Marco Rubio took the bold step of offering a plan that even he acknowledges might make some people pay more for their college degrees. He wants to set up a system where private investors could cover a student’s tuition in exchange for a percentage of their earnings after college, but clearly hasn’t thought it through.
- Will it limit someone’s freedom to choose their job afterwards since a financier will be breathing down their neck?
- How much uncertainty will students face about the fine print and what could get sneaked into their contract?
In his Chicago speech today, Rubio left out his call to eliminate the Department of Education, which would also drive up the cost of college by getting rid of federal student loans and Pell Grants. He did, however, re-up his extreme proposal that would likely open the door to more for-profit colleges. A prime example is Corinthian College, which recently went bankrupt and left the federal government covering the student debt that could amount to $3.5 billion. The for-profit education industry is a major backer of Rubio – even Corinthian donated to him, and Rubio advocated on their behalf.
Conveniently, both far-right ideas he referenced today are backed by the Koch brothers through their millennial front-group, Generation Opportunity. Add today’s speech to the list CNN compiled of Rubio’s suck up attempts in front of the Koch brothers.
Rubio’s backwards education policies are just a few of the reasons why he doesn’t have any claim to the “New American Century.” The silver lining is Rubio has a history of making big policy speeches but failing to write his plans down as legislation.
Background:
Rubio: Student Investment Plans “Will Likely Reward Those Who Are Going Into Fields That Are Highly Compensated.” According to CNBC, “Rubio acknowledged the bill might not help the majority of students, though. Investment will likely skew toward those pursuing careers in science, technology, engineering and math, he said. ‘I do think it will likely reward those who are going into fields that are highly compensated,’ he said. ‘It will in fact serve as an incentive for more students to graduate with degrees that are ultimately turned into employment as opposed to large number of students now that are graduating in fields that don’t lead to jobs.’” [CNBC, 4/9/14]
Rubio: Students Who Finance Their Education Through Student Investment Plans May Pay More For School. According to National Journal, “Students who finance their education through student-investment plans might end up paying more than the initial cost of their education, Rubio said. They could also end up paying less. ‘Unlike with loans, you would be under no legal obligation to pay back the entire [cost of tuition],’ Rubio said. ‘Your only obligation would be to pay that 4 percent of your income per year for 10 years, regardless of whether that ends up amounting to more or less of the’ full tuition amount.” [National Journal, 2/10/14]
Plans Like Rubio’s Seen As “21st Century Version Of Indentured Servitude.” According to Financial Times, “[Some] see [income share agreements] as a 21st-century version ofindentured servitude, a system dating from the 1600s in which employers in the US paid the cost of the sea crossing for would-be immigrants in return for a fixed number of years of labour.” [Financial Times, 2/9/14]
Took Money From And Helped Failed For-Profit College
June 20, 2014: Rubio Wrote A Letter To U.S. Department Of Education Deputy Secretary Expressing Concern Over The “Extreme Financial Constraints” Placed On Corinthian Colleges, Which Restricted The Company’s Access To Federal Financial Aid. According to Bloomberg, “The top-tier Republican presidential candidate had made his plea in a letter—obtained by Bloomberg Politics—dated June 20, 2014 and addressed to Jim Shelton, the deputy secretary of education, and Ted Mitchell, the undersecretary for post-secondary education. ‘It has been brought to my attention that the U.S. Department of Education has recently placed extreme financial constraints on Corinthian Colleges, Inc. by restricting the company’s timely access to federal financial aid. It is my understanding the the [sic] Department of Education has requested extensive documents be provided by Corinthian Colleges for review, and Corinthian has acted in good faith to try to provide these documents as expeditiously as possible,’ Rubio wrote.” [Bloomberg, 4/29/15]
- Asked The U.S. Department Of Education To “Demonstrate Leniency” Toward Corinthian Colleges. According to Bloomberg, “Last summer, Senator Marco Rubio of Florida asked the U.S. Department of Education to ‘demonstrate leniency’ toward Corinthian Colleges by permitting the wealthy for-profit company to continue accessing millions of dollars in federal financial aid while it was cooperating with a federal investigation.” [Bloomberg, 4/29/15]
- Rubio Claimed That The Letter Regarding Corinthian Colleges Was Written On Behalf Of Florida Constituents. According to Bloomberg, “Founded in 1995 by five for-profit education operators, the company once ran more than 100 campuses across the country, including in Rubio’s home state of Florida. (He described his letter as written on behalf of his constituents.).” [Bloomberg, 4/29/15]
Ten Months Later Corinthian Colleges Closed 28 Campuses And Displaced About 16,000 Students After Being Fined $30 Million By The Department Of Education. According to Bloomberg, “Ten months later, the company shuttered its remaining 28 campuses, instantly displacing some 16,000 students just days after it was fined $30 million by the Department of Education for a scheme involving ‘confirmed cases of misrepresentation of job placement rates’ for as many as 947 students. The decision to close shop came after years of federal and state investigations into the company.” [Bloomberg, 4/29/15]
April 2014: Rubio Had Been Informed That The Company “Admitted To Falsifying Placement Rates And/Or Grade And Attendance Records At Various Institutions.” According to Bloomberg, “Mitchell responded to Rubio on April 2, explaining that the federal investigation found ‘systemic deficiencies’ in the company’s operations and mentioned that the organization had ‘admitted to falsifying placement rates and/or grade and attendance records at various institutions.” [Bloomberg, 4/29/15]
Contributions Benefitting Rubio
October 5, 2010: Marco Rubio For US Senate Accepted $5,000 In Campaign Contributions From Corinthian Colleges, Inc. PAC. According to Florida Division of Elections filings, on October 5, 2010, Marco Rubio for US Senate accepted $5,000 in campaign contributions from Corinthian Colleges, Inc. PAC. [Florida Division of Elections, Accessed 5/7/15]
December 7, 2011: Rubio’s Reclaim America PAC Accepted $5,000 In Campaign Contributions From Corinthian Colleges, Inc. PAC. According to Influence Explorer, on December 7, 2011, Rubio’s Reclaim America PAC accepted $5,000 in campaign contributions from Corinthian Colleges, Inc. PAC. [Influence Explorer, Accessed 5/7/15]
February 2, 2013: Rubio’s Reclaim America PAC Accepted $5,000 In Campaign Contributions From Corinthian Colleges, Inc. PAC. According to Influence Explorer, on February 2, 2013, Rubio’s Reclaim America PAC accepted $5,000 in campaign contributions from Corinthian Colleges, Inc. PAC. [Influence Explorer, Accessed 5/7/15]
March 8, 2013: Rubio’s Reclaim America PAC Accepted $5,000 In Campaign Contributions From Corinthian Colleges, Inc. PAC. According to Influence Explorer, on February 2, 2013, Rubio’s Reclaim America PAC accepted $5,000 in campaign contributions from Corinthian Colleges, Inc. PAC. [Influence Explorer, Accessed 5/7/15]
Corinthian Colleges Made Payments To Karl Rove Co-Founded Crossroads GPS. According to The Intercept, “The spectacular crash of Corinthian Colleges after years of systematically deceiving thousands of students into enrolling into low-quality, high-cost education programs has once again raised questions about how the for-profit college industry staved off stronger rules governing the $1.4 billion per year in federal loans that helped keep Corinthian afloat. Some hints emerged today in the giant chain’s filing for Chapter 11 bankruptcy protection in Delaware. It shows that Corinthian made secret payments to an array of political consultants, think tanks, and political dark money group. The filing doesn’t list amounts, but shows that Corinthian made payments to Crossroads GPS, a group co-founded by Karl Rove that has raised over $300 million to elect Republican members of Congress through campaign advertising. Crossroads G.P.S., a 501(c)(4) nonprofit, does not disclose any of its donors.” [The Intercept, 5/4/15]
- 2010: Crossroads GPS Spent Over $700,000 To Help Elect Rubio. According to The Intercept, “Crossroads G.P.S. spent over $700,000 to help elect Sen. Marco Rubio, R-Fla., during his 2010 election. As Bloomberg News revealed, Rubio later filed a letter with the Department of Education, requesting that the agency ‘demonstrate leniency’ with Corinthian.” [The Intercept, 5/4/15]
Proposed Bizarre Corporate Student Loan Program That Mirrored Indentured Servitude
Rubio Called For The Creation Of “Student Investment Plans” Which Would Allow Private Firms To Provide Loans That Were Repaid As A Fixed Percentage Of A Graduate’s Income. According to the Associated Press, “Rubio, who often notes that he still owed more than $100,000 in student loans when he became a senator in 2011, is calling for ‘student investment plans.’ Private investment firms would cover tuition costs that could be repaid later as a fixed percentage of a graduate’s income for a set number of years, regardless of whether that amount covers the total debt.” [Associated Press, 2/10/14]
- Video: Rubio Claimed That Under His Investing In Student Success Act Students And Investors Would Both Take Financial Risks. In an appearance on CNBC’s Squawk On The Street, Rubio stated: “So our notion is: what other options to the student loans can we create? And here is an existing model that now exists that’s called Income Share Agreements. A student goes to an investment group and says, Here’s who I am, here’s my resume, here’s my transcripts, here’s what I want to graduate in. Will you invest in me? And when I graduate, I promise, over a defined period of time, to pay back a certain percentage of my income. For the investment group, they may make a lot more money than they invested in the student. They may lose. That’s the risk they take. For the student, they may end up paying more than what they would have, but they may end up paying a lot less. So the bill is designed to create a legal framework so we can encourage more entities, more investment groups to step into this field and help people with an alternative to the college loans that we currently have.” [CNBC, 4/9/14]
Admitted To Potential For Higher Amount Paid For Education, That It Would Reward More Lucrative Fields
Rubio: Student Investment Plans “Will Likely Reward Those Who Are Going Into Fields That Are Highly Compensated.” According to CNBC, “Rubio acknowledged the bill might not help the majority of students, though. Investment will likely skew toward those pursuing careers in science, technology, engineering and math, he said. ‘I do think it will likely reward those who are going into fields that are highly compensated,’ he said. ‘It will in fact serve as an incentive for more students to graduate with degrees that are ultimately turned into employment as opposed to large number of students now that are graduating in fields that don’t lead to jobs.’” [CNBC, 4/9/14]
Rubio: Students Who Finance Their Education Through Student Investment Plans May Pay More For School. According to National Journal, “Students who finance their education through student-investment plans might end up paying more than the initial cost of their education, Rubio said. They could also end up paying less. ‘Unlike with loans, you would be under no legal obligation to pay back the entire [cost of tuition],’ Rubio said. ‘Your only obligation would be to pay that 4 percent of your income per year for 10 years, regardless of whether that ends up amounting to more or less of the’ full tuition amount.” [National Journal, 2/10/14]
“Indentured Servitude”
Financial Times: Plans Like Rubio’s Seen As “21st Century Version Of Indentured Servitude.” According to Financial Times, “[Some] see [income share agreements] as a 21st-century version of indentured servitude, a system dating from the 1600s in which employers in the US paid the cost of the sea crossing for would-be immigrants in return for a fixed number of years of labour.” [Financial Times, 2/9/14]
Koch & Higher Ed Accreditation Reform
Freedom Partners
Davis And Koenig: “Republicans Should Send The President Legislation To Use Federal K-12 Dollars To Expand Parental Choice,” And Allow States “To Make Accreditation Decisions.” According to an opinion by the executive vice president of communications at Freedom Partners, James Davis, the budget and spending project director, at Freedom Partners, Andy Koenig, for The Hill, “Republicans can also pursue policies that prove that they can govern. They can start by rolling up their sleeves to repair broken federal programs that are hindering opportunity. Republicans should send the president legislation to use federal K-12 dollars to expand parental choice. Meanwhile, they can increase higher education opportunities by allowing states to make accreditation decisions.” [The Hill, 1/20/15]
Generation Opportunity
GenOpp: “Getting Rid Of The Federal Government’s Unwieldy Accreditation Process Would Be The First Step In Opening Up A Myriad Of Awesome New Possibilities For Students—Without The Loans.” According to a web post from GenOpp, “Getting rid of the federal government’s unwieldy accreditation process would be the first step in opening up a myriad of awesome new possibilities for students—without the loans.” [Post via GenerationOpportunity.org, 5/4/15]
GenOpp’s Luke Kenworthy Claimed The Higher Education Reform And Opportunity (HERO) Act Would Bring College Costs “Down” And Allow For “Healthy Competition” In Higher Education. According to a web post from GenOpp, “Luke Kenworthy, Director of Policy Engagement at Generation Opportunity, said in a statement: ‘The fact is, the average student with loan debt carries a $33,000 burden with them as he or she tries to begin the next stage of life. Government intervention in the name of alleviating this burden has, ironically, only made the situation worse. Unfortunately, legislation that would bring costs down and allow for healthy competition in the higher education marketplace, like the Higher Education Reform and Opportunity (HERO) Act, has been stuck in Congress for years.’” [Post via GenerationOpportunity.org, 5/8/15]
GenOpp: HERO Act “Would Reform The Federal Government’s Ability To Decide Which Schools Get Accredited And Make Room For… Online Programs, Vocational Schools, And Trade Schools.” According to a web post from GenOpp, “Specifically, the Higher Education Reform and Opportunity (HERO) Act would reform the federal government’s ability to decide which schools get accredited and make room for new and innovative approaches to higher education, like online programs, vocational schools, and trade schools. That would give states the power to decide which schools get accredited, providing students with new and cheaper approaches to education our generation so desperately needs.” [Post via GenerationOpportunity.org, 5/8/15]
GenOpp: HERO Act Would “Get The Government Out Of Academia.” According to a web post from GenOpp, “In addition to that, we can push for legislation like the HERO Act which would reform higher education and get the government out of academia, allowing us to work toward new solutions that ultimately lower the cost of tuition and make a college degree more accessible—without the debt.” [Post via GenerationOpportunity.org, 5/8/15]
Generation Opportunity Director Of Policy Engagement Luke Kenworthy: “We Need More Options In Education.” According to OneNewsNow, “Luke Kenworthy at Generation Opportunity suggests that those who are hesitant to take on substantial student loan debt examine all the options available to them. ‘There are an increasing number of options, community schools and other things, but they need to look at education in terms of what’s going to advance their careers, what’s going to get them the education that they need to get a job,’ he tells OneNewsNow. ‘But overall, we need more options in education.’” [OneNewsNow, 6/9/15]
- Kenworthy: We Have Too Few Options For Higher Education Because “The Department Of Education Has Full Control Over Accreditation.”According to OneNewsNow, “[Kenworthy] explains: ‘Right now, the Department of Education has full control over accreditation. And so you sort of have these institutional structures that kind of stay in place. They have no incentives to change their models. We don’t have as many options when we choose to invest our money into a school.’” [OneNewsNow, 6/9/15]
Kenworthy Opposed Recent Proposals For Free Community College Because “Last Thing We Need To Be Doing Is More Government Intervention.”According to OneNewsNow, “While there’s been a greater push in recent months for things like free community college, Kenworthy points out there is no such thing as free. ‘We have nearly a trillion dollars in student loan debt to address, and the last thing we need to be doing is more government intervention,’ he cautions.” [OneNewsNow, 6/9/15]
Kenworth: “Accreditation Reform Is Really Where You Need To Go.” According to OneNewsNow, “‘As I mentioned, accreditation reform is really where you need to go. When you do that, when you have more competition; when you open up the possibilities of other institutions providing education, that competition will drive down costs,’ [Kenworthy] says.” [OneNewsNow, 6/9/15]
GenOpp: Congress Should “Break Up The Federal Government’s Monopoly On Higher Education Accreditation Standards.” According to a Generation Opportunity web post, “One simple way to do this, right now, is by breaking up the federal government’s monopoly on higher education accreditation standards. Currently, the Department of Education accredits post-secondary institutions and has full authority over the national and regional accrediting agencies it tasks to do so.” [GenerationOpportunity.org/articles, 6/15/15]
GenOpp: Accreditation Reform Would Allow States To “Develop Their Own Systems Of Accrediting Educational Institutions.” According to a Generation Opportunity web post, “Senator Mike Lee and Representative Ron DeSantis introduced the Higher Education Reform Opportunity (HERO) Act in the beginning of March, which would allow states to develop their own systems of accrediting educational institutions, apprenticeships, programs, and courses. […] Once a state develops its own accreditation criteria, the Secretary of Education would have to approve it before implementation. Students who attend these accredited programs would then be eligible to receive Title IV funding, which refers to the ‘Student Assistance’ portion of the original Higher Education Act of 1965 – distributing different federal grants and loans.” [GenerationOpportunity.org/articles, 6/15/15]
Published: Jul 7, 2015