Responsive Documents (9/30/10 FOIA) - CREW: Department of Education: Regarding For-Profit Education: 6/8/11 - Dan Madzelan Email 00026

Madzelan, Dan
From: Glickman, Jane

Sent: Thursday, August 13, 2009 4:52PM
To:
Cc:
Smith, Zakiya; Madzelan, Dan; Bergeron, David; Manheimer, Ann; Shireman, Bob
Hamilton, Justin
Subject: RE: DeVry Settlement
Thanks for sending Zakiya -- no calls yet ...
---- -Original Message-----
From: Smith, Zakiya
Sent: Thursday, August 13, 2009 4: 30 PM
To: Madzelan, Dan; Bergeron, David; Manheimer, Ann; Shi reman, Bob
Cc: Hamilton, Justin; Glickman, Jane
Subject: DeVry Settlement
Importance: High
Hi all,
Tom Babel from DeVry just called to let us know that they have reached a settlement with
regards to a lawsuit brought by a former employee under the false claims act. In this
lawsuit, the DOJ had decided not to intervene, but the pl aintiff had appealed. He said that
they are announcing i t on their earnings call right now to investors.
You can listen to the call here:
http://phx . corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=93880&eventiD=2064144
In the formal announcement, which he read to me, DeVry admits to no wrong-doing, and said
that they are settl ing so that they can focus on the interests of their students. They are
admitting no fault (at least in the statement , I haven't seen any official news/info on the
actuaJ settlement) in terms of incentive compensation.
He says that there will be an announcement on tneir website shortly, as well.
We may get press calls on this, so it's just a heads up.
Zakiya Smith
1
Office of the Under Secretary
U.S. Department of Education
(202) 205-9891
<mailto:Zakiya.Smith@ed.gov>
2
Madzelan, Dan
From: noreply+feedproxy@google.com on behalf of Student Lending Analytics Slog
[tranzetta@studentlendinganalytics. com)
Sent: Friday, August 14, 2009 4:05 AM
To: Madzelan, Dan
Subject: Student Lending Analytics Slog
Student Lending Analytics Slog
~
DeVry Highlights Positives in Administration's Education Initiatives; Ready to
Implement DL If Necessary
USA Today Highlights Programs to Help Strapped Student Borrowers
.suze Orman Says Ditch the Private Loan And Take Out A Parent PLUS Instead
A Conversation With Steve Biklen, Former CEO of Student Loan Corporation
Dept. of Education Answers Questions At NASFAA Conference About Proposed Shift to
Direct Lending
o emand For Private Student Loan ABS Remains Weak
DeVry Highlights Positives in Administration's Education Initiatives; Ready to
Implement DL If Necessary
Posted: 14 Aug 2009 12:47 AM PDT
Thanks to Seeking Alpha for the transc1ipt to DeVry's 4Q conference call held today. Here were the highlights:
Impact of credit crunch on their student's ability to finance their education:
"As I have done for t he l ast five quarters, let me provide an update on student lending. Back then when many
of our stakeholders were focused on the credit crisis and its potential impact on student loans, we said that we
didn't foresee any loss and ability for our students to finance their education at DeVry.
Well, it's huned out just as we said. Our students have been able to secure the financing t hey needed, and we
haven't seen any material i mpact on our operations as a result of the student-lending environment."
Ready to switch to DL and don't foresee operational issues to accomplish it:
"First, as we mentioned briefly when we reported earnings last quarter, there's the likely conversion from
FFELP to a direct lending program. This potential conversion is more of an issue for lenders than it is for
students or for the schools that they attend. We are prepared for the switch and don't foresee any operational
issues, nor do we believe it'll have any impact on our students."
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Reaction to Perkins Loan expansion:
''The expanded Perkins program would increase funding from $1 billion to $6 billion. Interestingly, DeVry
University is one of the only market-funded education proViders who participate in the Perkins loan program.
Moreover, if you refer to chart two in our press release, you'll see that DeVry University is currently the
number one administrator of Perkin's funds in the nation. So given this, taken together with the recent change
to year round Pell Grant eligibility, we believe that there are good financing opportunities for our students."
Reductions in state grants not impacting enrollment or retention:
And what we're finding is the state-budget crunches are certainly having an impact and there are reductions in
the state grants. We're not seeing that impact our ability to attract new students. We're not seeing any impact
on retention or anything like that. It's just kind of like I montioned five quarters ago or six quarters ago there
was a reduction in private loan availability and a lot of people sott of asked a lot of questions, a lot of angst
about whether students would stop going to school and we said no, we don't see that. It 's sort oflike that .
We'll work our way through it and help students finance their education. And we will do that by increased
availably of federal money. I mentioned Perkin, I mentioned Pell, Stafford Loan, so that's an offsetting factor
as well.
Trends in bad debt:
"Bad debt expense was 2.9% of revenue for fiscal2009 which is within our historical range of 2.5%-3% ... we've
done a really good job at the campus level and within our central service group of really communicating well
with the students, staying on top of any issues, business by business, sector by sector. So we got a couple new
businesses in our portfolio now with U.S. Education and Fa nor that have a little bit higher bad debt a5 a
percent of revenue than what was the case within DeVry University, but as you look at it business by business
we've been able to stay within the range and have really not seen any movement up because our accounts
receivable per account have remained relatively flat as well."
USA Today Highlights Programs to Help Strapped Student Borrowers
Here are the programs highlighted:
SafeStart, a start-up which was discussed in an earlier SLA p ost.
A program in Nebraska that allows students to defer their bills for six months:
"Bellevue University, a private university in Nebraska that primarily enrolls adult students, says st udents who
are laid off can have tuition, fees and loan obligations deferred for up to six months. The program is designed
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to prevent laid-off students from dropping out or taking on more debt, says Scott I<lene, senior director of
student financial services."
The article provided statistics on the new income-based repayment program available on federal
student loans since July ISt:
"About 8,700 borrowers who have loans through the federal Direct Loan program have applied since the
program's July 1launch, the Department of Education says."
Let's try and put that 8,700 figure in context. According to the House Committee on Education and Labor:
"While it's difficult to estimate an approximate number of borrowers who could participate, at the end of
2008, there were almost $556 billion in outstanding federal loans, representing almost 95 million student
loans to more than 30 million borrowers."
So, let's assume that 20% of the borrowers are DL which makes about 6 million borrowers in total and assume that
about 1/3 of those borrowers are still in school This makes about 4 million borrowers eligible for the program. In
case you were wondering that works out to 0.22%. The pick-up rate on a similar but less aeeomodating
repayment option, income-contingent repayment, is 1% based on information provided at an ED news
conference.
Suze Orman Says Ditch the Private Loan And Take Out A Parent PLUS Instead
Here is her advice in a USA Weekend article titled "Suze's 6 tips:"
With the credit crisis, banks are less likely to give private student loans, so students are getting their parents to
cosign. But I tell parents to put away their pens. Interest on a private student loan is averaging 12% now, according to
Forbes [SLA.Note: SLAestimates average rates at u%.]. But a "PLUS loan," which parents can take out in their own
names, is fixed at only 8.5% interest [SLA Note: Rate is 7.9% at schools in the Direct Lending program].
SLA tip: Remember not to let the starting i n t e ~ e s t rate on a variable-rate private loan entice you since rates
are at historical lows. Based on an analysis of interest rates over the past 20 years, I don't think it is
unreasonable to assume that the average rate on your private loan will be 4% higher than your starting
rate.
She also recommends parent's reduce their equity allocation in their investment p01tfolio as their child gets within 5
years of enrolling in college:
Also, if families are invested in a state 529 college savings plan, they need to take a good, hard look at their
balance and how their plan managers invest the money, then make some adjustments. Many plans have lost
much of their value over the last several years, thanks to the stock market's decline. If your child will enroll in
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college in the next five years, make sure your portfolio is in safe, fixed-interest-generating options, not in
stocks.
A Conversation With Steve Biklen, Former CEO of Student Loan Corporation
Posted: 13 Aug 2009 10:43 PM PDT
Steve Biklen retired as CEO from Student Loan Corporation in 1998 after a 25 year career at Citibank with 18 years
in the student loan business there. Since his retirement, Steve has been involved with a number of student loan
related activities and is currently serving on the Board of American Student Assistance, a student loan guarantor
agency. SLA Blog contacted Steve last week to get his perspectives about how student lending had changed over the
past decade.
Here is an edited transcript of our conversation:
Question: Steve, you retired from Student Loan Corporation in 1998, when private loan volumes,
according to the College Board, were about $3.0 billion (in 2008 dollars). Private loan volumes peaked in
2006-07 at over $19.0 billion, over a six-fold increase. What factors got private loan volumes to that level
in such a short period of time?
Answer: There were clearly a large number of factors that came together to drive this growth:
Tuition costs rising faster than CPI probably had the biggest impact.
This was an era of high consumption versus saving to cover future education costs
Direct marketing and internet/TV ads aimed directly at the consumer which went around the financial aid
offices
Unethical marketing of private loan products which didn't mention the availability of federal loans or
focused on the simplicity of the private loan product or tried to instill fear of the F AFSA of giving
government data. The high percentage of students taking out private loans without maximizing federal
loans provides evidence of their success.
General trend toward easy credit until things started to blow up in 2007. The securitization model and
auction-based securities provided many new lenders with the ability to get into the business. However,
given their inexperience they really didn't know what they were getting themselves into (as their default
rates would later indicate)
Short memories also played a role. During my 25 years at Citi.bank, if my memory serves me correctly, there
were three credit cycles that we experienced as the pendulum swung between tightening and loosening
credit.
Demand increased because of a nationwide toward consumption vs. saving for future education.
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I would say all of the above factors played a role in the sharp rise of private loans over the last decade.
Question: Why haven't more banks been increasing their capital deployed into the private loan market
given the expanding_ margins and decreased risk profile of borrowers (as more ]enders require a cosigner
and higher FICO scores)?
Answer:
A primary driver is the fact that executives are "gun shy" given the state of the economy and the specific
challenges in the student lending sector to deploy more capital in this area.
There are also company-specific issues including liquidity concerns or lack of funds, so although many
believe our economic situation is improving there seems to also be a realization that it is going to take a
while to sort out.
On the demand side, there..may be less demand as families look to reduce their debt burdens given this
economic environment .
. Severa] lenders who relied on TERI left the market after they went bankrupt.
Need to remember also that this is not a primary focus with most banks as the assets in their student loan
operations pale in comparison to their trillion dollar balance sheets.
Question: You recently co-authored with Paul Combe (CEO of ASA) a paper titled "BREAKING THE
DEADLOCK: UNIFYING OUR FEDERAL STUDENT LOAN PROGRAMS." In it, you describe a new
model for guarantors as "Guarantor fees and incentives should be focused on the relative success of the
borrowers in their portfolio as measured by Loans in Good Standing and these results should be published
and available to the consumer." Operationally, does your proposal envision changing the activities
currently provided by guarantors?
Answer: Practically speaking, guarantors in the traditional sense ceased to exist when HEAF collapsed in
1989-90. HEAF was shut down by ED due to liquidity issues. HEAF at the time was the largest guarantor
agency and its collapse led to involvement by the ED and Congress which changed the role of guarantors.
This changed their mission from that of guarantor to more of an emphasis on administering programs to
help manage student debt. However, the incentives were structured so that the guarantors had a
significant revenue stream from collections. The proposal laid out in our paper would focus more on
providing fmancial incentives upfront to ensure that loans stay in good standing with much less of an
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emphasis on collections.
Question: In that same paper, you also call for a unified platform for loan origination. Can you talk about
your rationale for this concept?
Answer: I have always been a believer in open networks, such as ATM or Credit Card networks and the
ELM Resources model for student loans. I b e l i e v ~ it simplifies the delivery system, provides borrower
choice, is easier for schools and can reduce the cost of delivery. The proposal in the paper envisions one
delivery platform through which Direct and FFELP Loans could both be delivered. I testified in the House
about this concept as far back as 1997 and also served as Co-Chair of the Dept. of Education's EASI
steering committee. The
EASI
project was begun in the late 1990's with a goal of simplifying the delivery of financial aid. The single delivery
platform concept ran into resistance as many providers wanted to con?nue to use their own proprietary networks. A
unified platform could have been helpful last year when the credit crunch disrupted FFELP as schools could have
steered their students to the Direct Lending choice on their platform.
Question: ASA has been atop
SLA
's list of guarantors with the lowest default rates for several years. What 2-3 factors do you think make the difference
in ASA's ability to manage to keep default rates at such low levels. What unique services does ASA offer students to
keep rates so low?
Answer: I would highlight two items: approach and culture. ASA's focus is on the borrower and wanting
to help the borrower manage his/her debt. The emphasis is on maintaining contact with borrower right
from the start to ensure they are aware of all of their options. You can't do this if your communications are
not reaching the borrower so the company tests a variety of different approaches to reach borrowers. I give
a lot of the credit to Paul [CEO Paul Combe] and his management team. Their leadership has not only
ensured that the organization's focus is the borrower but also created an organization where employees are
much more involved in decision-making. Today they are considered one of the hundred best places to
work (ASA was selected by Boston Globe as one of top 100 places to work in 2008]
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Question: I often think the key to default prevention actually occurs prior to a .student/parent taking out
their loan, rather than after. If a student has over-borrowed relative to their job prospects, is there much
anyone can do at that point?
Answer: This is not entirely true. If you are in contact with the borrowers you can work with them and
determine their options. Borrowers need to know that they are not always behind the ''eight ball.' ' Having
someone walk through their options to help them can make all the difference.
Question: What do you think the private loan market will look like ifFFELP goes away, as currently proposed in the
legislation that passed through the House Committee on Education and Labor?
Answer: I would think that the DL (Direct Loan) servicers would have an edge if this happens. Certainly others could
participate but the DL servicer/lenders would have an edge in tenns of access to the borrower. A positive result could be that
ED [Education Department] might have more influence on borrowers with respect to ensuring they maximize their federal
borrowing before taking out private loans.
Dept. of Education Answers Questions At NASFAA Conference About Proposed
=Shift to Direct Lending
Here is a transcript of the Q&A session (see video below) with Bob Shireman, Deputy Undersecretary at Deparlment
of Education and William Taggart, Chief Operating Officer at FSA, taking several questions focusing on the proposed
shift to Direct Lending at the Annual NASFAA conference last month:
Question: The first questioner had three issues with the proposal to move to Direct Lending:
Student's right to choose a lender
If student takes out Direct Federal Loan and private loan, they will have two different lenders when they go
. into repayment.
Would like to see the savings of moving to DL shared amongst all students and suggests that graduate
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students receive a $so,ooo Stafford loan limit to "share the wealth"
Shireman:
There were three or four topics here. While I understand the choice mantra, we are talking about
two government programs for delivering essentially the same kind of loans and one of them costs the
government a lot more than the other. And to present students with a supposed "choice", that their
choice they don't see the costs. They are imposing costs on the taxpayer when they choose one
versus the other. They are blind to it as you are blind to it at your It makes total and
complete sense for the government to say delivering these loans in a way that is expensive for
taxpayers is not appropriate and we are going to end that and use the efficient approach and put
that money into Pell Grants.
Let me add that the proposal that has kind of emerged recently where some large lenders want
Congress, in law, to pay them $75 per loan for the origination. In the true choice kind of approach
you'd give $75 per loan to the campus and you decide if you want to pay $150 per borrower to that
lender what and you decide if whatever they are doing for you is worth the $150. My guess is that
you would ultimately decide that that is not the best usc of that money and frankly that is not the
only federal dollars that are involved. Here you need to pull back the lens and look at the big picture
and figure out how we can do best by students.
I would note in terms of graduate students, overall, they earn very healthy salaries and are generally
able to repay the loans that they take out. And the new programs that Congress enacted and we are
currently implementing, income-based repayinent and public service loan forgiveness program,
helps to provide protection for those students who are not on the higher end of the income scale once
they go to college. The experts, College Board and others, in Rethinking Student Aid, suggested that
the best way was to go give people the loans they need and have an based repayment
option. ln terms of providing a big subsidy to all graduate students when overall they make much
more money than those earning baccalaureate degrees is probably not the best use of federal tax
dollars.
Question: 75% of directors chose FFELP an.d even after mortgage crisis and the meltdown you have still
2/3 selecting FFELP. There have been a number of suggestions proposed that seemed to have been
dismissed out of hand. What I have heard from schools is "We like FFELP; we have choice and
innovation and service. When I ask a FEELP lender to do something for us they do it, otherwise they
know that they can be replaced.,. These are the experts who are telling us this. What is yoirr response to
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this? Usually when government does something it is not the best in terms of innovation and service?
Shireman:
Our Pcll Grant delivery systems works really, really well and that's essentially what we are using
here. We have not dismissed out of hand the proposals we have seen; it's just that they aremore
costly and administratively very difficult and don't provide level of certainty that students will
actually receive their loans. The reliability of the system has to be #1 here. When you have an
entitlement based system, where we tell a lender in law, you will get his amount of money, or
commercial paper rate plus x, and-in some particular quarter something happens in the economy and
that is not enough they run away, they are not there for you, because the government subsidy at that
moment isn't enough tor them. With all of our contractors, we have to be completely ready to jump
in when they don't want to make a loan because that quarter it doesn't make them enough money.
That happened a year ago. You had a lot of lenders at that moment, they didn't see anything for
them. We cannot have that kind of system that has that kind of unreliability in it. It means change
from the way the system operates now but it will be a very, very good system. It will build on the
highly effective systems that are there now and we are improving them over time.
Question: I have Mr. Taggart's letter in front of me. My president received it in his e m ~ i l box and I got a
call from him immediately. He called me to ask what is the issue? \\Thy haven't you told me about this?
He didn't get to the last paragraph on the first page. Can you tell it like it is? Are we moving there [to
Direct Lending] or are we not? This is the issue. I have signed up for Direct Loan; it took me 2 weeks to
set it up. Then the onus comes on me and my staff; 3-4 months to get our system in place to get DL
running. That is the problem that I am up against right now. Do I have the opportunity to take a sabbatical
and ask my president, I need four months to get tl)is going. I still have to work. I need to know are we
doing it or are we not? Do we have options? I came to this conference as that being one of my goals. Am
I moving to Direct Lending or am I not?
Shireman:
Part of this decision on this will be in Congress's hands but it is important to realize that the
temporary programs that were put in place that are currently used by lenders to allow them to
continue to make loans, the ECASLA program, expires in a year. And it's not likely that if that
were to expire without some Congressional action that very many lenders would remain in the
program. Even now, the system, we can't guarantee you from day to day the lenders will stay in or
9
pull out based on whatever their cost-benefit, balance sheets look like.
To be safe, ifl was a financial aid administrator, I would make sure that I was ready to be in DL to
the point where it would not take very much work to complete the process and be making Direct
Loans because that is the way that I ensure a reliable source for my students no matter what
Congress does. It's just the reality of the marketplace that it is the kind o f ~ c failsafe approach.
Follow-up question: I would then offer one suggestion, having worked at DL and at a FFEL school, to
have the servicing on the student side and student interaction to give good service b/c it hasn' t been that
way in the past.
Taggart:
We plan to do exactly that. The reason why we wanted to send the communication out to you as
soon as possible was that we didn't want to wait until the last minute when the legislation comes
down from the Hill in pristine fashion. We cannot read the tea leaves here but the intent of the
legislation is go 100% Direct Loans. We know there is a lot of moving parts and you don' t have a
lot of idle time yourselves. In our infinite wisdom we felt it best to send that letter out and to offer
our a-;sistance both from a partnering standpoint and technical assistance to make sure that we arc all
collectively prepared when that legislation comes down in its pristine fashion.
Here is the video provided by NASFAA from the recent NASFAAAnnual Conference held in San Antonio:
Demand For Private Student Loan ABS Remains Weak
Here is a market summary from Citibank that appeared in the WSJ today:
"The demand for pxivate student loan-backed deals remains low though, they say. Private student loans are
long assets and are typically floaters, which makes finding investors more difficult ''because the floating-rate
investor base segment of the market took the largest hit" when this market faced a virtual shutdown last
year."
Here is a summary of the three private student loan ABS dea1s that Sallie Mae has completed under TALF:
Name Date
Amount
(Billion)
Coupon
10
Equiv. Effective Cost
LIBOR Rate (If called)
SLM-B 5/5/2009
SLM-C 7/2/2009
SLM-D 8/5/2009
$2.60
$1.10
$1.68
1-month LTBOR + 6%
Prime + 1.25%
Prime+ .25%
LIDOR+6%
LIBOR+4.2%
LffiOR+3.2%
LIBOR+3.7%
Prime- 0.71%
NIA
While this data shows improvement in pricing, as one industry expert noted "this is still well off from anything close
to "normal" as compared to deals done prior to the credit crunch at LIBOR + 30 to 40bp." One other factor not
captured in the cha1t is the degree of overcollateralization required for these deals to receive a MA rating.
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Madzelan, Dan
From: Cummings, Glenn
Sent:
To:
Thursday, October 01, 2009 11 :27 AM
Madzelan, Dan
Subject: FW: Neg Reg Nominations
Attachments: Nomination of Mark Pelesh0001.pdf; ACTE Nomination.doc; 090924
_TJO_PeleshNomination_Chase.pdf; Program Integrity Nomination - Comprehensive
(DC045414).pdf; CCA Nominations Letter{1).docx
Dan - I rec'd this from Mark Pelesh of Corinthian Colleges passed this on to me and I am forwarding it to you. Thanks,
Dan.
Ps- will try to stop over for ice cream today!
Glenn Cummings
. Deputy Assistant Secretary
OVAE, U.S. Department of Education
400 Maryland Ave.
Washington, DC 20202
Ph: (temporary) 202.205.2644
Email: Glenn.Cumtnings@ed.gov
From: Pelesh, Mark [mailto:MPelesh@cci.edul
Sent: Thursday, October 01, 2009 10:25 AM
To: Cummings, Glenn
Subject: Neg Reg Nominations
Glenn -It was our pleasure to have you visit our Tyson's Comer campus. As Jack said, we would be delighted to have
Bob Shireman and other of your colleagues visit as well.
As you noted at the end of the visit, I am very interested in serving on the Program Integrity Issues negotiati ng committee
in the new neg reg that the Department will convene, as announced in the Federal Register of September 9, 2009 (74
Fed. Reg. 46399). You may recall that I testified at the public hearing in Philadelphia that you attended and that provided
input to the Department on the issues to be addressed. And I am gratified to have been nominated to serve as a
negotiator by a wide variety of parties - Gov. John Baldacci of Maine, the Chair of Jobs for America's Graduates; Jan
Bray, Executive Director of the Association for Career and Technical Education (ACTE); Tom Donahue, President and
CEO of the U.S. Chamber of Commerce; Tom Netting, Executive Director of the Higher Education Allied Health Leaders
(HEAL) Coalition; and Harris Miller, President of the Career College Association (CCA). Their nomination letters are
attached. My resume is included with Gov. Baldacci's letter.
I would appreciate any help that you might be able to provide so that I can be selected to represent the interests of
private, for-profit institutions of higher education in the neg reg.
Regards,
Mark
1
JOHN I: LIAS 8ALDACCI
Patty Chase
ST.\TF O l' \.{AT!'\F.
O FFH:e en T TI E
1 ST ATE HO USE STATtON
A\..' GUSTA. MAlNE

September 23, 2009
U.S. Depart1n0nt of Edu<.:ation
1990 K Street, N.W. , Room 8034
Rc: ;'\lomination of Mark L. Pelcsh -Notice of Negotiated Rulemaking
Dear Ms. Chase:
l would like to rake this opportunity to J)ominate Mark L. Pdcsh. Executive Vice
President of Corinthian Colleges, Inc., to serve as a negotiator representing the interests
ofprivatt:, institutions of higher education on Team l, Program Integrity fssues,
in the negotiated ruh:making announced in the Federal Register Notice of September 9,
2009. I enclosed Mr. Pcksh's resume in support of this nomination.
ln addition to my gubernmorial responsibilities, I serve as the Chair of Jobs for
America s Graduates (JAG). JAG is a school-to-career program implemented in 700 high
schools, alternative schools, community (;Ollcgcs, and middle schools across this country
and the United Kingdom. JAG's mission js to keep young people in school through
graduation and provide work-based karning experiences that will lead to career
advancement opportunities or to crrrolhncnt in n postsecondary institution that leads to a
re\\'arding career. Wi th Mr. Pelesh's assislru1ce, Corinthian has a valuable partner
to JAG by suppotting the work of our high school counselors and offering opportunities
for postsecondary education and meaningful careers to the students that JAG serves.
l believe that J/\G's mission is consistent with what I understand to be the
Department's goals for this proceeding- promoting quality educational experiences and
effective outcomes for students, especially in educational programs thm prepare students
for j obs. lam confident that Mr. Pelesh would make a constructive contribution toward
the success ofthis pn.H:eecling.
( 'f'T)
1
)

FAX: (207) 28/ l i.'H
I understand that Mr. Pelesh has participated in other negotiated mlemaking
proceedings conducted by the Department, and therefore would have the commitment
required of a negotiator. His contact information is:
M < ~ r k L. Pelcsh
Exc<.:utivc Vice President
Corinthian Colleges, Inc. Suite 1270
Washinglon, DC 20005
202-682-9494 (phone)
202-682-9 170 {fax)
!ill)t' lesh!rucci .edu
John E. Baldacci
Governor
Cc: Arne Duncan, U.S. Secretary of Education
Glctul Cummings, Dep. Asst. Sec. Office ofVoc. & Adult Ed.
Business
Corinthicm Colleges, Inc.
l 350 1 Street, N.W., Suite 1270
D.C. 20005
(202) 682-9494
mpclcsh((O,cci .cclu
Professional
Corinthian Colleges, lnc.
MARK L. PELESH
Home
Execmivc Vice President, Legislative & Regulatory Amtirs, 2003 -present
Represent Corinthian before Congress and state legislatures and advance its
interests in Reauthorization of Higher Education Act, renewal of California
postsecondary education l aw, Florida student access grant prograrns, and other
higher educalion initiatives.
Monitor developments at U.S. Department of Education, accrediting
agencies and statt! regulatory bod ics, nnd lead Corinthian responses
Chair Corinthian regulatory compliance committee
Represent Corinthian in Washington higher education policy communily
Drinker Biddle & Rcath LLP
Partner, 1997 - 2003
Founded and led Education Law Praclice.Group
Represented higher education institutions, accrediting agencies, education
associations, and venture capital and private equity investors in educational
enterprises
Advised on legal, regulatory and policy issues in education, including distance
and e-karni ng, Title IV of Higher Education Act, mergers, acquisitions,
joint ventures and IPOs involving educational institulio.ns, accreditation standards
and procedures, and state licensing and regulation
Advocated U.S. Depattmcnt of Education, Congress and Courts
Cohn and Mar:ks
Partner, I 985-1997; Associate, 1981- 1985
education practice
Served on tirm Management Committee
broadcasting, cable tdevision an<.l common carrier commw1ications
companies before FCC and courts
Mark L. Pelesh
Page 2
Arnold & Poner
Associate. 1978-1981
Assisted in corporate, antitrust., real estate aud liti gation matters
Education
Yak Law School
J.D. , 1978
Editor, Yale Law Journal
Stanford Un.ivcrsity
A.B. With Distinction, 1975
Honors in Hi story
Phi Beta Kappa
Publications
Articles published in Yale Law Journal, Harvard Law Review, Notre Dame Lawyer,
Edu<.:.:ltion Law Reporter, Duke Journal of Law and Contemporary Problems, Trusteeship
Prcscnta tions
Prt!sentations to Notth Central Higher Learning Commission, Washington Higher
Educati on Secretariat, Council for Higher Education Accreditation, Council of Graduate
Schools, Career College Association, U.S. Chamber of Commerce, American Legislative
Exchange Council, American Enterprise Institute, and education investment conferences
Professional Memberships
Board of Directors of the Career College Association (elected June 2005)
lloard of Directors of Institute for a Competitive Workforce (elected July 2007)
Nonhcm Virgiuia Workforce fnvestment Board (elecred August 2009)
Ba1 Admissions
Disnict of Columbia, U.S. District Court for the District of Columbia, U.S. Cout1 of
Appeals tor the District of Columbia Circuit, and C.S. Supreme Court
Personal
Mark L. Pclcsh
Pngc 3
List of Publications
The Concept of Law-Tied Pendent Jurisdiction: Gibbs and Aldinger Reconsidered,
87 L.J. 627 (1978)
Revitalizing Corporate Democracy: Control oflnvcstrnent Managers' Voting on Social
Responsibility Proxy lssues,
93 Harv. L. Rev. 670 (1980)
The Changing Role of Outside Counsel: A Proposal for a Legal aAudiL,"
56 Notre Dame Lawyer 838 ( 198 1)
Accreditation and Ballkruptcy: The Death of Executory Contract,
71 Education Law Reporter 975 (1992)
Regulations tmder the Education of 1992: A Case Study in
Negotiated Rulemaking,
57 Duke Journal of Law and Contemporary Problems 151 (1994)
Dne Process in the Accreditation Context: A Reply,
22 Joumill of College and UniversiLy Law 175 (1995)
Reauthorization '97: The Calm Before the Storm,
Nursing and Health Care Perspectives (1997)
Unfriendly Territory,
6 Trusteeship 27 (May/June 1998)
!\rc You Telling Me I'm Personally Liable?
7 Trusteeship 13 (July/August 1999)
Tripping Up on the Paperwork- comment on Oakland City case
Inside Higher Education 0'-J'ovember 4, :2005)
Federal Rcglstcr /Vol. 74, No. 173 /Wednesday. September 9, 2009/ Proposed Rules 463!)9
Dat<:d: !\ngust 2.11, 200(1.
fos11ph T. R'JJmazzisi,
Dt:p111y Assistant AtlmitoislrMor, Office of
Divcrsio:-o Cor.trol.
[l<'R Doc. 1:.9- 21698 Filed 9- 6- 09; 6:45 um)
Bit. liNG COllE 441 0.0!)-P
DEPARTMENT OF EDUCATION
34 CFR Chapter VI
Office of Postsecondary Education;
Notice of Negotiated Rulemaklng for
Programs Authorized Under Tille IV of
the Higher Education Act of 1965, as
Amended
AGENCY: Department of Education.
ACTION: Notice of establishment of
negotiated mlemaking committees.
SUMMARY: We announce onr intention to
establish two nogoti<Jted rulamAking
commit tees to prepare propos!ld
regulations under Title IV of tbe Higher
Education Act of 1965, f\S amended
(HEA). Each commitloc wi!l include
representati ves of organizations or
gronps with that are
signific&ntly affected by the subject
metter of the proposed regulations. We
request nominations for individual
negotiatOI'S \'iho represent key
stakeholder constilnencies that are
in t he student finuncial
programs authorized under
Tit] I! J'V of the HEA to se1ve on. tl1ese
committees.
DATES: We must rcceivo your
nominations for ntJgutiators to serve on
the committees on or before September
25, 200!),
ADDRESSES: Please send your
nominations for nagotiotors to Patly
Chase, U.S. Departmont of Education,
'1990 K Street, NW., \'oom 13031,
Washington, DC 20006. or by fax at
(202) 502-767'.!. You may also e-mail
your nominations to
. Palty.Ghase@ed.gov. Nomin13es will be
.notified whether or not they havo hcon
selected as negotiators, as soon as the
Department's review pror.ess is
comploted.
FOR FURTHER INFORMATION CONTACT: For
information about the content of this
notice, including information about the
rulamaking process or the
nomination submission process contact:
V'I'Mldy Macias, U.S. Department of
Education, 19<JO K Street, NW., room
8017, \'Vashington, DC 20001.?.
Jelephone: (202) 502-7:i2G. You may
nlso a-mail your questions about the
nomination l;Ubmission process t o:
Wondy.lvlacins@ed.gov.
Note: For general i:-oformatiolJIIMllt the
negotiated rulemekins proooss, seo The
Nagolioted Rulemoking Process for Tit/o JV
nt:guluiirms, Fl>:quent/y Ask8d Q!wstions at
l:ftp:lllrti'IY.od.gov/poJicy/higilorod!ror/
llam1Jlemoking!hea08/neg-r.Jg-faq.lllml.
If you usa a telecommunications
device for the deaf (TDD), cell the
Federal Relay Service WRS). toll free at
'1-fl00-fl77- !\3:l!l.
Individuals witJ1 disabilities can
obtain lhls document in an accessible
format (e.g .. braille, large print,
audiotape, or computer diskette) by
conti:lcting the pHrson FOR
FURTHER INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION: On May
26, 2009, we publlshed a notice in the
Federal RagistE<r (71 FR 2-1720)
announcing our intent to establish
negotiaHd rulamakiug committees to
develop proposed regulations {1)
governing foreigti schools, including the
implementation ofl he changes made tn
the L!.EA by thl3 Higher Education
Opportunity t\ct of 2006 (HEOA), Pl)blic
Law 110-315, that affect foroig.Il
schools; and (2) t(; maintain or improve
program integrity in i he Title IV, HEA
pro(lran1S. We annmmc:erl ol)r intent to
develop these proposed regulntions by
following the negotiated tu!omaking
procedures in section 492 of the HEA.
Tho notica also anno\mced a series of
three regional hearings at which
intorestcd cou!d comment on the
topics suggested i.Jy the Department, and
suggest additional topics for
consideration for ad ion by lho
negotiating committees. We invited
parHes to comment and submit topics
for consideration in writing, as well. We
hQard testimony and received w; illen
comments from approximately 2!l0
individuals. 1ianscripts from the
hearings end copies of the written
commclits can be found 111 http:!/
1\'Ww.ed.gov/p(IJicylllighiJredlregl
hearu/omaking/2009/negreg-
swnmeifull.htm/.
Rogu!atury Issues: Afler consi deration
of the infonnation received at tl1e
regional hearings and in writing, we
have decidod to establish the following
two negotiating committees:
'foam !-Program !nlegrily issues
Team Tr-Foreign School Issues
Wo rocoivod many comments
suggosting !hatwa negotiate issncs
related to the student loan programs
nutJJOri:I.Od under Tille lV ofthe HEA.
As we anticipate the need to convene a
negotiated rulemaking committue
following the completion of pending
legislative action related to student
\\'e will not be including st udon t
loan issues on the agenda at this time.
Many of those who tesliih:cl and those
who provided written r.omments mado
the case for changes to bankruptcy ru!es
as t.hoy relate to student loans: some
also cal!ed for changes in statutes of
limilalions and loan refinancing rules.
While those i$sues are important,
addressing thom would require action
by Congrt'lss.
We also received comments
suggesting mvisions to.tha Institutional
financial responsibility regulations for
Tille IV, HEA institutional eligibility.
We agree that !his is an arc11 whoro
may bo benefici6l. However,
signifit.tmt analysis must be done by tho
Department before we can bring this
issul3 to a committee for negotiation. We
will be beginning this process in the
near future. More information about the
public aspects of this process will be
for thcoming on Ule Web
site.
We list the topics each committee is
likely to address during this round of
negotit'llions elsewhare in this notice
unaor Commit/eo Toplcs.
We intend to select nogoliators for the
committees that represent lho interests
significantly affected by the topics
proposed for negotiations. In so doing,
we will follow tJw requirement in
section 492(b){l) of the HC:A that the
indlviduals selected must have
demonstrated expertise or experience in
the wlovant subjects unrler negotiation.
We will select individual
negotiators who reflect !.he diversity
among program part.iclpants, in
accordallCe wiiJJ seelion 4.92(b)(1) of the
HEA. Our goa! is to establish
commilleas that will allow significantly
affected parties to be represented while
keeping the committee size manageable.
The cummHteas rnay cronte subgroups
on particular topics that would involve
additionar individuals who aro not
membHl'S of thtl Indivirl<Ais
who are not selected as mombers of the
committees will be able to attend the
meetings, have access to the individuals
ropresenting their constituencies, end
parUcipate in inforrnai working groups
on wnious issues batwl'klD the m!latings.
The commit_leu meetings will be open to
the public.
The Department has idontificu U1e
follcwing constituencies as having
interests t hat are significantly affected
by the topics proposed for negotiations.
The Department plans to seat as
ncgotlato1s individuals from
organizations or groups l'epreseoting
each of these constituancies. TJ1e
Department anticipates thai irtdividuals
from organizations or groups
representing each of these
constit uencies will participate as
members of one or more committees as
appropriete. Theso constituencies are:
Students.
I
I
I
46400 Federal RegistedVol. i4, No. 173/Wednf!sday, September 9, 2009/Pr<.)posed Rules
Legal 6llsist:mca organi zations that
ropt-osont students.
Conswnor advocacy orgonizatim:s.
Financial aid administrators at
postsecondory institutions.
Business orficors and bursars at
postsccondory irutltutiuns.
Admissions officers at
p ostsnconc!my i nsti tuti ons.
!nstitutionullhird-perty seniccrs
who porform functionN related to tho
Title l,V programs (Including colloctiou
ogoncHJS).
Siot9 higho1 educution executive
ofCicers.
Att01'110)'8 Gunoral and olltor
appropriate Stato officials.
Business and
InctitutloM of hlg}Hll' education
oligibln to recoivG essislanco
under Titlo Ill, Purls A and B. end Title
V of tho HE/\, wulch Include
Hilltorically 'RIRck Collages and
Univeasilios, Hispanic-Serving
Institutions, J\mor!cun Indian Tribally
Controlled Colleges 6:-ld Uni ... arsilies,
Aleska Nelive Native Haw:Jiian-
Sorving 11nd othe1
.. dth a substanlial
enrollment of needy students os clofinod
in Title Ill of tbo HC:A.
Two:;ear public inst!tutions of
high6r education.
f'onr-ya11r public institolions of
h igher education.
Privata, non-profit instiwtions of
highot education.
Private, fOI'-profit institutions or
higher education.
Guaranty agcm:ius and gunnmty
ugoncy sotv1cers (including collection
ogonclos).
I.endors, secondary markets, and
loan sul'\icots.
RogionuJ :Jccrodili ng agencies.
No!lonal agencies.
Specfnlir.P.d accrodiline ep,encies.
State approval agencif)s.
Stale st udcm1grnnt agoncios.
Stahl agoucies auwe8sins secondary
oducotlon.
Privulo soconda1y schools.
Hom a schoolG for secondary
education.
Foreign institutions.
GolleTnmcntDI entities oversoeing
public forc!t;n institutions.
Clinical sites of foroign modi cal
institutions locDtod in tho Unitod Stat()s
(for Toam ll-Foroign School Issues.
lsr.ues spuciFic to foroigu medical
achools).
State ngonc!es that certify clioicaJ
situs offoroign medical instilUtions in
tho Unit Ad Stotos (Cor Teom 11-Foreign
Schoo! Issues, lssuos :>pt.:dl'ir: to forAign
mcdicel schools).
Tho nogotlatlon of proposod
fClf.lU}atlOllS for iS$UeS SpecifiC lO foreign
medical schools on lho Teem II agenda
requires some specific constituencies
who are affocted parties for purposes of
these Issues only.
For those we will bo selocting
"single-issue ncgoti:ltors" whose
participation on Ulo committee will be
limitAd to thn nogoti3tion of only the
issues spocif!c to fo!Qign medical
schools. As prov!ously noted, the
committoo may form for
pteliminary discussions oftheso, or
othe1, Issues to includo who
sre not members of the comrnittea hut
who have o.xpurtisc thut would bo
helpful,
The goal of each committee is to
eroposad regu\atianR thllt
rellecl a bnal consenstlS ofthe
committGo. Consensus moans that thcuo
is no dissont by any mclmbor ofthu
nagotiatiu.g commilteo. An inuividual
selected as a negotiator will be oxpoctad
to represan! tha interests of tllOir
organiznlon or group. If consensus is
roached, ell members of tba organiY.ation
or group l'cprcscnted by a negotiator ai'O
bound by tho consonsns and aro
prohibited from commenting negatively
on tho resulting proposed regulations.
TI113 Department will not consider any
such negative comments thnt are
submHted by members or snell nn
organization or group.
Nomlnations should include:
The n:lmo oft he nominoo, tho
organization o: group the nominoa
represents, und a description of the
thai the ropreso11ts.
of the nornlnP.P.'$ oxpnrtiso
or experienN in the snbjocl. or subjects,
to be ner.otiated.
Eviaenco of support fl'om
individualN or gcoups of tho
constit uency that the nomitlOF.I will
represent.
The nomillOe's com.mitmont that he
or she will actively participato in good
faith in the dovelopmenl of tho
proposed rogulat!ons.
The nominee's con met information,
including address, phono nnmber, fax
number, and adtlress.
. For a botlor undorslandmg of t.ho
negotiated rulcmaking process.
nominees should revinw ThR Negotiated
llu!emaking Procass for Title IV
Regulations, Frequently Asked
Questions all:tlp:llwww.ecl.gov/pol/cyl
highered/reg/heorulemokinglheo081neg-
reg-faq.hhnl prior to committing to
serve as a negotiator.
Conmllheo Topics
Tho topics the committoo9 aro likoly
to address are us follows:
TPom /-Program Jntegrfry Issues
Satisfactory academic
Monitoring grade r:oint sverages.
Incenlive compensation.
Gainful employment in a
rocognizod occupation.
Stoto authorization as a component
of institutional eligibility.
Dr.finit!on oh credit hour.
Veaiflcalion of information
inc!udod on o Proe Application for
Podoral Student Ald {FAFSA).
Dofinition of a high school diploma
for of e$lllblishing eligibility to
participate in Federal student aid
progrmns.
Misrepresentation of informaiion
provided to students and prospective
Stl!donts.
Ability to benefit.
Agreements between instilt!tions of
highatuduculion.
Retaking coursework.
TormbtJscd module programs.
Institutions required to take
attendance for of the Return of
Tille IV Funds requirements.
Timeliness 6nd method of
di11bursement of Title JV funds.
Team JI-Poreign Schooi Issues
Uttited Slates Generelly Acr.optod
Accounting Principles {U.S. GAAPI
fmancial statements (section 493(b) :)j
theHEOA).
Compli6nce audits (soction 493(b)
of tho HEOA).
Dofin!tlon of a foreign school.
Non-profit !!latus or foreign
scltool.s.
Public foreign schools and fi:1ancial
rasJ?onsibility. .
Consolidation or saloc! Title IV
requlrements on a countrywide basis.
Deferments for eligible non-cflizens.
Non-degroe programs.
Issuer. spocific to foroign madir.al
schools:
o New oligibility crileria for foreign
med ical schools (section 102(a)(t){B)
end (b) of the HEOA).
o Clinical silos of foreign medical
schools in other countl'ies.
o Bailie science locstions of foreign
rnodicol scbooJs in other countries.
l::liglbility requirements for foreign
veterinary schools.
Ellglbllity requimmonts for foreign
nursing schools (sections 102(a)(1)(A)
and (D) of the HEOA}.
Foroign medical and veterinary
schools certified separa:cly from lergllr
school.
These topLcs are tentative. Topics may
be added Ol' removed as !ho process
continues.
Schodulll for
We enticipato thot nesotiations for
thcso commiltoos will begin at the end
of October 2009, with eacb committoe
Reg ister J Vol. 74. No. 173 / Wednesday, Septr.mbcr 9, 2009/ Proposed Rules 46401
T:'IOttting for thrau sessions of
approximetoly flvo at
monthly lntotvels. Meetings will start
on 11 Monday at 1:00 and end on a
Frid11y at noon. The committees w:ll
moot in tltu Woshlngton, DC aroa. The
d3tas and locations of these meeting.s
will be posted on the Department's Wub
site at: llttp:llwiVw.cd.gov/poJicy/
lliyhet'f;d/reg/hearu.iemoking/20091
nen,reg-summoJfoll.html.
rhe for tia:so negotiations
hns been developed to onsure
publication of tho final regul3tlons bv
tho November 1, ?.010 stalulnt)' dead1i\1o
fm publishing Title TV, J-lEA student
fimmciAl Assi,91tlnce finalmgulations.
Elactronic to This Document
You can v!ow this clncnment, as well
as all otJtar documents of tl1is
pub!Jslwcl in the Fc:dcrnl
Roglstor, In text or Adobe Pol'tablo
Document Form3t ('PDF), on the Internet
at thA following silo: http://ww'.'..ed.gov/
nawslfed:y:glstcr.
To 11so PDfl you must havo Atlobe
J\oo!>at Reade:, which is llVflliable free
IFR Dec. zs 20395 Jiillld !Hl 00: 8:<15 am)
6 1Llltltl COOE ISCS.OI-0
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Part 17
[FWS R4ES20090029
MO 922105008382)
Endangered and Threatened Wildlife
and Plants; 90Day Finding on a
Petition to List the Eastern Population
of the Gopher Tortoise (Gopherus
polyphemus) as Threatened
AGENCY: Fish and Wildlifll Service,
Interior:
ACTION: Notice of 9Q-day petition
finding and initiation of status review.
SUMMARY! \.Vo, the U.S. Jlish and
Wil(IJifo Service, ennounce a Oo-day
findinz on o petition to list tho asstcrn
population of tho gophor tortoise
(G()pherus polyphemus) as threatened
undAr tha l!:ndangared Species Act of
1973, as amended (Act) and desiguato
critical habitat. H.:!rout, Ulll Sorvico
refers to the eRstAm pop11letion of tl1e
gopht;r tortoise ns the gopher tortoise in
the Aastam portion of its range.
al this site. If you havt! qnestions 11l>out
using PDF, call the U.S. Government
Printing Office toll free at 1-888-293-
6498: or in the W11shington, DC, 11ro1! ot
(202) 512- 1530.
Note: The officiBl VOr$10n or this document
is tho document published tn lhe fdderal
Register. Free Internet occcss t.o tho ofioc!nl
edition oi tha l'edcro:o l Regisltlr Md tho Codo
ofredantl Regnlntions !s available on GPO
Acces.' ot: IJpODr.Ctl!:S.f-ovlnoro/
lndcx.ll:mJ.
Pmgram Authncity: 20 U.S.C. 1098a.
Delegation of Authority: Tho Secretary
of Educatiotl has delegated authority to
Daniel 1'. Madzol a' DirP.ctol',
Forecasting and Policy AnBlysir. for the
Office of Postsecondary Eductition, to
perform tho functions and duties of the
Assist11nt SecreltH'Y for ?oslsecond11ry
Education.
Dated: Suptcmbor 3, 200!1.
Daniel T. Madzdan,
Direclor, Forecoslin8 ant! J>olfcy llnolysis.
(FR Ooc. E9-21S!J5 J!ilocl 9-IH>!.l: 8:<15 e.ml
atLU'IC COD: 4CCHt-P
d = r- - - -rd +-d
ff p-I} ' I l
Vl P .. 2 ""
l.!q. 2H-J
Following A review of ths petition, we
find that tho petition presents
substantial scientific or commercial
info:madon indicating thnllisting tho
gt,pher tortoise in tho castoi'O potllon of
its range may bo warranted. Therefore,
with the publication of this notica, we
are initiating a status review \o
determine If listing the gophor tortoise
in the eastern portion of lho range is
warranted. To ansru'O lhot Uto status
rtwiaw is comprohansivA, wr. aro
soliciti ng scientific and commercial daht
and other information regardlug tlw
status of and Um:ats facing tho gop1ler
tortoise t}l.,roughoutaiJ oi its l'tmga.
OATES: We made l11e finding annount:ud
in this documoni on September 9. 2009.
To allow us udsquijtc limo to conduct
this review, wo I U1at wo rocoivc
information on or before November 9,
2009 to allow us time to roviow and
consider tho information in our statns
rovisw.
ADDRESSES: You may submit
info:matio11 by one of tho foll owing
methods:
Federal eRulomaking Porte/: http:!!
w.-;w.rsgulotfons.gov. Follow tho
instructions for submitting comments.
U.S. moJ'/ or hond-deli'my: Public
Comments Processing, Alln: FWSR4
ES-2009-0029; Division of Policy and
Directives Management; U.S. Fish and
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR P<lrt 60
[EPA-HO-OAR-2008-0697; FRL-8948-9)
RIN 2060-APOB
Revisions to Test Method for
Determining Stack Gas Velocity Taklng
Into Account Velocity Decay Near the
Stack Walls
Cnrrer.tinn
In pt'Oposod rule document E0-20:305
beginning oft pogo 42819 i n U1e issna of
TnP.sday, August 25, 2009 make the
following conection:
Appandix A-2 to Part UO [Corrected)
On pogo 42810, in Appendix A- 2 to
P:ll'\ 60, Equation 2H-1 is reprinted
correctly to read as sat forth below:
Wildlife Sorvlco; 4401 N. Fairfax Drive,
Suite 222; Arlinoton, VA. 22203.
Wo will post all information received
on bllp:/lwww.rcgu}otions.gov.
FOR FURTHER INFORMATION CONTACT:
D:1vid L. HanklA, Field Snpervlsor,
Jacksonvil le Ecological Sel'vices Field
Oflit:e, 7915 Baymeadows Way, Suite
200, Jacksonville, FL 32256, by
telephone 904/7:11-3386, or by facsimile
904/7313045. Persons who usc a
telecommunicat ions device for the doaf
(TDD) may call tho Federal Information
Rolay Service (FlRS) at 1300-877-8339,
SUPPLEMENTARY INFORMi\TtON: .
InCorma tion Solicited
Whon we mako a finding that a
petition presents substantial
information lndlcerlng that listing a
$pecies may be warranted, we are
rnqulrod to promptly commence a
toview of tho status of tho soeciss. To
ensll.l'A that the status rovie\v is
complete and based on the best
scientific and commercial
information, we ate soliciting
in formation concerning the steins of the
gopher throughout all of its
r .tnge. We request. information from
other coucornod governmental agencies,
Native American Tribes, tJ1e scientific
community, industry, or any other
interos\od p .. rtios concerning the status
. j
I
....
I
THOMAS J . DoNOHUE
P'Rl!SID.St-.'T AND
CtiU!P ExeciJTtVE OFFICER
Ms. Patty Chase
CHAMBER OF COMMERCE
OFTHli
UNITED STATES OF AMERICA
September 24,2009
1990 K Street, NW
Room 8034
1615 H STR.EET.N.W.
WASH1NG1"0N. D.C. 20062-2000
Re: Nomination of Mark L. Pelesh- Notice of Negotiated Rulemaking
Dear Ms. Chase:
On behalf of the U.S. Chamber of Commerce, I nominate Mark L. Pelesh,
Executive Vice President of Corinthian Colleges, Inc., to serve as a negotiator
representing the interests of private, for-profit institutions of higher education on
Team I, Program Integrity Issues, in the negotiated rulemaking announced in the
Federal Register Notice of September 9, 2009.
The Chamber has been pleased to work with Secretary Duncan in the effort to
reform and improve education in America. This proceeding can contribute to
ensuring that students receive a quality educational experience and effective outcomes.
W c believe that Mr. Pelesh would contribute substantially to achieving those goals.
Mr. Pelesh has extensive experience with the subjects that will be the subject of
this negotiated rulemaking. In his role at Corinthian and previously in private legal
practice, he gained close familiarity with all of the topics that Team I will address, and
has led efforts to interpret and maintain compliance with the Department's
regulations on these subjects. At the Chamber, we have seen his expertise first-hand
from his involvement, on behalf of Corinthian, with our Coalition for a Competitive
American Workforce; the Project for Workforce Evolution and Competitiveness; the
Education, Employment, and Training Policy Committee; and as a Board member of
the Institute for a Competitive Workforce. Mr. Pelesh has won the respect and
support of other significant parties in the private, for-profit higher education sector
that have also participated in these Chamber activities.
Ms. Patty Chase
September 24, 2009
Page Two
Mr. Pelesh has constructively participated in other negotiated rulemaking
proceedings conducted by the Deparunent, from the implementation of the Higher
Education Amendments of 1992 to the implementation of the Higher Education
Opportunity Act of 2008. He well understands the commiunent required of a
negotiator and has demonstrated that he will participate in good faith in the neg reg
process. Mr. Pelesh's resume is enclosed and his contact information is:
Mark L. Pelesh
Executive Vice President
Washington, D ~ 20005
202-682-9494 (phone)
202-682-9170 (fax)
mpelesh@cci.edu
Thomas J. D o n o h ~ e
Enclosure
Business
Corinthian Colleges, Inc.
1350 I Street, N.W., Suite 1270
Washington, D.C. 20005
(202) 682-9494
mpelesh @cci.edu
Professional
MARK L. PELESH
Home
Executive Vice President, Legislative & Regulatory 2003 - present
postsecondary education law, Florida student access grant programs, and other
higher education initiatives.
Monitor regulatory developments at U.S. Department of Education, accrediting
agencies and state regulatory bodies, and lead Corinthian responses
Corinthian regulatory compliance committee
Represent Corinthian in Washington higher education policy community
Drinker Biddle & Reath LLP
Partner, 1997 - 2003
Founded and led Education Law Practice Group
enterprises
education and e-learning, Title IV of Higher Education Act, mergers, acquisitions,
joint ventures and IPOs involving educational institutions, accreditation standards
Advocated before U.S. Department of Education, Congress and Courts
Cohn and Marks
Partner, 1985-1997; Associate, 1981-1985
Established education practice
Served on firm Management Committee
Represented broadcasting, cable television and common carrier communications
Mark L. Pelesh
Page2
Arnold & Porter
Associate, 1978-1981
Assisted in corporate, antitrust, real estate and litigation matters
Education
Yale Law School
J. D., 1978
Stanford University
Honors in History
Phi Beta Kappa
Publications
Articles published in Yale Law Journal, Harvard Law Review, Notre Dame Lawyer,
Education Law Reporter, Duke Journal of Law and Contemporary Problems, Trusteeship
Presentations
Presentations to North Central Higher Learning Commission, Washington Higher
Education Secretariat, Council for Higher Education Accreditation, Council of Graduate
Exchange Council, American Enterprise InstitUte, and education investment conferences
Board of of the Career College Association (elected June 2005)
Board of Directors of Institute for a Competitive Workforce (elected July 2007)
N01t hern Virginia Workforce Investment Board (elected August 2009)
Dar Admissions
District of Columbia, U.S. District Court for the District of Columbia, U.S. Court of
Appeals for the District of Colum9ia Circuit, and U.S. Supreme Court
Personal
Mark L. Pelesh
Page3
List of Publications
87 Yale L.J. 627 (1978)
Revitalizing Corporate Democracy: Control of Investment Managers' Voting on Social
Responsibility Proxy Issues,
93 Harv. L. Rev. 670 (1980)
The Changing Role of Outside Counsel: A Proposal for a Legal "Audit,"
56 Notre Dame Lawyer 8 38 ( 1981)
Accreditation and Bankruptcy: The Death of Executory Contract,
71 Education Law Reporter 975 (1992)
Regulations under the Higher Education Amendments of 1992: A Case Study in
57 Duke Journal of Law and Contemporary Problems !51 (1994)
Due Process in the Accreditation Context: A Reply,
22 Journal of College and University Law 175 (1995)
Reauthorization ' 97: The Calm Before the Storm,
Unfriendly Territory,
Are You Telling Me I'm Personally Liable?
Tripping Up on the Paperwork- comment on Oakland City case
Inside Higher Education (November 4, 2005)
CCA
College
September 25, 2009
Ms. Patty Chase
1990 K Street NW
Room 8034
Via email: Patty.Chase@ed.gov
Dear :Yfs. Chase:
On behalf of the Career College Association, we would like to thank you for this opportunity to
submit nominations for participation in the upcoming negotiated rulemaking sessions to develop
proposed regulations implementing the changes made to the Higher Education Act by the Higher
Education Opportunity Act of2008 that affect foreign schools and to maintain or improve
program integrity in the Title IV, HEA programs.
CCA is the preeminent membership association representing for-profit higher education
institutions in the United States. All CCA member institutions are licensed by the state in which
they are located and accredited by a national and/ or regional accrediting agency recognized by
the U.S. Department of Education. Almost all CCA member schools participate in the federal
student financial aid programs.
Our 1,500 members include large, publicly traded college systems; smaller multi-campus
institutions; and family owned single-campus schools. CCA members offer programs ranging
from short-term career-specific certificate and diploma programs to associate and bachelor's
degrees, master's degree, doctoral, and professional degree programs in more thap 200 fields.
These institutions operate on "traditional" semester basis; year-round rolling starts; clock hours;
and virtually every schedule in between. Additionally, our representation includes brick-and-
mortar institutions, online colleges, and hybrid programs.
CCA strongly believes for-profit institutions have been underrepresented at past negotiated
rulemaking sessions. While other trade associations count for-proiit institutions among their
membership, they do not always speak on our behalf and, in many instances, are opposed to or
unsupportive of issues of great importance to our schools. With for-profit education now
representing almost 1 0% of al1 higher education and more than 2 million students annually, we
believe representatives from our sector should be allowed to speak for themselves and the
students they serve.
CCA Negotiated Rulemaking Nominations Page 1
Several of the issues slated for the negotiating agenda are either specific to or more commonly
thought of as "for-profit school issues." With this in mind, we respectfully request the
Department to allow more than one seat at the table specifically for for-profit institutions, with
the desjgnation of those seats done in a manner similar to the not-for-profit representation. Just
as issues can apply to and impact 2-year and 4-year public schools in different ways, thus
allowing them two seats at the negotiations, the issues impact 2-year and 4-year for-profit
institutions in different ways, and those schools should be permitted to have separate
representation at the table. Additionally, we urge the Department to allow a separate seat for
online educational providers, since they are also impacted by the regulations in different ways
than traditional brick-and-mortar schools.
Having experts for each segment of higher education participate in the negotiations will allow for
clear, practicable regulations to be crafted that all sectors and segments of higher education will
have a.better ability to comply with.
We believe the nominees submitted by CCA will represent every constituency of the for-profit
sector of higher education and the students they serve. Each nominee has agreed to attend all
negotiated rulemaking sessions for the team they would be selected for, as well as to participate
in any needed working groups or conference calls held outside of the regularly scheduled
sessions.
With that, we respectfully submit the following representatives to fill the indicated team and
constituency seat at the negotiating table for your consideration, with a biography or curriculum
vitae for each attached.
TEAM 1 -Program Integrity Issues
Constituency: Private, for-profit institutions of higher education
As the primary association representing for-profit postsecondary education institutions, CCA is
pleased to nominate the following individuals to represent our sector at the negotiating table.
However, we submit for your consideration that the issues faced by for-profit institutions can be
broken down into sevenil special constituencies based on the mariner in which institutions offer
educational programs, the duration of those programs of study, and, oftentimes, the students
served by those institutions. Just as public two-year schools may have a diflerent-vie-vvpoint then
their four-year counterparts, so do for-profit institutions. In that regard, we respectfully nominate
the following persons to represent constituencies within the for-profit educational community,
with each sub-group having one seat at the table.
Degree-granting institutions and 4-year-and-above programs
Nancy Broff, Counsel to ITT Educational Services, Inc., Dickstein Shapiro LLP
Nancy Broff is an attorney in private practice specializing in higher education representation.
Her clients cover the gamut from publicly-traded higher education companies to single campus,
privately held institutions. Ms. Broff advises clients on the full range of issues related to
CCA Negotiated Rulemaking Nominations Page2
compliance with the Higher Education Act and its implementing regulations. In addition, Ms.
Broff has an active public policy practice, including legislative work and participation in
negotiated rulemak.ing procedures.
She has participated as a negotiator, alternate, or technical advisor in many negotiated
rulemaking committees, including serving as an expert advisor and second alternate on the 2006-
20007 Loans Team and serving as an alternate negotiator on the 2002 Loans Team, as well. as
participating on the 2002 team that developed the incentive compensation safe harbor provisions.
Prior to her current position, Ms. Broff served for nearly 15 years as the General Counsel of the
Career College Association, where she represented the career college sector on a wide range of
regulatory and policy issues. She currently serves on CCA's Board of Directors.
Ms. Brofr s resume is attached, and she can be reached at:
Ms. Nancy Broff
Dickstein Shapiro, LLP
1825 Eye Street, NW
Telephone: 202.420.3526
Fax: 202.379.9224
Email: broffn@dicksteinshapiro.com
\
Ms. Sharon Thomas Parrott, Senior Vice President of Government and Regulatory Affairs
and Chief Compliance Officer, DeVry Joe.
Ms. Thomas Parrott if) the Senior Vice President and Chief Compliance Officer with De Vry lnc.
She has over 25 years of experience in lhe education arena. Ms. Thomas Parrott began her
employment with De Vry in student financial aid compliance before her appointment as Vice
President of Government Relations and Student Finance in 1989. She became Chief Compliance
Officer in 2004. ln this role, she is responsible for the design, implementation, enforcement and
monitoring of the organization's comprehensive corporate and government compliance and
internal audit programs. Prior to her tenure at DcYry, Ms. Thomas Parrott directed national
student financial aid training programs for the U.S. Department of Education.
Ms. Thomas Parrott's role as Chief Compliance Officer, coupled with expansive higher
education policy and administrative experience, offers unique, varied and seasoned perspective
for the negotiating team.
Ms. Thomas Parrott' s biography is attached and she can be reached at:
Ms. Sharon Thomas Parrott
1 Tower Lane
Suite 1000
Oakbrook Terrace, l L 60181-4663
CCA Ncgoliatetl Rulemaking Nominations Page 3
Telephone: 630.706.3146
Fax: 630.574.1991
Email: stpaiTott@devry.com
Non-degree institutions and 2-year-programs and less
Mark Pelesh, Executive Vice President for Legislative and Regulatory Affairs, Corinthian
Colleges, Inc.
Mr. Pelesh has served as Corinthian's Executive Vice President for Legislative and Regulatory
Affairs since September 2003. Corinthian Colleges, Inc. is one of the largest post-secondary
education companies in North America. It operates 91 Everest and WyoTech campuses in 24
states with an additional 16 campuses in Ontario, Canada, and it serves approximately 76,000
students. Corinthian's campuses offer diploma programs and associate's, bachelor's, and master's
degrees in a variety of high-demand occupational areas, including healthcare, transportation
technology and maintenance, criminal justice, business, information technology, and
construction trades.
Prior to joining Corinthian, Mark was with the law firm Drinker Biddle where he fmmded and
led the Education Practice group, which focuses ori regulatory matters affecting for-profit
institutions.
For the past six years, Mark has been actively involved in the Reauthorization of the Higher
Education Act on behalf of Corinthian and CCA, focusing on regulato!-1' issues of great
importance to the ior-proiit sector, including 90-10, institutional and other definitions, student
outcomes (including completion and placement), and year-round Pel!. He is a current member of
the Career College Association's Board of Directors.
Mark has served as a negotiator on five Department of Education negotiated tulemaking teams.
You will firid Mr. Pelesh's resume attached for your review, and he can be reached at:
Mr. Mark Pelesh
1350 Eye St NW
Suite 1270
Washington, DC 20005-3331
Telephone: 202.682.9494
Fax: 202.682.9170
Email : mpelesh@cci.edu
Dr. Donna L. Gray, Senior Vice President of Academic Affairs and Chief Academic
. Officer, Career Education Corporation
CCA Negotiated Rule making Nominations Page 4
Ms. Gray has a solid background in education, with a strong emphasis on student, facuJty, and
administrative operations. She is experienced in troubleshooting and partneling with campuses to
solve issues regarding compliance, human resources, accreditation, faculty development,
cutTicultun development, academic suppott, budgeting, and assessment.
Dr. Gray's resume is attached and she can be reached at:
Dr. Donna Gray
Career Educ.ation Corporation
2895 Greenspoint Parkway
Hoffman Estates, IL 60169
Telephone: 847.585.3735
Pax: 847.585.3775
Cell: l (b)(6) ]
Email: DGray@careered.com
Online Institutions of Higher Education
Mr: Robert Collins, Vice President, SFA Legislative & Regulatory, Apollo Group, Inc.
Bob Collins has extensive experience in the day-to-day operations of for-profit institutions of
higher education. His duties have included development and oversight of student consumer
information, institutional policies and procedures, student services, financial aid, and more. Bob
has over 28 years experience in student financial aid, including the management of state and
federal fmancial aid operations for more than 250 campuses andleaming centers nationwide as well as
centralized financial aid operations at Apollo Group, Inc. Mr. Collins' company, The Apollo Group,
operates the University of Phoenix Online, the largest provider of online education in the world.
In addition to Mr. Collins' many years of hands on financial aid and compliance experience, Bob
has demonstrated strong volunteer leadership within the financial aid profession by collaborating
with other organizations to further the goals of improved student service, expanded student
access, and heightened standards of excellence in the financial aid and student services aTena
Bob has served in many capacities, including as a member of past negotiated rulemaking teams,
on NCES technical review panels, and on various NASF AA cornminees.
Mr. Coll ins' resume is attached for your review, and he can be reached at:
Mr. Robert T. Collins
Apollo Group
4025 S Riverpoint Parkway
Mail Stop CF-K.XlO
Phoenix, AZ 85040
Telephone: 602.557.1405
CCA Negotiated Rulemaking Nominations
.. ,
Page 5
Fax: 602.557.1365
Email: robert.collins@apollogrp.edu
Elaine Neely, Senior Vice President of Regulatory Affairs, Kaplan Higher Education
Corporation
Elaine Neely is uniquely qualified to represent for-profit institutions, having served as one of two
career school negotiators during the 1993 negotiations whlch were a result of that reauthorization
of the Higher Education Act. This was the first and most extensive negotiated rulemaking
undertaken by the U. S. Department of Education. She also served as a negotiator in 2007 and
2009 during deliberations on general provisions dealing with technical student financial aid
issues.
With her experience, she can represent all types of private career schools. She has technical
experience with a wide variety of types of institutions, structure of institutions, aid delivery
programs, delivery of education, types of loans and types of students. Current and past company
structures she has worked at include publicly traded, privately owned and "mom and pops";
Masters, Bachelors and Associate degree programs, semester, quarter, term, non-term, non
standard term a ~ d clock hours aid delivery systems; online line and on ground educational
delivery system; FFEL and Direct Loan programs; traditional high school and non-traditional
students. She also has extensive knowledge of Default Prevention.
Elaine has over 35 years experience in student financial aid, accreditation and school operations
and has worked extensively with the higher education community and the U.S. Department of
Education in the establishment of tp.e Direct Loan program, the Distance Education
Demonstration Program and various task forces. Her expertise includes all areas mentioned in
the Federal Register announcement and is not limited to the financial aid aspect of the
regulations. She is knowledgeable in academic issues, admissions compensation and financial
aid eligibility areas, and is also actively involved 1n all areas of student complaints.
Elaine' s resume is attached and she can be reached at:
Ms. Elaine Neely
Kaplan Higher Education Corporation
3750 Brookside Parkway
Alpharetta, GA 30022-1433
Telephone: 303.887.0297
Fax: 303.575.1291
Email: elaineneely@khec.com
Constituency: Financial Aid Counselors
CCA Negotiated Rulernaking Nominations Page6
The members of the Career College Association have a strong interest in the issues affecting
fmancial aid that will be discussed during this negotiated rulemaking session. The variety of
ways programs are offered at our institutions, including term-based, modular, semester, or clock-
hour programs, creates a multitude of issues surrounding the packaging and disbursing of Federal
financial aid. Additionally, the student population served by career colleges tends to exhibit one
. or more independent student characteristic, be first-generation and lower income, resulting in the
need for additional in-depth counseling on all aspects of the financial aid process, from filling
out the FAFSA through accepting aid, as well as entrance and exit loan counseling. We believe
the following nominees will represent the financial aid counselors of all types of institutions, as
well as the students they serve.
Mr. William Leach, Director of Funding and Analysis, Lincoln Educational Services
Mr. Bill Leach began his career ii1 proprietary education more than 24 years ago in admissions, where
he showed an innate abil ity to communicate with students. Subsequently he worked as a Director of
Financial Aid and then Assistant Vice President of Financial Aid.
His penchant for and knowledge of Title IV regulations, ability to covey clear understanding of
regulations to others, and tenacity are an asset to the schools artd students in our sector. His zeal to see
. fair and equitable solutions to legislative issues that affect the Department of Education,
Institutions of Higher Education, and, most importantly, the taxpayers ol'the United States make
him an ideal candidate for the committee.
Mr. Leach is strongly student-centered and results oriented. He served as a negotiator on Team 1:
Loans during the negotiated rulemaking sessions held in early 2009.
Mr. Leach's biography is attached and he can be reached at:
Mr. William Leach
Lincoln Educational Services
200 Executive Drive
West Orange, NJ 07052
973.736.9340, extension 49950
Email: bleach@lincolnedu.com
Mr. Jeff Arthur; Vice President of Information Systems & Aid, ECPI College of
Technology
Jeff has over 25 years experience with two proprietary education school groups, including 17
years with ECPI. He 'grew up' in this sector, with responsibilities and influence in all areas of
career college operations, putting to good use his creative decision and problem solving skills.
He has served as a primary negotiator in past negotiated rulemaking and has been a key
participant on advisory boards for the Department of Education, loan guarantors, and Campus
Management. Additionally, Mr. Arthur has served on dozens of accreditation teams for ACICS
CCA Negotiated Rulemaking Nominations 7
and ACCSCT, and has been presenter on a wide range of topics for state, regional, and national
financial aid groups, CCA, and Campus Management.
Jeff has managed financial aid operations with exemplary results in corn,pliance and an ability to
influence college operations to the benefit of students and the college. He is well qualified to
deal with the major themes of this negotiated rulemaking with student success being a prominent
theme. He has extensive experience with term-based module programs.
A copy of Mr. Arthur's. CV is attached, and he can be reached at:
Mr. Jeff A1tbur
ECPI College of Technology- Virginia Beach
5555 Greenwich Road
Suite 300
Virginia Beach, VA 23462-6542
Telephone: 757.671.7171 x55311
Fax: 757.671.8661
Email: arthur@ecpi.edu
Constituency: Business officers and bursars at postsecondary institutions
Business officers and bursars work to advance the economic viability and business practices of
higher education institutions in fulfillment of their academic missions, as well as manage the
billing and collection of tuition, fees, campus housing and other university related charges. For-
profit institutions, especially those located in multiple states that offer a variety of types and
levels of academic credentials, face unique challenges in this task and we believe the following
nominees will provide expertise and insight on the issues.
Mr. Roger Swartzwelder, Executive Vice President, General Counsel, Chief Compliance
Officer and Board Secretary, Education Corporation of America.
As you will see from the attached resume, Roger offers an unusual, if not unique, combination of
educatio!l, accreditation experience, legal practice and now bands-on school experience. He
handles much more than just regulatory and accreditation issues at Virginia College and is a
partner in the business. As such, he understands not only the issues faced by the business office
but the regulations and statute behind them, and the various compliance concerns with those
issues.
Mr. Swartzwelder has conducted mock compliance evaluations, provided training workshops for
institutional staft: assisted with application preparation, carried out due diligence and other
activities associated with changes of ownership, and represented institutions in adverse action
appeals before accrediting agencies. He also has extensive experience with corporate issues such
as employment, insurance, real estate, and other contracts.
Roger's resume is attached and he can be reached at:
CCA Negotiated Rule making Nominations Page 8
Mr. Roger L. Swartzwelder.
Education Corporation of America
3660 Grandview Parkway
Suite 300
Birmingham, Alabama 35243
Telephone: 205.329.7903
Fax: 205.912.6701
Email: roger.swartzwelder@ecacolleges.com
Mr. George Fogel, Vice President of Student Financial Services and Compliance,
Rasmussen College
Mr. Fogel is well suited to serve on Team L based on his experience in for-profit education over
the last seven years. He has had many different roles within Rasmussen College that have
provided him with a breadth of knowledge that w11l prove an asset to the negotiations. Having
dealt with many regulatory, compliance and operational issues over the years, he knows how the
regulatory environment can impact an institution.
For almost three years, he oversaw all of the Florida campuses of Rasmussen, in addition to the
launch of their first branch campus in Illinois. Concurrently, he was responsible for the financial
aid organization for all of the Rasmussen Campuses. During this time, he gained additional
lmowledge as he experienced first-hand the. implementation and impact of the regulatory
framework in which for-profit postsecondary institutions operate. Having had hands-on
operational knowledge will help him best serve the committee as he will more clearly know how
changes immediately impact a campus, and he has the ability to identify longer term unintended
consequences of changes in the regulations.
More recently he maintained his responsibility for financial aid operations while at the same time
launching a more robust compliance organization and internal audit team. This has continued to
broaden his knowledge and experience within the regulatory environment in which our schools
operate.
Alt ached please find Mr. Fogel's resume, and he can be reached at:
Mr. George E. Fogel
Rasmussen College
745 McClintock Drive
Suite 105
Burr Ridge, IL 60527-6490
Telephone: 630.366.2840
Fax: 630.528.3111
Email: george.fogel(a),rasmussen.edu
Constituency: Students
CCA Negotiated Rulemaking Nominations Page9
As previously stated, students attending for-profit institutions tend to be older, they may be
employed, have had previous postsecondary experience, be lower income, and first generation
college students. As such, they have unique viewpoints and issues when trying achieving their
postsecondary goals. As such, we believe the students attending [or-profit institutions would be
well served by having a voice in the negotiations. As such, we respectfully nominate the
following.
Mr. Robert M. Keiser
Robert Keiser grew uj:> in the postsecondary environment, as his father is the founder and
chancellor of Keiser University. Robert understands the issues being faced by students at all
types of institutions, but especially those served by career colleges. Mr. Keiser has direct
experience working on behalf of Keiser University students while working for the school 's
Media and Governmental Relations Department. Of Keiser's current student
approximately seventy percent are female. The Universily serves a predominately adult or non-
traditional student, however fowieen percent of new students enrolling in Keiser in 2006 were
recent high school Sixty percent of students are 25 years of age or older and seventy-
six percent work full- or part-time while attending classes. Keiser University students are
focused on entering new careers in high demand professions or enhancing their level of skill in
their present field.
His active participation in various legislative efforts as well as his knowledge of the students
served by for-profit institutions (who have not tradi ti onally been represented at the table) and the
challenges they face on a dai ly basis will make him a valuable member of the negotiated
rulemaki ng team. Robert is currentl y a student at The George Washington University, majoring
in Political Science.
Robert's resume is attached and he can be reached at:
Mr. Robert M. Keiser
6069N.W. 87
111
Avenue
Parkland, FL 33067
Telephone: 954-612-6532
Email: rkeiser@gwmail.gwu.edu
Constituency: Admissions officers at postsecondary institutions
The admission of students to a college is one of the most regulated areas of postsecondary
education, with Federal and state, accrediting agency, and other oversight of every aspect of the
process, from advertising to the information given to prospective students, to defining which
students arc eligible to receive Federal financial aid, to how the human resources department of
an institution may compensate those working in admissions. With thought being given to the
complexity of the compliance issues faced by an admissions office, we respectfully submit the
following nomination for your consideration.
Mr. Dean Bartness, Chief Operating Officer, Dade Medical College
Dean has extensive compliance experience in all aspects of postsecondary education, including
compliance with federal, state, accreditation, corporate and college rules, regulations and
policies. Mr. Bartness is well versed in student eligibility regulations including those of foreign
students. His broad knowledge of all matters of regulatory compliance will allow him to speak
. with expert authority on the topics before the negotiating committee.
Dean's resume is attached for your consideration, and he may be reached at:
Mr. Dean S. Bartness
Dade Medical College
2750 W. 68th Street
Suite 202
Hialeah, FL 33016
Telephone: 786.363.3340, x2027
Fax: 786.363.6047
Email:
TEAM II- Foreign School Issues
Constituency: Private, for-profit institutions of higher education
Mr. Ronald Blumenthal, Senior President- Administration; Kaplan Higher
Education, Inc.
Mr .. Blumenthal has served on two previous negotiated rulemaking dealing with accreditation
issues, in 2007.and 2009. In addition, he testified at the Department's hearing on this current
negotiated rulemaking process in Little Rock, Arkansas, on June 18, 2009. Ron has served a term
on NACIQI and currently serves as Commissioner and Treasurer of the Commission for
ACCSC.
Mr. Blumenthal has a unique perspective on the issues related to foreign medical sehoo1s that
goes back to Kaplan's roots as a test preparation company. Kaplan began as a test preparation
company, and for more than 30 years has b.een preparing graduates of foreign medical schools to
take the high stakes tests that determine their residency prospects. Among the thousands of
students whom Kaplan prepares each year are U.S. citizens who have gone abroad to pursue their
medical education.
When he first joined Kaplan in 1974, it was with a test preparation center in Dallas, Texas, where
he had his first interactions with U.S. citizens who attended medical school in Mexico. In 1980,
Kaplan was asked by a medical school in Tampico, Mexico, to send materials to Mexico to
prepare U.S. graduates for the U.S. test, which was then given by the Education Commission on
Foreign Medical Graduates. The late Stanley Kaplan refused to send his materials to other
counnies, but did agree to open a center in McAllen, Texas, near the border with Mexico, to
prepare students for the U.S. test. Mr. Blumenthal opened that center and worked with the U.S.
students over the course of a couple of years.
By 1997, Mr. Blumenthal was with Kaplan in New York City, and they had acquired the
National Medical School Review, which had a contract with Ross University in Dominica to fly
in Kaplan faculty to prepare their graduates for the USMLE. Ron went to check out the school
and program to determine what the island's continuing needs would be. Over the years he has
been involved with foreign dental and nursing students as well.
Mr. Blumenthal's resume is attached, and he may be contacted at:
Mr. Ronald Blumenthal
Kaplan Higher Education, Inc.
550 W Van Buren
7
111
Floor
Chicago, IL 60607
Telephone: 312.777.6646
Fax: 208.979.9544
Email: rblurnenthal@kaplan.edu
Dr. Nancy A. Perri, M.D.; Vice President of Academic Affairs; Ross University School of
Medicine
Nancy A. Perri, M.D., Vice President of Academic Affairs at Ross University School of Medicine,
has been the head of the Clinical Division for ni neteen years and VP for Academic Affairs since
January 2004. She began her association with the School of Medicine as a member of one of the first
graduating classes ofRUSM medical students, receiving her M. D. degree in 1982 as a cum laude
graduate; she received her Bachelor of Science degree in 1978 from St. Peter's College.
Dr. Perri's academic experience, in addition to her chairing the Admissions Committee for Ross
University School of Medicine from 1992 through 1998 and her serving as the school's Clinical
Dean since 1990, includes teaching through Downstate Medical Center in Brooklyn, New York in
the Depatt ment of Renal Diseases as a preceptor for Introduction to Clinical Medicine (1985-1989)
and an appointment as Faculty Preceptor in Clinical Medicine and Nephrology ( 1986-1990).
Dr. Perri also serves as a member of Ross University's Execut ive Committee. In 2006 she was
appointed by the New Jersey General Assembly as a member of the Advisory Committee on
Alternatively Accredited Medical School Clinical Clerkships. The purpose of this committee is to
recommend standards for appropriate facilities to be used in clinical clerkship programs operated by
an alternatively accredited medical school. Dr. Perri has also served as an advisor to staff at the
Florida. Commission for lndependent Education.
Dr. Perri's biography is attached, and her contact information follows:
Dr. Nancy Perri, M.D.
Ross University School of Medicine
630 US Highway 1
North Brunswick, NJ 08902
Telephone: 732.509.4600
Fax: 732.978.5319
Email: nperri@rossu.edu
Thank you for considering CCA's nominations to serve on the upcoming negotiated rulemaking
team. I would be happy to provide you with any additional information or answer any questions
you may have. I can be reached at 202-336-6754 or via email at HarrisM@career.org.
Sincerely,
Harris N. Miller
CEO and President
Career College Association
CCA Negotiated Rulemaking Nominations Page 13 .
1410 King Streer, Alexandria, VA 22314
800-826-9972 703-683-3111 Fax: 703-683-7424 ~ www.acteonline.org
September 23, 2009
Patty Chase
1990 K Street, N.W., Room 8034
Re: Nomination of Mark L. Pelesh - Notice of Negotiated Rulemakiug
Dear Ms. Chase:
On behalf of the Association for Career and Technical Education (ACrE), I nominate
Mark L. Pelesh, Executive Vice President of Corinthian Colleges, Inc., to serve as a
negotiator representing the interests of private, for-profit institutions of higher
education on Team t Program Integrity Issues, in the negotialed rulemaking announced
in the Federal Register Notice of September 9, 2009. I have enclosed Mr. Pelesh's resume
in support of this nomination.
Wilh Mr. Pelesh's assistance, ACTE and Corinthian recemtly forged a partnership to
address policy issues in career and technical education. He helped to plan, and
Corinthian co-hosted, our National Leadership Forum on The Re-Skilling of America in
June 2009. As we have come to know Mr. Pelesh, it is evident that he has deep
experience with the subjects that I understand will be U1e subject of this negoliated
rulemaking. I am confident that he would make a constructive contribution lo this
proceeding and help to ensure that the Department's regulations promote quality
educational experiences and effective outcomes for students, especially those pursuing
career and technical education.
I understand that Mr. Pelesh has participated in oth.f'J negotiated rulema king
proceedings conducled by the Department, and appreciates the commitment required of
a negotiator. I am sure that he would participate in good faith in the neg 1eg process. H.is
contact information is:
Mru:k L. Pelesh
Executive Vice President
202-682-9494 (phone)
202-682-9170 (fax)
mpelesh@cci.edu
Sincerely,
Janet B. Bray, CAE
Executive Director
----------------------------
f: rlur;'! tf!
September 24,2009
U.S. Department ofEducat1on
ATTN: Patty Chase
1990 K Street NW, Room 8034
Dear Ms. Chase:
On behalf of the Higher Education Allied Health Leaders Coalition (HEAL),
membership, and most importantly, the current students and past graduates our private,
for-profit institutions education have prepared for rewarding, professional
careers in the allied health care indusn-y, we are honored to submit the following
nominees for your consideration in response to the Department of Education's September
9, 2009, Notice of Negotiated Rulemakingfor Programs Authorized Under TiTle /Vofthe
Higher Education Act of 1965, as Amended (Notice).
Team I -Program Integrity Issues
Private, For-profit Institution of Higher Education:
Mr. PauJ Mitchell, ChiefExecutive.Officer, Ross Education, LLC
Private, For-profit Institution of Higher Education:
Mr. Mark Pelcsh, Executive Vice President, Corinthian CoUeges, Inc.
Student Financial Aid Administrator:
Mrs. Sandy Tallman, Executive Vice President,
Financial Aid Services/Compliance, Ross Education, LLC
While IlEAL's membership is diverse enough to have enabled us to put forth nominees
representing many of the constituencies listed in the Notice, we have chosen to narrow
our list of nominees to three candidates with the well-rounded knowledge, ievel of
expertise, and networking capabilities necessary to enable them to represent multiple
constituencies.
We recognize that a significant number of individuals and their constituencies win be
vying for a very limited number of non-federal negotiator positions, and believe strongly
that our nominees have the ability to represent a very broad constituency that includes
private, for-profit institutions of higher education, fmancial aid administrators, business
oi1icers and bursars, admission officers, institutional third-party servicers, business and
industry, and national accrediting agencies.
As evidenced by HEAL's attendance and pruticipation in each of the three regional
hearings, our presentation of testimony at the final hearing in Philadelphia, and our
review of all of the written testimony, we believe that we have shown our keen interest in
being actively involved in these critically imp011ant negotiations.
As noted in HEAL's public testimony during the third and final regional hearing seeking
public comments and recommendations on the reassessment ofvarious Title JV
regulations, we support the inclusion of all of the issues presented in the original May 26,
2009 publication, and the broader, amended list of issues outlined in the September
Notice.
Based upon the issues, we have put forth a slate of candidates representing both small-
medium sized privately-held institutions and large, publicly-traded institutions in an
effort to ensure that the views of the entire proprietary sector are provided with the
opportunity for full and equal representation.
HEAL has faith in the fact that our active involvement throughout the development of
this new round of negotiations, our supp01t for the negotiations and the topics to be
considered, and our track-record of success in working with the Department on a host of
issues, including some related and relevant to the issues to be negotiated by Team I, has
earned us the ability to request your serious consideration, and hopefully selection, as
non-federal negotiators responsible for assisting the Department in the development of
the regulations.
As previously noted, all three HEAL nominees have exteusive experience and expettise
relevant to the issues to be considered, are familil:lr to the Department based upon vmious
interactions with staff likely to be involved either as federal negotiators, and two of the
three candidates also possess prior experience as non-federal negotiators in previous
federal negotiated rulemakings- as detailed in their rcspccti vc resumes and biographical
information included with tllis cover.
We are confident that, if selected by the Secretary, our nominees are more than capable
of representing the interests of our membersllip, as they have done so effectively in the
past.
Furthermore, given this famlliarity with the process and high-degree of knowledge and
expe1tise with the issues proposed on the agenda, our nominees commit to:
put forth the time and effort required to prepare for each session - acquiring the
knowledge and information necessary to actively engage in discussions on all of
the issues slated for consideration by Team I;
invite individuals not selected as non-federal negotiators who represent similar
constituencies to attend and patticipate in meetings, present their views, and
share in the development of positions to be represented on behalf of our common
interests;
enter into all negotiations in good faith; and most importantly,
work with the Department and other non-federal negotiators to build final
consensus for adoption of a regulatory package addressing the full complement of
issues to. be negotiated by Team L
Thank you in advance for your serious consideration of these highly qualified nominees.
HEAL would be happy to answer any questions, or provide you with additional
information. If required, please contact me directly at (202) 824-1724 or via email at
tom.netting@akennan.corn.
Sincerely,
Tom E. Netting
Executive Director
Pau1 Mitchell
Chief Executive Officer, Ross Education, LLC
300 S. Rivea-side Ave., Suite A
St. Clair, MI 48079
Phone: (810) 637-6100 ext. 104 Email : Pmitcheii@RossLearning.com
Mr. Mitchell possesses over 30 years of experience in post-secondary education
management and workforce development in both the public and private sector. Cunently
as CEO ofRoss Education, LLC, the parent company of the Ross Medical Education
Centers, he leads the strategic plruming and operating strategy of a mid-size proprietary
school group with 14 locations in 3 states and almost 1900 students enrolled at any time.
Mr. Mitchell has been an executive with Ross for 21 years functioning in a variety of
capacities including Director of Technical Education and Vice President for Government
and Industry Relations. Mr. Mitchell currently serves as a Commissioner and Treasurer
for the Accrediting Bureau of Health Education Schools and on the Board of Directors of
the Michigan Association of Career Colleges and Schools.
Prior to joining Ross, Mr. Mitchell was an executive with Chrysler Institute (a division of
Chrysler Corporation) and a seolor policy advisor for workforce development within
Michigan State Government. Mr. Mitchell has an undergraduate degree from James
Madison College, Michigan State University (focus upon public policy and economics)
and graduate work in labor relations.
Dl1siness
1350 I Street, N.W., Suite 1270
(202) 682-9494
mpelesh@cci.edu
Professional
MARK L. PELESH
Home
Executive Vice President, Legislative & Regulatory Affairs, 2003 - present
postsecondary education law, Florida student access grant programs, and other
higher education initiatives.
. Monitor regulatory developments at U.S. Department of Education, accrediting
agencies and state reg\Ilatory bodies, and lead Corinthian responses
Chair Cori nthian regulatory compliance commitlee
Represent Corinthian in Washington higher education policy community
Drinker Biddle & Reath LLP
Partner, 1997 - 2003
Founded and led Education Law Practice Group
enterprises
education and e-learning, Title IV of Higher Education Act, mergers, acquisitions,
joint ventures and IPOs involving educational institutions, accreditation standards
Advocated before U.S. Department of Education, Congress and Cout1s
Cohn and Marks
Partner, 1985-1997; Associate, 19811985
Established education practice
Served on firm Management Committee
Represented broadcasting, cable television and common carrier communications
Mark L. Pelesh
Page2
Arnold & Porter
Associate, 1978-1981
Assisted in corporate, anti trust, real estate and litigation matters
Education
Yale Law School
J.D., 1978
Startford University
Honors in History
Phi Beta Kappa
Publications
A11icles published in Yale Law Journal, Harvard Law Review, Notre Dame Lawyer,
Education Law Reporter, Duke Journal of Law and Contemporary Problems, Trusteeship
Presentations
Presentations to North Central Higher Learning Commission, Washington Higher
Education Secretariat, Council for Higher Education Accreditation, Council of Graduate
Exchange Council, American Enterprise Institute, and education investment conferences
B.oard of Directors oftheCareer College Association (elected June 2005)
Board of Directors oflnstitute for a Competitive Workforce (elected July 2007)
Northern Virginia Workforce Investment Board (elected August 2009)
Bar Admissions
District of Columbia, U.S. District Court for the District of Columbia, U.S. Court of
Appeals for the District of Columbia Circuit, and U.S. Supreme Court
Personal
Mark L. Pelesh
Page 3
List ofPublications
87 Yale L.J. 62 7 (1978)
Revitalizing Corporate Democracy: Control of Investment Managers' Voting on Social
Responsibility Proxy Issues,
93 Harv. L. Rev. 670 (1980)
The Changing Role of Outside Counsel: A Proposal for a Legal "Audit,"
56 Notre Dame Lawyer 838 (1981)
Accreditation and Bankruptcy: The Death of Executory Contract,
71 Education Law Repmter 975 (1992)
Regulations under the Higher Education Amendments of 1992: A Case Study in
57 Duke Journal ofLaw and Contemporary Problems 151 (1994)
Due Process in the Accreditation Context: A Reply,
22 Journal of College and University Law 175 (1995)
Reauthorization '97: The Calm Before the Storm,
Unfriendly Tenitory,
Are You Telling Me I'm Personally Liable?
Tripping Up on the Paperwork:- comment on Oakland City c a ~ e
Inside Higher Education (November 4, 2005)
~ ..
1
--- - ... --- -- ----" __ ,,_ .. .. ... ..... ----- ... .....:.
Education:
Sandra Tallman
Executive Vice President, Financial Aid Services/Compliance
Ross Education, LLC
300 S. Riverside, Suite A
St. Clair, Ml48079
Phone: (810) 637-6100 ext. 109 Email : 3tall man@RossLearning.com
Bachelor of Arts Degree, Liberal Arts
Oakland University, Rochester Hills, MI
Graduated April 1978
Work Experience:
1978-81
1981-89
1989 - Present
Employment and Training Counselor serving unemployed residents of Macomb
County, MI. Served as office manager, training new staff: performed client
intake, managed caseload of over 1 00 clients, conducted group workshops, etc.
Financial Aid Director/Campus Director at Sawyer School of Business,
Centerline, MI. This campus was independently owned with approximately 300
students in attendance. I began as Financial Aid Director and was responsible
for financial aid packaging, keeping abrea<;t of state and federal rules and
regulations, audits and representing Sawyer to outside agencies. Promoted to
Campus Director where I was responsible for all facets of educational
management.
Executive Vice President of Financial Aid Services and Compliance at Ross
Education, LLC. I originally started at Ross as Corporate Director of Financial
Aid and was later promoted to my cunent position/title. I am responsible for
managing all Title IV activities at Ross and ensUling that compliance standards
are met. We have 14 campuses in the Midwest region with 30 t Financial Aid
Coordinators corporate wide and an annual enrollment of approximately 3,500
students. J oversee the hiring and training of new Financial Aid Coordinators,
represent Ross during audits, state and federal program reviews, develop and
update our Financial Aid Policies and Procedures Manual and follow-up on
campus activity to ensure and procedures are being met. Assist in
training of new Campus Directors and Assistant Directors to enhance their
knowledge of Ross procedures and Title IV responsibilities. I attend various
workshops/conferences and review/analyze federal regulations to ensure Ross
maintains tbe rughest compliance standards possible.
Madzelan Dan
From:
Sent:
To:
Subject:
Kantrowitz, Mark [Mark.Kantrowitz@Monster.com)
Tuesday, August 17, 201 0 11:42 AM
Kvaal, James; Madzelan, Dan .
AP encouraging fami lies to consider Loan Repayment Rates for evaluating colleges
The Associated Press is already pointing families at the loan repayment rates to help them evaluate colleges. See the
. highlighted paragraph below.
Mark
URL: http://www.google . com/hostednews/ap/article/AlegM5ilsf9RVs4hveNHnTUVZiz OGGUsQD9HKREM81
http://topics.ocregister.com/article/e3Xi26I37b3Qz
Pub Date: 8/16/le
Is that for-profit certificate worth the debt?
By CANDICE CHOI (AP) - 13 hours ago
NEW YORK - One sign a degree from a for - profit school may not be worth
pursuing? You won't be able to repay your student loans after
graduating.
New data from the Department of Education reveals low repayment rates
among recent graduates of for- profit schools, which usually offer
certificate programs or degrees in fields such as criminal justice or
health care. The numbers were released as part of the Obama
administration's proposed rule to cut off federal aid to schools that
don't achieve certain repayment rates.
The Washington Post Co., which owns the Kaplan school chain;
Corinthian Coll eges I nc . ; ITT Educational Services Inc . ; and Strayer
Education Inc. had repayment rates below 35 percent .
Recent undercover tests by the Government Accountability Office also
found some schools used deceptive recruiting tactics and encouraged
applicants to falsify financial aid forms.
The findings are troubling because students at these schools tend to
be low-income and in search of better-paying jobs; the vast majority
have household incomes of less then $Se,eee. Most work full time while
attending school .
Here how to size up whether it's worth taking on debt to attend one of
these schools.
Be Wary of the Hard Sell
For-profit schools know t hat most of their prospective students will
be able to tap into federal f i nancial aid and pay_ tuition. As such,
the marketing efforts can get aggressive.
~ B e very suspicious of high pressure sales t actics and an
unwillingness to share basic info about cost," said Lauren Asher,
president of The Institute for College Access & Success.
1
Case in point: my search on Everest University Online's website
yielded no answers on tuition costs. Yet after filling out an online
application form for more program information, my phone rang within
minutes.
An eager representative ignored my question about tuition> and
insisted that we had to work through a few questions first. I had to
firmly repeat the questions several times before a second
representative gave me an answer: $404 per credit. It takes 96
credits> or $39,000> to complete the paralegal program I inquired
about .
A representative of Corinthian Colleges, which operates the school,
did not immediately respond to inquiries about why tuition costs are
not listed on the site.
Comparison Shop
Prospective students often learn about for-profit schools through a TV
ad. After calling a school to inquire about classes> they often sign
up without shopping around for better options, said Mark Kantrowitz,
publisher of FinAid . org.
That's because these schools tend to do a lot of handholding through
the application process. For example, the vast majority of students at
for-profit schools have comp1eted the form for federal financial aid,
compared to less than half of students at community colleges
1
according to FinAid.org.
So if someone makes an impulse decision to become a chef, signing up
for classes would be very easy .
. "It's a very short step," Kantrowitz said.
Community colleges aren't nearly as solicitous. They're also not as
expensive. The majority of students at community colleges have no
student loans upon graduation. Of those that do, the average debt is
$10,000. By comparison
1
nearly all graduates of for-profit schools
have student loans; the average debt is $17,000.
What's more, almost a quarter of graduates of for-profit schools owed
at least $40,800 in student loans, according to The Project on Student
Debt.
Check Public Information
The release of national rankings for the quality of traditional
four-year schools is an annual event. But there's no similar resource
for those looking to attend a for-profit school.
"In this climate, the burden is really on consumers to sift through
inadequate information," Asher said.
Still
1
there are ways to do some homework on a particular school.
2
If you're applying for a certificate or degree in a particular fieldJ
find out the licensing requirements in your state. Contact the state
agency in charge of licensing and ask whether the school and program
you're considering are accredited.
You can also look up for-profit schools on the Better Business
Bureau's website at http://www.bbb.org. Companies are assigned grades
based on the number of customer complaints and they. work to resolve
them.
Finally} try talking to employers or professionals in the field you're
pursuing. Ask about their criteria for hiring} and check whether the
school you're considering addresses those skills in their marketing
materials.
Mark Kantrowitz
Publisher of Fastweb.com and FinAid.org
PO Box 2056, Cranberry Township, PA 16066-1056
1-724-538-4500 11-724-538-4502 fax 1 mkant@fastweb.com
Fastweb I FinAid I College Gold I EduPASS I Monster

NOTICE:
This message, and any attachments, contain{s) infonnation that may be confidential or protected by privilege from
disclosure and is intended only for the individual or entity named above. No one else may disclose, copy, distribute or
use the contents of this message for any purpose. Its unauthorized use, dissemination or duplication is strictly prohibited
and may be unlawful. If you receive this message in error or you otherwise are not an authorized recipient, please
immediately delete the message and any attachments and notify the sender.
3
Madzelan, Dan
From:
Sent:
To:
Cc:
Subject:
Attachments:
Pauline Abernathy {pabernathy@ticas.org]
Tuesday, April13, 2010 9:40AM
Madzelan, Dan; Arsenault, Leigh; Shireman, Bob; Manheimer, Ann
Lauren Asher
Industry take on what was submitted to OMS on Friday on GE
ITT and OV Upgrade.pdf
Have you seen this? The consumer, student and workforce stakeholders would appreciate receiving
the same information as industry where possible and appropriate. Thank you. Pauline
ITT and DV Upgrade.pdf
Pauline Abernathy
Vice President
The Institute for College Access & Success
www.ticas.org and www.projectonstudentdebt.org
We moved! TICAS' main number is now 510.318.7900. My direct line is 510.318.7903.
1
CREDIT
Research Analy81&
Kelly Flynn, CFA
617 556 5752
kelly.ftynn@Cfeditsulsso.com
Patrick Elgrably, CFA
312 750 2974
patrlck.elgrably@ creditsuisse.com
Adam Shatek, CPA
312 750 3317
adam.stlatek@cred'rtsuisse.com
13 April 201 0
Americas/United States
Equity Research
Education Services (Business & Professional Services) I MARKET WEIGHT
Education Services
UPGRADE RATING . . . . ' .' . . .': : . . .
Upgrade DeVry and ITI On New Gainful
Employment Insights
We are upgrading ITT (ticker ESI). and DeVry (ticker DV) to Outperfonn from
Neutral due to new insights on the DOE's Gainful Employment stance. We
are raising our ITI price target to $135 from $105 and our DeVry price target to
$75 from $55 as DCF discount rate reductions reflect perceived decreased
Gainful Employment risks. We detail our DCF analysis assumptions for DV and
ESI below. We are restricted on EDMC. All other Neutral ratings are
unchanged (see next page for details).
We believe DOE's latest GE proposal leaves 8o/J10 year parameters
unchanged. Following discussions with industry contacts last night, we believe
that the Department of Education on Friday submitted Its Gainful Employment
and other pr'Ogram integrity proposed language to the Office Of Management
and Budget (the OMB) for vetting. We believe the goal is to publish the Notice of
Proposed Rule Making by May 15, or June 1 at the latest, and to publish final
regulations, by November 1. We also believe the 8% debt-service-to-income
ratio and 1 0 percent repayment period inputs remain unchanged as of now and
that the "90% of graduates in repayment" exemption remains unchanged.
But, we believe DOE added a 50% completion exemption. Based on our
discussions, we believe one big change in the new draft proposal is the add back
of the "exemption" (that was removed In January after appearing In the initial
draft language) for schools with certain student completion and job placement
rates. We believe the completion rate cut off is now a more generous 50%
(versus 70% included in initial draft) and the placement rate cut-off Is 70% (same
as in initial draft language; we believe most companies with placement rates
have rates above 70%).
We think 50% completion rate exemption would help ESI, DV, & EDMC
regulatory positioning the most. We believe the 50% exemption, although not
eliminating Gainful Employment risks, would most significantly improve the
positioning for companies with placement rates at or close to 50% that would,
without an exemption, have potentially earnings prospects decimated by a
new Gainful Employment regulation; DeVry, ITT and Education Management fit
this profile. Although none of these companies release completion rates, the
DOE data (which likely understates actual completion rates because It only
includes fi rst-time, full time students and not transfers or part time students) is
close enough to 50% to make us think these companies likely have 50%
completion rates or could achieve them in coming years without decimating
earnings prospects; most recent DOE completion rate data points are -39% for
ESI (ESI also said on recent call that 60% make It through first year), - 31% for
DV and -41% for EDMC's Art Institute (-56% of company's students). Further,
we believe ESI's valuation, and DeVry's to a lesser extent, have been among
those most negatively impacted by Gainful Employment concerns.
DOE flexibi lity may also fuel more investor optimism. We also acknowledge
that the 50% completion rate change, if In fact it occurs, could fuel investor
optimism that the DOE could ease Its stance further in coming months in
response to more pressure that may arise after the NPRM is posted.
DISCLOSURE APPENDIX CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATlONS, INFORMATION ON
TRADE ALERTS, ANALYST MODEL PORTFOLIOS AND THE STATUS OF NON-U.S ANALYSTS. U.S. Disclosure:
Credit Suisse does and to do business with companies covered in its research reports. As a result, investors should be
aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this
report as only a single factor in making their investment decision.

Sector Implications/Thesis Update
Countercyclicality and other sector regulatory concerns remain; other ratings
unchanged. We continue to worry that countercyclicality will hurt growth In coming
quarters and we believe that, even if the Gainful Employment proposal is eased somewhat,
the broader regulatory landscape is likely to remain challenging for the foreseeable future;
we expect the DOE to tighten the Incentive Compensation rule and to generally seek to
crack down on schools' recruiting underqualifled, under-informed students. Further, our
thesis on other companies under coverage is not changed significantly by our changing
view on Gainful Employment. Our concerns about APE!, APOL, COCO, LINC and UTI are
largely unrelated to Gainful Employment. CPtA, STRA and LOPE trade at premium
valuations already, and we are not confident they would make the cut on the 50%
completion or graduation loan repayment Gainful Employment exemptions. For BPI and
CECO, although shares look cheap, we are also not confident Gainful Employment
exemptions apply, and we believe these companies also face other significant regulatory
risks. We are restricted on EDMC.
Valuation
Our price target changes largely reflect decreases in our discount rate used in the DCF
analyses due to lower perceived Gainful Employment risks, in our view.
Our $135 ESI price t arget is derived from our DCF analysis. We summarize our DCF
assumptions below:
2010-2020 revenue Compound Annual Growth Rate (CAGR) of 4.9%.
2009 operating margin of 37.9% going to 39.2% by 2020.
A Weighted Average Cost of Capital <;NACC) of 16%.
Terminal free cash flow growth of 3%.
Working capital changes and capital expenditures that remain in-line with historical
ratios.
Our $75 DV price target is derived from our DCF analysis. We summartze our DCF
assumptions below:
2019-2020 revenue Compound Annual Growth Rate (CAGR) of 10.7%.
2009 operating margin of 19.7% going to 20.2% by 2020.
A Weighted Average Cost of Capital <;NACC) of 14%.
Terminal free cash flow growth of 3%.
Working capital changes and capital expenditures that remain in-line with historical
ratios.
I Price
Price Rating Tllfget Price
Year I
EPS EPS FY1E
Company ccy 09 Apr 10 Prev. Cur. Prev. Cur. End Ccy Prev. Cur.
0
' --
.:IOO!l:.=_.
- .

--
.
OT Educational Services (ESJj' US$ 108.78 N OM 105.00 135.00 Dcc09 US$
-
10.50
13 Aprll2.010
EPSFV2.E EPSFVSE
Prev. CUr. Prev. cur.

. - -
. .
-
11.69
-
12.63
'0- Ourpetf(J(m, N - Ncvl((l}, U- Underperlorm, R- RestriCted
Source: Company tMra, Cffldll Suisse estimates.
- (VJ- Srock ronskiered volatile (see OISc/osvfll Append1x).
Education Services 2
13 Apri120t0
Companies Mentioned (Price as of 09 Apr 10)
American Public Education, Inc. (APEI, $46.03, NEUTRAL, TP $41.00)
Apollo Group lnc. (APOL, $63.14, NEUTRAL M. TP $65.00)
Bridgepoint Education (BPI, $23.60, NEUTRAL [V], TP $18.00)
Capella Education Company (CPLA, $90.90, NEUTRAL, TP $72.00)
Career Education Corp. (CECO, $31.70, NEUTRAL [VJ, TP $28.00)
Corinthian Colleges, Inc. (COCO, $17.51, NEUTRAL [V], TP $14.00)
DeVry Inc. (DV, $65.06, OUTPERFORM, TP $75.00)
Education Management Corporation (EDMC, $22.60, RESTRICTED (V))
Grand Canyon Education (LOPE, $25.68, NEUTRAL, TP $21.00)
ITT Educational Services, Inc. (ESI, $108.78, OUTPERFORM M. TP $135.00)
Lincoln Educational Services (LING, $25.70, NEUTRAL [V], TP $21.00)
Strayer Education, Inc. (STRA, $238.70, NEUTRAL, TP $195.00)
Universal Technical Institute (UTI, $23.05, NEUTRAL (V], TP $19.00)
Disclosure Appendix
Important Global Disclosures
I, Keny Flynn, CFA, certify that (1) lhe views expressed in this report accurately reflect my personal views about all of the subject comP.anies and
securities and (2} no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in
this report.
See the Companies Mentioned section for full company names.
3Year Pri ce, Target Price and Rating Change History Chart for DV
DV Closing Target
Date
4127/07
6/18/07
2121/08
6120108
7130/08
1018/08
1215/08
4121109
6/14/09
10128/09
1127/10
Price Price lnltlatlon/
(US$) (US$) Rating Assumption
34.52 29
35.22
43.86
58.54
56.75
45.19
58.37
42.12
51 .89
56.13
63.32
65
52
53
44
50
52
55
NC
0 X
N
A
N
67 65 . }"\
I
57 ... . ;v,, .. ..
:: - - -- y>w , .. -- --
42 1 - _ --- .... .
37 -- JV - .. ' ..... ------------y-- ......... ... .
82 -----------------------
21-Feb<lS

Pll(a 0 rhlion'As...-r;:iial Re!irQ
3-Year Price, Target Price and Rating Change History Chart for ESI
ESI Closing Target 16s ___ ... ------------------1Gs. -- ---------------------
Date
4127107
6/18/07
2121/08
2125108
6120108
10124/08
2/2/09
4/21/09
Price Price lnltlatlon/
(US$) (US$) Rating Assumption
97.9 110
113.52
60.17
54.02
88.4
74.1
129.43
101.31
65
61
81
84
165
105
NC
N
0
N
X
145 ------0 0. ----------- ----00 - ---------------- ----------
The analyst(s) responsible for preparing this research report received compensation that is based upon var1ous factors including GredH Suisse's total
revenues, a portion of which are generated by Credit Suisse's investment banking actlvltles.
Analysts' stock ratings are defined as follows:
Outperform (0): The stock's total return is expected to outperform the relevant benchmark by at least 10-15% (or more, depending on perceived
risk} over the next 12 months.
Neutral (N}: The stock's total return Is expected to be in line with the relevant benchmark* {range of 10-15%} over the next 12 months.
Educalion services 3
13 Aprll2010
U nderperfonn (U): The stock's total return Is expected to underperform the relevant benchmark* by 10-15% or more over the next 12 months.
Relevant benchmark by region: As of 2f!h May 2009, Australia, New U.S. and Canadian ratings are based on (1) a stock's absolute total
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Price Target: (12 months) for (DV)
Method: Our $75 target price for DV is derived from our Discounted Cash Row (DCF)-based model. Our target price is on the following
assumptions: 2010-20 revenue CAGR (compound annual growth rate) of 10.7%, 2010 operating margin of 19.-r'k going to 20.3o/o-by 2020, a WACC
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hurt restJits if IT spending declines, an economic recovery which oould Ctlr1 countercyclical post-secondary education companies, changes in the
regulatory and accreditory environments, and the Impact of a downturn in the student lending environment which could threaten the magnitude of
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Price Target: (12 months) for (ESI)
Method: Our $135 target price for ESI is derived from our Discounted Cash Flow (DCF)-based model. Our base case DCF has the following
assumplions: 2009-19 revenue CAGR of 4.9%, operating margins going from 37.9% to 39.2% from 201020, a WACC of 16%, and terminal free
cash flow growth of 3%.
Risks: The following factors may affect our projected results for ESI and our $135 price target: its heavy reliance on IT-related education which could
hurt results when IT spending declines, an economic recovery which has the potential to negatively impact countercyclical post-secondary education
services companies, Impact of greater regulatory and accredHing agency requirements and the recent downturn in the student lending environment,
which impacts the magnHude of federal loans provided to liT students.
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Services 4
13 April2010
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ITT and OV Upgrade. doc
The Honorable Anthony Wilder Miller
Deputy Secretary
400 Maryland Avenue, SW
Dear Secretary Miller:
Aprill2, 2010
Thank you for soliciting input on the Department of Education's (ED) proposed Gainful
Employment (GE) regulation at our recent meetings. We are writing on behalf of our
'institutions (Kaplan, DeVry, and Education Management Corporation), which together offer
opportunities for over three hundred thousand students to attend college annually. We are
deeply committed to educating and preparing our students for the new jobs of the 21st century,
and to ensuring that our students receive high-quality, results-oriented education, without being
burdened by excessive debt
We understand and support what you are trying to accomplish. We believe that together we
can find a solution that addresses student debt and simultaneously enables the Administration
to achieve its goals of expanding access to quality higher education, particularly among non-
traditional students. We believe both sets of goals are achievable.
We thought it would be most helpful to (a) describe the contribution of the private sector in
achieving the Administration s goats, (b) explain the impact of the latest GE proposal made
public, and (c) offer a constructive alternative to this GE proposal that would address the ED's
concerns without restricting students' access to college opportunities.
QuaHty Private Sector Colleges Play A Critical Role in Achieving Administration Goals
President Obama has said he wants America to have the highest percentage of college
graduates in the world by 2020. This goal will require educatingmillions of additional college
students at a cost of many billions of dollars and cannot be met without the participation of
quality private sector colleges like ours. The private sector currently educates some 2. 7 million
students a year and has the resources to help alleviate the financial burden of achieving the
Administration's goal. Moreover, the private sector attracts more non-traditional students- a
critical requirement to increasing the number of college graduates. .
Aprill2, 2010
Page 2
Not only do private sector colleges attract more non-traditional students, but we also help them
graduate and achieve gainful employment at significantly higher rates. A recent report by The
Parthenon Group, using ED data for public and private two-year and less institutions, shows
that students at private sector colleges graduate at rates roughly 50 percent higher than public
schools. The study further shows that private sector college students achieve higher percentage
wage increases (54% vs. 36%) after completing their education.
1
The Current GE Proposal Would Dramatically Limit Students' College Opportunities
Kaplan, DeVry, and EDMC share the ED's goal of ensuring that students receive a quality
education and enter programs with a full understanding of the costs, without incurring
excessive debt. We would support regulation that appropriately addresses over-borrowing
while enabling high-quality institutions to continue their good work of building capacity and
innovation in higher education.
The GE criteria proposed by the ED at the end of the most recent Negotiated Rulemaking
session attempt to define "gainful employment" by establishing an 8 percent debt-service-to-
income threshold based on median student debt for college graduates." Income would be based
either on the Bureau of Labor Statistics (BLS) 25th percentile wage data, or actual earnings of
college graduates. Loan payments would be based on a H)-year repayment plan.
This proposal as written would have a number of unintended consequences. A recent study by
Mark Kantrowitz, a respected independent authority on fmancial aid, concludes:
"The 8% debt-service-to-income threshold is so strict that it would preclude for-profit
colleges from offering Bachelor's degree programs. It would also eliminate many
Associate 's degree programs at for-profit colleges. Even non-rroflt colleges would find
it difficult to satisfy this standard if they were subjected to it. "
Kantrowitz further found that:
"The proposed use of Bureau of Labor Statistics wage data ... will disproportionately
harm minority and female students. "
3
Kantrowitz also points out that the proposed GE rule tasks institutions with a job without
providing the tools necessary to complete the job:
1
Parthenon Perspectives on Private Sector Post-Secondary Schools, February 24,2010, by Robert Lytle, Roger
Brinner and Chris Ross; p. 8; Souroe: NCES BPS 2004-2006.
2
What is Gainful Employment? What Is Affordable Debt?, Mark Kantrowitz, March 1, 2010, p. 1.
3
Ibid.
......... ...... .... .. . ..... .. ...... ... .. ..... .. . .. ..
April12, 2010
Page3
"The debt-service-to-income threshold effectively establishes bo"owing limits based on
field of study and degree programs, but does not give colleges the controls needed to
enforce these limits. Current sub-regulatory guidance precludes colleges from
establishing lower loan limits. "
4
Another study conducted by Charles River Associates reaches similar conclusions, estimating
that 18 percent of private sector programs will be disqualified from participation in Title IV
programs and that this would impact one-third of private sector students. This means that
hundreds of thousands of entering students would be displaced annually from private sector
colleges.s By 2020, approximately 5.4 million students who otherwise would be on track to
attend college would be denied access by the proposed GE.regulation.
6
Finally, the GE proposal would result in significant job Joss among the hundreds of thousands
of faculty members, administrators, and staff who work in the private post-secondary sector,
and in non-degree programs in public sector and independent schools as well.
Students Will Be Protected by Transparent Cost and Debt Information.
We remain concerned that defining "gainful employment" by student debt levels is beyond
Congressional intent. We believe that the necessary data to both define the problem and
support a sufficient and informed policy have not yet been compiled and analyzed. We are
certain there are numerous consequences of the GE proposal that are not currently
contemplated by the ED.
For these reasons, we propose that student debt concerns be addressed by mandating that all
institutions disclose to students the information students need to make informed decisions prior
to taking on student debt, as well as warn students about programs that fail to meet a minimum
debt-service-to-income ratio under a new student consumer "lemon law." Prospective students
who receive sufficient information at the time of enrollment are in the best position to make an
informed decision regarding whether or not to attend an institution. We believe the infonnation
students need to make decisions concerning the appropriate amount of debt to incur for a given
program should be provided in a disclosure form to students.
The form would include: (a) the eost of the program of study, (b) a reasonable projection of
potential earnings in the students' chosen field upon graduation and throughout the life of their
employment in that field, (c) a reasonable estimate of the debt students typically incur to
complete their program, and (d) students' repayment plan options. A proposed disclosure form
4
lbid. p. 2.
~ R e p o r t on Gainful Employment, Charles Rivers Associates, April2, 2010, prepared by Jonathan Guryan. PhD,
and Matthew Thompson, PhD, p. 38.
6
Executive Summary to Report on Gainful Employment, Charles Rivers Associates, April2, 2010, prepared by
Jonathan Guryan, PhD, and Matthew Thompson, PhD, p. I.
............................ _ ... , .. .
Apri112, 2010
Page4
is attached as Appendix 1. The accuracy of the information contained in the disclosure form
would be ensured by the misrepresentation prohibition that received tentative agreement at the
last Negotiated Rulemaking session. The proposed misrepresentation prohibition provides,
among other things, that:
If the Secretary determines an institution has engaged in substantial misrepresentation,
the Secretary may revoke or limit that institution's participation in the Title N
programs.
Misrepresentation is defined as any false, erroneous or misleading statement an
institution makes directly or indirectly to a student, prospective student, or any member
of the public, an accrediting agency, State agency, or the Secretary.
A misleading statement includes any statement that has the capacity, likelihood, or
tendency to deceive or confuse. The omission of information may also be interpreted as
a misrepresentation.
In addition to this disclosure, schools would be required to warn students prior to enrollment of
any program that fails to meet a debt-service-to-income ratio test The debt-service-to-income
ratio would be based on the approach recently proposed by the ED, with appropriate
modifications discussed below. Institutions offering programs that fail the test would be
required to warn students in appropriate marketing materials, and in a written disclosure signed
by the student prior to enrollment, that (a) the program has failed a debt-service-to-income-
ratio test, and (b) student borrowers enrolling in the program should expect to have difficulty
meeting their repayment obligations upon graduation.
To ensure that the debt-service-to-income ratio is appropriately directed at identifying "outlier"
programs we propose that the ratio currently contained in the GE proposal be adjusted as
follows:
Formula applied to non-degree programs only.
)o> Degree programs confer lifetime benefits that don't correlate easily to
specific job codes, such as higher lifetime earnings, higher income growth
rates, greater employability, better career advancement and job stability.
7
In
addition, degree holders tend to change jobs and pursue careers seemingly
unrelated to the degrees, but using the skills they developed in college.
Including degrees in t h ~ ratio definition would dramatically undervalue these
programs.
> By applying the formula only to non-degree programs, both private and
public institutions are impacted in the same manner.
A debt-service-to-income threshold of 15 percent, based on median student debt for
college graduates, and assuming a current unsubsidized Stafford loan interest rate of
6.8% to calculate the arinual repayment amount.
'Kantrowitz, pp. 20-21.
Aprill2, 2010
Page5
)> The 15 percent debtNservice-to-income threshold is referenced in the
Kantrowitz study as a well as a recent study published by the College
Board,
8
and is within the range generally used by personal financial
counseling professionals.
Income based either on the BLS 50th percentile wage data, or actual earnings of
graduates if the latter are higher than the BLS 50th percentile.
)> The 50th percentile of the BLS wage data more accurately reflects the long-
tenn potential earnings of a graduate, Moreover, there is no reason to
assume that non-degree program graduates, regardless of their backgrounds,
would be unable to achieve average earnings.
Loan payments based on a 20-year repayment plan.
)> The 20-year loan repayment plari is also referenced in the Kantrowitz study
and supported by the fact that borrowers are permitted to, and do, choose
repayment plans covering a period of up to 25 years.
Exclude prior school debt from the calculation and provide institutions the
regulatory ability to control student borrowing, thereby enabling compliance with
ratio and 90/10 requirements.
)> Absent the regulatory ability to control student borrowing, the GE
calculation should be based only on direct cost of education.
Eliminate the ED pre-approval requirement for new programs.
> State regulatory bodies and accrediting agencies already require approval of
all new programs.
We also recommend that the ED consider alternative routes to compliance with the debt-
service-to-income ratio test, specifically by establishing: (1) target graduate cohort default rates
(GCDRs) (e.g., 12.5% GCDR on a two-year calculation; 15% on a three-year calculation), (2)
targets for actual post-graduation salaries that include a multiplier of l.Sx to recognize the fact
that lifotime earnings are significantly higher than BLS rates, and (3) thresholds for post-
graduate employment rates.
We believe that the proposal contained in this letter provides an innovative and effective way to
protect students from institutions that over promise and under deliver to students, thus leaving
students with too much debt and not enough return on investment.
8
How Much Debt Is Too Much, Sandy Baum and Saul Schwartz, The College Board, 2006, p. 12.
April12,2010
Page6
We appreciate the opportunity to provide thls input and we look foiWard to sitting down with
you soon to discuss these matters further.
Yours Truly,
Anchew S. Rosen
Chairman and CEO, Kaplan, Inc.
Daniel Hamburger
President and CEO, DeVry Inc.
Todd S. Nelson
CEO, Education Ma:nagement Corporation
Enclosures
ce: The Honorable Martha J. Kanter
Mr. Robert Shireman
. APPENDIX 1
INSTITUTIONAL DISCLOSURES RELATED TO EXPECTED EARNINGS AND DEBT
You have requested information about our Accounting program
Program Level: 0 Associates [8lsachelors 0Masters Ocertificate/Diploma
Here are some important disclosures for the award year ending June 30, 2010
4,
''1\"
During the year ended June 30, 2009 , 75.8 % of in this program graduated or
continue to be actively enrolled at the institution while 2 %,feased enrollment.
Of the students who graduated, 88.6 % study, or a related field,
within six months of graduation with an average salary of S 46,300 per year.
This academic program corresponds to the following , cupational (SOC)
codes as reported by the Bureau of Statistics .,.,,, : 11 . The annual
salaries for SOC codes at the S 45.900 and $ 7a,210 ,
respectively. For information related these occupations, please visit
http:/ "'! t . . "'\. .
The cost of thls a student an,with no transfer credits is
$ . The ave .. concluded three years was
4.6 % \, .-.,
. .
The institution and who graduated from this .
program . ard $ amount includes$ 30.900 of federal
student to, debt and$ ' n debt. This does not include any debt incurred
while instit . n. of graduates obtained private student loans
from thtrd parfMs.- _ . . :i- .

If this average debrtps 100% federal loans with an average interest rate of 6.8% and
you chose to repay y !f lfc'lndard repayment term, the annual total of 12 monthly
payments would be $ 4 . ': If you chose to pay using a graduated repayment plan (over 10
years'), the total of your first ! - monthly payments would be $ 3,138.60 . For more information
concerning repayment options on federal loans, please visit
https://studentloans.gov/myDirectloan/index.action.
The latest official Cohort Default Rate (FY07} from the US Department of Education indicates that
1.7 % of graduates in this program defaulted on their federal loans.
PLEASE NOTE THAT YOUR ACTUAL EXPERIENCE MAY BE DIFFERENT THAN THE AVERAGES AND
STATISTICS PRESENTED ABOVE.
Madzelan, Dan
From:
Sent:
To:
Subject:
Nancy Coolidge [Nancy.Coolidge@ucop.edu]
Wednesday, June 23, 2010 8:06 PM
carolynh
Over 4 Billion in Title IV aid at Phoenix alone ...
I ~ o n d e r how much more federal money In the form of Post 9/11 VA money goes to students paying for proprietary
school enrollments. A lot of veterans are targeted for recruitment by Phoenix, Devry, Kaplan, Capella, Strayer, American
I ntercontinental, Grand Canyon, Argosy, etc.
" ... critics have said for-profit colleges [have an incentive to fill seats with students who will not succeed academically] consuming an
ever-rising volume of federal student-aid dollars and chuming out students with heavy debts and useless degrees."
htto:/khronlcle.com/article/for-Profit-Sector-Assails/66027/?sjd==pm&utm source:::pm&utm medium=en
Top Fifty Colleges by To1al Title IV Student. Aid (Total by OPE ID)
1
I
Madzelan, Dan
From: Kvaal, James
Sent:
To:
Thursday, June 24, 2010 7:16PM
Madzelan, Dan
Subject: FW: Harkin's report
(b)(5)
-----Original Message-----
From: Adams, Kristen
Sent: Thursday, June 24, 2010 3:27 PM
To: Yuan, Georgia; Wanner, Sarah; Wolff, Russell; Woodward, Jennifer; Shireman, Bob; Kvaal,
James
Cc: Jenkins, Harold; Gomez, Gabriella
Subject: RE: Harkin's report
(b)(5)
Thanks,
Kristen
-----Original Message-----
From: Yuan, Georgia
1
Sent: Thursday, June 24, 2010 3:22 PM
To: Wanner, Sarah; Wolff, Russell; Woodward, Jennifer; Shireman, Bob; Kvaal, James
Cc: Jenkins, Harold; Gomez, Gabriella; Adams, Kristen
Subject: Harkin's report
Hi everyone
Here's the url for the report that Senator Harkin read from today with the charts he showed.
http://harkin.senate.gov/documents/pdf/4c23515814dca.pdf
We should
l(b)(5)
(b)(5)
Georgia
look at the following issuel ll' liSl
Georgia Yuan
Deputy General Counsel
Postsecondary and Regulatory Service
LBJ 6E341_
202- 401-6399
2
Madzelan, Dan
From:
Sent:
To:
Subject:
Pelesh, Mark [MPelesh@cci.edu]
Monday, July 06, 2009 11 :28 AM
Madzelan, Dan
New Corinthian CEO
On July 1
1
Peter Waller became our new CEO after serving three years as our President and
COO. That day, he distributed a message internally to our employees which described the
themes and goals he wants us to pursue as an organization.
I thought you would find it inter esting to get this inside look at Corinthian for \llhat it
says about who we are and why we do what we do. You can view the message by clicking on the
link below. It will just take a few minutes of your time to watch.
Mark
"Changing Student s ' Lives"
http://www. corinthiancolleges.com/message-from- ceo/
1
Madzelan, Dan
From:
Sent:
To:
Subject:
Smith, Kathleen
Wednesday, March 17, 2010 8:05AM
Picoult, Francine; Madzelan, Dan; Bergeron, David
RE: HEADS UP - DESIRE FOR DISCUSSION ASAP
David can't do this today unfortunately ... he is back to back until after 5:30 so can we look at another day ... He could do
Friday early say 8:30 or 9 or Monday afternoon?
From: Picoult, Frandne
Sent: Wednesday, March 17, 2010 7:00AM
To: Madzelan, Dan; Bergeron, David; Smith, Kathleen
Subject: RE: HEADS UP - DESIRE FOR DISCUSSION ASAP

The best time this afternoon for Danny to participate in a conference call would be 3:30-4. Alternatively, 5:30.
Francine
From: Madzelan, Dan
Sent: Tuesday, March 16, 2010 5:24 PM
To: tom.netting@akerman.com; Bergeron, David
Cc: Smith, Kathleen; Picoult, Francine
I was reacting to Pelesh. I wasn't sure if you were channeling him. (You never know. Or maybe I should.)
For tomorrow afternoon, you can contact Francine (cc'd here). I don't know about David's calendar. Kathleen?
From: tom.nettlng@akerman.com [mailto:tom.netting@akerman.com]
Sent: Tuesday, March 16, 2010 5:17PM
. To: Madzelan, Dan; Bergeron, David
Cc: Smith, Kathleen
:0)
I never once used the word "negotiation" so I'm confused as to why you repeat it times. It seems like
other portions of the proprietary sector are at the very least having conversations to discuss ideas, and I guess I am
therefore seeking your guidance on whether or not other parties should be seeking to have these types of simi lar
conversations with Mr. Shireman and individuals like yourselves. to share their ideas as well - so as not to let a small
group of prodominately {dare I say excl usively) degree granting institutions be the only recommendations that Bob and the
rest of you all hear.
Again, and as always, I am seeking your guidance and as such would very much like to connect with you (and others if
necessary) tomorrow afternoon.
Is there a time and a number that l should use or do you want to call me? I don't see the need for a visit, but based upon
our conversation, may well be requesting your assistance in helping arrange one or two for the clients.
THANK YOU!
T
1
From: Madzelan, Dan [mailto:Dan.Madzelan@ed.gov]
Sent: Tuesday, March 16, 2010 4:51 PM
To: Netting, Tom (Cnslt-DC); Bergeron, David
Cc: Smith, Kathleen
Tom ...
First,there's no "negotiation."
Second, there's no "negotiation."
As y'all well know, y'all had several such opportunities earlier this year. This meeting is in response to our oft-repeated
invitation to the community to share their ideas around how we can approach a meaningful implementation of the
statutory language whil e keeping burden to a minimum.
I'm pretty much in the office tomorrow (Wed) afternoon.
And finally, there's no "negotiation."
Dan
From: tom.nettlng@akerman.com [mall to :tom.netting@akerman .com]
Sent: Monday, March 15, 2010 12:28 PM
To: Madzelan, Dan; Bergeron, David
Cc: Smith, Kathleen
Subject: HEADS UP - DESIRE FOR DISCUSSION ASAP
Dan & David,
Can I please have the opportunity for a call with one or more of you at your earliest convenience - preferably this week to
discuss this and a couple of other issues as well.
I know that you all are all busy with SAFRA moving this week, to say nothing of the development within ED of the Program
Integrity and Foreign Institutions NPRMs, which plays into the infqrmation below and the reason for the request and
urgency.
Also playing into my personal level of urgency is the fact that I will be going under the knife next Wednesday to have two
ruptured discs removed from my neck and would very much like to tie up as much as possible before hand ...
Thanks you in advance for your consideration and hopefully your assistance.
Tom
CONFIDENTIALITY NOTE. The information contained in this transmission may be privileged and confidential information, and is intended only for the use of the individaal or
entity named above. If the reader of tbis message is not the intended recipient, you are hereby notified that any dissemination, disuibution or copying ofthis communication is
2
strictly prohibited. If you nave received this transmission in error, please immediately reply to the sender that you have roccivcd this communication in error and then delete it.
Thank you.
CIRCULAR 230 NOTICE: To comply with U.S. Treasury Deparunent and IRS regulations, we are required to advise you that, unless expressly stated otherwise, any U.S. federal
tax advice contained in this transmittal, is not intended or writtcn to be usod, and caMot be used, by any person for the purpose of (i) avoiding penalties under the U.S. Internal
Revenue Code, or (ii) promoting, marketing or rocommending to another party aoy transaction or mallet addressed in this e-mail or attac:Jnll"...llt.
From: Pelesh, Mark [ mailto:MPelesh@cci.edu]
Sent: Monday, March 15, 2010 12:10 PM
To: Netting, Tom (Cnslt-DC)
Subject: Regarding our call
I am informed that, on a conference call last Friday of public companies in our sector, a "small working group" was formed
to meet and negotiate with Bob Shireman and ED on the gainful employment proposal. The working group, I am told,
consists of Tom Babel of DeVry, Tony Guida of EDMC, Becky Campoverde of Kaplan, Bob Collins of the University of
Phoenix, and perhaps a representative of a smaller, non-public company like Jeff Arthur of ECPI. The conference call was
not conducted by, or under the auspices of, CCA.
This is a self-appointed group and should not be seen as representative of the views of the career college/proprietary
sector. They have no authority to reach agreements or to bind anyone but themselves. Based upon what I know of what
they are interested in discussing, their positions may well be at odds, in significant part, from the positions of most other
institutions of higher education, whether for-profit or not.
Mark
3
Madzelan, Dan
From: Kvaal, James
Sent: Thursday, August 19, 2010 10:36 AM
To: .Kanter, Martha; Taggart, Bill; Ochoa, Eduardo; Bergeron, David; Madzelan, Dan; Gomez,
Gabriella; Finley, Steve; Yuan, Georgia
Cc: Hamilton, Justin
Subject: ABC undercover
This story is expected to run tonight
ABC News Investigates F o r ~ r o f i t Education: Recruiters at the University of Phoenix
ABC News Gets Answers for Student Who Claims She Was Duped by Online School
By CHRIS CUOMO, GERRY WAGSCHAl and LAUREN PEARLE
Aug.19,2010
Post a Comment
Ads for online schools are all over the Internet, plastered on billboards in subway cars and on television. The University
of Phoenix, with nearly 500,000 students, is the biggest for-profit college. But some former students said they were
duped into paying big bucks. and going deeply in debt by slick and misleading recruiters.
"I don't want anyone else to be sucked in," said JY!elissa Dah'nier, 30, of Noble, Ill.
The mother of three had big dreams to be an elementary school teacher, so when she saw ads for the University of
Phoenix pop-up on her computer, she e-mailed them for mor:e information. A few minutes later, Dalmier said she got a
call from one of the school's recruiters, who she said told her that enrolling in the associate's degree in education
program at the University of Phoenix would put her on the fast-track to reaching her dream.
1
"[The recruiter said] they had an agreement with Illinois State Board of Education and that as soon as I finished their
program I'd be ready to start working," she recalled.
Within 15 minut es, Dalmier was enrolled. Since she didn't have enough money to pay for tuition, she said the recruiter
helped her get federal student aid. In total, sne took out about $8,000 in federally-guaranteed student loans.
But just a few months after Dalmier started, she said she learned the horrible truth: the degree program she was
enrolled in would not qualify her to become a public school teacher upon graduation in Illinois.
" It was an outright lie. A bold faced lie/' she said.
Watch more of the undercover investigation tonight on "World News" at 6:30p.m. ET and later on "Nightline" at
11:35 p.m. ET
It's not the first time that the school, which obtains almost 90 percent of its revenues from students paying
tuition from federal aid, has come under fire for its recruiting methods.
The University of Phoenix was one of 15 for-profit schools whose aggressive recruiting practices were the subject of
hearings held by Sen. Tom Harkin, D-lowa. The Government Accountability Office sent investigators to for-profit schools
across the country and found that all of t hem were misleading potential students.
In 2004, the University of Phoenix paid nearly $10 million to the Department of Education to settle allegations that it had
violated rules about its recruiting practices. The school did not admit any wrongdoing.
"I think maybe the whole orchard is contaminated," Harkin said. "There's a systemic problem with the system itself that
needs to be addressed."
ABC News wanted to know firsthand whether what Daimler said happened to her, would happen to us, so we sent one
of our producers undercover to meet with a University of Phoenix recruiter.
Our producer told the recruiter, who was working out of an office in Houston, Texas, that he aspired to be a teacher and
planned to live in either Texas or New York. The recruiter told him to enroll in the Bachelor's of Science in Education
program, and with that degree and some student teaching, he would be set.
Producer: I just to understand clearly. I can go to University of Phoenix, do my bachelor's degree, and 100 percent
for sure I can go back to either Texas, or New York and I can sit for those exams and once I finish those exams ... l can
teach.
Recruiter: Then you can become a t eacher. Yes. That is true. What's your e-mail address?
Despite her assurances, the recruiter's claim was not true. Even with successful completion of the required certification
t esting, a from the University of Phoenix does not guarantee a teaching certificate in either of those states.
When we confronted Dr. William Pepicello, president of the University of Phoenix, about the recruiter's false promise,
he said it was "indefensible."
"It's wrong. Can we do better? Absolutely. Do we trai n our people to give that kind of misadvice? Absolutely not. And we
can do better, we wi ll do better, you know, we already have some initiatives that we talked about that we're putting in
place because at the end of the day, we have to get it right."
2
But this was not the first time that the university's recruiting practices have come under scrutiny. In December 2009,
after two former employees came forward and accused the university of violating federal financial aid regulations with
its recruiting practices, without admitting wrongdoing the school agreed to pay $67.5 million to resolve the accusations.
The two whistleblowers received $19 million in the settlement.
When asked if the 2009 settlement was a sign that "we got caught," Pepicello disagreed.
"No, I wouldn't say it's proof that we got caught. I mean, it's certainly proof that we weren't doing as well as we could.
We could do better/' he said.
The recruiter also told our undercover producer he could take out as much as $35,000 in federal financial aid to pay for
school. She also said that there might even be some money left over after tuition was paid.
Recruiter: I tell students to take out the max and whatever you don't need or you don't use then use it {for whatever].
But it's easier to take out more than you need and send back the excess versus you didn't take out enough.
Producer: What are the kinds of things though? I mean in terms of like that I could use it for? I mean, what if I
just...because you're going to have to have money to walk around.
Recruiter: They don't care. Right. They don't. They just tell you use it for educational purposes.
Producer: And they don't ... They don't what ?
Recruiter: No one follows up. No one says, What happened to this money? You received a check for $562, where did you
spend it?
Producer: It's your business.
The university president said that there was no excuse for a recruiter to push someone to borrow to the max.
'It's absolutely indefensible. It is not the way that I intend to run this university," Pepicello said.
For-Profit Universities Contributing to Financial Crisis?
Experts say recruiters who are misleading students may only be the tip of the iceberg. Students who have attended for-
profit schools are defaulting on their loans at an alarming rate, which experts say may be contributing to the next big
financial crisis.
At the University of Phoenix's headquarters, the loan repayment rate was 44 percent, according to data from 2009
provided by the Department of Education; students at their Nellis Air Force location had a repayment rate of 36 percent.
At the headquarters of Brown Mackie College, another for-profit school, the repayment rate was 27 percent. Harris
Miller, who heads the for-profit industry's lobby group, told Chris Cuomo that default rates at for profit schools are
comparable to other schools which service similar student populations.
Recruiters from for-profit schools obtained $24 billion in student loan and grant money for the 2008-2009 school year,
according to Government Accountability Office and Senate reports.
"These schools are marketing machines masquerading as universities," said Steve Eisman, a renowned hedge fund
investor who predicted the last big mortgage crisis. " I thought there would never again be an opportunity to be involved
in the short side as an industry as social destructive and morally bankrupt as the sub-prime mortgage
industry ... Unfortunately, I was wrong."
3
Though for-profits get the lion's share of their tuition from financial aid, the default rates on loans for students who
attended for profit schools are alarming. About 50 percent of the students at for-profits drop out, according to Eisman,
so schools need to keep adding new students, and have to try to recruit just about anyone-- even those most vulnerable
in society, he says.
Benson Rawlins was considered homeless last year when he met two recruiters from the University of Phoenix, who
gave three seminars at Y-Haven, a shelter for transitional men in Cleveland, Ohio, or in effect, a homeless shelter.
Rawlins doesn't have a GEO, but said the recruiters had no qualms trying to sell him an expensive associate's degree.
"It seems like it is just too much all about money," he said, "Instead of helping someone get an education."
The university told ABC News it does not tolerate recruitment at facilities like Y- Haven.
"We can assure you that anyone who participated in the recruitment of residents from homeless facilities in Cleveland
no longer works for the University," said Alex Clark, a spokesperson for the University of Phoenix.' "Any such activity is
strictly forbidden by our Code of Business Conduct and Ethics, and employees who violate this policy face disciplinary
action up to and including termination."
Harris Miller said even though the schools serve an important role by providing higher education to students who
wouldn't ordinarily get one, many schools' recruiting practices need to be changed.
Miller claimed that universities began to change even before the GAO's report on their misleading practices, including
changing how recruiters are compensated (so they do not receive bonuses or prizes for recruiting students), offering
"test drive" programs to help people figure out if higher education is for them and focusing more on consumer
protection.
When asked why for-profit universities don't return money back to those who have been misled by their solicitations,
Miller said: "There are other countries in the world like Canada which have a different system and it's something we're
going to look at."
But Miller admitted that the industry has no plan in place to pay back those who are carrying a debt from for-profit
schools.
Whatever the industry's plans for future, Oalmier said it won't help heal what happened.
"If they tell you something, investigate it before you enroll in their program. You really need to find out the truth and
how to further your passion or your dream," she said. "That way, you don't end up like me."
After ABC News' interview with Pepicello, the University of Phoenix offered Daimler a scholarship for a bachelor's degree
of her choosing. Oalmier said she is considering their proposal.
Pepicello also said he plans to change the school's recruiting practices, especially the current model of compensation,
and will be offering students a "test drive."
Click HERE to read a letter to ABC News from William Pepicello.
4
Office of the Ptesident
<1M$ hot n..ood
Dear ABC News:
Thank you for aUowine us thts opportunity w .sltamo.ur perspective Good
MorntngAmeri:Ca's vlewernnd onll11e realk!l'$,1olto'WiaSmy intel'\liewwitll Cbrl$
Cuomo.
A$1 told Mr. CllOmo, U'IW'er$lt.y ofPhoenlx has sti'Of\8 student protection measures at
and we-do not tolllnte deceptlw practices by any employee. we 11M strict and
unamblsuous in place to prospe!(tlve $Wdents art able to make a ful'ly-
iiiWrMcf detl$1on tl\e and tlli!ll' m sueeeed hen, Including tile
Incurring debt to pay for .a cohge Nl.laltlon.
It saddens and dliippoints me to now these pollcies llr& not adltered to
by o-ur 4!mployees, ttlough I want to ltress thatweU!ke Immediate act)on, to addJ'e$$.any
such vloLit!oo, up to and lnduding tennltntton nftbe emllfo:yees inlrolved Let me be
deu: even one vlolatfon ofOI.ll' studcu'lt proWe'tton polldi!S Is ooetoo emf as
of tft I m to eruurlng It does: not haptli!!n. tn faet, we
nave already undertaken a numbetof lmportmt new me;asures fv$d on s(udent
protediofl, k\dudins:
FJMnCI&I Oteracy thatllf!p SWJ:cts the facts about tinandlal aid
and hOIWmvch they need to wNch flas resulted in an
approlCimate 30pen:e:ntdecreasa tn the number of students whotke
maximum loan amount;
A. thtt@::Wetk lffllgram called Unill'e.rslty Orlffitatlpn. w2llch helps :students
wltb littJe or no oollege experfence 1.111demand w 1m It ta.l<es to Stletet d In a
like QIJI'$1 b$fort w king Qn burden of
college debt; , .
A d!sltal qll:mgnjtp!ing mkm toW iDA "tlfi! of thousands of phona
ct!li SMtrt dg. 1>etwet!n for 1my evlcleMe of
fakeormlsle.adlng Information; and
n!J!! 2i]ID!!Dill'nent _to COmjl)!etl!!y e!lm!JJate enroltme'llt targets CIS. 8 ClOmpo.nefd
of a.nd <ompen$!!dOn of our enrollmeM advtsors.
our foru I$ illnlt will always. be. serVing our stlldl!lltll, ami by
f!(!ulpplng thtm with the toors they need. to tl)ffl.pete anti thrive In a
eeolloMy'. We are extremely proud of our trU retonllo servfng st.udl!ni$. and more

the! r care:m after e;tatluatlng ftcm lOur Ulnlverslty. Comlodw tlle:se i'e!u[t$ ftom Ol.lt M
.ACAdemic Annya! Rmrt:
5
Dt.ll'inl their enro11rrteOt.. UntvmttvofPl!oomiK.stoOOnt!HOO?I!!'f!en
annual aalarv fouU iq 2008. our
bacheluf'i program mtdents t)(Jleriel'ltd :m 8.5" pareent sllbry \.mill!
our master's pwgmn studellt.i saw an average In crease ef 9.7.%;
U!!Jiversitypf Phoenlx.studtnts report than their pes-
aqpntbe Q!Sioll in each or1he ten cateaorlessurveye.d by the NatiOnal SUrvey of
StudeM
We ore il leader In !!duatlfiJZ "nontnldi!Jonar coiJm Jt.Ud!J}ts. a cro11p that
CXIMJlrises 13" of aU colleae students:. :aocnr-dii1S to the: u.s. Department of
&iuatlon; lind
M about $14000 per Uutvruitv ofeboe!J9c tyjtjop and feu in the IJ'id-
tall&e natlonaUv. t&Jrtboookand m1terial eostsam dramatically towertha11
averea:e-
We are rommitted to remaining at the forefrontofielnovation In higlter education antt
c:o\Jpled wrth the meuures 1ft arw undertaking: m e111hanoe stucU!nt J'f'Olec:tloft. weare
eonffdent University ofPIIo.enbe will vJeld even greater outcome' for our studenls.
6
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