Saturday, March 25, 2017

The Political Hysteria of Leftist McCarthyism: "Have you no sense of decency?"

Over the past century, the United States has suffered three episodes of mass political hysteria.

The first episode took place in the early 1920s, when the Ku Klux Klan emerged seemingly out of nowhere like a deadly virus--the political equivalent of Ebola. Unlike the nineteenth century Klan, which was focused solely on racist terrorism, the Klan of the 1920s had a broader agenda. The Klan spewed bigotry against Jews, immigrants, blacks, and--most especially--Catholics.  And the KKK of the twenties went far beyond rhetoric: the Texas Klan kidnapped Catholic priests and tortured several people.

Our nation's second bout of political hysteria was McCarthyism. Senator Joe McCarthy used the press and his power as a U.S. Senator to accuse his enemies of being closet communists. McCarthyism infected Hollywood, and a lot of good people lost their careers due to irrational and unfounded charges of treason.

And now we have our third epidemic of mass political hysteria--wild-eyed accusations from the political left that the Trump administration is in collusion with the Russians. James Howard Kunstler is documenting this ongoing witch hunt in his masterful Clusterfuck Nation blog essays. Kunstler is not a political conservative and he criticizes Republicans and Democrats alike. But he was correct when he wrote recently that there is no evidence of a conspiracy between Donald Trump and the Russians, while there is plenty of evidence suggesting that federal agents "surveiled" Trump during the 2016 political campaign.

Donald Trump has plenty of faults--I repeat, plenty of faults. But I disturbed by the Left's obsessive and unhinged attacks on the Trump administration.

And I am alarmed as I watch the mainstream media--New York Times, Washington Post, CNN, etc--cheerfully jettison journalistic ethics in order to whip up sentiment against our lawfully elected President. I find myself wondering whether we are headed toward some sort of Munich beer-hall putsch to overthrow the government.

I am reassured by the fact that our nation's first two episodes of political hysteria ended quickly. The KKK was powerful for a few years and even controlled a few state governments. But by 1926, the Klan era was over--brought down by clear-eyed and courageous civic leaders--including newspaper editors, brave criminal prosecutors, and the Knights of Columbus.

Likewise, McCarthyism collapsed under the withering scorn of one private citizen--Joseph Welch, an attorney who famously challenged McCarthy in a Senate hearing by asking, "At long last, have you no sense of decency?" That famous confrontation occurred in June 1954. Three years later, Joe McCarthy was dead, and so was McCarthyism.

I hope the current episode of leftist McCarthyism dies as quickly as the Klan revival of the 1920s and McCarthyism of the 1950s. But I am pessimistic.  Mass political hysteria can only be destroyed by a critical mass of civic-minded, cool-headed and decent individuals--journalists, lawyers, legislators, small town political leaders, and academicians.

As I scan America's political landscape, I don't see many people with the poise, balance, and courage of Joseph Welch, who stared down McCarthy in a Senate hearing room or the civic leaders who beat back the Klan in the 1920s.

I think is is highly likely that the paranoid hysteria unleashed by leftist politicians, journalists and academic intellectuals will continue to smolder until it explodes in a wildfire of political mayhem that drags down and destroys our long tradition of civic democracy

Our future will not be quite like what happened to Germany in the 1930s when Hitler came to power, but it will be bad enough.




References


Richard Fossey (2015). Lions for the Faith: The Knights of Columbus Battle the Bogus Oath in Texas During the Second Rising of the Ku Klux Klan. Catholic Southwest, 26, 3-36.

Richard Fossey & Stephanie Morris (2010). Courage under fire: Saint Katharine Drexel and the Sisters of the Blessed Sacrament Confront the Texas Ku Klux Klan. Catholic Southwest, 21, 7-22. 


James Howard Kunstler. The Swamp Drains Trump. Clusterfuck Nation, March 24, 2017/  http://kunstler.com/clusterfuck-nation/swamp-drains-trump/

Thursday, March 23, 2017

Trump and DeVos give aid and comfort to For-Profit Colleges: The Democrats should hold hearings on this sleazy industry

As Senator Dick Durbin once observed, the for-profit colleges "own every lobbyist in town." And indeed they do. David Halperin, in a terrific article for The Nation, explained how the for-profit colleges have effectively used lobbyists and lawyers to fight off federal efforts to regulate their sleazy industry.

And now the for-profits don't even have to pay their lobbyists and attorneys. Secretary of Education Betsy DeVos pays them directly!

As the New York Times reported, DOE hired two for-profit insiders to help shape DOE's policy toward the for-profit industry. Robert Eitel is taking an unpaid leave of absence from his job as vice president for regulatory legal services at Bridgepoint Education, Inc.  to take a paid job on the Department's "beachhead team." Bridgepoint, a for-profit education provider, is currently being investigated by the Securities and Exchange Commission. Former Senator Tom Harkin, a longtime critic of the for-profit college industry, called Bridgepoint a "a scam, an absolute scam."

And DOE also hired Taylor Hansen, a former for-profit lobbyist, to be a consultant. At least Hansen had the decency to resign his DOE position after a public outcry was raised.

These hires, along with DOE's decision to delay compliance deadlines for for-profit colleges to meet DOE's "gainful employment" regulations, are a strong indication that the Trump administration will not vigorously regulate this bandit industry.

Senate Democrats could put enormous pressure on Trump and DeVos if they would hold hearings on the for-profit colleges. I would like to see Senators Elizabeth Warren and Bernie Sanders question some of the so-called educators who run these diploma mills.  Nearly half of the students who took out federal loans to attend for-profit colleges default on their loans within five years of beginning repayment.

And Senate Democrats also need to examine the student-loan debt collectors who slap huge fees on student-loan defaulters and engage in high-pressure collection tactics.  Educational Credit Management Corporation (ECMC), for example, was hit with punitive damages last year for repeatedly garnishing the wages of a bankrupt student-loan debtor in violation of the Bankruptcy Code's automatic stay provisions.

Senator Warren might ask Janice Hines, ECMC's CEO, to disclose her compensation package--surely well over $1 million a year. And Senator Sanders might ask Hines how ECMC amassed $1 billion in assets.

Great political theater! So why don't the Democrats get busy and schedule those hearings? I tell you why. Too many politicians--Republicans and Democrats alike--are in bed with the for-profit college industry.  Read David Halperin's article in The Nation for details.

Janice Hines: How much money do you make running ECMC?

References

Patricia Cohen. Betsy DeVos's Hiring of For-Profit College Official Raises Impartiality Issues, New York Time, March 17, 2017.

Patricia Cohen. For-Profit Schools, an Obama Target, See New Day Under Trump. New York Times, February 20, 2017.

Danielle Douglas-Gabriel. Trump administration rolls back protections in default on student loans. Washington Post, March 17, 2017.

David Halperin. The Perfect Lobby: How One Industry Captured Washington, DC. The Nation, April 3, 2014.

 Shahien Nasiripour. , Betsy DeVos Hands Victory to Loan Firm Tied to Advisor Who Just Quit. Bloomberg News, March 20, 2017.
  
Predator Colleges May Thrive Again (editorial). New York Times, March 23, 2017, p. A 24.




Tuesday, March 21, 2017

Finally, More Bankruptcy Attorneys Getting on the Student Loan Discharge Bandwagon--article by Steve Rhode

This excellent essay by Steve Rhode originally appeared on the Personal Finance Syndication Network, PFSyncom.  Mr. Rhode also maintains a web site titled Get Out of Debt Guy that contains a variety of good advice and information about all manner of consumer debt problems, including student loans.  You can learn more about Steve Rodes here.

In addition to the attorneys listed in Mr. Rhode's article, I would like to commend George Thomas, a Kansas attorney, who did a great job representing Alan and Catherine Murray against Educational Credit Management Corporation  in a Kansas bankruptcy court. Mr. Thomas won a partial discharge of the Murrays' student loan debt. That case is now on appeal.


In addition,Eugene R. Wedoff, retired bankruptcy judge and incoming president of the American Bankruptcy Institute, is defending Alexandra Acosta-Conniff in an Alabama bankruptcy case now on appeal before the Eleventh Circuit Court of Appeals.


 ******

Finally, More Bankruptcy Attorneys Getting on the Student Loan Discharge Bandwagon

 by Steve Rhode


A recent MarketWatch piece by Jillian Berman did a great job of not only naming a bunch of attorneys I’m proud to call friends, but debunking this myth that there is nothing that can be done about student loans in bankruptcy.

I get so frustrated when consumers tell me they went to a bankruptcy attorney and was told there was no hope for dealing with their student loans, when there clearly was.

The article quotes four attorneys who all make the same point, there are legal options for dealing with student loans in bankruptcy. Don’t believe everything you’ve been told that there are no options – That’s Fake News! Want to learn more, here you go.

Attorney Richard Gaudreau is mentioned, “Nobody is doing anything for these people in terms of laws to benefit them,” said Richard Gaudreau, a New Hampshire-based bankruptcy attorney, who’s been working on student loan issues for the past few years. “We’re just forced to be creative.”

And when he says creative, what he’s really saying is applying some brain power and creative thinking to look at the law under new light to find where is already applies to dealing with student loans.

That’s what attorney Austin Smith is doing, and winning.

“Taking that logic one step further means that student loans from private lenders can be discharged in bankruptcy if they were made to students who didn’t attend an accredited program or were lent more money than the cost of attendance. Possible debts that fit into this category could include the aforementioned bar study loan or a loan to attend an unaccredited trade school, Smith said.

“A loan is not like a scholarship or a stipend and such a private loan cannot be included in this definition. If I were to interpret educational benefit to include loans that has some relation to attaining an education, it would render the other two provisions of [the bankruptcy code as it relates to student debt] totally superfluous,” the judge said, according to a transcript.

“I have yet to go in front of a judge who disagrees with my overall thesis, which is that not all student loans are not dischargeable,” Smith said. “I do think the tide is now turning on that.”

Then there is attorney Lewis Roberts, “Roberts’s intervention is to get judges and trustees to classify the federal student loan debt separately so that his clients can take advantage of special payment plans the government offers borrowers to manage their student loans.”

Attorney Jay Fleischman said, “This fight is just in its infancy,” he said. “We’re seeing the birth of it in many ways.”

Steve Rhode

Get Out of Debt Guy  Twitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away. 

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network

Monday, March 20, 2017

Trump administration cozies up to for-profit college industry: "I was wrong, I know, I know"



But I want you to know that I was wrong, I know, I know
I just wanna say that I was wrong, I know, I know
Well, I want you to know that I was wrong, I know, I know
And I just wanna say that I was wrong, I know, I know

I Was Wrong
  David Labuguen, Nathan Esquite, Zachary Hannah 

Patsy Cline gave one of the greatest lyrical apologies in music history when she sang, "I'm sorry, so sorry that I was such a fool." And of course about half of all country music songs are sung by some guy who says he's sorry for cheating on his girlfriend.

But for my money, the all- time best musical apology was sung by Arizona. So I want you to imagine me singing "I just want you to know that I was wrong, I know, I know."


I was willing to give Donald Trump and Betsy DeVos the benefit of the doubt regarding the student-loan crisis. I naively hoped Trump and DeVos would view this catastrophe with fresh eyes and take action to relieve massive suffering. 


But I was wrong.

Trump's Department of Education cozies up to for-profit college industry

Last week, Trump's Department of Education rolled back protections afforded to people who defaulted on their bank-based federal loans (the FFEL program). The Obama administration had instructed debt collectors not to assess penalties against FFEL defaulters if they entered a rehabilitation program within 60 days of default.


That relief is now off the table, and debt collectors are free to slap defaulters with a 16 percent penalty on the principal and accrued interest of defaulted bank-based loans.


And the New York Times reported that DeVos's Department of Education recently hired Robert Eitel to be a paid member of a "beachhead" team that advises DOE on regulatory matters. Mr. Eitel is taking an unpaid leave of absence from his job as vice president for regulatory legal services at Bridgepoint Education, Inc., a for-profit college company that operates Ashford University and the University of the Rockies.


As the Times reported, the Securities and Exchange Commission is currently investigating Bridgepoint to determine whether the company violated the 90 percent rule that requires for-profits not to receive more than 90 percent of their revenue from the federal student aid program. Attorneys generals in California and Massachusetts are also investigating Bridgepoint,


And there have been more allegations of wrongdoing against Mr. Eitel's employer. Last September, Bridgepoint reached  a $31.5 million settlement with the Consumer Financial Protection Bureau to resolve allegations that Bridgepoint deceived students into taking out private loans that were more expensive than advertised. And in 2014, Bridgepoint reached a $7.5 million settlement to resolve charges against it brought by the Iowa attorney general.


And now Bridgepoint's chief legal counsel is a paid consultant for DOE. And DeVos also hired Taylor Hansen, a former for-profit lobbyist, to join DOE's beachhead team. (According to Bloomberg News, Hansen resigned his DOE post last Friday.)


Is Betsy DeVos in the for-profit industry's pocket?

This stinks, and it is a strong sign that Betsy DeVos, Trump's new Secretary of Education, is in the for-profit college industry's pocket.

The for-profit industry is betting that Trump will reduce the regulatory pressure on it, and for-profit stocks have soared since Trump took office. Bridgepoint's stock is up 40 percent. DeVry Education Group's stock is also up 40 percent and Grand Canyon Education's stock rose by 28 percent.

I think we can conclude that the Obama administration's strict regulation of the for-profit industry has come to an end. And to be strictly accurate, Obama's DOE did not get serious about cracking down on the for-profits until the last two years Obama was in office.

Bottom line is this. The for-profit industry will continue to exploit unsophisticated Americans who are only trying to better themselves by investing in post-secondary education.  This sleazy industry's track record is terrible, and the 5-year default rate for people who borrowed to attend for-profit schools is almost 50 percent!

Bankruptcy may be the only option for overburdened student-loan debtors

Millions of student-loan borrowers are now drowning in debt, which includes the penalties and interest tacked on to the amounts they borrowed. Based on recent events, they can expect no relief from Betsy DeVos's Department of Education.

God help the people who took out student loans to enroll in worthless for-profit programs that did not lead to good jobs.  President Trump apparently has no sympathy for these people--even though he claims them as his core constituency.

College borrowers who have been driven into default on their student loans now have only one avenue for relief: the bankruptcy courts. As the bankruptcy courts become better educated about the student-loan crisis, I think we can expect more compassionate decisions by bankruptcy judges. So let us turn our eyes toward the bankruptcy courts because struggling student-loan debtor have no other place to turn.

Robert S. Eitel of Bridgepoint Education: On DOE's ""beachhead" team


References

Patricia Cohen. Betsy DeVos's Hiring of For-Profit College Official Raises Impartiality Issues, New York Time, March 17, 2017.

Patricia Cohen. For-Profit Schools, an Obama Target, See New Day Under Trump. New York Times, February 20, 2017.

Danielle Douglas-Gabriel. Trump administration rolls back protections in default on student loans. Washington Post, March 17, 2017.

 Shahien Nasiripour. , Betsy DeVos Hands Victory to Loan Firm Tied to Advisor Who Just Quit. Bloomberg News, March 20, 2017.



Tuesday, March 14, 2017

Student Loan Debt Collector accused of violating the Fair Debt Collection Practices Act; Brandon v. Eaton Group Attorneys

Unscrupulous debt collection practices: Economic exploitation of struggling student-loan debtors

Susan Browmmiller, in her classic book on rape, observed that rape victims are often assaulted twice. First, they are physically raped by their attacker; and then they are psychologically raped by the justice system when they testify against the rapist in a brutal and humiliating criminal trial.

Something similar can be said about student-loan debtors. Millions of unsophisticated young people have been enticed to take out student loans to enroll in academic programs that don't lead to good jobs. That's rape number 1.

Then when these duped individuals are unable to pay back their student loans, they fall into the hands of the unscrupulous debt collectors. That's rape number 2.

Brandon v. Eaton Group Attorneys: Law firm accused of violating Fair Debt Collection Practices Act

Last January, a federal judge in Louisiana ruled in a case brought by Cassandra Brandon against Eaton Group Attorneys (Eaton), a law firm representing National Collegiate Student Loan Trust (NCSLT), a student-loan debt collector. Eaton had sued Brandon on NCSLT's behalf, alleging that Brandon had defaulted on her student loans and owed NCSLT about $46,000.

After the lawsuit was filed, an agent for Eaton sent Brandon a letter, which was described as a "REQUEST FOR PAYMENT ARRANGEMENTS." And this is what the letter said:
Dear CASSANDRA PLUMMER [Plummer is Brandon's maiden name]: 
If you would like to explore a voluntary repayment plan, then please provide the requested information. The debt will need to be acknowledged through the attached consent judgment. Please return these forms as soon as possible. This is a communication from a debt collector. This is an attempt to collect a debt. Any information will be used for that purpose.
Accompanying the letter was a partially completed consent judgment, which stated:
IT IS ORDERED, ADJUDGED, AND DECREED that judgment be rendered in favor of Plaintiff, NATIONAL COLLEGIATE LOAN TRUST 2007-1, and against the defendant, CASSANDRA PLUMMER . . ., in the full sum of $41,115.13, together with accrued interest of $4,998.37, and additional interest of 4% from date of judgment, and for all costs of these proceedings, subject to a credit of $0.00.
Brandon then sued Eaton Group Attorneys in federal court, charging the law firm with violating the Fair Debt Collection Practices Act (FDCPA).  Basically, Brandon accused the law firm of sending her a deceptive debt-collection letter in violation of the FDCPA.

Eaton moved for summary judgment on Brandon's claim, arguing that its letter was "non-deceitful as a matter of law." But Judge Sarah Vance denied the law firm's motion and allowed Brandon to proceed with her suit.

Judge Vance began her analysis by summarizing the purpose of the FDCPA, which is to eliminate "abusive, deceptive, and unfair debt collection practices . . ." The law prohibits debt collectors from using any "false, deceptive, or misleading representation or means in connection with the collection of any debt," and it bars debt collectors from using "unfair or unconscionable means" to collect on a debt.

In the court's view;
[The] letter [Brandon] received was misleading because an unsuspecting debtor, seeking only to 'explore a voluntary repayment plan,' could be fooled into executing the consent judgment without knowledge of the consequences. Specifically, an unsophisticated debtor may not know that the consent judgment will serve to waive potentially valid defenses and may facilitate a wage garnishment order" [Emphasis supplied]
By telling Brandon she must formally acknowledge her debt before she could even "explore" voluntary repayment plan, the Eaton Group Attorneys was basically inviting her to "inadvertently dig herself into a deeper hole." (Internal citation omitted).

Congress needs to clean up the student-loan debt collection industry

Laws are already on the books that ban unfair debt collection activities. Brandon sued Eaton Group Attorneys under the FDCPA; and Navient Solutions and Student Assistance Corporation had a judgment assessed against them last spring for violating the Telephone Consumer Protection Act.


But more needs to be done.

Specifically, Congress needs to hold hearings on the activities of the student loan guaranty agencies--and Educational Credit Management Corporation in particular. A Texas bankruptcy judge slapped ECMC with punitive damages last year for repeatedly violating the automatic stay provision of the Bankruptcy Code, but the penalty was entirely too light for such a wealthy corporation.

And Congress needs to eliminate the excessive penalties--25 percent or more--that debt collectors assess on student-loan debtors in default.  After all, it is the penalties and accrued interest that are driving millions of struggling student-loan debtors into 20- and 25-year income driven repayment plans.

Republicans and Democrats could bring relief to millions of overwhelmed student-loan debtors if they just joined together to pass meaningful reform legislation.  If our nation's politicians can't cooperate in a bipartisan effort to clean up the student loan program, then shame on all of them.

References

Brandon v. Eaton Group Attorneys, CA No. 16-13747 (E.D. La. Jan. 24, 2017).

Bruner-Halteman v. Educational Credit Management Corporation, Case No. 12-324-HDH-13, ADV. No. 14-03041 (Bankr. N.D. Tex. 2016).

McCaskill v. Navient Solutions, Inc., No. 8:15-cv-1559-T-33TBM (M.D. Fla. April 6, 2016).

Robert Shireman and Tariq Habash. Have Student Loan Guaranty Agencies Lost Their Way? The Century Foundation, September 29, 2016. Accessible at https://tcf.org/content/report/student-loan-guaranty-agencies-lost-way/

Monday, March 13, 2017

Student Debtors and the Consumer Financial Protection Bureau: Trump needs to strengthen the CFPB, not weaken it

Last January, the Consumer Financial Protection Bureau sued Navient Corporation, a student-loan debt collector, accusing the company of "systematically and illegally failing borrowers at every stage of repayment."

According to CFPB Director Richard Cordray, Navient cheated student borrowers by making it more difficult for them to pay back their college loans. "At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs," Cordray charged. "Too many borrowers paid more for their loans because Navient illegally cheated them , , , "

Specifically, the CFPB accused Navient of these illegal practices:
  • Failing to correctly apply and allocate borrowers' payments to their student-loan accounts. "Navient repeatedly misapplies and misallocates payments--often making the same error multiple times,"  the CFPB alleged. And all too often, Navient would not correct its errors unless a borrower discovered the problem and brought it to Navient's attention.
  • Giving struggling borrowers bad advice about student-loan repayment options.  The CFPB also accused Navient of steering student debtors toward costly forbearance options when they were having trouble making their monthly loan payments. These options give borrowers a break from making their payments, but the interest continues to accrue during forbearance. CFPB believes Navient should have helped borrowers get into income-driven repayment plans (IDRs) that would lower their monthly payments instead of encouraging them to apply for forbearances.
  • "Obscur[ing] information" borrowers needed to remain in income-driven repayment plans. The CFPB also said Navient failed to adequately inform borrowers about what they need to do to maintain their eligibility for income-driven repayment plans. Once borrowers enter those plans, their monthly payments are determined by their annual income; but to remain eligible, borrowers must recertify their income every calendar year. Apparently, a lot of borrowers in IDRs do not know they are required to recertify their income on an annual basis.
As the New York Times said in an editorial, CFPB's charges against Navient "have the ring of truth." Without question, student borrowers who opt to skip loan payments temporarily under  a government-approved forbearance plan see their loan balances grow dramatically due to accruing interest, which accelerates their descent into default. And it seems evident that people in income-driven repayment plans don't understand what they need to do to maintain their eligibility; half the people who enroll in IDRs get kicked out of them for failing to recertify their income on an annual basis.

The student-loan debt collectors are hoping President Trump will dismantle or cripple the CFPB, which would prevent the agency from bringing lawsuits like the one it brought against Navient. And perhaps he will.

But I am hoping the Trump administration  surprises the corporate fat cats and throws its full support behind CFPB's lawsuit against Navient.  Indeed, the CFPB needs to become a lot more aggressive.

In my view, the CFPB should investigate the student loan guaranty agencies that are making a fortune in the student-loan collection business. As the Century Foundation reported last year, four of these agencies have amassed $ 1 billion apiece through servicing and collecting student loans.

Educational Credit Management Corporation, which holds a billion dollars in unrestricted assets, is particularly ruthless. Just last year, a federal bankruptcy judge assessed punitive damages against ECMC for repeatedly violating the automatic stay provision of the Bankruptcy Code by garnishing the wages of a Starbucks employee more than 30 times after she filed for bankruptcy in an effort to collect on a defaulted student loan.

In short, there is a lot for the CFPB to do, and the Navient lawsuit is only a small step in the right direction. It would be a tragedy if the corporate interests defanged the CFPB, which is only now getting serious about protecting student-loan debtors from abuse.

Richard Cordray, CFPB Director
photo credit: Getty Images

References

Bruner-Halteman v. Educational Credit Management Corporation, Case No. 12-324-HDH-13, ADV. No. 14-03041 (Bankr. N.D. Tex. 2016).

Consumer Financial Protection Bureau. CFPB Sues Nation's Largest Student Loan Company Navient for Failing Borrowers at Every Stage of Repayment. Consumer Financial Protection Bureau Press Release, January 18, 2017.

Robert Shireman and Tariq Habash. Have Student Loan Guaranty Agencies Lost Their Way? The Century Foundation, September 29, 2016. Accessible at https://tcf.org/content/report/student-loan-guaranty-agencies-lost-way/

Bob Sullivan. Will a Trump presidency lead to more predatory lending? Market Watch, January 18, 2017.

Unfairly Squeezing Student BorrowersNew York Times, February 4, 2017.

Friday, March 10, 2017

763 colleges and schools closed last year, and most of their former students have student loan debt

As reported by Bloomberg, 763 colleges and schools closed last year--the highest number since 2012, when more than 900 schools were closed. In fact, since 1984, more than 13,000 post-secondary schools have shut down,  including more than 300 foreign schools. And all these institutions--including the foreign institutions--were beneficiaries of the federal student aid program at the time of their demise, which mean they got Pell grant funds and federal student-loan money while they were operating.

However, a close look at the Department of Education's closed schools list, however, reveals that the numbers are not as alarming as they might first appear. First of all, most of these schools were small propriety trade schools, barber schools, schools of cosmetology, etc, which had relatively small numbers of students.  For example, Ruth's Beauty College and the Hollywood Script Writing Institute are on that list, along with Paul's Academy of Cosmetology.

Moreover, many schools on the list were simply branches of institutions that are still thriving. University of Oklahoma, for example, closed a campus at Kunsan Army Base and another one at Rhein Air Base. In fact, mainline universities all over the United States have been shutting down unprofitable satellite campuses, and these closings have swelled the list of total closures.

Nevertheless, sprinkled among the beauty schools, barber colleges, and satellite campuses on the closed school list, are a significant number of free-standing colleges that have shut their doors.  A few recent examples have made the national news: St. Catharine College in Kentucky, Dowling College in New York, St. Joseph's College in Indiana, Virginia Intermont College, and Virginia's Sweet Briar College (which later reopened).

And more are sure to follow. Moody's Investors Service predicted in 2015 that the number of annual college closures would triple in the years to come to about 15, and this estimate is probably too low. In my view, no college with an enrollment of  less than 1000 students can survive long; and there are a lot of schools in that category.

Here are some things to think about as the closure rate for postsecondary institutions accelerates:

I. Expedited loan forgiveness for former students of for-profit colleges

 First, all these schools--all 13,000 of them--participated in the federal student loan program, and a great many of them left their former students in the lurch. ITT Tech and Corinthian Colleges alone had a total of half a million former students, and both institutions are in bankruptcy.

The Department of Education needs to develop an expedited loan forgiveness process for student-loan debtors who attended closed schools--particularly the for-profit schools that close at the rate of several hundred a year. In fact, all students who to took out loans to attend a closed for-profit college should have their loans automatically forgiven--no questions asked.

II. A central records repository to maintain student transcripts of closed colleges

Second, a central records repository needs to be established to maintain the transcripts of students who attended these closed institutions. This should be a federal responsibility since many of these schools were created primarily to capture federal student aid money.

III.Shutting down the for-profit sector and foreign participation in the federal student loan program

Finally, we've simply got to shut down the for-profit college sector, and we've got to quit subsidizing foreign colleges that are receiving federal student aid funds.  Let's face it: a great many of the defunct for-profit schools  were created for the primary purpose of feasting from the federal larder of easy student-loan money.

Do we need postsecondary training in the trades? Yes, we do, but that mission should be assigned to public community colleges and not to flaky outfits like Bubba's Welding Academy.


References

Another Small Private Closes Its Doors. Inside Higher Ed, June 1, 2016.

Paul Fain. The Department and St. Catharine.  Inside Higher Ed, June 2, 2016.

Lyndsey Layton. Virginia Tech pays fine for failure to warn campus during 2007 massacre. Washington Post, April 16, 2014.

Rick Seltzer. Closing out a college. Insider Higher Education, January 5, 2017.

Kate Smith. Here's What Happens to Endowments When Colleges Close. Bloomberg.com, March 6, 2017.

Susan Svrluga. Alumnae vowed to save Sweet Briar from closing last year. And they did. Washington Post, March 3, 2016.

Kellie Woodhouse. Closures to Triple. Inside Higher Education, September 28, 2015.