Sunday, October 30, 2016

Huma Abedin: Hillary will throw her under the bus. A Catholic reflection on politics and fame as All Souls Day approaches and we remember our honored dead

Eleven days before the presidential  election, FBI director James Comey announced he is reopening the FBI investigation into Hillary Clinton's email scandal.

Those of us who live in fly-over country will never know all the facts about Hillary's private emails, but this much I believe we can safely conclude:

1) James Comey is a decent and honest man. Mr. Comey was fully aware of the political and legal risks he was taking when he sent a letter to Congressional leaders telling them the FBI had discovered new evidence on Anthony Weiner's computer about Clinton's private email traffic.

Attorney General Loretta Lynch objected to Comey's decision to alert Congress, and Comey sent the letter anyway. Surely he is a man of integrity and courage.

2) Whatever the FBI found on Weiner's computer must be significant. At the very least, I think Weiner's computer will show that Huma Abedin, Weiner's estranged wife and Hillary's closest confidant, lied to the FBI when she testified about Hillary's private server. And the new evidence may show that Hillary lied as well. Otherwise, why would Comey write such an explosive letter?

3) Regardless of who wins the election, this latest revelation will destroy Hillary Clinton's political career. Hillary may still win the election next week, regardless of what the FBI found on Anthony Weiner's computer, but this scandal won't go away until Hillary Clinton's political career is over.

4) Hillary will throw Huma Abedin under the bus. Hillary makes all her decisions out of expediency, and she has no sense of personal loyalty. If necessary, Hillary will throw Huma under the bus to save herself. I predict that will happen before election day.

5) Journalists and politicians who sold their integrity to support Hillary Clinton will never regain the public's trust. Bill Richardson, former governor of New Mexico and a Democrat, chastised Mr. Comey on Fox News this morning for sending a bombshell letter to Congressional Republicans just a few days before the election. But as the Fox News commentator quickly reminded Richardson, Comey sent the letter to both Republicans and Democrats. Richardson's characterization of the letter, like Hillary's, was a deliberate misrepresentation.

In my mind, Richardson's pathetic dissembling destroyed his credibility forever. And the same can be said for dozens of other obsequious Clinton supporters. For example, Froma Harrop, insinuated in an op ed column that Bernie Sanders is a racist when Bernie was running against Hillary in the Democratic primaries last spring. Bernie Sanders--a racist?

Will Froma Harrop ever recover her integrity after writing that sleazy essay? No, she won't.

The Cemetery at St. Francis Cabrini Catholic Church in Livonia, Louisiana

Yesterday, while Hillary's latest email scandal simmered and boiled, I drove to Livonia LA to visit the Catholic cemetery at St. Francis Cabrini Catholic Church near Bayou Grosse Tete. This is the weekend before All Souls Day; and in South Louisiana, every Catholic family has a duty  to place flowers on the graves of departed loved ones. I was determined to honor this tradition by placing bouquets of flowers on the graves of Ivy Alford, Sr. and his wife Mary Alice, my wife's grandparents.

To my surprise, fresh flowers had been placed on about  two thirds of the graves in Cabrini cemetery. The Cajuns were honoring their dead,  knowing the parish priest would sprinkle holy water on the grave sites on All Souls Day. No one wanted to appear indifferent to their ancestors as this Holy Day of Obligation approached.

Before leaving the cemetery, I noticed two men standing at Mr. Alford's grave; they were obviously paying respect to his memory. I introduced myself and the men told me a little about Mr. Alford, who had died 30 years ago. They testified to his kindness, his willingness to help anybody who needed aid. They recalled his humility and his sense of humor. A teardrop appeared on one man's face as he testified to Mr. Alford's extraordinary goodness.

Ivy Alford, Sr. was not a wealthy man; he left this world without leaving much of anything other than a good duck-hunting shotgun. But he was loved, and he is still remembered 30 years after his death.

Hillary Clinton will go down in history as America's most prominent woman politician. If she is elected President, she will have a presidential library; and win or lose,  scholars will write books about her for centuries to come. And when she dies, she will lie beneath a stately monument.

But no one will stand before Hillary's grave 30 years after her death and shed a tear for her remembered kindness. And so who lived the greater life--Hillary Clinton or Ivy Alford, Sr?




References

Froma Harrop. Bernie Sanders and Racism LiteSeattle Times, May 19, 2016. Accessible at http://www.seattletimes.com/author/froma-harrop/

Friday, October 28, 2016

Educational Credit Management Corporation and the U.S. Department of Education: Are They Co-Conspirators in Accounting Fraud?

Last March, an Arizona bankruptcy court discharged $245,000 in student loan debt owed by  Rita Gail Edwards, a 56-year-old single woman earning a tenuous living as a counselor. Educational Credit Management Corporation (ECMC), her student-loan creditor, fought the discharge. ECMC wanted Edwards placed in a 25-year income-based repayment plan. Under such a plan, Edwards would only pay $84 a month on her loans for 25 years.

ECMC's position was absurd, of course. A woman in her late 50s  will never pay off a $245,000 loan by making monthly payments of $84. The only possible purpose that is served by jamming Ms. Edwards into a 25-year repayment plan is to carry her student-loan debt on the Department of Education's books as a performing loan.

In ruling for Ms. Edwards, the bankruptcy judge questioned the wisdom of a system that allowed Edwards to borrow so much money. "In hindsight, it is a shame that [Edwards] ever incurred these student loan debts," the court observed.
While her Ottawa University education may have given her the tools and credentials to work in an emotionally satisfying role [as a counselor] and may have provided a well needed skilled counselor in her rural community, the predictable economic burden was never likely to justify the massive economic burden she incurred.
The Edwards case demonstrates the insanity of the federal student-loan program. Our government allows people to borrow extravagant amounts of money for educational programs that will never pay off, and then it engages debt collectors to push borrowers into long-term income-based repayment plans that stretch out over 25 years and will almost never result in the loans being repaid.

And the Edwards case is not an anomaly. In the Roth case, ECMC opposed a bankruptcy discharge for an elderly woman with chronic health problems who was living on less than $800 a month. In fact, Roth's income was so low that ECMC acknowledged that Roth's monthly payments under an income-based repayment plan would be zero!

In the Halverson case, ECMC opposed a discharge for a man in his sixties making less than $14 an hour as a substitute teacher and who owed almost $300,000 in student loan debt. Mr. Halverson borrowed less than half the amount he owed when he filed bankruptcy and was never in default. His debt ballooned mostly due to accruing interest while his loans were in deferment.

The Department of Education itself has taken the same irrational stance regarding bankruptcy discharge for student debtors. In the Myhre case, DOE opposed a discharge for a quadriplegic, and in the Abney case, it opposed a discharge for  a single father of two children who was living on less than $1200 a month and could not even afford to own a car.

Why?

 I can think of only one reason. ECMC and DOE are engaged in a massive accounting fraud, trying to convince the public that the federal student loan program is solvent and fiscally sound. But in fact the student loan program is a disaster. Eight million people are in default and and one out of four debtors are either in default or behind on their loan payments.

ECMC benefits from the status quo--that is clear. According to a Century Foundation report, it has $1 billion in unrestricted assets, most of it obtained from its loan-collection activities. The Westlaw database shows that ECMC has  appeared as a named party in over 500 federal court rulings; it has spent literally millions of dollars in attorney fees chasing after people like Gail Edwards and Janet Roth.

And who pays those fees?  According to a law review article written by Rafael Pardo, ECMC draws money from a Federal Reserve Fund to finance its loan-collection activities and has access to "significant [federal] resources when litigating against student-loan debtors" (p. 2145).  Pardo cites a document showing that DOE allowed ECMC to keep a quarter of a billion dollars that it drew from DOE's Federal Reserve Fund to finance its activities in 2008 (p. 2145).

So you, Mr. & Ms American taxpayer, are paying ECMC to engage in unproductive litigation against impoverished debtors--litigation intended to keep the student-loan crisis under wraps.

And ECMC is a nonprofit organization--supposedly devoted to the public good.

But ECMC is not acting for the public good. On the contrary, ECMC is DOE's hit man--the entity DOE sends to beat down bankrupt student debtors and prevent them from getting the bankruptcy relief they deserve.

 ECMC's senior executives are getting well paid to be DOE's "Mac the Knife."  Its CEO makes at least a million dollars a year.

References

Annual Report of the CFPB Student Loan Ombudsman. Consumer Financial Protection Bureau, September 2016. Available at http://files.consumerfinance.gov/f/documents/102016_cfpb_Transmittal_DFA_1035_Student_Loan_Ombudsman_Report.pdf

Edwards v. Educational Credit Management Corporation, Adversary No.. 3:15-ap-26-PS, 2016 WL 1317421 (Bankr. D. Ariz. March 31, 2016). Available at http://www.azb.uscourts.gov/sites/default/files/opinions/024139558300_dmd.pdf

In re: Halverson, 401 B.R. 378 (Bankr. D. Minn. 2009).

Rafael Pardo. The Undue Hardship Thicket: On Access to Justice, Procedural Noncompliance and Pollutive Litigation in Bankruptcy. 66 Florida Law Review 2101-2178. Available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2426744

Roth v. Educational Credit Management Corporation490 B.R. 908 (9th Cir. BAP 2013). Available at http://cdn.ca9.uscourts.gov/datastore/bap/2013/04/16/RothV%20ECMC%20opinion-FINAL%20AZ-11-1233.pdf

Wednesday, October 26, 2016

Sued Because You Defaulted On a Private Student Loan? Read Richard Gaudreau's blog in Huffington Post about National Collegiate Student Loan Trust

If you defaulted on a private student loan and got sued, you should read Richard Gaudreau's recent blog essay in the Huffington Post.

As Gaudreau explained, there are big differences between federal student loans and private loans. The federal student-loan program offers alternative repayment plans that lower monthly payments for borrowers who run into financial trouble.  In addition, the Department of Education offers loan forgiveness for people who borrowed to attend an institution that closed while they were enrolled and for people who were defrauded by the institution they attended.

Private student loans offer none of these protections, and private creditors have responded heartlessly toward their defaulted student-loan debtors. In many instances, private lenders have turned over their defaulted student loans to collection agencies. In particular, National Collegiate Student Loan Trust (NCT), a debt collector with a deceptively benign name, has filed law suits against numerous student-loan debtors, as many as one a day in some states, according to a Bloomberg Business Week article.

In some cases, however, NCT has not been able to show that it is the real party in interest in those lawsuits. In other words, NCT cannot always produce the paperwork that demonstrates it has the authority to collect the loan.

In such cases, some debtors have been able to persuade judges to dismiss these collection suits. So if you have been sued because you defaulted on a private student loan, your lawyer should demand that the debt collect produce evidence that it has the right to sue you for your student-loan debt.

Why would a debt collector sue someone without being  able to show it has the authority to collect on the debt? I am not certain, but here is my best guess. I think private banks and lenders (Wells Fargo, Sallie Mae and some other prominent names) have bundled thousands of basically noncollectable student loans and sold them to debt collectors like NCT, without providing the debt buyers with all the necessary legal documents for the individual loans. The debt collectors may have bought these loans for pennies on the dollar.

The debt collectors then sue distressed borrowers, betting the borrower are too unsophisticated to know how to find out whether the debt collector has the legal authority to collect the debt. .

In most instances, it is a safe bet. Distressed student-loan debtors usually do not have enough money to hire lawyers to defend their interests. In some cases, they naively admit to damaging "Requests for Admissions" that the creditors send them in the mail. By doing so, debtors give up their legal rights without knowing it.

In essence, private student-loan debt collectors maybe engaging in the contemporary equivalent of the "robo-signing" scandal that occurred during the home-mortgage crisis of 2008. A lot of home owners lost their homes in foreclosure actions even though the agencies that confiscated their houses sometimes couldn't prove they had the legal authority to sue the homeowner in the first place.

So if you have been sued by NCT or another student-loan debt collector, read Gaudreau's article and then hire a lawyer. The first thing your attorney will probably do is demand that the debt collector produce the evidence that is has the authority to sue you. If it can't produce that evidence, it shouldn't have sued you, and you have a good chance of getting your case dismissed.

Justice! Wouldn't it be nice to see a little of it come your way?


References

Richard Gaudreau. In Spate of National Collegiate Student Loan Trust Lawsuits One Defense Stands Out. Huffington Post, April 25, 2016.  Available at http://www.bloomberg.com/news/articles/2015-06-04/the-student-debt-collection-mess

Jamie P. Hopkins & Katherine A. Pustizzi. A Blast From the Past: Are the Robo-Signing Issues That Plagued the Mortgage Crisis Set to Engulf the Student Loan Industry? 45 University of Toledo Law Review 239 (Winter 2014). Available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2413848

Natalie Kitroeff. The Lawsuit Machine Going After Student Debtors: "This is robosigning 2.0". BloombergBusinessweek.com, June 3, 2015. Available at
http://www.bloomberg.com/news/articles/2015-06-04/the-student-debt-collection-mess

Gloria J. Liddell & Pearson Liddell, Jr. Robo Signers: The Legal Quagmire of Invalid Residential Foreclosure Proceedings and the Resultant Potential Impact on Stakeholders. 16 Chapman Law Review 367 (Winter 2013).






Tuesday, October 18, 2016

Suicides and a Jail Death in Anadarko, Oklahoma: Bitter, Angry and Frightened, Oklahomans will not vote for Hillary

Last January, the Washington Post reported on a spate of suicides in Anadarko, Oklahoma. Four people committed suicide over a period of less than two months. All were young, all were racial minorities, and all killed themselves with guns.

And last April, Darius Robinson, an African American father of seven, was killed in his Anadarko jail cell, asphyxiated by jail employees. Jailers say Robinson was trying to escape, but the Oklahoma Medical Examiner ruled the death a homicide.  A small demonstration was organized a couple months after Robinson's death; about 50 people attended. Robinson, by the way, was not in jail for a violent crime; he was in the slammer for failing to pay child support.

You might think these tragedies would draw the attention of President Obama. Four desperate young people killed themselves with handguns--what a great opportunity for the President to talk about gun control. A black man strangled by his jailers while in police custody--that's as least as shocking as the death of Freddie Gray in Baltimore/

Nevertheless, as far as I can determine, Barack Obama has said nothing about these deaths, and Hillary Clinton has said nothing about them. And, to the best of my knowledge, neither Al Sharpton nor Jessie Jackson has shown up in Anadarko.

Why? Because the Oklahomans don't matter. The Democratic political operatives have written off Oklahoma, and well they should. In the Democratic presidential primary, Oklahoma Democrats voted overwhelmingly for Bernie Sanders--Bernie Sanders! And  God knows they didn't vote for Bernie because they are socialists. No, Oklahoma Democrats loath Hillary Clinton, and Bernie was their only alternative. And if Oklahoma Democrats loath her, you can imagine what Oklahoma Republicans think.

In truth, Oklahomans are bitter, angry and frightened. Outside a few pockets of urban prosperity--Oklahoma City, metropolitan Tulsa, and Bartlesville--the state is in deep depression. From the Winding Stair Mountains in the east to the short grass country of western Oklahoma, there are no jobs. Anadarko, my home town, may be the epicenter of Oklahoma's desperate condition. Abandoned houses, suicide, alcohol abuse, drug addiction--rural Oklahomans are among the casualties of the new global economy.

Hillary and Barack despise these people, and the Oklahomans know it.  Barack sneeringly dismissed poor white Americans generally when he said they comfort themselves with guns and religion. When Hillary condemned the "basket of deplorables," she was talking about the people I grew up with.

Eighty years ago, John Steinbeck wrote The Grapes of Wrath, a tribute to the strength and courage of the Oklahomans who were driven off their land during the Dust Bowl years and migrated to California in rattletrap cars. "We're the people that live," Ma Joad says in the novel. "They can't wipe us out; they can't lick us. We'll go on forever, Pa, 'cause we're the people."

Do you think Barack Obama or Hillary Clinton have read The Grapes of Wrath? Not likely. Do you think they give a damn about contemporary Oklahomans who are suffering now just as much as their ancestors did during the Great Depression? No, of course not.

Image result for darius robinson death
Darius Robinson: "We're the people"



References

Sarah Kaplan.'It has brought us to our knees': Small Okla. town reeling from suicide epidemic. Washington Post, January 25, 2016. It https://www.washingtonpost.com/news/morning-mix/wp/2016/01/25/it-has-brought-us-to-our-knees-small-okla-town-reeling-from-suicide-epidemic/


Xin Xin Liu. Protesters Gather At Caddo Co. Courthouse After Inmate's Death, new9.com, July 22, 2016. Available at
http://www.news9.com/story/32507009/protest-planned-at-caddo-co-courthouse-after-inmates-death

Sunday, October 16, 2016

Medieval America: Victor David Hanson correctly diagnoses the collapse of American liberal democracy

It is difficult to convey a brilliant insight in less than 2,000 words, but Victor David Hanson has done it. In a brief essay published last week, Hanson said it is inaccurate to compare our declining American civilization to the fall of the Roman Empire. In truth, Hanson argued, our nations is becoming like medieval Europe.

Like today's America, Hanson points out, medieval Europe could boast some fine universities where the sum of human knowledge increased. But the universities of that day, like our modern American universities, had strict speech codes. The sun revolved around the earth, and woe to any medieval scholar who argued otherwise.  And today of course professors are permitted to express only one point of view on important global issues like climate change.

Humanist scholars of medieval times "wrote esoteric treatises than no one read," Hanson writes. "These works were sort of like the incomprehensible 'theory' articles of university humanities professors who are up for tenure."

Hanson definitely got that right. Not to mention the 10,000 law review articles that law professors and their students publish every year even as the core principles of our legal system disintegrate.

In my view, Hanson's most trenchant comparison between contemporary America and medieval Europe relates to the economy. Today, as Hanson notes, one fifth of Americans own absolutely nothing or have negative worth, much like medieval serfs. In fact, 18 percent of adult Americans have student-loan debt, which they are permitted to work off by donating a percentage of their income to the government over 20 or 25 years--just like peasants.

Indeed, America becomes more like medieval society with each passing day. The middle class--once the glory of liberal democracy--gets smaller every year. The nation's elites fly in private jets, work in fortress-like offices, and are protected by private security agencies; they are truly lords and barons surrounded by modern-day moats. Their kids go to the best private schools. And the elites do a good job of protecting their income from taxes.

Meanwhile the rest of us ride the subway or commute to work on crumbling freeways. We pay taxes at a higher rate than either Donald Trump or Hillary Clinton, and we send our kids to mediocre schools.  Defined-benefit retirement plans are fast disappearing, and we put our puny savings into the stock market because the elite have declared that we can earn nothing on our savings if we invest anywhere else.

Everywhere, the non-elites are getting poorer, but the slide into serfdom is most evident in rural America. In my own hometown of Anadarko, Oklahoma, the little family shops and stores of my childhood are all empty and boarded up. If you want to buy something--almost anything at all--you must go to Walmart. Hundreds of houses have been abandoned, including the one I lived in as a kindergarten child. Drug addiction and suicide are up; decent jobs have disappeared.

Americans know in their hearts that our slide into medievalism will accelerate after the national election unless our economy is radically restructured. Let us hope President Trump can do what he promised he would do to restore jobs to middle-class and working-class Americans.


References

Victor David Hanson. Medieval America, Town Hall, October 13, 2016. Available at http://townhall.com/columnists/victordavishanson/2016/10/13/medieval-america-n2231213http://townhall.com/columnists/victordavishanson/2016/10/13/medieval-america-n2231213

Tuesday, October 11, 2016

The Department of Education strips ACICS of accrediting authority: It's time to pull the plug on the rapacious for-profit college industry

Turn out the lights
The party's over
They say that
All good things must end

Willy Nelson
Turn Out the Lights

Last month, the Department of Education stripped the Accrediting Council for Independent Colleges and Schools (ACICS) of its accrediting authority--basically signing ACICS's death certificate. ACICS will appeal of course, and there may be litigation; but for now at least ACICS is essentially out of business.

ACICS accredited 245 post-secondary institutions, mostly for-profit colleges.  These institutions are scrambling to find a new accrediting agency, which is a life-or-death issue for them. DOE requires colleges to be accredited by  a government-approved accrediting agency in order to receive federal student aid money.  Without regular infusions of federal cash, none of these colleges would last a month.

According to Inside Higher Ed, more than 100 colleges that were accredited by ACICS have applied for accreditation with another accrediting body--the Accrediting Commission of Career Schools and Colleges (ACCSC).  ACCSC also accredits for-profit colleges (more than 300), and many for-profits will probably find a new accrediting home with this agency.

But, as Willy Nelson once observed, when the party's over, someone should turn out the lights. And the party is about over for the rapacious for-profit college industry.  

Corinthian Colleges and ITT have filed for bankruptcy, leaving thousands of students in the lurch. As state and federal regulatory agencies step up the pressure on the predatory for-profit college industry, more for-profit schools will close. DOE has more than 250 proprietary schools on its "Heightened Cash Monitoring" watch list,an indication that the financial viability of this industry is shaky.  Publicly traded for-profits have seen their stock prices plummet as investors bolt for the exits.

Shutting down the for-profit colleges will be messy. The for-profits have been incredibly litigious, and they will certainly sue to protect their interests. But with each passing day, more unsuspecting and unsophisticated young people takes out student loans to attend  for-profit colleges; and many of them never recoup their investments. Indeed almost half of the people who take out federal student loans to attend a for-profit college default within five years of beginning repayment.

It is going to be ugly, and its going to be complicated. But the time has come to turn out the lights on the for-profit college industry, which has harmed so many innocent and unsuspecting American young people.

References

Scott Jaschik. Slight Drop in Colleges in Heightened Cash MonitoringInside Higher Education, July 25, 2016. Accessible at https://www.insidehighered.com/quicktakes/2016/07/25/slight-drop-colleges-heightened-cash-monitoring?utm_source=Inside+Higher+Ed&utm_campaign=8991789a59-DNU20160725&utm_medium=email&utm_term=0_1fcbc04421-8991789a59-198564813

Paul Fain, Hundreds of colleges, many for-profits, seek a new accreditor. Inside Higher Ed, October 6, 2016. Accessible at https://www.insidehighered.com/news/2016/10/06/hundreds-colleges-many-profits-seek-new-accreditor

Adam Looney & Constantine Yanellis.  A Crisis in student loans? Brookings Institution, September 10, 2015. Accessible at: http://www.brookings.edu/~/media/projects/bpea/fall-2015_embargoed/conferencedraft_looneyyannelis_studentloandefaults.pdf










Monday, October 10, 2016

America's "Men Without Work": It's not their fault

Almost a third of American men in their prime working years are not working. Thirty-two percent of men older than 20 are out of the labor force--double the rate in 1948. And a lot of unemployed men aren't even looking for work. According to Nicholas Eberstadt,  author of Men Without Work, only 15 percent of American men in the 25-54 age group who didn't work in 2014 said they were unemployed because they could not find a job.

Of course some of these men are disabled, but the percentage of men sitting on the sidelines because of some certified disability seems too high. Eberstadt reports that there were 134 workers for every officially disabled person in 1960 (as summarized by George Will). Today, there is one disabled person for every 16 workers--in spite of the fact that the American workplace has become much safer over the last 50 years.

Eberstadt argues that unemployment has become a "viable option" for millions of American men, and George Will implicitly scolded this vast population--saying these unemployed men have chosen a life of "protracted idleness."

But I know some of these men, and I think most would prefer to be working. Here are some examples of men I know personally.

  • A friend who worked in the petrochemical industry was laid off in his 50s when the company he worked for merged with another company. He found various part-time jobs at minimal pay and then took his Social Security benefits early--at age 62. He and his wife are living frugally on Social Security income and modest savings.
  • A guy I know worked as an architectural draftsman but he didn't upgrade his skills when  computer-assisted drawings (CAD) fundamentally changed the nature of his craft by greatly speeding up the drafting process and making it less expensive. He is not lazy. I've seen his enormous garden, from which he derives a substantial amount of his food.
  • Another friend worked many years in public education and gained a reputation for being an effective disciplinarian in chaotic urban schools. But the work burned him out, and he took his state pension early. He does carpentry work and cabinet work from time to time, but essentially lives off his pension.
I  come in contact with unemployed men all the time, and few of them are happy. No wonder the suicide rate for middle-aged white Americans has gone up substantially in recent years, along with death from alcohol- and drug-related causes.

In my opinion, this doleful trend cannot be explained by laziness. There are lots of reasons.

First, the nation's economy has failed working-class and middle-class Americans--which is what Donald Trump has been saying with considerable effect. Millions of Americans have been shoved out of the workforce as low-skill and medium-skill jobs have gone overseas.  And of course, our multinational corporations don't give a damn about the millions of Americans who have been thrown out of work. Profits are greater if goods are manufactured by exploited Asians rather than middle-class Americans.

Second, Americans have been betrayed by our educational system. The United States has a crummy educational system. Too many people graduate from high school without the  minimum reading and math skills they need to find a job or to profit from postsecondary education. 

And postsecondary education is a disaster. Our government is shoveling money into predatory for-profit colleges that have ripped off our most vulnerable young people--minorities and first-generation college students. Our elite liberal arts colleges obsess on race and sexual identity and care more about creating "safe spaces" than they do about producing problem solvers. Our public institutions have become vast bureaucratic mazes run by spineless and clueless administrative robots.

No wonder so many working-age men are unemployed. They didn't get the skills they needed to be productive workers in our post-industrial economy. Many of them tried to get those skills and wound up with no skills and a lot of student-loan debt.

Third, American cultural institutions no longer respect and support the American family. There was a time when our government, our churches, and our civic institutions honored the American family; and it was universally understood that the foundations of our culture rested on extended families that nurtured children and provided essential support for their members in times of trouble. I thank God I am part of such a family. 

But all that is falling away. And this distressing trend, in my view, contributes to a vast subculture of working-age men who do not work. At one time family obligations and a personal sense of honor prompted men to work to support their families--even if that meant working for poverty wages under humiliating conditions.

But many men no longer recognize family obligations. They do not work and save so their children can go to college. Rather their children are expected to take out loans to pay for their college education. They do not recognize a moral responsibility to be the breadwinner for their wives and children; women are expected to work. In fact, our society celebrates the fact that it now takes two working adults instead of one to support a family--as if every working woman is a lawyer or a brain surgeon instead of working as clerk in convenience store, which is the reality for millions of working American women.

It's not their fault

In short, the high percentage of unemployed men cannot be explained by indolence. Our culture, our government, our colleges and schools, and our post-industrial economy have conspired to create a world in which millions of American men see no point in working. And to suggest--as some commentators have done--that this calamitous trend is attributable to laziness completely misses the mark.



References

Nicholas Eberstadt. Men Without Work: America's Invisible Crisis (Washington, DC: American Enterprise Institute, 2016).

George Will, America's 'quiet catastrophe': Millions of idle men. Washington Post, October 5, 2016. Accessible at https://www.washingtonpost.com/opinions/americas-quiet-catastrophe-millions-of-idle-men/2016/10/05/cd01b750-8a57-11e6-bff0-d53f592f176e_story.html?utm_term=.d45b9f19bab9

Anne  Case and Angus Deaton. Rising morbidity and mortality in midlife among white
non-Hispanic Americans in the 21st century.  Accessible at: http://www.pnas.org/content/early/2015/10/29/1518393112.full.pdf

Editorial. Death Among Middle Aged Whites. New York Times, November 5, 2015.

Katherine A. Hempstead and Julie A. Phillips. Rising Suicide Among Adults Aged
40–64 Years: The Role of Job and Financial Circumstances.  American Journal of Preventive Medicine 84(5):491-500 (2015). Accessible at: http://www.ajpmonline.org/article/S0749-3797(14)00662-X/pdf

Jason Iuliano. An Empirical Assessment of Student Loan Discharge and the Undue Hardship
Gina Kolata. Deaths Rates Rising Middle-Aged White Americans, Study Finds. NewYork Times, November 3, 2015. Accessibe at: http://www.nytimes.com/2015/11/03/health/death-rates-rising-for-middle-aged-white-americans-study-finds.html

Betsy McKay. The Death Rate Is Rising for Midle-Aged Whites. Wall Street Journal, November 3, 2015. Accessible at: http://www.wsj.com/articles/the-death-rate-is-rising-for-middle-aged-whites-1446499495

Sunday, October 9, 2016

Hillary Clinton promises free college education and lower interest rates on student loans: These ideas won't solve the student-loan crisis, which is one hot mess

Prompted by Senator Bernie Sanders, presidential candidate Hillary Clinton made two promises to student-loan debtors. First, if she is elected President, all Americans with a family income of $125,000 or less will be able to get a college education for free from a public institution. Second, if elected, Hillary will slash interest rates on student loans.

These are both good ideas, and I endorse them wholeheartedly. But even if Hillary gets elected and keeps these promises, the student-loan crisis will still be one hot mess.

A Free College Education for Families of Modest Means: A good idea

Hillary has promised a free college education at a public institution for everyone whose family income is $125,000 or less. How much would that cost?

Catharine Hill, president of Vassar College, estimated that Bernie Sander's free-college plan would cost about $70 billion a year. The Clinton campaign estimates that her plan will cost less---about $50 billion a year.

Currently, the federal government gives out around $100 billion a year in student loans, and roughly a third of this money goes to for-profit colleges and private institutions. So if the government replaced $50 billion in loans with grants in the same amount, that would go a long way toward giving middle-class families access to a free college education at a public university.

But  Clinton's plan faces major hurdles. First, it will require Congressional approval from a Republican Congress, which seems unlikely. Second, Hillary's plans calls for state governments to contribute one third of the cost, and that assumption may not be realistic.

But let's assume Hillary gets this plan through. We still have a huge problem.  Millions of Americans will still have massive student-loan debt totally $1.3 trillion, and free college for future students will do nothing to relieve them of their suffering. People are having their wages garnished, their Social Security checks dunned, and their income-tax returns seized. Honest people who deserve bankruptcy relief are prohibited by law from getting it.

So if Hillary implements her free college plan she must do something to help the millions of people who are suffering from massive student-loan debt. In my view, she must push for bankruptcy reform that will permit honest but unfortunate student-loan debtors to shed their oppressive student-loan debts. And she should also endorse loan forgiveness for everyone who took out loans to attend an overpriced for-profit college and received no economic benefit from the experience.

Lowering Interest Rates On Student Loans: Another good idea

 Hillary also promises to slash interest rates on student loans if she is elected President, and she has called for a 90-day moratorium on student-loan payments to allow borrowers to refinance their debt. Ag ood idea.

Interest rates on student loans, currently around 4 percent, seem too high when ten-year treasury bonds are going for 1.7 percent. Lowering those rates will give student-loan debtors some relief.

But again, refinancing student loans won't relieve the massive suffering people are experiencing right now. Millions have seen their loan balances grow larger because they obtained economic-hardship deferments that caused unpaid interest to pile up. Others defaulted on their loans, and the loan guaranty companies slapped an 18.5 percent penalty to their loan balance. As a result, many people now owe two or even three times what they borrowed due to accruing interest, penalties, and collection fees.

A two percent interest rate on a $50,000 debt is certainly better than an 8 percent rate, but Hillary must stop the student-loan guaranty companies from imposing unreasonable costs and penalties to borrowers' loan balances. After all, the loan guarantee companies are supposedly charitable organizations, but four of them have each accumulated $1 billion in assets--most of acquired from their debt collection activities.

Conclusion: Hillary must acknowledge that the student-loan program is a catastrophe

Hillary's two proposals for reforming the federal student-loan program are good ideas, but free college in the future and lower interest rates won't relieve the hardship visited on American young people who borrowed too much money to enroll in educational programs that resulted in little or no economic benefit.

We must face facts. Millions of people were ripped off by shoddy and rapacious colleges. The victims of the student-loan program need to get back into the economy and begin building economic security for themselves and their families. That won't happen until massive amounts of  student-loan debt are forgiven.



References

Catharine Hill. Free Tuition Is Not the Answer. New York Times, November 30, 2015, p. A23. Accessible at: http://www.nytimes.com/2015/11/30/opinion/free-tuition-is-not-the-answer.html?_r=0

http://www.nytimes.com/2016/09/29/us/politics/bernie-sanders-hillary-clinton.html

Laura Meckler. Hillary Clinton's Free College-Tuition Plan Short on Specifics. Wall Street Journal, August 14, 2016. Accesible at http://www.wsj.com/articles/hillary-clintons-free-college-tuition-plan-coming-up-short-on-specifics-1471167001

Letter to the Honorable John King, Secretary of Education, from 23 Democratic Senators, September 15,2016. https://www.insidehighered.com/sites/default/server_files/files/9_15_16%20ITT%20Tech%20ED%20Letter%20(1).pdf

Dawn McCarty and Shahien Nasirpour. ITT Educational Services Files for Bankruptcy After ShutdownBloomberg, September 16, 2016. Accessible at http://www.bloomberg.com/news/articles/2016-09-16/itt-educational-services-files-for-bankruptcy-after-shutdown-it6byu6t

Reuters. ITT Educational Services Files for Bankruptcy After Aid CrackdownInternational New York Times, September 17, 2016. Accessible at http://www.nytimes.com/2016/09/18/business/itt-educational-services-files-for-bankruptcy-after-aid-crackdown.html?_r=0

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/