Inside Bill Clinton's Lucrative Work With For-Profit Education CompanyAug. 23, 201603:55
Since launching her bid for president, Hillary Clinton has been a vocal critic of for-profit schools, pledging in speeches across the country to “crack down on predatory schools” and help students drowning in student loan debt.
“If they load students up with debt for programs that don’t lead to good paying jobs, students and taxpayers should not be the only ones left holding the bag,” said Clinton in a campaign speech in New Hampshire.
She has also slammed her opponent for the problems at his namesake school. Said Clinton, “[Donald Trump] is trying to scam America the way he scammed all those people at Trump University!”
But Trump isn’t the only one who has profited. Over five years, former president Bill Clinton earned $17.6 million from the world’s largest for-profit education company, Laureate Education, Inc. In his role as “honorary chancellor,” Clinton has traveled the world on Laureate’s behalf, extolling the virtues of the school.
And some two dozen former and current students at Laureate’s flagship school in the U.S. — an online, for-profit school called Walden University — told NBC News they feel victimized by the kind of practices Clinton has promised to fight. A 2015 study found Walden students had one of the highest debt loads of any school in the U.S.
“We pursued [our degrees] because we wanted to be successful and not be put in poverty,” said Sondra Beall-Davis, a current PhD candidate at Walden and a former corporate consultant, who now owes over $200,000 in student loan debt incurred during her time at Walden. “Now you’ve taken me from a successful career to poverty.”
'Here for Good'
According to tax returns released by the Clinton campaign, the Clintons earned a total $22 million from for-profit education companies. Laureate’s paychecks to Bill Clinton made up the bulk of that, with $17.6 million going to Clinton in his role as honorary chancellor from 2010 to 2015. He quit that role 12 days before Hillary Clinton announced her run for president. A spokesperson told NBC News Tuesday that his five-year contract expired at that time.
Laureate bills itself as “Here for Good” and “the biggest university network in the world,” and made about $4.3 billion in revenue last year. The bulk of Laureate’s revenues come from their international schools - the company has about 800,000 students in more than 70 schools in 30 countries. Walden University is the company’s flagship school in the United States.
While a 2012 Senate investigation of for-profit schools described an “enrollment driven culture” at Walden, it also concluded that the school was “perhaps the best of any company examined” and that its “students are faring well.” Walden is also accredited, unlike Trump University. (Trump and his attorneys deny that Trump University, now defunct, was a scam, and say all but a few students were satisfied.)
The education company and the ex-president maintain ties that go back years, with former appointees in Clinton’s administration in high positions at the company. Walden’s current President, Jonathan Kaplan, worked in Clinton’s administration, serving as special assistant to the president for economic policy. One of Walden’s colleges, the Richard W. Riley College of Education and Leadership, is named for Richard Riley, former secretary of the US Dept. of Education under Clinton and a former board member at Laureate.
Laureate’s CEO, Douglas Becker, is a longtime Democratic donor and friend to the Clintons. Laureate has donated between $1 and $5 million to the Clinton Global Initiative, and has partnered with the Clinton Global Initiative on several projects, including a commitment to the charity to offer scholarships to teachers around the world.
An aide to Bill Clinton told NBC News that the former president “engaged with students at Laureate’s campuses worldwide and advised Laureate’s leadership on social responsibility and increasing access to higher education,” and that “he was pleased to support their mission to expand access to higher education, particularly in emerging markets.”
In 2009, according to emails released by the State Department, Hillary Clinton wrote to a top aide that she wanted to add Laureate Education to the guest list for a State Department dinner on education. Describing Laureate as “the fastest growing college network in the world,” Clinton said the company was “started by Doug Becker, who Bill likes a lot.”
“It’s a for-profit model that should be represented,” Clinton added. Laureate was added to the list.
Experts say that for-profit schools have led to skyrocketing student loan debt. Today, Americans owe about $1.2 trillion in outstanding student loan debt.
“They’re disproportionately responsible for the amount of debt out there,” said Dr. Kevin Kinser, head of Penn State’s Department of Education and Policy Studies. “They are extremely reliant on student tuition as their sole source of revenue and at the same time extremely reliant on federal financial aid, in particular federal student loans.”
The Obama Administration’s efforts to curb the worst practices of the industry have resulted in new regulations and investigations of for-profit schools like ITT Tech and Corinthian College.
Josh Schwerin, spokesperson for the Clinton campaign, said, "Hillary Clinton has made it clear that all for-profit institutions should be held to the same standards and she will crack down on law-breaking for-profits by expanding support for federal regulators to enforce laws against deceptive marketing, fraud, and other illegal practices.”
In 2011, Clinton stood at a podium and told an auditorium full of eager Walden graduates about a conversation he had with Laureate’s CEO, Doug Becker. “I just asked Doug, I said ‘Have all the Laureate colleges in the United States converted to the Direct Loan program,” Clinton said, according to a transcript of the commencement address. “And he said, ‘Yes.’
“The law now says if you get a federally-supported student loan, you have the absolute right to pay it back as a small percentage of your income for up to 20 years,” Clinton added. “Means no one ever has to drop out again in the United States. This is a very, very important thing.”
The federal student loan program has been good to Walden University. According to several studies, Walden students carry some of the highest student loan debts in the country. A 2015 Brookings Institution study found that by 2014 students who last borrowed at Walden had accumulated $9.8 billion in debt, second only to the University of Phoenix. The study also found that of that $9.6 billion in debt, the students had accumulated $6.1 billion while at Walden, the fifth largest amount of debt of the more than 3,000 schools in the report.
A 2015 study by the Center for American Progress found that Walden students received the most federal graduate loans in the 2013-2014 academic year, with over $756 million. The 2012 Senate investigation found that over 70 percent of the school’s revenue came from federal financial aid programs.
NBC News gathered five current and former graduate students at Walden. Collectively, they hold over $1.1 million in federal student debt incurred during their studies at Walden.
They told NBC News that they believe Walden recruiters misled them about the time it would take to finish their doctoral degrees – that the school said their student-loan financed degrees would take only a handful of years to complete and lead to future job opportunities.
After Jody McGrath earned a master’s degree in psychology, she began searching for a doctoral program in health psychology and reached out to Walden. “I called them, and was told it would be a two-year for my coursework and then 16 to 24 months to do my dissertation,” McGrath said.
McGrath, like other students NBC News spoke to, said that high faculty turnover rates, disorganization and a lack of oversight seemed to perpetuate her enrollment at Walden.
She completed her coursework, which she called “rigorous,” in two years, with a 3.6 GPA. But it took her six years -- and four committee chairs -- to get her dissertation approved. Her first chair told her after a full year of correspondence that she was “doing the wrong study,” McGrath said, and that she would also have to find a new chair.
McGrath said over the years she struggled to find new advisors and get feedback on her work. “There were times that I sent 25 to 30 emails just praying, praying that somebody would write me back,” she said.
“I thought at some level it was me,” McGrath said. “That I wasn’t working hard enough. As crazy as this sounds, that I thought when I got a new chair there was hope. This time it will be better. So it’s just this vicious cycle that you get into.”
Today, McGrath is over $100,000 in debt. She has finally earned her PhD. But, she said, Walden “failed me.”
“I was there emailing,” she said. “I was turning in my work. I have no problem paying for a four-year doctorate program. But I have an extra four years tacked onto my loan that wasn’t my fault.”
Lehnee Dopwell, a public school teacher, said she left the PhD program after incurring $100,000 in debt. Dopwell said she realized too late that her struggle to keep finding new chairs and receive meaningful feedback on her proposals was preventing her from advancing in the program.
“When they see that you really, really want to be in there, they jump at you,” said Dopwell. “[The recruiter] called a lot, and he kept telling me, ‘Five years. Don’t worry.’”
“When I was seeing issues with my thesis in regards to the chairs, in regards to them sending me back the document the same way I sent it to them is when I realized that something was wrong,” Dopwell said. “But the sales pitch is basically you're going to be done in whatever time you want it to be done.”
A review of online boards, court filings and Better Business Bureau complaints shows similar charges. A federal lawsuit filed in Maryland in 2015 by two Walden students, which was later settled out of court, alleged that “Walden University’s breach of its own rules thus unnecessarily prolongs students’ efforts to obtain their degrees, and results in students extending their enrollment in their respective dissertation or thesis course and paying additional tuition.”
Online message boards contain similar complaints. “The lack of communication is absolutely appalling. I once waited 9 weeks...yes WEEKS for a reply to an email,” reads one. “Once you are done with your required coursework and begin the dissertation process, you are essentially stuck.”
Walden University told NBC News it could not speak to students’ specific stories, but a spokesperson for the university said that "Walden University’s overall student loan cohort default rate is well below the national average for all universities, non-profit and for-profit. This well-established financial aid metric clearly demonstrates that Walden students overall are far less likely to default and able to manage and pay their federal student loans.”
“According to third-party research, the average student loan amount for graduate students at Walden is comparable to the graduate students who attended non-profit universities. More than 80 percent of Walden students are enrolled in graduate programs, which are high quality, rigorous, and challenging.”
The spokesperson also noted that student loans can be used towards living costs, and that those funds go directly to the students, not to the university.
Other students who spoke to NBC News said they had an overwhelmingly positive experience at Walden.
Derek Olson, 50, is a public school teacher and earned his PhD from Walden this past January. He received a scholarship that covered his tuition at Walden. Earning a doctoral degree is a “very difficult task,” he said, and Walden’s standards are rigorous -- it took six years for him to earn his degree.
“I would never discount or dispute anyone’s personal experience,” Olson said. “But my experience at Walden was positive, it was rigorous and it was relevant to my classroom work. It really has opened up doors for me.”
Another graduate student at Walden, Cynthia Hickman, told NBC News she had a positive experience at Walden and didn’t have to deal with any change in committee chairs.
While Dopwell left the PhD program, the other students who spoke to NBC News continued on in their respective programs. One, McGrath, earned her degree. Two are continuing to work on their dissertations. One, after reaching his graduate student loan limit, left Walden.
“How do I tell my children,” asked Sondra Beall-Davis, “that after all these years education is key and if you do the right thing, good things will happen? ... [They say], ‘Didn’t work for you, big mama.'”
Beall-Davis said she’d like Bill Clinton to forgive the Walden students’ loans.
“He can do that. Because see, I don’t think he’d want to be representative of something that is basically unfair or unethical. He can’t give us back our years, but he can give us back our dignity.”
Today the students say they are stuck with debts they can never hope to pay off in their lifetime. When asked why they continued to take out loans to finance their Walden degree, some said the value of the education they purchased seemed to outweigh the debt.
“High achievers don’t quit,” McGrath said. “It’s like we’d get these glimmers of hope and we’re like, “OK, if we just put nose to the grindstone, we are going get it and we’re going to get that dream.”
-- Thomas Himes contributed reporting to this article