Documents Referred to in Harkin Floor Statement Recruiting Tactics • June Analysis 2007 The inUllcdi atc reflection ofJune 2007 is dismal as\vc missed the start, but in that rellection there are things thaI I will discuss and interpret. The MP was 158 and we came short at 130, leaving 28 SITS that have to be recovered. The raw data collected is from the time frame of 3/25·6/23. As a campus we scheduled 965 appointments, and had 329 conducts (34%). Of the 329 conducts we wrote 3 16 applications (96%). Of the 31G applications, 308 (97%) were applied. From the 308 applied. 244 went through the FAl (79%), and 130 c6unted for the SIT report (53%). As a campus our conversion rate was 7%. From the amount of appointments that were schedule and aernal conclucts completed, I believe the first obstacle is the "selling afthe appointment". The department needs to focus on the selling thc appointment by digging in and getting to the pain 'of each and every prospective student. By getting .to the pain, the representatives will be able. to SOlidify the appointments and have a bettcr show ratc for the actual conducts, When looking at thc amowlt ofapplicd students, it would appear that the representatives have the kllow1cdge .. . but do they actually use it? My observation would be that they hurry through the interviews in order to avoid such elaborate questioning and rejections. Thc next major statistical data would be the FAI conducts. This is where the reps can increase their individu al show rate by following up and getting the students tluough the entire process. The assumption is that once they arc writtcn, the student is good! And therefore,. no contact is interpreted as good news! The fear of rejection or removing people from the ASR is psychological to the reps and not looked at as accountability or constructivc criticism, From a DOR perspective, there needs 10 be more training and accountabilily/ownersrup convcyed to the reps. The concept of accountability and 'ownership has been broachcd, but yet to be unanimously accepted and practiced. Th is coupled with the weaknesses of overcoming obstacles or objections, working the student completely through the entire process and still muintauung contact throughout the wholc . quarter is something else that we Heed to focus on ... which includes from FA! to SIT. Our referral campaign has been anything but that if a campaibTIl. The department needs to fOCllS more on generating more PDL's and converting them for the September start. These arc all areas of training opportunity and will bc implcmcnted in the carJy stages of the next quartcr, as well as Increased observations, more structured aC,tivitics, and better review of pending contacts. Our threats arc the obvious .. .loss of reps, lack ofPDL's, and complacency and lack of ownership. The positives arc a very large increase in phone activities and applied to accepted (whieh should be). If you have any questions please contact me as soon as possible. • • Ways [0 combat "drops" in Marketing duri ng the class building period. Co 111m 1111 ication • • • • • • • • • • • • Remai n ccntcrcu, focused and calm. Remember, most of the time drops late in the quarter £Ire due to FEAR! Don't take things personally Stay in constant contact through phone cails, emaiis, etc. Remember nothi ng can replace vo ice to voice contact. Remind them of the ir motivation often. Use this to keep them motivated. Rem ind them of what things will be like if they don't"colllinue forward and cam their degrees. Poke the pain a bit and remind them (if applicable) who else is depending on them and their commitment to a better fut ure. Usc visuals an"d analogies. Remember most humans arc visual learners. Avo id words such as "concerns" or "issues". Many times these words imply there arc not solutions. Instead talk about "obstacles" .. . obstacles can generally be moved in order to continue going down a spccific path. Watch the stress tone in YOUR voice when conununicating with thelll. Remember, they are NOT nwnbers ... they are students. Usc positive speak. Exampl e "Wben you come to classes ncxt week." Invite the ohst:Jdes • Do not fear obstacles; embrace them . The better you are at inviting them, being patient to work on them, and laking on the role of "solutions prov ider" the stronger you will be as a Rep. AND the bettcr your students w ill feel as you became their advocate to success. • rn the initial (or futu re) phone calls listen for things whieh may give you some insight on potential obstacles. Things dealing with kids (potential lime, money and transportation obstacles?), things dealing with transportation (shuttle passes?), spouses (are they supportive? Co-s igner potential?), parents (arc they supportive? Co-signer potential?). grandparents (supportive? Co-signer potential?), etc. Ask about their current employment situatioil. Are there potential work schedule conllicts? If so, how supportive is the employer? Can we assist the student through -Career Services seeking morc " education friendly" employers allowing an appropriate work schedule fo r your stude nt to attend class? • Remember, ifeost is an obstacle ... il is also part of their motivation! (If they don' t make a change, where do they see their finan ces in 2 years, 5 years, 10 years? If they DO have a degree, where do they see their finances?) • Remember EVERYONE Wants to graduate, but NO ONE wants to start. AVOID statements in your initial conversations such as "when do yo u see yourself slarling classes?" Instead use phrases such as "How SOOIt tlo YOIl see YOflrselj GRADUATING?" .-:, ..... . . c. '.' •. ,., ;. .. : !., ':'. . -, .. .. .. -'':' "-; ::.;;. '.,': . . N·-· .-." .. . , ; ',. ... " ", .... . ", - ..:'.,. ' '. "" .. . ........ -.; '-' .. - . '." '. '.- .' .. ,' . .' . ' -, .. ',... . • ' ,. . ., .. ., Sandler Sal •• 'iliUM,: 2. Pain Funnel and Pain Puzzle Eight Questions Level 1 Pain 1. Tell me more about that ... ? 2. Can you be more specific? • Give me an .example. 3. How long has it been a problem? .!a. 4. What have you tried t.o do about Level 2 Pain • that? (What have you done to fix it?) 5. And did that work? .. What results did you get?) 6. hat I" ,/ f/< Level 3 Pain 7. How o you feel about tha Level.4 Pain 8. Have yo given up tryi 9 to deal with the obI em? Does the prospect have e ough pa n to qualify for the next step? .Is the problem one that you can fix? • Problem Reasons Does the prospect recognize the problem? Do they acknowledge it Consequences is a problem? -Are they committed to fixing it? . Are they willing to do sorr;zthing about it now? lJ,.)W:J' c. fl." ',-,_ ""-,,,,+ t-'-'e... (oY\(e t ", • • • ITT Technical Institute Questionalre EXHIBIT 3 , Ihig h sc hooUGEO questions Lllvel1 Pain flow woulll you describe your high experience? Did youleel successful in high school? Tell me more about that; Can )'QU be more specific; Give me all example How did thaI make)'QU feel7 HOw did your patBllts feet? What could YOli do differently? What $ubje!:!s did you feel most slICcesslul? what dD you think was attribUtable to your success? What subjects did yoo leelleast sUttesslul? L l've/2 Pain Level J Pllin Level 4 Pain lalldltional education Level 1 Pain level 2 Pain Levell Pal ll Leve1 4 PII.ln What dO you think attributed 10 lila!? What hav"lhau you tri\!d 10 do ilboullt7 What has it cost you7 And d id that work? How d.o you feel about that? What are you willing to change now or haYe you given up trying to deal with tho problem? How long have you been going to KXX college? Have you WOfked while illtendiog? Have you wanled 10 work while 81Iendlr.g? Why did you pul off allendlng college aller high school? How would you desail>e your college experietlCe? Did you leel al )(X. college? Tell rue ru-ore that; Can you be more specific; Give me an uamplll" How thai mako you feel? How does your family leel? What have you tried to do about Ulal? And did Ihat work? What subjects did you reel most successful? Whal do you thiM was attributable 10 your success? What subjects did you feel least successful? What do you Ihlnk a!lrlbuled to Ulan An d did that work? Wltal have/had you tried to do alJOut It? Do you reel Ulal spending x amount of [ione atlOUl college has held you back from where you want to be? What ha&!l cost Y0!-l? Huw d o yuu leel abuut Whal are you w1l1l119 to chal1ge 110W or have you given up Irylng to deal with Ihe probl em? .' • lem iliaymen i level 1 Pllin • How we ll wou ld you say you have been able to support your In this f>Os lUon 7 How well wou ld your family lily you have been willing 10 sup port them? Tell mil more a\xJ ullhat; Can you be more spe1:;lIic; Give me an exllmple How did Ih;)l make you leel? Leve l 2 Pain Wllal have you tried to do about th.H And did that work? Whal h3$ not having a college tduc,Uon cos, you1 In sell worth? Finaoo3fly1 Leve l 3 Pa in lcvel4 Pain How do you leel about that? What ate you wil ling to c hange now or have yo u give n up trying to deal with thlliltoblem? • Job Aid: Outbound with Rubric at DES references Based on the Undergraduate Programs Script published on July 8-8, 2009 Hello. this is ,lf yo u DON' T make a change or move into this new d irection, wha t do you th ink you r Iture wlil iook like? (BE SILENT· DO NOT SPEAK.) Can you elaborate? ·1 am happy to hearthal . As lon(l as you don't lose sight of the li fe YOU want to live, I promise you I will do everything in my power to help you take the first step and I will be one more person in the audienco clleering yo u on at graduaUon! Is that a DEAL??? _ -,.. 3. Active Listening 4. Advi sor picks up on buying signals 5. Buildl Maintain Rapport w/Prospec t KEEP DIGGING UNTIL YO U UNCOVER THEIR NOT ANSWER FOR THEM. 7! TH E PROSPECT IS RIGHT NOW AND IF TH EY DISCUSS THE LIFE THEY CAN'T GIVE THEIR FAMILY BECAUSE THEY DON'T HAVE A DEGREE, YOU WILL DRAMATICALLY INCREASE YOUR CliANCES OF GAINING A COMMITMENT FROM n lE STUDEN,TI . _ _ _"",,":YOU CAN STIR UP THEI R EMOTIONS, YOU WILL CREATE RGENCYI 2 Reiterating the Objective of the Call: Rubric Attribute Objective As I stated a moment ago. our objective today is to become better acquainted. First. I want to know more about th ca you - your hopes, dreams, goals and perhaps even fears. Does that sound fair? 1F TRANSITION: The best way for me to assist you today is to ?nd out a bit more about you and your goals, togetherwe'lt determine the right next steps. 533:3 . UNCOVERING THE PAIN AND THE FEAR CREATING URGENCY 1g; Affected Rubric Attributes -How long has this been a goal of yours? When did you first reatize this is the direction you wanted to move in? 1. Asks probing questions to exptore -Whathas stopped you in the past? Whatis different today? . . student motivation ?Whose life would this impact, besides you? What would it mean for them to see you finally take this step to a 2. Empower the student better THIS STIRS UP EMOTION) to resputmd:t Adviser Call Control *Who will be the most of you for making this change? In addition to your biggest sopporter. who else would you 'nvite to graduation? opportunity} I am assuming your friends and family have been thinking about Active Lismning making a positive change as Well correct?? Once we get you started on this path to success,l will 4. Adviser picks up on reach out to them and see if we can help make a positive change in their life just like you. Sound like a buying signals I pm"? Awesome' 5. BuiIdI Maintain Rapport wIProspect vLastly, what are something?s you would LOVE to provide for your-family but unfortunately due to your current situation you are unable to? Tell me more about that. [Keep digging until you get to their REAL DREAM- a house, taking family to Disney World. DO NOT ANSWER FOR THEM. LET THEM PAINT THEIR OWN PICTURE IF YOU CAN HELP THEM UNCOVER THEIR TRUE PAIN AND FEAR. IF YOU GET THE PROSPECT TO THINK ABOUT HOW TOUGH THEIR SITUATION IS RIGHT NOW, IF YOU TALK ABOUT THE LIFE THEY GIVE THEIR FAMILY RIGHT NOW BECAUSE THEY HAVE A ORAMATICALLY INCREASE YOUR CHANCES OF ENROLLING THIS PROSPEC IVE STUDENT. TO THEIR EMOTIONS, AND YOU WILL CREATE THE URGENCYI . see er? . new FEES. A: k. '3 fart The following are some common objections as tips on how to resolve them: Concern: Not enough?ryg Response: How much time do you believe this will take? How much time can you invest in yourself? Is there ever a good time to go back to school? Why did you call or request the information? (Don?t sound condescending) Wall: me through a day in the life of you. When do you get upfhome front work, etc? Do you see yourself having more time for school in the ?iture? How would having your degree afford you more time? How long have you been thinking about ?nishing your degree? Concern: Moneyr'Cost Response: Investing in yourself How much did you plan for? Education is an asset that never depreciates. Asltford is more affordable than most private schools offering online programs, How will you bene?t once you have your degree? What costs more, having your degree or not having it? Are you aware of the ?nancing options available for those who qualify? 0 Student loans not income or credit based - 0 Loans deferred while in school 0 Have up to 10 years to pay back Concern: Credibilitvaeputabilitv Response: What do you know about acereditation or 0 Established in 1918 II Traditional 4-year campus with sports teams, dormitories - Regionally accredited since 1950 98% of students surveyed said they would recommend AU to a family member or friend Concern: Era; Response: What concerns do you have? Explain the bene?t of having a personal advisement team (EA, AA FSA) What makes you feel more anxious? Obtaining your degree or not having it? Tell me about another time in your life you felt afraid and how you overcame that fear? Students just like you that have been out of school, working adults, etc Many resources: online library, tech support, writing consultant, Smartthinking, etc Created by Ashford University Learning a Development SIEQIZUDQ. For internal use only. 7 I. UNDERSTANDING 0 UR . I Who Are Our Students? MARKET. .3 ?mi. . Hr}; Inuiw! Sales Begins With?f meme: THE MARKET sum: . . Student Pro?les Welfare Mom w??ids Recent High School Graduates College Freshmen dropout. Pregnant Ladies Recent Divorce Military - Active'c?c . Retired Low Self-Esteem . Low Income obs . Vocational Rehabilitation Experienced a Recent Death Experienced a Recent Birth Empty Nest Recent Marriage Relocation?? . Career Chang-? Upgr?de Skills Physically/Mentally Abused Recent Incarceration Drug Rehabilitation Dead End Jobs-No Future College Credits 2 Years+ Living w/multitude of Families - Living With Parents Living with Signi?cant Other 'Fired Lay off Self Employed w/ No Bene?ts - Emotion We deal with people that live in the momentand for the moment. - Their decision to start, stay in school or quit scheol is based more 011 emotion than logic. n. - Pain is the greater motivator in the short term. ?Lately it seems admissionsHa52353353; been putting in some really troubled this be a trend?? I - ?This last batch of students you guys dumped in here are about the worst I?ve seen in' years? just walked by orientation?l ?Do your ads say, LOSERSE. ENROLL ?You need to target a better demographic it wOuld make all of our jobs ?a lot easier!? . We Serve UN-DER UNEMPLOYED . UNDERPAID I UNSATISFIED . UNSKILLED . . UNPREPARED . UNSUPPORTED I - UNMOTIVATED . UNHAPPY Examples of Buying I Motive}? -L0w Pa}: .-D?pendent upon others. 'Higher income -J0b Securitv -Self?.Esteem -Recogniti0n ,. u Uutbound Calls-50 MlNlMUM -1Y .... .. Appolnrmenrs .. M -y Appointments Held-3 ...... j 3 Packaged per ,veek ....,. -:- ....4 .. per weeK 1XI VAT -02-14-03934 Corinthian For-profit colleges face federal crackdown - Los Angeles Times Page 1 of 3 ĸ Back to Original Article For-profit colleges face federal crackdown The industry has seen growing criticism of its high-powered marketing and the heavy debt many students incur, as well as doubts about the value of the degrees it offers. February 06, 2011 By Walter Hamilton, Los Angeles Times Chelsi Miller was managing a burger joint when she saw an ad for Everest University promising a better life. The single mother in a small town near Salt Lake City wanted an associate's degree as a first step toward medical school. She said she chose Everest, a forprofit college, after a recruiter guaranteed that she could apply her credits toward a higher degree at the University of Utah. It wasn't until after she graduated in 2008 — two years and $30,000 in student loans later — that Miller learned the state university wouldn't take her credits from Everest, a unit of Santa Ana-based Corinthian Colleges Inc. "I got completely taken advantage of, and now I'm struggling to pay the bill for it," said Miller, now 26. "I got sold my degree by a used-car salesman. I got a lemon." For-profit colleges have expanded rapidly in recent years, with enrollment nearly tripling in a decade to more than 1.8 million students in 2008. But amid growing criticism of its high-powered marketing and doubts about the value of the degrees it offers, the industry faces a federal crackdown that casts a shadow over its future. "Rightly so, the industry is going to have to shift focus" from maximizing profits to ensuring student success, said Jeff Silber, an analyst at BMO Capital Markets. "That means slower growth and less profitability." Among the companies most vulnerable to stiffer rules is Corinthian, which already has undergone wrenching changes. Its chief executive and president both quit last fall, and the firm last week warned that its enrollment of new students, already on the decline, could plunge further. Its stock has slumped 75% since April. The for-profit industry caters to nontraditional students — 20-somethings with poor academic records and working adults needing flexible class schedules. But the schools lure such students, critics say, by exaggerating their job and salary prospects, then strand them with dubious educations and mountains of debt. "We're seeing too many examples where students go deeply into debt and either end up with no diploma or a worthless diploma," Sen. Richard J. Durbin (DIll.) said. "It is a terrible outcome for a student who was just trying to get an education." High tuition Tuition is nearly five times as high at two-year for-profit colleges as at state schools. At four-year for-profit colleges, half of graduates leave school with at least $31,000 in student loans. That's nearly four times that of their public-university counterparts, studies show. For-profit students borrow heavily, receiving 24% of government-guaranteed student loans while accounting for only 12% of U.S. college students. But many graduates say they can't get jobs in their chosen fields, and certainly can't earn enough to whittle down their debt. One in four students at for-profit colleges default on their loans within three years, more than double the rates at state schools and private colleges, the U.S. Department of Education says. Defaults can stay with students forever. Student-loan debt can't be erased by filing for bankruptcy, and collectors can seize money from a borrower's paycheck, tax refund and even Social Security benefits. Sen. Tom Harkin (D-Iowa), who has spearheaded the federal crackdown, likens the industry to the subprime mortgage business. "Subprime lenders went out and marketed houses to people who really couldn't afford them, gave them subprime loans and said, 'Don't really worry about it,'" Harkin said. "At least in the subprime debacle the defaulter could walk away from the house and leave the house. These students have this debt on their head forever." High-pressure sales tactics laced with false promises are the core abuses that critics ascribe to for-profit higher education. An investigation of 15 for-profit colleges by the congressional Government Accountability Office last year found widespread problems, including inflated salary projections and misleading tuition information. One school told an investigator posing as an applicant that barbers could earn $150,000 to $250,000 a year. At Corinthian, recruiters are taught to convince students that their lives are bad and can be improved only by going to the school, according to a former recruiter. "The ultimate goal was to essentially make them wallow in their grief, feel that pain of having accomplished nothing in life, and then use that pain" to coax them to enroll, the recruiter, Shayler White, testified in an affidavit in a lawsuit filed against Corinthian by Miller and other ex-students. The schools, accusing critics of overstating the problems, say job-placement and default rates have suffered in the recession. http://articles.latimes.com/print/2011/feb/06/business/la-fi-for-profit-colleges-20110206 2/8/2011 For-profit colleges face federal crackdown - Los Angeles Times Page 2 of 3 Filling a niche Corinthian in particular says it fills a crucial niche by taking troubled students, many of them minority and low-income, whom traditional colleges can't or won't accept. "We deal with the most difficult students in American education, and as a result we get criticized," said Jack Massimino, Corinthian's chairman and chief executive. "At the end of the day these students are graduating and getting opportunities they've never had before. The world's passed these students by, and we're giving them a second chance." A showdown is looming over a Department of Education proposal that would limit the loan eligibility of a school's current students if the salary levels and repayment rates of its former students are too low. Supporters say the "gainful employment" rule would ensure that students get marketable skills and decent jobs. The industry says it could prevent needy students from getting degrees. Corinthian also is scraping up against a federal rule that caps the percentage of a school's revenue that can come from federal student loans and grants at 90%. Corinthian is at 89%. Given the heavy reliance by Corinthian and other schools on federal money, industry critics express outrage that the industry is lobbying against the rule. "They're using federal funds to buy advertising to stop federal regulation of the abuses in their industry," Durbin said. "It's a shameful situation." Underlying the debate about for-profit schools is the belief among even some critics that they must play a big role in the education system given cutbacks at public universities and community colleges. "We cannot reach the needs we have in California without a for-profit sector," said William Tierney, an education professor at USC. Tierney acknowledges flagrant violations at some for-profit colleges but says cases of excessive debt and low employability exist in traditional education as well. "I should not be paying tax dollars for somebody to get a degree as a dishwasher because he doesn't need it," Tierney said. "But why doesn't that hold for everybody? Why wouldn't that hold for the person who's accumulating $100,000 in debt and majoring in philosophy at Stanford?" Heavy advertising Corinthian, one of the nation's largest for-profit chains, was founded in 1995 and expanded via 18 acquisitions. It has more than 100,000 students at 110 campuses in 25 states and Canada under three nameplates — Everest, Heald and WyoTech. Focusing on career training, it offers courses in auto repair, healthcare and paralegal studies. Most of its programs are two years or less. The company advertises heavily, with 20% of its revenue going to pay for marketing and admissions in fiscal 2010. Many of its TV commercials feature testimonials by students. In one ad running now, a single mother says she's proud to have graduated. "If she can do it, you can do it," an announcer intones. "Pick up the phone and call right now, and start on the road to a rewarding career and a better life." Yet 40.3% of Corinthian students default on their loans, according to calculations by Jarrel Price at Height Analytics. That dwarfs even the overall for-profit industry's 25% average, let alone the much lower rates for nonprofit schools. "For one in four students to be defaulting is astonishing enough, but for 40% of a school's former students to be defaulting calls out for immediate action," said Pauline Abernathy, vice president at the Institute for College Access and Success. Corinthian says it has boosted efforts to help students find jobs and avoid defaults. It hired 250 career counselors during the recession, bringing the total to 750. And it spent $10 million last year to help students avoid default. About 60% of Corinthian's students complete their coursework and 73% got jobs in their field in 2009, according to the company. "I'm not telling you we're perfect — we do make mistakes," Massimino said. But "it is in our best interest to do a good job. We're trying to do the best job possible." Negative publicity This is not the first time Corinthian has come under a harsh spotlight. Four years ago, it paid $6.5 million to settle a lawsuit by the California attorney general's office alleging that the company used misleading come-ons to recruit students, including exaggerating job-placement rates and starting salaries. The company also late last year stopped accepting students without high school diplomas because of their above-average default rates. http://articles.latimes.com/print/2011/feb/06/business/la-fi-for-profit-colleges-20110206 2/8/2011 For-profit colleges face federal crackdown - Los Angeles Times Page 3 of 3 That move, along with negative publicity about the industry, caused the number of new students enrolled by Corinthian to sink 8% in the fourth quarter from a year earlier. Warning that new enrollment could tumble as much as 17% in the current quarter, Corinthian said last week it would eliminate 4% of its workforce and raise tuition an average of 12%. To former Corinthian students such as Wendy Cogdill, reforms can't come quickly enough. The 41-year-old substitute mail carrier said she got straight A's in her quest to become a paralegal. But three years after completing her classes, the Conyers, Ga., mother of three hasn't found a job in her field and is groaning under $40,000 in debt. She believes that the system is designed to divert students' attention from the debt they're accumulating. Corinthian handled all her loans and gave evasive answers when she asked for details, Cogdill said. "They don't tell you how much you're borrowing until after the fact," she said. "I had no idea that after graduating I would be $40,000 in debt." In some ways, Miller, the aspiring doctor, is doing better than other Corinthian alumni. She landed a job as a surgical technician shortly after graduating but says she got it only with the help of a friend's mother and can't advance unless she starts college all over. Miller and two other former students have sued Corinthian, alleging that they were misled about accreditation and tuition. Corinthian says it clearly discloses tuition and accreditation issues. For example, the company says it makes every new student sign a form that says credits generally can't be transferred to other colleges or universities. "There is no hide the ball here," Massimino said. Despite her frustration with Corinthian, Miller recognizes that the school's statistics will count her as a graduate working in the field she studied. "I'm a success story to them," she said. walter.hamilton@latimes.com Copyright 2011 Los Angeles Times Index by Keyword Index by Date Privacy Policy Terms of Service http://articles.latimes.com/print/2011/feb/06/business/la-fi-for-profit-colleges-20110206 2/8/2011