the CEO of Gra nd Ca nyon
> University i n Ariz ona - a pub l i cl y traded, propri etary sc hool - wi l l
> be in DC on wednesday and Thursday morning and wanted to see if he
> could meet with Bob.
> Does he have 39 minutes he coul d spar e to meet with Br ent?
>
> Than ks so much.
73
)

> Dennis
)

> Denni s M. Ca r i ello

> Sonnens chei n Nath & Rosent hal LLP
) Two World Fi nancial Cent er
> New York, NY 10281
> Direct: 212 .398 . 7636
) Cell : 917-613-3235
> ~ ax : 212 . 768. 68 e0
>J<h)(6) ~onnenschein .cOfll
> www .sonnensc hein . com
)

> - - - - ---~ --- - - - -------- - - ---- - --- - - - --- - --- - - - --- ----- - - - - -- - _.- - - - - -
) CONFIDENTIALI TY NOTE :
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> er ror . pleas e not i f y us i mmedi at ely by r et ur ning i t t o the se nder and
) del et e thi s copy f rom your syst em. Thank you f or your cooperat i on.
> IRS CIRCU LAR 230 NOTICE :
> To comply with r equirements impos ed by t he IRS, we inform you that any
> U.S. fe deral tax adv i ce contained her ein (i ncluding any atta chme nts),
> unles s speci f i cal l y st at ed otherwise, i s not i ntended or written to be
> used, and cannot be used, f or the pu rpose of ( i) avo i di ng penalties
> under t he Inte rnal Revenue Code or ( i i) pr omot ing, marketing or
> r ecommending any t ransac tion or matt er addressed her ein t o anot her
> part y .
)

> --- - - - - - - - --- - - - - - -- - ---- - - - - - - - ---- - - - - -- ----- - ------ ----------- - - -

)

74
 From : Arsenault, Le ig h
Se nt : Tu esday, April 13, 20 10 2:03 P M
To: . Babyak, Stephanie; Glickman, Jane
Subject : FW : Pre ss Question on Gainful Employme nt Ga ins

Fr o m: Shireman, Bob
sent : Tu esday, April 13, 20 10 1:51 PM
To: Hamilton, Justi n; Arsenault, l eigh
• •
(b)(5)

From : Hamilton, Justin

To : Arsenault, Leigh ; Shireman, Bob
Sent: Tue Apr 13 12:40 :48 2010
Subj ect: Press Quest ion on Ga inf ul Employment Gains

Bob,

Does any of this so und famil iar?

------ Forwarded M essage

From: Dou g Lede rman <doug.lede rma n@i nside highere d.com>
Dat e: Tue, 13 Apr 2010 09 :24:57 -0500
To: "Ha m ilton, Justin " < just in.hamilton@ ed .gov>
Subject: Fwd : Signal Hill - Post-Seco ndary Edu cation : Relief: Gainful Em ployme nt Ga ins Alterna t ive M easure

Just in:

The analysts seem t o be putti ng t heir ow n spin on inform ation that th ey say they 've gotten from OM B ... is there any
wa y to m ake sure th at they're pre sent ing this info rmation accurate ly, etc.?

I'd love t o get my hand s o n t he document, o r at least the portion related t o gainful employment. If t here's any way of
doing that, please let me know ...

Thanks,

Dou g

---------- Forwarded m essage ----------

Fro m : Trace A. Urdan <turdan@signalhill.com >
Date: r ue, Apr 13, 2010 at 7:20 AM
Subject: Signal Hill - Po st -Secondary Ed ucat ion: Re lief : Ga i nf ul Employme nt Gain s Alte rna t ive M easure
To: doug.lederma n@in sid ehi ghered .com

75
 ----------------------------------------------------------------------------

Busi ness Services - Education Services

Indu st ry Update

April 13, 2010 Relief : Ga inful Employm ent Gains Alternative M easure

Trace Urdan
~b)(6)
(b)(6)

Our Call :
As anticipated, Department of Ed ucat io n (USDOE) d raft regulat ion s went to the
Office of M anagem ent & Budget (OMB) last Fri day 4/9 for review prio r t o their
publicat ion in the Federal Register -- likely 5/15. A cre di b le so urce close to
OMB t ell s us that wh ile t he 8% median debt/income mea sure, and the 90% student
loan repayment measures appear t o be essent ially unchanged from the terms
present ed by the USDOE in January, a third alt ernative measure has been added .
This measure would allow programs w ith a graduat ion rate of 50% or better and
a subsequent jo b placement (in the rel evant fie ld) of 70% o r better to qualify
o ut of the other two m easures.

Tho ugh the devil will certainly be in th e details, incl uding how t hese items
are t o be co nsidered for st udent s th at are t ransferring cred it s and may be
already em ployed, the new measure effe ctive ly rem oves th e significa nt threat
t he ru les had creat ed fo r natio nally-accred ited degree program s w ith typically
high default rates. The new measur e, in fact. seem s t o closely resemble rules
already impose d by nat ional accredit ing bodies. And w hi le we might anticipate
that the terms co uld be st ricte r in USDOE's co ncept io n, they should be
eminently achievable wit h minima l d isruption for all programs.

According to USDOE analysis, (in process of being rev iew ed by OMB,) the ru les
them selves wo uld o nly affect 6-8% of all for-p ro f it pro gra ms, w it h cu linary,
automotive t ech, and nursing programs hardest hit. (We not e th at t his seems
out of keepin g w it h o ur knowled ge of t hese programs as rep resented by
publicly-traded schoo ls, but neve rtheless appears t o represent a co nclus io n
reached by USDOE.) Our co nt act ind icated t hat the University of Phoen ix
(NASDAQ: APO L; Buy) was no t seen as affected at all in the USDOE analysis.

Wh ile w e expect all po st-secon dary schoo l stocks to benefit f ro m t he news, w e

believe that the those names t hat had been m ost challe nged by the existing
terms are likely t o see t he biggest ben efit as a result of t he change. These
include lIT Ed ucat ion al Serv ices (NYSE: ESI; Buy), Co rint hian Colleges
(NASDAQ: COCO; Buy). and Career Education (NASDAQ: CECa ; Buy ) which recently
heralded graduat io n rat es co m fo rtably above 50%. Though some individ ual
programs m ay st ill fail all th ree t est s, w e believe these are likely to be
iso lat ed, rare and fi xa bl e.

W e view th is apparent concession as evidence o f a desire by Secretary Duncan

t o defuse w hat was prom ising to be an area of rea l co nte nt io n, as ev ide nced by
House Republicans, m embers o f t he Co ngressio nal Black Ca ucus, and Se nat o r

76
l am ar Alexa nder all ca lli ng out the Secreta ry o n th is issue . Sec reta ry Duncan
needs, in o ur o pinion, a dive rse coalit ion of supporte rs t o pass hi s signat ure
issue: K-12 educat io n reform . Beca use t he Secre ta ry's K-12 pro posa ls do not
easily fall w it hin typical party boundaries, he really does need a bipartisan
coalition in bot h the Hou se and Se nate ed ucat io n com mittees t o pass his
ve rsion of [ SEA (NCLB). No co ncession at all would have kicked o ff a lo ud and
publicized sum me r of public co mmentary. Because it is ve ry diffi cu lt t o argue
that a 50% grad uat io n rate and a 70% em ploy ment rate is an one rous burden , we
think USDOE has effective ly neut ered the campaig n to ditch the rule e nti rely.

We st ill expect industry to challenge the rul e in public and like ly later in
court, but based o n o ur reliabl e source, we believe investors need no lo nge r
fear that significant revenues coul d be at ri sk in t he eve nt t hat the rules
are passed .

Please see end of t his report for impo rta nt disclosure(s)

Invest m ent Analysis:

Impo rtant Disclo sures

Analyst Ce rt if icat io n
I, Trace urdan, hereby certify t hat all of the v iews exp resse d in this
research report accurate ly refl ect my perso nal views about t he subject
securit ies o r issuers. I also certify that no part of m y com pensat ion was, is
o r w il l be directly o r indirectl y related to t he specif ic reco m me ndat io ns o r
views expressed in t his research report. Signa l Hill does no t compensate it s
equ ity research analysts based o n specific investmen t ban king transaction s.
Signal Hill Equity research analysts receive co mpe nsat io n based o n several
factors, incl uding ove rall pro fita bility and revenues of the firm, w hich
include invest me nt banki ng reve nues.
Meaning of Ratings
Signa l Hill uses a t hree -tie red rati ng system defined as foll ow s:
BUY: We expect t his stoc k to o utpe rform its peers over the next 12 mo nt hs:
HOLD : We expect t his stoc k t o perform in line wit h it s pee rs ove r the next 12
m onths:
SElL: We expec t t his stoc k to underpe rfo rm it s peers over t he next 12 m on ths:

Distribution of Ratings/IB Services

Signal Hill

IB Serv'/Past 12 M os.
Rating Count Pe rcent Co unt Percent
BUYIBUY) 77 61.6 72 93.5
HO LDI HO LDI 47 37.6 38 80.9
SE LLISEL LI 1 0.8 1 100.0

Disclaimer
Thi s report has been prepared using sources we deem to be reliab le b ut we do
not guarantee it s accuracy and it do es not purpo rt t o be co mp lete . Thi s
repo rt is publ ished sole ly fo r in formatio n purposes and is not inten ded to be
used as the prim ary basis fo r m aking investm ent decisio ns, w hich sho uld
reflect the investment o bje ctives and financia l sit uat ion of the investor.

77
The op inions exp ressed herein are subject t o change w it ho ut notice. This
report is not an o ffer or the solicit at ion of an offer to buy o r se ll
securit ies. Additional informa tion is available upon request.

Doug Lederman
Editor, Inside Higher Ed
http://insidehighered .com
doug.lederman@in sidehighered .com

1320 18th St reet, N.W., Fifth Floor

Wa sh ington, D.C. 200 36
work: 202.659.9208, ext . 100
fax : 202 .659.9381
cell : 301.503 .4277

Join the new conversation in higher educat io n.

Sign up for you r free daily e-mail new s alert at http ://insidehigh ered .com/sign up

------ End of Forwarded Message

78
 From: Shireman, Bob
Sent: ~ on~ p ril 12, 2010 11:48 AM
To: (b)(6) career.org'
Subject: e: Wages Versus Actual Wages-Impact On Eligibility under the Gainful Employment
Oro rvu,,,,l

Attachments: l(b)(6)

80 out of how many that provided earnings data?

From : Harris Miller l(b)(6) ~reer.Qrg>

To : Shireman, Bob
cc: Kanter, Martha; Madzelan, Dan ; Ber eron, David; MaJtb)imer. Ann: Arsenault, leighJ(b)(6)
m(b)(6) ~ >; b 6 ka Ian. om (bl(6)
Ly
liikaplan.cgm> ;I(b)(6) @edmc. u
(b)(6) u> (b)(6) h' .edu kb}(6} i@thjcaqob<:>2th.edu>; Thompson, Matthew
[@@j i!aai.com>; Brian Moranl(b)(6) ~ca reer,o rg>
sent : Mon Apr 1209:24:4220 10
Subject: BLS Wages Versus Actual Wages--I mpact On Eligibility under the Gainful Employment Proposal

Bob: During the meeting last week to discuss the gainfu l employment issue, you asked why the
report prepared by Charles River Associates (eRA) and Dr. Jonathan Guryan that we presented
to you and your colleagues assessing the likely impact of the Department's proposed rule did
not include an analysis of the impact on the results if "actual wages" were used by schools in
place of Bureau of Labor Statistics numbers in situations in which the BLS numbers lead to
failed eligibility.

The estimates in the initia l report did not adjust for these possibilities because the earnings data
provided to CRA by CCA member institutions was incomplete for most programs. Analysis
subsequent to our meeting of the incompl ete data indicates including the actual wage data
wou ld allow few programs to retain eligibility that otherwise failed to meet the ratio test using
BLS data.

In the initial request for data, CRA asked CCA member schools to provide actual earnings data
to allow for an analysis of this portion of the proposed regulation. However, few institutions
have these numbers because they are not required to capture such data. Less than 3 percent of
programs analyzed were able to share actual earnings data that CRA judged sufficient to be
used as an "alternative measure" to the initial debt to earnings calculation.

After our meeting with you, I asked CRA to " run the numbers," even with the very limi ted data
they had received on actual earnings. When the limited data were applied by CRA to programs
that did not meet the initial debt to earnings, o nly 80 would not fail the test using actual med ian
earni ngs. This would change the percent of impacted programs from approxi mately 18 percent
to approximately 17 percent, a minimal change. So the fundamental results of the study stand,

.,
 •

namel y, the gainful employment proposal would have a substantial negative impact on higher
education oppon unities across a wide range of occupations.

We also did not ask CRA to run the other alternative if a program fails the debt/earnings ratio
test----Ioan repayment rate of90%--because, as Mark Kantrowitz and others who have studied
the available data closely have pointed out, this repayment rate is so high that an institution
would have to have a coho n default rate ofless than 2.3% to qual ify, wh ich few schools in any
sector have.

If the Department has its own data/analysis that wou ld lead to a different conclusion than the
CRA analysis regarding the impact of the ga inful employment proposal, we would be glad to
receive and re view it.

Harri s

Harris N. Miller
CEO /Preside nt
Career College Association
1101 Connecticut Avenue. NW, Suite 900
Was ' ton, DC 20036
(b)(6) areer
(b)(6)
Executive Assistant: Jackie McWilliams
\(b){6) W career.ora
(b)(6)
www.career.org

Save The Dat e

2010 Annual Convention Leadership Institute

and Exposition July 15-20, 2010
June 9-1 1, 2010 The Bolger Center
The Palazzo, las Vegas, NV Potomac, MD

83
From : Arsenault, Leigh
Sent: Friday, April 09, 2010 1:11 PM
To : Pauline Abernathy
Subject: RE: Young people and financia l reform

Thanks Pauline!

Of f ice of th e Un der Secreta ry

U.S. De pa rtment of Educat io n
lei gh .arsen ault @ed .gov

From: Pauline Abernathy [ma ilto:pabernathy@ticas .org]

Sent: Friday, April 09, 20 10 10:53 AM
To: James_R._Kvaal@who.eop.gov; Arsenault, Leigh
Subject: FW: Young people and financial reform

FYI In case for some reason you were not awa re of today's WH call and the attached (which is good
on student loans!).

From: Ca leb Gibson[(b)(6) !@demos.org]

Sent: Friday, April ~01 0 10:27 AM
To: 'Angela Peoples~usstudents.org)' ; 'Christ ina Hollen back'; 'Hilary A. Doe'; 'Rich Williams [~b)(6 ) @pirg .org)';
b
Luke Klipp; Pauline Abernathy; 'Gregory A. Cendana'; 'Aaron Smit h'; Darby Hull !C }(6) j@.consumerfed.org); Fa rid E. Ben
Amor
Cc: Gennady Kolker; Robert Hiltonsmith ; Lucy Mayo; Viany Orozco
Subject: RE: Young people and financial reform

Also, in case you hadn't seen it, the White House is doing a call on financial reform with youth orgs today. (Thanks,
Christina.)
WHEN: Friday, April 9, 201 0 2:00PM-2:30PM
HOW: Please call (800) 553-0327 and ask lor the "White House Regulatory Relorm Call:'
I have attached the WH's fact sheet on how financial reform affects Young Americans that they circulated with this
nouce.

Thank you all,

Caleb

From: Caleb Gibson

Sent: Wednesday, April 07, 2010 12:11 PM
To: Gennady Kolker; 'PdelatorrerIDame; nprogress(rQ' ; ~ngela People5 usst udents.or '. 'Christ ina Hollenback';
'Hilary A. Doe'; 'Rich Williams~b)(6 ) pirg.org)'; Ib )(6) ticas.org'; Robert Hiltonsrnith : (b)(6) @t icas.org'; Lucy
Mayo; 'Gregory A. Cendana'
Subject: RE: Young people and finan cial reform

Friends-
84
Attached, please find a DRAFT of a shon policy brief I drew up on Why Young Ame ricans Need Financial
Refonn. It is based on the outline I shared with you last week

The hope is to a) release the paper collectively by several of our organizations, b) hold a press event with allies in
the Senate, and c) share widely with Hill staff and media. Please let me know if you think )Our organization can sign
on. And to that end, I would love your feedback and suggest ions.

Please tty to let me know by f iB tomorrow (Thursday) if you can sign on. And!or definitely please let me know if
;our need more time to run it up the chain. I will actually be out of the office on Friday and I'd love to get this to
our Communications staff for layout befo re the weekend. But I'd rathe r have more of )QU on board, so let me
know if }QU need more time to look it over.

If you do want to sign on, please also send me a high- res logo.

Now is also the time to start thinking about Senators who might be willing to stand with us on this. I know Durbin
is a champ on the private loan issue. W'ho else have folks been working with who might be won h reaching out to?

Thanks eve ryone!

-Caleb

-----
From: Caleb Gibson
Sent: Friday, April 02, 20104:55 PM
To: Gennad Kolker
Cc b 6 americanprogfess.org; Angela PeoPI~llsst! .cjents.org); Christina Hollenback; Hilary A. Doe; Rich
Williams (b)(6) pirg.org); Iklipp@ticas.org; Robert Hiltonsmith; 'pabemathy@ticas.org'; lucy Mayo
Subject: RE: Young people and financial reform

And here is a link to the Roosevelt Campus Network's exce llent millennial- perspective analysis of the bill and its key
p rovis ions.
hup;ll www.rooseveltcampusnetwQrk.0rUPo!icy! fin an cia ~ulato ry- reform- millenniaIs-analysis

Thanks again to everyone for taking time out of your Friday afternoon for the call today. For those of you we
didn't speak to today, I'll follow up early next week.

Have a great weekend, all.

-Caleb

From : Gennady Kolker

Sent: Friday, April 02, 20 10 2:42 PM
To: Caleb Gibson
Cc: (b)(6 ~ mericanprogress.org; Angela Peopl~usstudents.org); Christina Hollenback; Hilary A. Doe; Rich
William (b)(6) pirg.org); IkJipp@ticas.org; Robert ~~smith
Subject: Re: Young people and financial reform

Here's the piece I mentioned by the Prospect's Tim Fernholz (also includes useful links to other terrific coverage
by the Prospect)

LI NK: h1!P://www .prospcct.orgics/articlcs?article=a wall steet cheat sheet

8S
-Gennady

On Apr 2, 20 10, at 1:15 PM, Caleb Gibson wrote:

Hey everybody-

This is a reminder that we'll be having a call today at 2PM EDT to discuss general interest in coordinating our
message on financial reform for young people.

Conference Dial-In Number. (951) 262-4343

Participant Access Codc: 77810

I've attached a rough outline of a policy brief I am working on that makes the case about why reform is important
to the young Americans. I'm working on filling in the midd le sections, but I wanted to let you see the general shape
of the message so far. Take a look if you have the time. We'll run over it quickly on the cal l,

Again, here's a rough agenda:

• Overview of reform legislation

• Main areas of importance to young people
• Work already undertaken by our groups
• Level of interest!capacity of the groups
• Other organizations to bring in
• Proposed actions
• Timing
• Immediate next steps

Thanks!
-Caleb

<image003.j pg>
Caleb A. Gibson
Federa l Affa irs Ma nager
Demos: A Network for Id eas & Action
1710 Rhode Isla nd Ave nue, NW
12 th Floor
Washin gto n, DC 20036
202/559- 1543

<Why Young Americans Need Financial Reform DRAFT OUTLI NE.docx >

Gennady Kolker
Online Commu nications Coord inator
Editor, Ideas Actio n Bfoq
Direct: (21 2) 389-1408
Cell: 925) 437-4522
(b)(6) emos.or
www .demos.org

86
Follow on Twitter: hlt p:/fwwv.I.twitter.comlDemos Org

Visit Demos' online policy and research ce nter at WW'N.demos.org.

87
 From: Shireman, Bob
Sent: Monday, April 12, 2010 11;37 AM
To : Babyak, Stephanie
Subject : Re: AOL NEWS-2nd request

We'd. Be happy to fact check it but we can', respond is we don't know what it says.

From: Babyak, Stephanie

To: Hamilton, Justin; Shireman, Bob; Glickman, Ja ne
Cc: Arsenault, Leigh
sent: Mon Apr 12 09:36:37 2010
Subject: AOL NEWS-2nd request

John M erline has called again. W hat shou ld I tell hi m ?

From: Babyak, Stephanie

Sent: Friday, April 09, 2010 3:41 PM
To: Hamilton, Justi n; Shireman, Bob; Glickman, Jane
Cc: Arsenault, Leigh
Subject: ACTION lTEM:AOL NEWS
Importance: High

I just spo ke w it h John M erlin e, AO L New s, about th e site running an op-ed by Colo rado State Uni versity
pres ident (not sure if th is is Dr. Fran k, but he wo uld n ot give the author's nam e) on the "ga infu l em p loyment
ru le" and w het her th e Dep artm ent would wa nt t o run a side-by-side respo nse.

We chatted abo ut t he aut ho r's perspective (t he ru le wou ld prevent st udents from getti ng loan s, t hat the
d ep artm ent has gone t oo f ar, etc.]. Ho w ever, M erline was not awa re th at th e Depa rt me nt had not actua lly
ublished an ru les et and so was o ln t o reiect t he idea.
(b)(5)

93
 From : Rogers. Margot
Sent: Thursday, April 29, 20107:50 AM
To: Cunningham, Peter ; Kanter, Martha; Miller. Tony
Subject: RE: Here's the story: "Comparing Higher Ed to Wall Street"
INonresponSive

Fr om: Cunni ngham, Peter

Sent: Thursda y, Apri l 29, 2818 7: 41 AM
To : Kant er, Ma rt ha; Roger s , Margot ; Mill er, Tony
Subject: RE: Here' s the sto ry: "Compa ring Hi gh er Ed to Wall Street"

rCompari ng Hi gh er Ed to Wa ll St r eet
Whenever wo r r ied l eaders of fo r- pr ofit col leges have impl i ed in r ecent month s t hat the U. S.
Education Depar t ment i s gunni ng fo r the i nst i t ut i ons , of f i ci al s of t he f ederal age ncy have
di scouraged suc h t alk , <htt p://www. i nsi dehighe red.com/ news/ 2889/86/ 16/cca> offe r i ng
evenha nded rhet or i c about t re at i ng al l sectors t he same in th eir pus h for i nc reased
accountability.

The wo r ds have pr ovid ed little r eassur ance t o t he col leges, si nce t hey haven' t always seemed
t o squa re wit h t he aggr essive approach
<htt p://www. i nsi dehighered.com/ news/2818/ 84/21/gainful> the Obama admi nis t r at i on is ta ki ng
i n r ewr it ing f ederal rul es gover ni ng vocat iona l and ot her prog rams .

On Wednesday, in a speec h t o sta te r egul at ors who oversee for -p rof it col l eges , t he chief
arch itect of th e Ed ucation Depar t ment's st rategy, Robert Shi reman, of f ered a mu ch more
cri t ica l assessment of t he private sec tor i nsti t utio ns t ha n he has i n hi s publ i c comments t o
dat e , acco rd i ng to accounts given by seve ral people who we re in the r oom. He compar ed th e
instituti ons r epeat edly to t he Wa l l Street f irms whose behavior l ed t o t he f in ancial meltdown
and cal led t hem out individu all y, one by one, f or t he vast and quickly i ncreas ing s ums of
f ederal st udent ai d mon ey t hey are drawing down.

Whi l e Shi rema n's comments were aimed most directly at th e fo r- profit col leges t hemse lves,
they may be most not eworthy fo r hi s i ndi ctment of acc redi ta tion, hi gher educ at ion's system of
i nstitutiona l peer review. In Shi reman 's narrati ve bef ore the annua l meeti ng
<htt p://www . nasas ps .org/confe rence/ regis tra tion- ma te ria ls> of the Nation al Association of
State Admi nis trators and Supervisors of Priva te Sc hools , t he acc rediti ng agenc ies are to th e
for-p rofi t colleges what t he Wa l l St reet r atin gs agencies were to t he mi sbehavin g fi na nc i al
firms : enti ties charged wi t h r egul at ing an i ndust ry that has gr own too quick ly and t oo
complex f or th em t o cont rol , and that have an "inher ent confl ict of interest " because th eir
existence depends on f ina ncial cont rib ut io ns from those they r egu l at e.

Acc r editors lac k th e "firepower" t o r egulat e t he f or-profi t sec to r, and t he states and t he
f ederal govern ment don' t necess ari l y have al l t he tools t hey need to do i t eit he r , Shirema n
sa i d, accord i ng to th e not es of several i n the audience. Tha t, he s uggested, is why t he
Educat ion De par t me nt mu st t ou gh en i ts r ules in t he way i t is now proposi ng .

Shi rema n could not be r eached fo r comment, and an Educatio n Depa rtment spo kesma n said i t s
of f icials di d not wis h to comment on t hi s artic le .

To several peopl e in t he aud ience, Shirema n's comments r epresent ed a muc h more candi d (a nd
crit ical) appraisa l of t he for- profit se ctor than he ha s offe red publ i cl y si nce he became
56
deput y under secretary of education almost exactly a yea r ago
<ht t p:// www.i nsidehighered.com/ news/2009/04/21/shi rema n> . Ma ny s uppor ters of t he education
compa nies fea red hi s appoi ntment beca use t hey believed hi s track r ecord as an advocate f or
l ow- in come st udents and a fo e of st udent debt woul d r es ult i n a crac kdown on t he
inst itutions , whose st udents are dis pr oportionately needy and di sproport i onat ely go int o
heavy debt <ht tp://www.i nsidehighered.com/ news/2919/94/27/debt> t o f i nance t hei r educat ions .

But wi t h Wall Street ana lysts hanging on hi s every word

<htt p://www.i nsi dehighered.com/ news/2009/96/01/qt#200115> l ooki ng fo r sni ppets t hat might
t hreaten t he pu bl i cly t r aded compa nies ' stoc k pri ces , Shi reman has often seemed t o go out of
hi s way t o avoi d si ng li ng th e i nstit utions out for criticis m.

A t ypi cal quotat ion, fro m l ast summe r : <ht t p://www. i nsi dehighered .com/ news/2009/06/ 16/cca>
"Our overall goal at t he Department of Edu cation i n post secondary education i s to make s ure
th at st udents . . . have the i nfo r mation th ey need t o make good choices, and t hat they have
good qual i t y postseco ndary education t hat serves bot h them as st udents and tax paye rs as
well," Shirema n said. " . .. If there is not qual ity, we wa nt to know about it and if we can, we
want to do somet hi ng about i t. Whet her th at i nvolves a pub l ic i nsti t ution, a nonprofit , a
fo r- profi t, a two-yea r, a fo ur-year , a t r ade pr ogram, whateve r type or sector of i nst i t ut i on,
we wa nt to do all we can to make s ure that we have good qu ali t y ."

Di ff erent Tone

In hi s comments Wednesday, Shi rema n l ai d out t he context underlyin g the Ob ama

admi nist ration's elevat i on of hi gher education as a cent ra l f ocus of i ts domest i c pol i ci es .
The economic slide created i n part by t he col lapse of t he cr edi t mar ket s has sent Ame ric ans
st reami ng back t o college in r ecord numbers, and has made i t more i mperat ive than eve r that
more Amer icans get a hi gh er educat i on to st re ngt he n the cou ntry 's economic base f or the
fu ture , Shireman said.

The admi nistration has poured te ns of bi l lions of dollar s i nto Pel I Gra nts and r est ructured
t he federa l st udent loa n progr ams t o try to e nsure t hat Amer i cans have access to higher
education, Shi rema n sa id wednes day. Many public i nst itu tions, faci ng cuts i n t he i r state
f und i ng, have had to li mi t or even cut their enrol l ments, r educi ng t heir abil ity t o meet t he
i nc reasi ng demand fro m st udents .

The f or- pr of i t col leges, by cont rast, have stepped up , seei ng their enrollme nts explode --
and wit h th em , t he amou nt of Pell Grant money th at f ollows the students t o t he i nstit ut ions,
Shireman said. Anyone in t he audie nce f rom Co rint hia n Colleges? Shirema n asked th e assemb led
audience Wed nesday.

A hand we nt up. The California-based f or- prof i t hi gher ed company has see n i t s reve nue from
Pell Grants grow by 38 percent i n t he fi r st t hree quar t ers of this fisca l year compared to
the last one, he said . Anyone from DeVry? Fort y-t wo perce nt, Shireman sa id. Strayer? ITT? One
by one, he tic ked th r ou gh a l ist of public ly t raded companies, point ing out the i ncreas ing
amounts of f eder al money t he in stit utions were collecting ( " It was like f ou rth grade, wit h a
teac her scol ding students over th ei r grades, " sa i d one per son who was in t he room).

What are tax payers and students getti ng i n r et ur n for t ha t i nvestment? Shireman as ked. It has
hi st ori cally been up to the "triad" -- t he th r ee-h eaded r egu l at ory sc heme i nvolvi ng t he
fede ral government, st at e gover nme nts and accred i t i ng agencies -- to ensure acces s, qu alit y
and int egr i t y in hi gher education, he said .

But i s t hat r egulatory system up to t he j ob? To draw a para l le l , Shireman noted that as th i s
meet i ng was unfold ing in St . Paul, pol i t i ci ans back i n Was hi ngton were debati ng possible
r ef orms of Wa ll Street, to t ry to fi x t he "flawed" r egul at ory process that allowed Goldma n

57
Sachs and ot her pu r veyors of s ubpr i me mortgages t o engage i n mi sbehavior that helped
devastat e t he economy.

One major r ea son th e process was fl awed, Shirema n said, was becaus e the bond ra ting agenc ies
t hat we re supposed to be judging t he r is ki ness of the fi nanc ia l i nst r uments we re suppo r t ed i n
large part by fees fr om th e companies t hat were as ki ng t he agenc ies t o r at e the fi nanci al
instrument s -- "a clear , inherent confl ict of interest ," Shi rema n sai d, accord i ng to the
accounts of seve ra l i n the r oom .

On t op of t hat inherent conf l ict, the r at ings agenc ies have been st r uggl i ng t o keep tab s on
indu stri es t hat grew qu i ckl y and adopted inc reasi ng ly complex practices, Shi rema n said,
suggesti ng t hat t he r ati ngs agencies l acked t he "firepower" to r egul at e t he fin ancial
market s .

In case anyone mi ssed it, Shi reman drove his poi nt home, point ing out t hat hi gher educat ion
acc rediti ng agencies are made up of (and f i na nc i al ly s upported by ) t he i r member col leges, and
see it as their mi ssion both to help the institution s "improve" and al so t o ensure, in what
i s essent ia lly a subcontract from t he f ederal gover nment, t hat t hey are of s uf f ic ient
quali ty .

The peer r evi ew natu r e of hi gh er educat i on acc redi ta t ion has an inh er ent conf l ict of interest
s i mi l ar to t he r at ings agencies, Shirema n sai d. Gi ven that , he s ugges ted , i t i s cruc ia l fo r
state and f ederal agencies, as t he ot her two part s of the t r i ad, t o s tep up t hei r r ole i n
r egul ating hi gher educ ation. But do sta te r egul at ors think t hey have t he "fir epower" to keep
t abs on t he big, growing and complex pri vat e market col lege sector? Shi rema n as ked t he st ate
off ic i als in t he r oom . The r espon se was underwhelming.

The f ederal gover nment's own powe rs may be i ns ufficie nt t o do t he job, too, Shi rema n
suggested, accordi ng to members of t he audience. That i s why t he department needs new
approac hes t o ensuri ng i ntegr ity i n t he fi nanc i al ai d progr am s, he sa i d, s uc h as r equ iring
most f or-p rofi t col leges and non-degree vocat ional progr ams at nonprofit col leges t o show
that t hey are preparing st udents f or gai nf ul employme nt.

Several people who heard t he speec h sa i d t hey viewed it as a mu ch mor e str ident cri t i que of
f or -profit colleges, and of hi gher educat ion accredi ta tion, t han Shirema n has del i vered
before. But Davi d Di es, wh o heads t he Wisconsi n Edu cati onal Approva l Board and ju st fini shed
a te r m as president of th e nat i on al group of state r egul at ors , didn't hear i t qu ite t ha t way .

"I t hi nk Bob was expl ai ni ng why we need state r egu l ati on and [E ducati on] Department ove rs i ght
t o be part of t his t hree- legged stool, not j ust acc reditat ion, and why we all need to wo rk
t ogether ," said Dies. "He was pointi ng out some limitat i ons of accreditation, but I di dn't
really see it " as highly cr i tic al of accred itors or for -p rof it colleges .

Doug Leder man 1(_b_)(_6_) ~in S idehighered .com>

58
 From: Dannenberg, Michael
Sent: Friday, April 30, 201 0 10:30 AM
To: Shireman, Bob
Subject: GE msg
(b)(5)

From: Dannenberg, Michael

To : Shireman, Bob
Sent : Thu Apr 29 14:25:422010
(b)(5)

From: Shireman, Bob

Sent: Thu rsday, April 29, 2010 1:34 AM
To: Dannenberg, Michael
Subject: FW: my speech

I'd welcome your perspective.

From: Shireman, Bob

Sent: Thursday, April 29, 2010 1:26 AM
To: Shireman, Bob; Ka nter, Martha; Hamilton, Justin; Cun ningham, Peter
Cc: Arsenault, l eigh
Subject: RE: my speech

The audio file can be down loaded from GoogleDocs:

http://docs.qoogle.com/leaf?id- OBxEeRDh60ka M2U2MGZkYWUtZmMOMyOONjJ jlTqxNGItN2E1OThhMmY20GU4&hl-en

(the ti le is too large to attach)

From: Shireman, Bob

Sent: Wednesday, April 28, 2010 10:13 PM
To: Kanter, Martha; Hamilton, Justin; Cunningham, Peter
Cc: Arsenault, leigh
Subject: my speech
54
I was speaking to state regulators of postsecondary institutions ( most of t he agencies focus on for-p rofit and non-
degree). http://www. nasasps.org/
For-profit colleges were there, too, and I t hanked them for being responsive to the demand for educat ion and training . I
cited t heir increases in federal aid.
Using t he current events, I pointed out the parallels between accrediting agencies and credit rating agencies ( responsible
for judging quality, but paid by those w ho are being j udged = inherent confl ict of interest ). I said t hat's w hy t he other
two parts of t he regulatory t riad (states and fed) need to be st rong .

I said nothing of Goldman Sachs.

I will t ry to send the audio file or post it on youtube or someth ing.

-Bob

Robert Shireman
Deputy Undersecretary
U.S. Department of Education
(202) 260-010 1

55
From: Ralph Wolff (b)(6) wascsenior.org)
Sent: Wednesda,",~~..\ ., 201 0 9:31 AM
To: Shireman, Bob
Subject: Re: Would you have time for a call?

Bob,

Great. Thi s i s not about new regulation s but getting better pos i ti oned to deal wi t h fo r
prof it s . I wil l be at the airport but can cal l you at
2:45 Chicago t i me . Would that work ?

Ralph

Sent from my iPhone .

On May 5, 2ElIEl ~ at 7: 57 AM~ "Shi r eman, Bob" <Bob.Shi reman@ed ,gov> wrote :

> Ral ph:

> Ni ce t o hear from you. We are now in a period when we are not all owed
> t o dis cuss the rulemaking. But I woul d be happy to di scu ss ot her
> t opi cs if you want to give me a call at th e number below at, s ay, 2:El0
> t oday (or give me your number wi t h t imes th at work f or you ).
> - Bob
>
> Robert Shireman, Deputy Unde r secretary U. S. Department of Educat i on
> 400 Mar yla nd Ave ., S.W .
> Room 7E31El
> Washingt on , D.C . 20202
> ( 202) 260 -0101
> Fax: 202 -205-ElEl63
> bob. shi r eman@ed.gov
>
>
>
> - ----Or i gi nal Mes sage- - - - -
> From : Ralph Wolff [(b)(6) rwwas cseni or . or gl
> Sent : Mond ay , May 03, 2Elle 3:35 PM
> To : Shi r ema n, Bob
> Subject : Would you have time for a cal l ?
>
> Bob,
>
> I r ead a tra nsc ri pt of your recent ta l k about fo r pr ofit inst itution s ,
> and wo ul d wel come a behind the s cenes conve rs atio n wi t h you about what
> you t hi nk we acc r editors shoul d be doing t hat we aren' t . We at WASC
> are dealing with a growi ng number of f or profit institut ion s and
> see i ng a vari et y of approache s to f undi ng, governance, and delivery. I
> have some idea s t oo about what we might do.
>
> Any cha nc e we coul d ta l k thi s week? I am traveling in Chic ago and
> Mi nneapol is thi s week and have t i me available .
>
42
> Thank s .
>
> Ral ph
>
> Sent f r om my i Phone .
>
>

43
 From : Shireman, Bob
Sent : Monday, May 17, 2010 9:09 PM
To: Viadeck, David
Cc: lucsikes@sbcglobal.net
Su bject: RE: your pal Bob Shirem an...
Attach ments: image00 1.gif; image005.gif ; image006.gif; image002.gif
(b)(6)

~ohert Shireman
Deputy Undersecretary
U.S. Department of Education
(202) 2 60~0 1 0 1
-'
Fro m: Vladeck, David [dvladeck@ftc.gov]
Sent: Monday, May 17, 2010 6:33 PM
To: Shireman, Bob
SU btIect•• F'N : your pa I B0 b Sh'Ireman...
.. • . ,0. _H
(b)(6)

(b)(6)

(b)(6)
Dav id C. Vladeck
Director
Bureau of Cons umer Protection
Federal Trade Comm iss ion
600 Pennsylvan ia Avenue, NW
Washington, DC 20580
(202) 326 -2234

From: Poe Vladec~(b)(6 ) K&collegeforward.orgl

Sent: Man ay, May 17, 2010 5:56 PM
To : Vladeck, David
c c: ((b)(6) f@col1egeforward .org
Subj ect: RE: you r pal Bob Shirema n...

Thanks - no pressure eit her way, and no real hurry t o fi nd out.

BTW here' s a grap h showing the spike in stock prices afte r the 3 PM art icle on Inside Higher Ed that broke t he new s-
t hat 's Apo llo Gro up (Univ of Phoenix), DeVry, In Educational Services, and Corint hian Co lleges. Prett y remarkable.

Symbol Last Trade Ch ange Volu me Intraday

APOL 3:48 PM EDT 58,10 i"5.32 i"1(1.08% 6,289,027 ~_.. ../

DV 3:48PM EDT 61.97 i"2.8 \ i"4,75% " ._."',_...~ '

1,717, \ 15 _,_ "r

25
ESI 3:48 PM EDT 110.16 ~7. 65 ~7.46 % 1,71 8,473 _ , '" _-,I:
,,_

COCO 3:48PM EDT 15.85 ~ 1.74 ~ 1 2 .3 3 % 4,306,734

26
From : Shireman, Bob
Sent: Mo nday, May 10, 2010 1:26 PM
To: Gomez, Gabriella
Subject: FW : Hi mr secretary

FYi

From: Private - Duncan, Arne

sen t: Monday, May 10, 2010 1:07 PM
To: Shireman, Bob
Subject: Fw: Hi mr secret ary

Fyi

From: Andrews, Rob[lb)(O) l$::;;=~~a~i~l.~hQ~us.

~=e=.g=Q=V=>·----------------------------­
To: Private - Dunca n, Arne
Sent: Man May 10 10:48:02 2010
Subj ect: Hi mr secretary

Hope all is wel l. 1 would be happy to d iscuss the below at any time.

Thanks

Rob

Quality index

( I)Goal-Io assure that schools-irrespective of ownership- offering career preparation education are providi ng value added for
taxpayers

(2)M ethod- create an index as follows-

(A) we ighted average factors

(I) Job pla cement in jobs paying at least 25th percentile o f bls re ported income for that job in that region (50 pCI of score)

(Ii) Graduation from an accredited progra m (30 pet of sco re)

(Iii) Loan default rate (20 pet of score)

(B) multiplier to take into account effort 10 train those most in need- take percentage ofpel1 eligib le students and add it to 1, so a
school with 38 percent pe ll eligible has a multiplier of 1.38. Multiply the weighted average of the factors by the multiplier in order to
produce the quality index score.

(C) determi ning the success thres hhold for the index- take the target return for taxpayers on aid dollars invested, and then determi ne
the sco re necessary to generate that return . Th is becomes the suc cess threshhold.

(3) Consequences-schoo ls failing to meet the threshhold would be required to develop and imp lement red mediation plans for a given
number of years. Schools chronically failing to meet the threshhold for a given number of years wo uld lose title iv eligibility for the
program in ques tion.

(4) Next steps-because this proposal is broader than the gain ful employment rule's statutory authority, the proper procedure is to
withdraw the proposed rule, and determine whether statutory authority exists to adopt the quality index. If it docs not. we shou ld work

30
on a legislative proposal to implement the plan. I believe it would enjoy bipartisa n support. If this plan works, it frankly accompl ished
all of the goals of the 90 -1 0 rule, cohort loan default, and the proposed gainful employment.

I would be happy to d iscuss further at any time.

Thanks

Rob
Andrews

Sent using BlackBerry

31
 From : Shirema n, Bob
Sent: Friday, June 18, 20 10 5:1 3 PM
To : Shedd, Jessica; Weko, Tom; Bergeron, David; Miller, Elise
Subject : RE: debt to income ratio spreadsheets

(b)(5)
I know him but I ra n 'r i m
(b)(5)

-- - - -Ori ginal Message - - - --

Fr om: Shedd, Jes si ca
Sent : Friday, June 18, 2010 4 : 20 PM
To : Weko, Tom; Be rge r on, David ; Shi r eman, Bob ; Miller, Eli se
Subject : FW: debt to in come r at i o s pre ads heets

Bob & Davi d,

Is t his someo ne you have been wor king wit h? I'm not s ur e how he got my name.

Jes s ic a

--- - -Or i gi nal Me s sage - ----

Fr om: Kantrowitz, Mark ( mai t o: ar . antrowitz@1ons er .com
Sent: Friday, J une 18, 2010 4 :09 PM
To : Shedd, Jessica
Subject : debt to in come rat io spreads heet s

(a n you send me copies of t he spreads heets us ed t o eva l uate the imp act of t he proposed 8%
debt se rvi ce to in come t hres hol d on propri et a ry i nst it utions ? I' m part ic ular ly i nte re sted i n
t he analysi s i nvolv i ng median debt and mappin g fr om ( PI /SOC codes t o in come, as well as
anyt hi ng r el at ed to t he gai nful employment proposals .

Thanks,

Ma rk

----------- -------------- -------------- -----------

Mark Kantrowit z
Publi sher of Fi nAid.or g and FastWe b. com
Aut hor , FastWe b Col lege Gol d

FinAid Page LLC

PO Box 2056
Cra nber ry Towns hip, PA 16066-1856
Tel : 1-724- 538 -4500
Fax · 1 - 7 24 _S 3B _dS A2

r
NOTI CE :

Thi s mes s age, and any at tac hment s, cont ai n(s) information t hat may be confi dential or
protected by pr iv i lege fr om di scl osu r e and is int ended onl y for t he i ndivi dual or ent i ty
named above . No one els e may di s cl os e, copy, di st r ibut e or use the conte nt s of t his mes sage
for any purpose. Its un author i zed use , di s seminat i on or dupl i cat i on i s st r i ct l y prohibited
8
and may be un l awfu l . I f you receive t his message i n erro r or you ot her wise are not an
aut hor i zed re cip i ent , please i mmediately dele te the mes sage and any at tac hments and not i f y
t he se nder.

9
From: Kanter. Martha
Sent: Thursday, May 06,20109:55 PM
To: Rogers, Margot; Miller. Tony; Cunningham. Peter; Rose, Char1ie; Yuan, Georgia; Martin,
Carmel; Gomez, Gabriella
Cc: Ham ilton, Ju stin
Su bj ect: FYI: CCA astoturfing opposition to defining gainful employment

•
From: Paul ine Abernathy [pabernat hy@ticas . org ]
Sent: Wed nesday, May 05, 2010 12:14 PM
To : Ma nhei rner , Ann; Ar senaul t , l ei gh ; Gomez, Ga briel la ; Sh i r ema n, Bob; Kvaa l , James R. ;
Pl otkin, Hal ; Kanter, Mart ha; Madzelan, Dan
Cc : Laur en Asher; Debbi e Fr ank I e Coc hr ane
Subject : CCA as t ot urfi ng oppos i t io n to def ini ng gai nf ul employment

The stri ng below revea ls t ha t CCA has set up a web s ite and i s ur ging its members to have
st udent s s ign a petition t o "r ej ect th e De par tment of Education ' s defi ni tion of Gai nf ul
Employment." The fact that CCA is not even wait ing to see what the Administrati on pr oposes
at a min i mum ra ises questions about CCA ' s inte rest in any defi nition of gainful employment .

A student petition rejecting ED' s [ currently nonexistent] definition of gainfu l empl oyment .

http : / /www. studentsfora cademi cchoices.org/index.cfm ?page-3

A search reveals a few school s t hat are directing st udent s t o the sit e . Example :

http : / /communi ty . globeuni ver si ty.edu /online/?p: 1266

Thi s appears to be i n r esponse t o thi s not ice by Students for Academi c Choice . Questi ons are
to be di r ect ed to Bruce l eftwic h, Senior Vice Presiden t of l egi s l at i on at CCA .

ht t p: / / commu nity . gl obeun i ver sit y. edu / Elk · Ri ve r / ?p=84

Pauline Abernathy
Vice Presiden t
The I nstitute fo r College Access & Success www .ticas . org and www .pro jectonstudentdebt . org We
moved ! TICAS' main number i s now 510.318.7900. My di r ect l i ne is 518. 318. 7903 .

37
Fro m: Bergeron, David
Sent: Tuesday, June 15, 2010 12:10 PM
To: Arsenau lt, Le igh
Subject: Re: 2 page su mmary and reg

Thanks! And it was unus ual as I've only seen immatures in MT a nd MN before ...
David A. Bergeron

Sent using BlackBerry

From: Arsenault, Leigh

To: Bergeron, David
sent : Tue Jun 15 10:53:55 2010
Subject: RE: 2 page summary and reg

Than ks David .

Grea t job with the briefing. And a yearling eagle, that doe sn't happen ofte n in oc..

From: Bergeron, David

Sent: Tuesday, June IS, 2010 11 :51 AM
To: Arsenault, Leigh; Madzelan, Dan; Shireman, Bob
Cc: Yuan, Georgia; McFadden, Elizabeth; Hamilton, Justin
Subject: RE: 2 page summary and reg

He re is t he su mma ry from t he press rel ease.

The iss ues co vered in th is NPRM a r e t he following:

En s u r ing t h a t only e ligible s t u d ents receive federal fu n ds. Generally stu dents are e ligible for aid only
if they ha ve a h igh scho ol d iplom a o r pass an "ab ility t o benefi t" test, a nd o n ly if the ir acad em ic stand ing
is sa t isfact o ry. The NPRM proposes some cla rifica tions:

• High Sch ool Dipl oma : The p rolife ra t ion of hi g h school diplom a m ills h as ca ll ed t he valid ity o f so me
seco n da ry scho ol credent ials into que st ion. The p ropos ed reg ula ti ons would requ ire ins t it u tio ns to
develop and foll ow procedures to eva lua te the valid ity of a s t ud e nt's hi gh school di ploma if t he
institution o r the Secreta ry has rea son t o be lieve that t he d ipl om a is not valid o r was not o btai ned
from a n entity that provides seco ndary school ed uca ti on.

• Co ll ege Cred its : The prop osed regu latio ns wo uld exte nd eligibility for fed eral st ud e nt a id t o st ude n ts
without high sch oo l d ip lo mas after t hey s uccessfully co mp lete six cred its of college w o rk. Th is
im ple me nts a provis ion th at w as in clud ed in t h e Hi ghe r Ed ucatio n Op po rtu n ity Act of2 008.

• Ab ility To Benefi t: The De partment is re s pon sible for a p proving te st mat e ria ls d eve loped by test ing
co mpa n ies. The Gove rnme n t Acco u ntability Offi ce reco mmended a n u mber of ways that the
Department co uld im p rove its overs igh t o f how ATB t es ts a re a p p roved a nd ad mi nistered. The NPRM
foll ow s up on th ose recom m endations.

11
• Satisfactory Acade mic progress: Every institution is required to have satisfactory acade mic progress
policies. Audits and institutio nal program reviews have uncovered policies that meet the cur rent
regulatory sta ndards but permit students to receive fu nds even thou gh they may not be meeting the
institution's progress standards. The proposed reg ulations wo uld require a structured and consiste nt
approach to evaluating a student's aca demic work, while continuing to provide fl exibility to
institutio ns in establishing their policies.

• Ve rifica tion: Each yea r, a number of students are required to confi r m the information on the ir Free
Appli cation for Federal Student Aid (FAFSA). Due to cha nges in th e law and a new da ta retrieval
process with the Internal Revenue Service, th e proposed changes would, in man y cases, reduce the
amo unt of information students wo uld have to provide to institutions.

Protect ing consu mers from misleading or overly aggressive recruiting p ractices, and clarifying
State ove rsight responsibilities. The NPRM s trengthens three cur rent ru les that are designed to
protect students and taxpayers:

• Misrep resentatiQn: During public hearings and negotiated ru le maki ng sess ions, the Departm ent
heard numerous complaints from stude nts enroll ed in programs whe re they felt mi sled on what was
and was not being offered, the way progra ms could be paid for, and their job prospects upon
completion. To protect consumers, th e proposed regulations strengthen the Department's authority
to take action against insti tutions engaging in deceptive advertising, marketing, and sales practices.

• Incentive Compensation: The Department heard reports of aggressive recruiting practices resul ting in
students being encouraged to take out loans th ey could not affo rd, or enroll in programs where they
we re either unq uali fied or could not succeed. Though current laws proh ibit schools from
compensating adm issions recrui ters based so lely on su ccess in securing stude nt enroll ment,
regulations known as "safe harbors" allowed this practice to go on under certa in circ umstances,
which we believe viola te the spirit of the law. The proposed regulations will re move all the "sa fe
harbor" provisions.

• State Authorization: State authorization is required by the Higher Education Act for a postsecondary
institution to participate in federal student aid, and othe r federal funding prog rams. Some states have
fa iled to establish how they approve and mon itor post seconda ry programs. The proposed regulations
would clarify thi s important State responsibility.

Clarifying the courses that are eligible for fede ral a id, and the amount of aid that is appropriate.

• Credit Hour: Credit hours are the metric used by the Department to measure eligibility for federal
funding. Currently there is no standard defi nition for a credit hour, which has led to reports of
institu tio ns awarding more credits (and d rawing down more federal fu nds) th an are deserved. To
address th is iss ue, the regulation defi nes a credit hou r and establishes procedures for accredi ting
agencies to deter mine whether an institution 's assignme nt of a credit hou r is accepta ble. Recognizing
that "seat time" is not the goal, the proposal all ows for equivalent meas ureme nt of learn ing outcomes.

• Written A,2rgemen ts: A postsecon dary institution is all owed to delive r a porti on of another
institution's educational program thro ugh a wri tte n arra ngement. Problems have s urfaced when th e
two institution s are controlled by the sa me entity or do not meet certain participation requirements.
The prop osed regulations lim it the amount of a progra m that can be provided by a school in an

12
 arra ngement and prohi bit arrangements between ineligible insti tutions that have had their Federal
stu dent aid participation revoked.

• Retakin2 Coursework: Curre ntly students w ho repeat coursewor k can not have the course they
re peat count towards the calculation of a full-time course load. The proposed regulations would
expand the definition of fu ll -time student by allowing such courses to count if the student is in a
program that registers by the term or semester.

• Determinin2 When a Student Has Withdrawn: Currently, loopholes complicate the measure of how
much fede ral funding mu st be paid back if a stude nt who dro ps out of a program. The proposed
regu lations would eli minate loopholes and clarify the calculation of returning federal funds to the
Departm ent by defini ng whe n a student is considered to have withdrawn from a progra m. It will also
clarify the circumsta nces under which an institution is req uired to ta ke atte ndance for the purpose of
calculating a return of federal funds.

• llisbursing Fede ral Student Aid Fu nds: As it sta nds now, students are not receiving the ir Federal
student aid funds in eno ugh t ime to obtain their books and before th e sta rt of school. The proposed
regulations wo ul d ensu re that the neediest recipien ts can acquire books and su pplies by th e seventh
day of their payment period.

• Disclosures regard ing Gainful Employme nt: The Department is proposing that career college and
t raining programs at pu blic, private nonprofit, and fo r-profi t institutions provide prosp ective
stu dents with the program's graduation and job placement rates, and tha t colleges provide th e
Department with infor mation that will all ow determ ination of st udent debt levels and incomes after
program complet ion. The Department is still develop ing metrics to hold programs accountable for
meeting federa l req uirements. A separate NPRM on th is topic will be publish ed later in the summer.

Fro m : Arsenault, Leigh

Sent: Tuesday, June 15, 2010 11:44 AM
To: Madzelan, Da n; Shirema n, Bob; Bergeron, David
Subject: FW: 2 page summary and reg

Ju stin is asking fo r a 2-page summa ry ta ken from t he prea mb le. Does t his ring a be ll and is t here something I ca n do t o
help pu ll this t ogether? Thanks.
Le igh

From: Yuan, Georgia

Sent: Tuesday, June 15, 2010 11:21 AM
To : McFadden, Elizabeth; Hamilton, Just in; Arsenau lt, Leigh; Madzelan, Dan
Subject: Re: 2 page summary and reg

David and 1are on the hill all day. Bob is at a graduation . I believe that Bob and David were going to do a 2-pager taken
from the preamble.
Leigh can you and Dan figure oul how to gel th is done asap?
Thx. Georgia

From : McFadden, Elizabeth

To: Hamilton, Justin; Yuan, Georgia
Sent : Tue Jun 15 10:12:53 2010
Subject: RE: 2 page summary and reg

13
I think that is something OPE would prepare. Have you checked with them?

From : Hamilton, Justin

sent: Tuesday, June 15, 2010 11:10 AM
To: McFadden, Elizabeth; Yuan, Georgia
Subject: Re: 2 page summary and reg

And that it wo uld summarize the narrative section

On 6/15/10 10:59 AM, " McFadde n, Elizabeth" <Elizabeth.McFadden@ed.gov> w rote:

I haven't see a 2-page summary.

From: Hamilton, Justin

sent: Tuesday, June 15, 2010 11 :02 AM
To: McFadden, Elizabeth; Yua n, Georgia
Subject: 2 page summary and reg

Can you guys give me the tw o page summa ry as well?

14
From: Kvaal, James
Sent: Thursday, July 22,2010 7:51 PM
To: 'pabernathy@ticas.O'g'
Subject: Re: Press release issue

Correct

Sent using BlackBerry

From: Pauline Abernathy <pabernathy@ticas.org>

To: Kvaa l, James
Sent: Thu Jul 22 17: 21: 37 2010
SU bject: Press release issue

The first line says it applies to for-profits but it applies to all programs subject to GE, right? That
includes non profits and publics including most CCs!

Pauline Abernathy
Vice President
The Institute fo r College Access & Success
www.ticas.orq and www . ~ ecton studentdeb t. orq
TICAS: 510.318.7900 Direct: 510.31 8.7903

1
From : Kvaal , James
Sent: Thursday, July 22, 2010 10:38 AM
To: 'pabernalhy@ticas.org'
Subject: Re: Warning language

Thanks
--------------------
Sent using BlackBerry

From: Pauline Abernathy <pabemathy@ticas.org>

To: Kvaal, James
Senl: Thu lui 2209:29:31 2010
Subject: RE : Warning lang uage

I know . Just resent with complete message!

From: Kvaal, James [mailto :James.Kvaal@ed.govl

Sent: Thursday, July 22, 20 10 10:29 AM
To: Pauline Abernathy
Subject: RE: Warning language

Didn't get thi s all

---------- -
From: Pauline Abernathy [mailto:oabernathy@ticas.org)
Sent: Thursday, July 22,20 10 10 :23 AM
To: Kvaal, James
Subject: Warning language

The April 12 letter to Tony Miller from Ka

Pauline Abernathy
Vice President
T he Institute for College Access & Success
lNWW.ticas.org and www.R[Qjectonstudentdebt.org
TICAS: 51 0.31 8.7900 Direct: 510 .31 8.7903

2
From : Kvael. James
Sent: Monday, July 19, 2010 11:06 AM
To: Nassinan, Barmak
Subject: RE: Write-up

There is information in this paper that is not accurate.

From: Nassirtan, Barmak [mailto;barmak@aacrao.orgl

Sent: Monday, July 19, 2010 10:47 AM
To: Kvaal, James
Subject: Write-up

3
From : Kvaat, James
Sent: Monday. July 19, 2010 10:09 AM
To: Martin, Phil
Subject: FW: i know you cannot respond

Importance: High

l et's discuss

From: Bergeron, David

Sent: Monday, July 19, 2010 10:06 AM
To: Kvaal, James; Yuan, Georgi a
Subject: FW: i know you cannot respond
Importance : High

From: Eisman, Steven f mailto: seisman@fpoartoers.com}

Sent: Monday, July 19, 2010 9:45 AM
To: Bergeron, David
Subject: i know you cannot respond

But just fyi. Education stocks are run ning because people are hearing DOE is backing down on gainful employment.

Steven Eisman
FrontPoint Fina ncial Services Fund
seisman@fppartners.com
91 7-934- 1770

4
From: Pauli ne Abernathy [pabernathy@ticas .org}
Sent: Monday. July 19. 20109:05 AM
To: Kvaa t, James; Hamilton, Justin
Cc: Lauren Asher ; Jennifer W ebber
Su bject: FW : Would NBC News have BP sponsor a show on oil drilling with Tony Hayward on a panel?

Heads up- NBC will be called out on this and Se cy Duncan is listed as a speaker.

Fro m: Pauline Abernathy

Sent : Monday, July 19, 2010 9 :01 AM
To:
Subject: Would NBC News have BP sponsor a show on oil drilling with Tony Hayward on a panel?

The University of Phoenix is sponsoring NBC News' week-long

series of events on education issues, including a summit that the
Univ of Phoenix president will speak at!

NBC News to Hold Education Summit

NBC News today announced "Education Nation ," a week of events in September that will bring
together leaders fro m politics, all levels of educatio n and policy experts, focused on a two -day summit
at Rockefeller Plaza. Attendees are expected to include U.S. Secretary of Education Ame Duncan ,
New Yo rk City Mayo r Michael Bloomberg, Delaware Gov. Jack Markell, Minnesota Gov. Tim
Pawlenty, and AI Sharpton. University presidents who will be parti cipating include Susan Hockfield,
president of the Massachusetts Institute of Technology, and Bill Pepicello, pres ident of Un iver sity of
Phoenix. Several hundred people -- including students and parents -- are expected at the summit.
Content from the summit and special stories on education issues will be featured on "NBC Nightly
News," "Today," "Meet the Press," "Your Busines s," MSNBC, CN BC, Telemundo , msnbc.com and
nbclearn.com. NBC announced that the effort is also being supported by the Bill & Melinda Gates
Foundation, t he University of Phoenix, the Eli a nd Edythe Broad Foundation , American Express,
Raythecn, Tishman Speyer and Scholastic.

From !J!!p:/Iwww.insidehighered .comlnewsI20 101071191gt#232687

Pauline Abernathy
Vice President
T he Institute for Colleg e Ac cess & Succe ss
www.ticas.org and www.lllQjectonstudentdebt.orq
TICAS: 510.3 18.7900 Direct: 510.318.7903

5
From : Kvaal, James
Sent: Wednesday, July 07 , 201 0 12:46 PM
To: Mayes, Edgar
Subject : RE: heads up

Edgar have we gotte n a lot of these?

From: Winters, Debora h

Sent : Tuesday, June 22, 2010 5:26 PM
To : Mayes, Edgar; Kvaal, James
Subject: RE: heads up

Thanks Edgar! James - can you please forward the new address to whoever needs it?

From: Mayes, Edgar

Sent : Tuesday, June 22, 2010 5:24 PM
To: Kvaa l, James; Winters, Debora h
Subject: RE : heads up

Th e e-mail address for the ga inful employm ent write-in-campaign has been set-up. The address is
ame.duncall.gainful.@ed.gov.

It will be activated, tomorrow.

Thanks ,
Edgar
- - - - - - - - - -- - - -
From: Kvaal, James
Sent: Friday, June 18, 2010 6:42 PM
To : Winters, Debora h
Cc: Mayes, Edgar
Subject: RE : heads up

They say they would be happy to use a dist inct address, or a subject line that would allow easy so rting. Would it be
easier if I got out of the middle? The contact is Pauline Abernat hy at TICAS, pabernat hy@ticas.org.

Thanks aga in

From: Winters, Deborah

Sent : Friday, June 18, 2010 2:54 PM
To: Kvaal, James
Cc: Mayes, Edgar
Subject: FW : heads up

Hi Jam es - we lco me back! Teresa asked me to work with you on your quest ion about the gai nful employment
regulations e-mails. The best way to handle t his from our point of view would be to have t hem send their e-ma its not to
t he public address but to a unique e-mai l address that we will set up. Would that work?

6
Fro m : Kvaal, James
sent: Friday, June 18, 2010 1:52 PM
To: Garland, Teresa; Mayes, Edgar; Shirema n, Bob
Subject: heads up

Teres a and Edgar,

I understand that an out side gro up ma y be generat in g e m ails suppo rting t he Department's gainf ul employ me nt
regulat ions to the public Arne Duncan add ress. It' s possib le t hat there w ill be t housand s o f them .

I w ant ed to let yo u kno w t his is co ming. If t here is a better w ay for t hem t o d eliver this m essage, I would be happy t o
m ake a suggest ion t o t hem - of co urse no guarantee t hey will accept it.

Than ks

James

7
From: Vladeck, David [dvladeck@ftc.gov]
Sent: Tuesday, June 29, 201 09:00 AM
To: Shireman, Bob
Cc: Kanter, Martha; Kvaat, James; Harwood, Charles A.
Subject: RE: GI Bill Web site

We ' l l t ake a l ook at i t asa p and r eport back. Hope al l i s we l l . Davi d

David C. Vladec k
Director
Bureau of Consume r Protection
Feder al Tr ade Commiss ion
600 Pennsyl vania Avenue, NW
Was hi ngton, DC 29589
(202) 326-2234

- ----Origin al Message-----
From: Shi rema n, Bob Imailt o: Bob. Sh i r eman@e d.govl
Sent: Tuesday, June 29, 2919 8: 98 AM
To : Vladec k, Davi d
Cc: Kant er, Ma r t ha; Kvaa l, James
Subject : FW : GI Bil l Web s i t e

Davi d:
Might t he FTC cons i der t aking a qu i ck l ook at thi s deceptive we b site? I'm copy i ng our Under
Secretary, Ma rt ha Kanter , and my r e pl acement as deput y, Ja mes Kvaal .
- Bob

Robert Shi rema n

Deput y Under secreta ry
U. S. Department of Education
( 202) 260 - 0101

Sub ject: GI Bill Web si t e

htt p: / / www . gi bill . coml

Looks li ke a govt si t e but i t' s act ually a for -pr of it col l ege s i t e.

Matth ew Demb i cki , Edi t or , Community College Ti mes <ht t p: / / www. commun itycolleget imes . com/ >
America n As sociation of Communi ty Colleges< ht t p: / /www.aacc.nche.edu/>
292 -728-9288, ext. 296
Follow AACC on Twi t t er <ht tp : / / t wit t er . com/Comm Col lege> ,
Facebook<ht t p: / / www.facebook. com/ CommCollege >.
Flickr <http : / / www.fl i ckr. com/photo s/ communit ycolleges I > and
YouTube<ht tp : / /www. yout ube . com/ Commun i t yColleges >

Th i s ema i l has been scanned f or all viruses by the Mes sageLabs Emai l Security System.

10
From: Howard. Pat
Sent: Monday, June 28. 2010 7:52 AM
To: Shireman, Bob
Subject: RE: GE

19:99 a .m . i s fine.

---- · Or i gi nal Message---- -

From: Shi r eman, Bob
Sent: Sunday, June 27, 2919 11: 33 AM
To: Howard, Pat
Subject : RE : GE

Ca n we do 19 a ,m. t omor r ow (st i l l Monday) in stead ?

From : Howard, Pa t
Sent : Thu r sday, J une 24, 2910 5: 13 PM
To: Shi r eman, Bob
Subject : RE : GE

Bob, Monday at 3:90 i s fin e. I am in PC P Room 8125, my of f ic e number i s 292 -245 -6949. Ther e
will be probably myself and two ot her s f r om th e OI G. I will send an invit e through Out look.
l ook f orwar d to talking wi t h you.

Pat

--- - -Original Mes sage- - - - -

From: Shi r eman, Bob
Sent : Thur sday, June 24, 2919 4: 38 PM
To : Howar d, Pat
Subj ect : RE : GE

Let ' s t ry 3:99 on Mond ay, at your office s i nce I may need t o do i t by phone (dependi ng on
whethe r I'm sti l l home waiti ng f or a s hi ppi ng cont ai ner ) . l et me know where to go/ cal l.

---- -Or i gi nal Message- - - - -

From : Howard, Pat
Sent : Thur sday, June 24, 2019 4: 32 PM
To: Shireman, Bob
Sub ject : RE : GE

Sorry I di d not get back to you sooner, wa s at t he Senat e HELP hearing and then at our Annual
OIG Award s Ce r emony . We are open t omo r row af t ernoon or anytime Mon day .

Pat

-----Or i gi nal Mes sage-- - - -

From: Shi r eman, Bob
Sent ; Thursday, June 24, 2019 9:45 AM
To : Howard, Pat
Subj ect : RE : GE

Might t hi s afte r noon wo r k? I 'm open between 2 and $.

11
-- - - -Origina l Message---- -
Fr om: Howard, Pat
Sent : Wednesday, June 23, 2010 5:41 PM
To: Shireman, Bob
Subj ect : RE : GE

Bob ,

We are very intere sted i n briefing. Myself, Mary Mitchelson, Howar d So rensen, Chris
Vi erli ng, and poss i bl y Bill Hamel. I f you want to propose a time & pace I will check
s chedu les for us .

Thanks - Pat

--- - -Or i gi nal Me ssage -- - - -

From : Shi reman, Bob
Sent : Wednesday, June 23, 2010 4: 51 PM
To : Howar d, Pat
Subject : GE

Pat :
I ' d l i ke to give your office a briefing on where we are headed wi t h th e gai nfu l empl oyment
NPRM. Who s houl d I set up a meeting with ?
- Bob

12
From: Kvaal, James
Sent: Friday, June 18, 2010 6 :42 PM
To: Winters, Deborah
Cc: Mayes , Edgar
Subject: RE: heads up

They say they would be happy to use a dist inct address, or a subject li ne t hat w oul d allow easy sorting. Would it be
easier if I got o ut of the m iddle ? The contact is Pa uline Aberna t hy at TICAS, pabernathy @ticas.org.

Thanks again

From: Winters, Deborah

Sent: Friday, June 18, 2010 2:54 PM
To: Kvaal, James
Cc: Mayes, Edga r
Subject: FW: heads up

Hi Ja mes - welcome back! Teresa asked me t o work w it h yo u o n yo ur quest ion about the gainful employment
regulat io ns e-malts. The best way to handle this from ou r poi nt of view w ou ld be t o have them send their e- malts not t o
the public add ress but to a unique e-mail add ress that we w ill set up. Wo uld that wo rk?

From: Kvaal, James

Sent: Friday, June 18, 2010 1:52 PM
To: Garland, Teresa; Mayes, Edgar; Shireman, Bob
Subject: heads up

Teresa and Edga r,

I understand that an o ut side gro up ma y be generating ema ils su ppo rt ing the Dep artment' s gain f ul employme nt
regulation s to the public Arn e Duncan address. It' s po ssible that there w ill be thou sands of them.

I wanted t o let yo u know t his is com ing. If there is a better w ay fo r t hem t o deliver t his m essage, I would be happy to
make a suggest io n t o t hem - o f course no guarantee they w ill accept it .

Thanks

James

13
From: Pauline Abernathy [pabemathy@ticas.org)
Sent: Thursday. May 27. 2010 4:06 PM
To: Kvaal, James R.; McGuire, MaryEllen C.; Gordon, Robert M.; Shireman. Bob; Arsenault,
Leigh; Gomez, Gabriella; Cecilia_Rouse@who.eop.gov; Kanter. Martha; Yuan. Georgia;
Manhelmer , Ann
Cc: Lauren Asher; Connie Myers
Subject: FW: Dear Colleague: NAACP. National Council of La Raza and 30'" Orgs Support
Administration's Efforts to Protect Students and Taxpayers

FYI · Below is a Dear Colleague from Reps. Polis and Grijalva to all House members sha ring the
leUer to Secretary Duncan from more than 30 organizations in support of stro ng and
effective regulations on gainful employment and incentive compe nsation.

Pauline Abernathy
Vice President
The Institute for College Access & Success
www.ticas.org and www.projecton studentdebt.org
We moved! TI CAS' mai n number is now 51 0.31 8 .7900. My di rect line is 510.318.7903.

From: e-Dear Colleague

sent: Thursday, May 27, 2010 3:34 PM
To: E-DEARCOLL_ISSUES_A· F_OOOO@ls2.house.gov
Subject: CivilRights, ConsumerAffairs, Education: Dear Colleague: NAACP, National Council of La Raza and 30+ Orgs
Support Administration's Efforts to Protect Students and Taxpayers

NAACP, National Council of La Raza and 30+ Orgs

Support Administration's Efforts to Protect
Students and Taxpayers
From: The Honorable J ared Polis
Sent By: §piros.Protopsaltis@mail.house.gov
Date: 5/27/2010
NAAC P, National Council of La Raza and 30+ Organizations Suppor t Department of
Education's Efforts to Protect Students and Taxpayers

Dear Colleagu e,

We would like to bring to your attention a lette r thai was sent to the Secretary of Education Arn e Duncan last
week in support of the Department' s efforts to ma ke its regulations more consistent with the program integrity
provisions in Title IV of the Higher Education Act and to prote ct students and taxpayers. This letter was signed
by more than 30 education, student, consumer protection and civil rights groups, including the NAAC P,
11
National Council of La Raza, American Association o f Collegiate Registrars and Admissions Officers,
Ameri can Association of University Women, American Federation of Teachers, American Medical Student
Association, Campus Progress Action, Center for Law and Social Policy, Institute for College Access &
Success and its Project on Student Debt, National Association for College Admi ssion Counseling. National
Association of Consumer Bankruptcy Attorneys, National Consumer Law Center, Consumers League, U.S.
PIRG, and the United States Student Association. The letter can be found at
h!!.Wro jectonstudentdebt.orgl fi leslpublNeg reg coalition support letter to Duncan.I2M

This Co ngress passed and President Obama signed into law historic legislation that made the single largest
investment in college fi nancial aid ever by transforming the system to serve the needs o f students, not banks or
big corporations. As we work on education issues in the I I I th Congress, we look forward to making further
progress on expanding college access and success, curbing federal student loan abuse, and safeguarding
taxpayer dollars. If you have questions or need more in formation, please contact
fuJ iros.Protopsaltis@mail.house.govat 5-2 161 (Polis' o tlice) or Joseph.Mais@mail.house.gov at 5-2435
(Grijalva' s office).

Sincerely,

Jared Polis Raul M. Grijalva

Member of Congress Member of Congress

May 20, 2010

The Honorable Arne Duncan
Secretary of Education
U.S. Department of Educat ion
400 Maryland Avenue, SW
Washington, DC 20202

Dear Secretary Duncan:

As organizations representing students, higher education, consumers and civil rights, we write to express our
support for the Department of Education's efforts to make its regulations more consistent with the program
integrity provisions in Titl e IV of the Higher Educa tio n Aet. In particular, we urge you to propose regulations
on incentive compensation and gainful employme nt th at will more effectively protect students from high-
pressure and deceptive sales tactics for education al programs of little o r no benefit to them , and will ensure that
taxpayer dollars do not subsidize such practices and programs.

To protect both students and taxpayers, federallaw prohibits "any com mission, bonus. or other incentive
payment based directly or indirectly on success in securing enrollments or fi nancial aid," and requires
vocational programs and nearly all program s at for-profi t institutions to "prepare students for gainful
employment in a recognized occu pation." Yet. examples of overly aggressive recru iting are plentiful. Some for-
profit institutions recently made headlines by targeting homeless shelters in their recruitment efforts. Another
for-profit institution paid $78 .5 million to settle a whistleblower False Claim Act lawsuit and another $9.8
million to the Department of Ed ucation to resolve claims that it was paying improper incentive compensation to
its recruiters. Yet another large for-profit insti tution paid 56.5 million to settl e a lawsuit brou ght by the
California Attorney General charging " a persistent pattern of unlawful conduct." including the inflation ofjob
placement and starting salary information in order to recruit students to enroll in costly vocational programs,
and falsifi cation of records prov ided to the government .

22
While most schools may not engage in such practi ces, federal data suggest these are not isolated incidents.
Students at for-profit schools are the most likely to borrow and borrow the most. According to the most recent
federal data, one in five for-profit school students default on their fcderalloans. A full 44% of all defaulters
attended for-profit institutions, even though j ust 7% of all students attend fo r-profi t schools. Low-income, first-
generation and minority students attend for-profit institutions at disproportionate rates, making them
particularly vulnerable to illegal or unscrupulous acts by these schools.

Incentive Compensation. In direct confl ict with federal law prohibiting institutions of higher education from
providing "any commission, bonus, or other incentive payment based directly or indirectly on success in
securing enrollments or financial aid," current regulatio ns permit incentive payments that are not "based solely"
on the number of students recruited, admitted, enrolled or awarded fi nancial aid. Some schools have
aggressively exploited this and other loopholes in the current regulati ons to do just what the statute is intended
to prohibit. Consistent with the Department' s proposals during the negotiated rulemaking process, the proposed
new regulations should conform to the law and prohibit any employee or contractor compensation "based
directly or indirectly" on successfully securing student enrollments or aid. To avoid ereating additional
loopholes, it is important that the prohibiti on include co mpensation based directly or indirectly on applications
or enrollment up to and including completion, as well as payments for prospective student contact info rmation.

Ga inful Em ployment. Each year, students borrow and taxpayers spend billions of dollars to subsidize
attendance at programs required to "prepare students for gainful employm ent in a recogni zed occupation: ' Yet,
the Department' s current regulations include no official definition of "gainful employment." We urge you to
develop regulations that define gainful employment in a way that is measurable, enfo rceable, not overly
burdensome to schools, and is aligned with the following principles:

• Include all debt incur red at a ny affiliated sc hool. All debt incurred at a schoo l under the same control
structure must be included in any measure of gainful employment that considers debt. Otherwise,
schools controlled by the same company could simply move students from one school or program to
another. Excluding debt from unaffiliated schools also has the benefit of allow ing low-cost schools to
enroll and graduate students with high debt from unaffi liated schools without fear of penalty.
• Include all private loans known to the school and its affil iatcs. Debt-related measures of gainful
employment must include all pri vate loans that should be known to the school. Excluding private loans
would create a perverse incentive for schools to promote risky private loans before students have
exhausted their safer federal loan options. Pri vate loans that should be known to the school must include
all credit provided by any school under the same control structure as well as any loans provided by
lenders with which the school has a preferred lender arrangem ent.
• Avoid loopholes for programs with both high student bor rowin g and low completion rates. A low
completion rate is one of the ways schools can fail to prepare students for gainfu l employment. Students
who borrow but do not complete are oftcn left carryi ng substantial debt without the increased earning
power that should come from a completed degree or certi ficate. The definiti on of gainfu l employment
should not create a loophole fo r schools to discourage completion by students they consider likely to
have trouble repaying their loans.
• Use onl y data that a re accurate and consiste nt acr oss colleges and progr ams, Existing requirements
for the calculation and reporting of completion and placement rates are not suffi cient for use in any
success-based measure of gainful employment. Accrediting agency requirements vary widely and allow
for substantial variation in the calculation of rates, and some schools have been found to have fa lsified
and manipulated their placement data. It is therefore essential that the data and reporting standard s arc
clear, consistent and independently verified.

Again. we applaud your initiative in revi ewing the Department' s current program integrity regulations to ensure
their consistency with federal law and to protect both students and taxpayers. We support your e fforts and stand
ready to assist you in improving the Departments regul ations.
23
Sincerely,

American Association of Collegiate Registrars and Admi ssions Officers

American Association of University Women
American Federation of Teachers
American Medical Student Association
California Community College Student Financial Aid Administrators Association
California Tomorrow
Campaign for College Affordability
Campus Progress Ac tion
Center for Law and Social Policy
Community College League of Cali fornia
Consumer Action
Consumer Federation of California
Crittenton Women 's Union
Demos: A Network for Ideas & Action
Empi re Justice Center
Florida State College at Jacksonville
Greater Boston Interfaith Organization
The Greenlining Institute
The Institute for College Access & Success and its Project on Student Debt
NAACP
National Association for College Admission Counsel ing
National Association of Consumer Bankruptc y Attorneys
National Center for Public Policy and Higher Education
National Consumer Law Center (on behal f of its low-income clients)
National Consumers League
National Council of La Raza
Neighborhood Economic Development Advocacy Project (NEDAP)
New York Community College Association of Presidents
Public Advocates Inc.
Public Higher Education Network of Massachusetts
Rainbow PUSH Coalition
Student Senate for California Community Colleges
U.S. PIRG
United States Student Association

Visit the e-Dear Colleague Service to manage your subscription to the ava ilab le Issue and Party list(s).

24
From : Shireman. Bob
Sent: Tuesday, May 25. 2010 5:42 PM
To: Kanter, Martha
Subject: FW: Higher Learning Commission Final Report
Attachments: x13jOOO3(1 J.pdf

Thi s i s OIG' s f inal r epor t on the i ssue of c redi t hour s and t he accredi ta t i on of Ameri can
In t ercontinental University by North Central .

-- - --Or i gin al Message - -- - -

From: Vi er ling, Chri s
Sent: Tuesday, May 25, 2010 5: 06 PM
To: Shi r eman, Bob; Manheimer, Ann
Subject : Hi gher l earning Comm iss ion Fi nal Report

Thi s report went l i ve at 5: 00 t hi s eveni ng. I t hi nk t hat t here wi l l be a l ot of buzz around

t his one. I t i ncl udes i nf or mati on on the acc redi t at i on of Ameri can In t ercont i nent al. The
sc hool wi t h the Ale r t Memora ndum .

29
From: Pauline Abernathy [pabernathy@ticas.org]
Sent : Saturday, May 22,201010:34 AM
To : Shireman, Bob
Subject : Fw: For-profits on Face tomorrow?

----- Ori gina l Message -----

From: Pauline Abernathy
To; 'Ieigh .arsenauh@ed.gov' <Ieigh.arsenault@ed.gov>; 'rshireman@ticas.org'<rshireman@ticas.org>;
'James_R._Kvaal@wbo.eop.gov' <James_ R._ Kvaal@who.eop.gov>
Cc: Lauren Asher
Sent: Sal May 22 07:3 1:57 20 I0
Subject: For-profi ts on Face tomorrow'!

Sestak and lamar alexander are both cca advocates. Does gibbs have Ips on ge in case it comes up tomorrow'!

-Face the Nation': White House Press Secretary Robert Gibbs; Sen. Lamar Alexander (R·TN); U.S. Senate candidate Rep. Joe Sestak
(D-PA)

30
From : Bergeron, David
Sent : Tuesday, May 11, 2010 3:21 PM
To: Madzelan, Dan; Adams, Kristen; Shireman, Bob; Gomez, Gabriella
Cc: Hammond, Cynthia; Arsenault, Leigh
Subject: RE: Request for Data - Please let me know how long th is will take

I am as well.

From: Madzelan, Dan

Sent: Tuesday, May 11, 2010 3:20 PM
To: Adams, Kristen; Shireman, Bob; Gomez, Ga briella ; Bergeron, David
Cc: Hammond, Cynt hia; Arsenault, Leigh
Subject: RE : Request for Data - Please let me know how long this will take

I'm available at 11.

From : Adams, Kristen

Sent: Tuesday, May 11, 2010 2:03 PM
To: Shireman, Bob; Gomez, Gabriella; Bergero n, David; Madzelan, Dan
Cc: Hammond, Cynthia; Arsenault, Leigh
Subject: RE : Request for Data - Please let me know how long t his will take

Can we do a call with lu ke tomorrow at 11 am ?

From: Shireman, Bob

Sent: Tuesday, May 11, 2010 1:16 PM
To: Gomez, Gabriella; Bergeron, David; Madzelan, Dan
Cc: Hammond, Cynt hia; Adams, Kristen; Arsenault , Leigh
Subject: RE : Request for Data - Please let me know how long this will take

I' ll take this for no w .

From: Gomez, Gabriella

Sent: Tuesday, May 11, 20 10 1:0 3 PM
To : Gomez, Gabriella; Bergeron, David ; Madzelan, Dan; Shireman, Bob
Cc: Hammond, Cynth ia; Adams, Kristen; Arsenault, Leigh
Subject: RE: Request for Data - Please let me know how long this will take

Hi all - Can we get on t he phone w it h l uke and his sta ff t o go t hrough t his list? They are anxio us to know w hat we can
do. Thanks

From : Gomez, Gabriella

Sent: Friday, May 07, 2010 6 :43 PM
To: Bergeron, David: Madzelan, Dan; Shireman, Bob
Cc: Hammond, Cynt hia; Adams, Kristen
Subject: Request for Data - Please let me know how long t his will ta ke

Hi AlI- not sure the best person t o t alk to about th is so I t hought I would send an email t o a few of you and hopefully
yo u steer us in the right direction . Met w it h luke today and he asked for data on t he follow ing items. For all t hese
request s t hey wo uld like year by year information and any information tha t we t hink t hey w ould be interested in if it

J8
come s up in our research for th em . Please let me know how soon we can get th is information and if it wo uld be helpful
t o put someone on the phon e w it h him . I know t here is a lot here so rea lize we may need to break t his up a bit. Thanks

Overa ll data qu esti on s/requests

• As a general question, what does NSLDS offer?
• Wou ld like informat io n from NSLDS versus IPEDS if possible
• On IPEDS is it possible to give them access t o the t ables instead of j ust the info on t he websit e, need it for all for-
profit inst itutions

Specific data request s

• Grad uation rates by schools over t ime
• Placement rates o f schools over time
• Co ho rt Defa ult Rat e Info - all req uested by in stitution
o 2 year cohort default rate as well as 3 year cohort default rat e
o Is it po ssible t o do 4 year cohort default rate ?
o lifetim e co hort defa ult rate
o All CDR dat a by schoo ls and dollar amoun ts not j ust percent ages (if po ssible)
o Also all recovery rates for t he loans by sector over t ime.
• l oans in repayment by schoo l and sector
• Informat ion on the licen sing required for each stat e agency
• Tota l dollar amo unt including grants and loans fo r each institution
• Enrollmen t fo r all institutions, broken dow n by degree and if there are ot he r factors that can be bro ken down
wo uld like t o know tho se factors.
• Information on ability t o bene fit te sts. Percentage of t ests used at instit utio ns, in o ther word s who gets in as a
result of t hese t ests at each instit ut ion.
• 90/10 for all for-pro fit s over ti me
• list of for-prof it s on heightened cash management
• list of all d osed fo r-profit s in t he last 10 years and their accredit ors.

Gabriella Gomez, Assist ant Secret ary

Off ice of l egislati on and Congressional Affa irs
u.S. Depart ment of Ed ucat ion
400 M ary land Ave., S.W .
Washington, D.C. 20202
(202) 40l-{)020
gabriel1a.gomez@ed.gov

39
From : Kanter, Martha
Sent; Friday, April 30, 20 10 7:32 PM
To: Yuan, Georgia
Subj ect: FW: Todays W all Street Journal

From : Kanter, Martha

sent : Friday, April 30, 2010 7:32 PM
To: Rogers, Margot; Cunningham, Peter; Miller, Tony ; Gomez, Gabrie lla; Martin, Carmel; Rose, Charlie
Subject: Today's Wall Street Journal

htt p:U online.w sj .com/ art ide/5T-( 0 -20100430- 71 5 181 .ht m11mod:WSJ latesthead lin es

NEW YORK (Dow Jones )-This week's sell-off in for-profit school stocks, prompted by a report of a U.S. Department of
Education official's speec h, may have been overb lown, so me analysis say now that they have read a full transcript of the
comments.

The sector's shares fell sharply T hursday after tra de Web site Inside H ig her Ed reported that Robert Shireman, deputy
undersecretary for education, spoke harshly of market-funded colleges at a meeting of state school adm inistrators and
accreditors Wednesda y. The article , citing sources at the m eeting , said Shirem an com pared the school s to W all Street
firms whose actions helped cause the rece nt financial cris is. Inside Higher Ed , which d idn't have a reporter at the meeting ,
attem pted to confirm the comments with Education Departm ent officials, who declined com m ent for the articl e .

Shireman d id 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 betler job.

M ore ...
 From : Shireman, Bob
Sent: Wednesday, April 28, 2010 5:21 PM
To : Wolff. Russell
Cc: Woodward, Jennifer; Manheimer, Ann
Subject: Re: Elimination of the Safe Harbors for Incentive Compensation

(b)(5)

67
(bl(B)

Robert Shi rema n

Deputy Und e rsec reta ry
U. S . Department of Ed uca tion
(20 2 ) 260 - 0 101

From: Kantrow it z, Ma r k [Mark . Kantrowit z@Monst er. comJ

Sent : Monday , Ap ril 26, 2B1B IB : 39 PM
To : FINAID-l@L I STS. P5U . EDU
(c : Kantrowit z, Ma r k
Subject: Elimi nation of the Saf e Harbor s fo r In centi ve Compensat ion

Sect ion 487(a ) (2B) of the Hi gher Edu cation Act of 1965, as amended by
t he Hi gh er Education Amendments of 1992, bans co l leges f rom paying
68
commissions, bonuses or othe r f orms of incent i ve compensation based
di rect ly or i ndirec tly on succe ss i n sec ur i ng enrollments or f i nancia l
aid. Thi s res t ric t ion i s in cl uded in the program parti cipation agreement
for institutional eligibility f or f ederal st udent aid funds available
through Tit le IV of t he Higher Ed ucation Act of 1965 and appl ies t o al l
col leges . i ncl udi ng pu bli c, non - prof it and f or-pr ofit col leges. Si nce
2002, the regul ations at 34 CF R 668. 14(b)( 22)( ii) have provided a set of
twelve safe harbors for activi t ies t hat are deemed to not violate the
re st r i ctions on in centive compensa tion. During negotiat ed r ulemaki ng for
Hi gher Edu cation 2009- 10 , however, the US Department of Edu cation
proposed to r epeal th e safe harbors because of concer ns about abus ive
recru iting prac t ices . Thi s st udent ai d pol icy anal ysis paper dis cusses
t he consequences of a r epeal of the safe har bors .

The paper can be found at

ht tp : / /www .finai d. org/edu cators /20100426in centivecompens ation.pdf

The r eport is int ended to be descripti ve and pred i ct ive . I t doe s not
ana lyze dat a. As such t here ar e no key fi ndings or pol i cy
recommendations . The report does provide cl ar i t y on some of the l ikely
consequenc es of current ly proposed regul atory changes concer ni ng
i ncent ive compe nsat ion , and r evi ews rel evant hi stori cal context .

The report may al so hel p col leges comp ly wi t h the US Depart ment of
Educat i on' s proposed regulatory changes i f they become fi nal. ( Please
note that thi s paper represents my persona l professiona l opi nion and has
no off ic i al st andi ng.)

Mark Kant r owi tz

Publ is her of FinA id. org and FastWeb. com

P.S. Pr evi ous student ai d policy analysi s papers and artic les may be
f ound at
www.finaid .org/ studentaidpol icy

---------- --------- --- ---- ------- --- ---- --- ----._-

Mark Kantrowi t z
Publis her of Fi nAid. org and Fastweb . com
Aut hor, Fas t Web College Go ld

FinAid Page l lC
PO Box 2056
Cranber ry Township . PA 16066-1056
Tel : 1-724 - 538 -4500
Fax : 1-724-538- 4502
Emai l : mkant@finaid . org.mkant@fastweb . com
www .fastweb.com www.fina id. org w~.col leg egold . com

NOTI CE:

Thi s message, and any attachments. contain (s) information that may be confidential or
protected by pri vilege fr om disclos ure and i s intended only f or the individual or entit y
named above . No one else may di s close . copy. distri bute or use t he contents of t hi s mes sage
f or any pu rpose . I t s unauthorized use. di sseminati on or du plication i s stric t ly prohibited
and may be un lawfu l . I f you r ecei ve t his mes sage i n error or you otherwi se are not an
aut hori zed reci pient, pl ease immediatel y delete the mes sage and any attachment s and not ify
t he sender .

70
From: Bergeron, David
Sent: Tuesday, April 27, 201 0 12:22 PM
To: Yuan, Georgia; Shireman, Bob
Subject: RE: FYI

How ???? ?????

I had a cal l f r om an analyst th i s morn ing and sai d we 're not ta l king about GE . . .

-- - --Origi nal Message- - - - -

Fr om : Yua n, Geor gi a
Sent : Tuesday, April 27, 2010 12:20 PM
To: Bergeron, David; Shireman, Bob
Subject : FY I

htt p: / /on l ine .wsj .com/a rt ic le/BT-CO- 2010e426-710339.html?mod= rss_Hot_Stoc ks

APRIL 26, 2010, 10:57 A.M. ET
Debt , Job Rule Un certainty Hi t s Shar es Of For -Prof i t Co lleges NEW YOR K (Dow Jones ) - -A
government proposal to hold col leges accountab le f or graduating st udents with hi gh debt l oads
and l ow i ncome levels came f ront and cente r , agai n, aft er Credit Suisse anal ysts r eversed
t heir ass umption t hat th e Depar t ment of Educ at ion had softe ned its sta nce on t he s ubject .
Monday morning, Credi t Suisse i ssued a not e sayi ng the Depar t ment of Educati on has r etu r ned
to a st i f fer set of r ul es on post - graduat i on debt and gainfu l employment l evel s that colleges
mu st meet. The news hi t share pr i ces of fo r-p rof i t uni ver s i t i es that had ra l l ied on expect ed
softer r ules .
Credit Suisse downgraded I TT Educ ational Services I nc . ( ES I) and DeVry Inc . (OV) to neutral
from outperform and s lashed their pr ice target s, ci ting the potential fallout from their new
take on gainful employment as well as concerns of countercyclical ity. I TT recent ly was off
2.9% to $108 . 53, while DeVry was down 6.5% to $64. 96 . Credit Suisse had upgraded the schools
t wo weeks ago .
Ot her f or -prof i t s chools , i ncl udin g St raye r Educ at ion Inc . (STRA) , Career Educat ion Cor p.
(CECO) , Corin thi an Col leges In c . (COCO) and Apollo Group I nc. (APO L) , were also t r adi ng down .
The Depa rtment of Educ at ion or i gi nal ly sa i d sc hools coul d fa ce scr ut i ny t hat coul d put
f eder al as si sta nce- -of ten th e primary r evenue st r eam fo r f or - prof i t col l eges-- at ri sk if t hey
di d not have at l east a 70% gra duat i on r at e and 70% j ob pl acement in fi eld of st udy , Two
weeks ago, Credi t Suis se , and ot her s , sent out notes saying t hey believe the Department of
Ed ucati on had softened t he graduat ion leve l to 50%, sending s hares hi gher, wit h some hi t ting
52-week hi ghs .
"Oddly, we suspect t he big upward move the st ocks had when the i nvestment communi ty found out
about the 50% exemption may have led to pr ess ur e on the DOE to remove the 5e% exemption," the
firm wrote Monday.
Some education insiders have had mixed f eeli ngs on pr edi ct i ng the gai nfu l-employment meas ure ,
arg ui ng th at i t's i mproper t o say what the Depa rtment of Educat i on wi l l put fort h and i t's
bes t t o wait unt i l th e of f i ci al pr opos al i s r eleased f or public comment. That wi l l happen by
mi d-June .
"I ' m not sur e who t hi nks they have what access t o what ' s i n t his draft, " said one for - profi t
s chool off ic ial, but "I wo ul d r eally not be j umpi ng to any conc l usi ons ju st yet . " He s ai d
t he re 's no way of knowing "whet her i t ' s bee n har dened , softe ned, pureed, whatever . "
Repr esent ati ves f r om t he Depar t ment of Edu cation we re n't immedi ately ava i lab le fo r comment.

IBD I ndust r y Themes

Rumor s Swirl, Li ft And Sink School Stocks By VICTOR REK lAITIS, INVESTOR' S BUS INESS DAI LY
Posted e4/26/2010 06:23 PM ET

71
News of a r egul at or y exempt ion provi ded a big boost on April 13 t o DeVr y (DV), ITT
Educational Service s (ES I) and other sc hool stocks .

So mu ch for that exemption.

On Monday, DeVry and ITT tumb led amid reports that they mi ght not get a pass in new Educa tion
Department r ules after all .

The Edu cation Department i s wor king on regu la t ions that wou ld link graduates' income t o the ir
st udent - loan payment s .

Credit Suisse s ai d on April 13 th at there could be an exempt ion f or sc hools with a 50%
complet i on r ate and a 7a% job- placement ra te.

That exempt ion l i kely would hel p DeVry and ITT , t he bank said t wo weeks ago as i t upgraded
those two schoo l stocks to outperform.

But on Monday, Credit Suisse sai d its Washington sour ces think t he exemption may not make i t
in the new regu lations .

The bank downgr aded DeVry and ITT t o neut r al.

Credit Suisse al so expressed conce r n about a recent DeVry warni ng about s lowi ng enr ollment in
one unit, as well as an ITT warni ng about in creased adv erti s ing expenses . Enro l l ment has been
ri sing for fo r-profit educators , but that t r end coul d end as the j ob market improves.

DeVr y slid 5 . 8% to 65.45 on Monday, dropping be low its 10-week moving average in heavy
t ur nover . It had cl imbed as hi gh as 74.36 afte r a r ebound off its 10- week li ne .

ITT Educational al so fell hard and sliced through its l 0-week line, though it recovered to
end the day down j ust 1. 2%.

Another s chool s t ock t hat slid was top- rated Grand Canyon Education (LOPE) , down 1 .1% i n
bel ow -average vol ume .

The stoc k sta nds 9% bel ow a hi gh reac hed on Ap r i l 13. It has not been i n a prope r buyi ng
r ange fo r seve ral wee ks, but i t may be nearing its la -week movin g average .

DeVry fa l ls afte r analyst downgr ade

Bloomberg News Published : 4/ 26/ 2010 12:13 I TT Ed ucational Services Inc. and OeVry I nc . f ell in
New Yor k t rad ing afte r a Cred it Sui sse Grou p analys t said the U. S. govern ment may make it
harder f or the compani es ' student s to get f inancial ai d.

DeVry, based in Oakbrook Terrace, fell $4.58, or 6 . 6 percent, to $64. 88 at 12: 01 p.m . in New
Yor k Stoc k Exchange compos i te trading after the Bost on- based analyst, Kel ly Fl ynn, cut her
rating t o "neut r al" f rom ftoutperform ." ITT Educat i onal , based i n Carme l, I ndi ana, fe l l $2. 37,
or 2.1 per cent, t o $109. 41 after i t was al so cut t o "neutral . "

Departme nt of Educa tion rul es may requi re educa ti on companie s t o s how t hat gradu at es ear n
enough t o afford repayment of their st udent loa ns . An exempt ion t o th e r egul ation s th at woul d
have eased r estrictions on st udents ' access to l oans may be dropped fr om t he propo sal , whic h
may be made publ i c i n May or June , Fl ynn sa i d today.

"We expect sector t o r ema in vol ati l e i n coming weeks as regulat ory proce ss plays out," r I ynn
wrote i n a not e t o cl i ent s .

72
The r ecoveri ng economy may al so hur t the fo r- profi t col leges if st udents can get jobs rather
than s ign up f or cl asses , Fl ynn s ai d.
- - - -~~ - - - - - - - - - -

73
From : Pauline Abernathy (pabernathy@ticas.org}
Sent: Monday, April 19. 2010 11:20 AM
To: Kanter, Martha; Shirem an, Bob; Arsena ult, Leigh; Gomez, Gabriella; Manh eimer . Ann;
Madzelan, Dan; Kvaal, James R. ; Gordon, Robert M.
Cc: Debbie FrankIe Cochrane; lauren Asher; Connie Myers
Subject : Analysis of CCA paper on gainful employm ent

Attached is a brief TI CAS memo to interested pa rties on the Career Ccllege Association-
co mmissioned paper on gainful employment. It notes that their own analysis found that:

• St udents from for-pr ofit colleges are much more likely to default o n student loans. According to their
own analysis, even after controlling for demographic differences among students, for-pro fi t college students
are twice as likely as other college students to defau lt;
• Few for-profit pr ogra ms would be affected by proposed defini tion. Their own analysis found that only
a small minority of for-profit programs currently do not meet the proposed 8-percent median debt-to-income
ratio test (al tho ugh those programs currently enroll 1/3 of their students); and
• No loss of student access to college. Their stud y indicates that other colleges would be well positio ned to
absorb the students who might have enrolled in programs that failed to meet the test-and would serve them
much better.

TICAS memo on
: RA Report 4~1 5_..

Pauline Abernathy
Vice President
The Institute for College Access & Success
www.ticas.org and www.Q!Qjectonstudentdebt.org
We moved! TICAS' main number is now 510.318.7900. My direct line is 51 0 .31 8.7903.

80
From: Bergeron, David
Sent: T hursday. April 15.20106:45 AM
To: Shireman. Bob
Cc: Madzetan, Dan
Subject: RE: Data for GE

J 'U ask Nces. J'll have t hem in clude cdr s i f poss ibl e t oo .

From: Shi r ema n, Bob

Sent : Thurs day, Apri l 15, 2010 4 : 17 AM
To: Bergero n, Davi d
Cc : Madzelan, Dan
Subject : Data for GE

Can you get an excel f i l e of graduat ion and retent ion rates by institut i on and t ype ?

89
Secretary Duncan's Speeches June-Mav 2010

Can be found at: http://www.ed.go v/news/speeches/latesUindex.html

li sted by date and speech name

The Roadmap to Reform

Remarks at Fourth Annua i lES Research Conference
Data- First of Four Assurances
June B, 2009

States W ill Lead the Way Towa rd Reform

Rema rks at 2009 Governors Education Symposium
Higher Standards and Assessments-Second of Four Assurances
June 14, 2009

Turning Around the Bottom Five Percent

Remarks at National Alliance for Public Charter Schools Con ference
Tu rnarounds- Third of Four Assurances
June 22, 2009

Partners in Reform
Remarks at Nationa l Education Association
Teacher & Principal Quality-Fourth of Four Ass urances
July 2, 2009

Race to the Top Begins

Remarks at the U.S. Department of Education Department Aud itorium
RTlT, need for change
July 24, 2009

National Council of La Raza

Reducing the dropout ratel boosting s tudent achievement
Improving educational attainment amo ng Hispanic s t udents
July 2B, 2009

From Compliance to Innovation

Remarks at America's Choice Superintendents Symposium
Need for innovati on and chan ge & i3 Program
August 20 , 2009

9
HBCUs and Higher Education: Beyond the Iron Triangle
Remarks at National Historically Black Colleges and Universities Conference
Challenges of HBCUs and higher education in general
Impro vi ng the college pipeline
College Access and Comp letion Fund
September 2, 2009

Reauthorization of ESEA: W hy We Can't Wa it

Remarks at the Monthly Stakeholders Mee ting
Reauthorization of ESEA
September 24, 2009

Building Safe and Healthy Communities

Remarks at City Hall in Chicago
Call for a national conversation on values, build ing healthy c om m u n ities
October 7, 2009

Make No Small Plans

Rem arks at the Grantmakers for Education Conference in Chicago
Need for transformational change
The i3 Fund, Early l earning Challenge Fund, Harlem Children's Zone
OCtober 7, 2009

A Gall 10 Teaching
Rem arks at The Rotunda at the University of Virginia
Need for an anny of new teachers
October 9, 2009

Partners for Success

Remarks to the National Association of State Boards of Education
Federal role, president'S goal, innovation, ESEA reauthoriz ation
October 16, 2009

Teacher Preparation: Reforming the Uncertain Profe ssion

Remarks at Te achers College, Columbia University
Need for change in s chools of education and teacher preparation
October 22, 2009

10
Remarks to the President's Council of Advisors on Scien ce and Technology
Need t o Improve performance In STEM, increase s tu d ents' global
competitivene ss
October 23, 2009

Economic Security and a 2 1st Century Educa tion

Remarks at the U.S. Chamber of Commerce's Education and W orkforce Summit
Federal role; reauthorization of ESEA; ways to in vest in education
November 9, 2009

The Promise of Promise Neighborhoods: Beyond Good Intentions

Remarks at the Harlem Children's Zone Fall Conference
Commun ity schools, Promise Neighborhoods, year-round educ ation, civil r ights
November 10, 2009

The Early Learning Challenge: Raising the Bar

Remarks at the Na tional Association for the Education of Young Children Annual
Conference
Importance o f ear ly learning and d evelopment, Early l earning Challenge Fund
November 18, 2009

Lawmakers Who Lead

Remarks to the National Con ference of State Legislature s
States' role in reform, McKIn sey report, education and the global econ omy
December 10, 2009

Investing in Education
Remarks to the National School Boards Assoc iation
Fiscal 2011 Budget
February 1,20 10

Using Technolog y to Transform Schools

Remarks to the Association of American Publishers Annual Meeting
Draft Education Technology Plan
March 3, 2010

Crossing the Next Bridge

Remarks on the 45'" Anniversary of "Bloody Sunday
Ci vil rights agenda
March 8, 2010

11
A Blueprint for Reform: The Reauthorization of ESEA
Testimony before House and Sena te authorizing comm ittees
ESEA reauthorization
March 17. 2010

Statement on Race to the Top Phase 1 Winners

Remarks for call with media
Race to the To p
March 29. 2010

The Well-Rounded Curriculum

Remarks to the Arts Education Partnership National Forum
ESEA reauth orization and the Importance o f a well-rounded cur riculum
April 9. 2010

Keeping the Promise to All of America's Children

Remarks to the Council for Exceptional Children
Special ed ucation and accountabil ity
April 21. 2010

Success a s the Norm

Remarks to the KIPP Annual Dinner
Tak i ng succes s to sc ale
April 30. 20 10

Looking in the Mirror

Remarks to the Mom Congress
Parent Involvement
May 3.20 10

12
 MEMO

TO: Interested Parties

FROM: Th e Institute for College Access & Success
DATE: Apri l 15, 2010
RE: Charles River Associates Report on Gainful Employment prepared for the
Career College Association

The Career College Association (CCA) recently co mmissioned a study o f how their
institutions and programs would fare under an Education Depart men t proposal for defin ing
gainful employment. ' As a condition of participat ing in federal student aid programs,
federal law has long required most programs offered by for-profit institutions and any
program o f less than two years to "prepare students for gainful employment in a
recognized occupation." Yet there is no official definition or " gainful employment." With
enrollment in these programs rising rapidl y- now accounting for nearly I in 4 federal Pell
Grant and federal student loan dollars- the Obama Administrat ion has proposed defining
gainful employment.

Using data provided by CCA and not publicl y avai lable, Charles River Associates (eRA)
found :

• Students from for-profit colleges a rc mu ch more likely to d efa ult on st uden t loan s.
According to their own analysis, even aft er controlling for demographic differences
among students, for-profit college stud ents are twice as likely as other college students
to default;
• Few for-p rofit p rogra ms would be a ffe cted by proposed d efinition. Their own
analysis found that only a sma ll minority of for-pro fit programs currently do not meet
the proposed 8-perccnt median debt-to-income rat io test; and
• No loss of stud en t access to coll ege. Their study indicates that o ther co lleges would
be well positioned to absorb the studen ts who might have enrolled in programs that
failed to meet the test-and would serv e them much better.

Their own fi ndings therefore further support the Administration' s proposing a clear and
enforcable definition of gainful employment that will prevent tax payer dollars from being
used to subsid ize programs that leave stud ents worse off than before-deep in debt and no
better prepared fo r gai nful employment.

Twice as Li kely to Defa ult

Demographic factors, such as inco me. gender, race and fami ly size, playa role in the
likelihood o f defaulting on federal student loans, but they do not tell the w hole story. CRA
controlled for these and other factors to deter mi ne the effect of a stude nt' s school on the
likelihood o f defaulting, and found that students attending fo r-profit colleges were twice as
likely to default as students at other colleges.' Even if all students at for-profits completed
their academi c programs, CRA estimates that about 12 percent of their students would still
default on their student loans, compared to about six percent at community colleges after
controlling for demographi c differences.

Few Programs Would Be Affected

Using CCA data on student graduation, tuiti on charges, and indebtedness for more than
10,000 academic programs, CRA found that 82 percent of for-profit school programs
would currently pass the Department's proposed 8-pcrcent median debt-to-income test.
The Department' s proposal is intended to ensure that the majority of graduates of a
particular program arc able to repay their loans without hardship, and more than four out of
fi ve for-profit programs would meet this standard. The Department has also offered two
alternative ways for colleges to demonstrate that their programs are suffi ciently preparing
students for gainful employment, but the eRA report does not estimate the effects of these
alternatives. It is possible that some or many programs will meet one of these alternative
gainful employment standards, narrowing the share of affected programs even fu rther.

No Loss of Student Access

Colleges with programs that cannot demonstrate that they are adequatel y preparing
students for gainful employment under any of the proposed standards will have several
options. They could improve their program quality so that students are better prepared for
employment opportunities, or they could reduce what they charge so that students are
better able to repay what they borrowed to attend the school. This is similar to what
happened when the Department first began enforcing sanctions for very high cohort default
rates. In response, many schools adj usted their practi ces to lower their default rates so the
schools would remain eligible for federal student aid, and the share of students defaulting
on their student loans decreased substantially.

Even if some schools choose to eliminate. rather than change, a program, students
currently enrolled in these programs will have plenty of options, including enrolling in
public, private non-profit, or the vast majori ty of for-profit programs that meet the
Department's proposed standards. While enrollment has increased in all college sectors,
state budget shortfalls and shri nking endowments have limited many publi c and nonprofi t
colleges ability to increase enrollment. Given that the vast majority of for-profit college
programs currently meet the Department' s gainful employment standard, and the sector
says it has the ability to rapidly expand enrollment, students will still have plenty of
options, but at a lower cost and greater benefit. Taxpayers and the economy will benefit as
well from lower student default costs and a better-trained workforce.