Get smart before you go to college because you might not get smarter while you're there

 I had a stroke last month, and I spent three weeks at a rehab center in Baton Rouge, Louisiana. During my time there, I was treated by several gifted occupational therapists, physical therapists, and speech therapists.

All my therapists were young women in their twenties. Every day I was inspired by these therapists’ competence, energy, and optimistic spirit.

Why did these women choose therapy as their occupation instead of gender studies or sociology? Why were they spending their days teaching elderly people how to walk and feed themselves instead of working as a government bureaucrat?

This is what I learned. The women who choose to become physical therapists and occupational therapists selected their vocation early, and they planned their college studies to reach a specific goal.

One young woman, I’ll call her Laura, told me she was awarded a state scholarship for her undergraduate studies, which she received based on her high school GPA and her score on the ACT exam. This scholarship award was good for four years, but she managed to graduate in three years, which allowed her to use her scholarship money for the first year of her graduate studies. she finished college with no debt.

Laura had to take out loans to finance her master's degree program in physical therapy, but she lived frugally and only borrowed $22,000. When the COVID crisis hit, the Department of Education put a hold on student debt collection. Unlike most student debtors, Laura kept on making monthly payments during the whole time of the COVID moratorium. She told me she reduced the amount of her debt from $22,000 to $17,000 during this time.

Unfortunately, I might say tragically, millions of college students do not pursue their vocational goals with the same discipline and clear-mindedness that Laura displayed. They see college as a time to party, to drink, and to engage in casual sex. They see student loans as a way to live a lifestyle they could not afford with their parents’ limited financial resources. They choose their academic majors carelessly. Perhaps they major in sociology because they heard it is an easy major. Maybe they choose a major like gender studies or ethnic studies in order to nurture a sense of victimhood.

When these hapless fools graduate from college, they learn that there are no jobs for people who graduated in the humanities or the social sciences. They realize they have no job skills at all. They can’t solve problems, they can’t write coherently, and they lack the people skills to be successful in the workplace.

Thank God there are still young people like Laura, who understand they have a responsibility to become productive citizens, and they have a desire to do something useful with their lives, even even if the job involves the unglamorous work of teaching an old man to walk, talk, and feed himself.

Not everyone can major in gender studies.

Cazenovia College is closing: Who cares?

 Cazenovia College is closing at the end of the spring semester. According to Inside Higher Ed, the college missed a bond payment due to financial stresses exacerbated by inflation and the COVID pandemic.

Cazenovia College is a liberal arts college located in the town of Cazenovia in upstate New York. It has about 800 students. The school was founded as a Methodist seminary almost 100 years ago.

Over the years, Cazenovia has gone through several metamorphoses and name changes. From 1904 until 1931, Cazenovia functioned as both a seminary and a secondary school.  The Methodists withdrew church sponsorship in the 1940s, and the school transitioned into a junior college. In the 1980s, the school became a four-year college and began offering graduate programs in 2019. 

In short, this plucky little college has done its best to remain relevant and to change with the times. Ultimately, however, Cazenovia couldn't make a go of it.

Cazenovia is primarily a liberal arts school. For example, the college has majors in Liberal Studies and Individual Studies.  What kind of job will a Cazenovia graduate get with a degree in those fields?

Like many obscure liberal arts schools around the United States, Cazenvovia's attendance costs can't be justified.  Tuition for this academic year is more than $36,000. Room and board are another $15,000. Who in their right mind would pay $50,000 a year to attend this tiny college with a 6-year graduation rate of only 59 percent?

But maybe the costs aren't that high.  The U.S. News & World Report points out that Cazenovia's sticker price is below the national average.  According to that source, the net price for federal loan recipients is only about $19,000. 

 That's still high.  When room, board, and living expenses are added, the total cost to attend Cazenovia for federal loan recipients is around $34,000 per academic year--34 grand to attend a college with only 800 students.

Across the United States, there are hundreds of obscure, expensive colleges struggling to survive. How have they held on for as long as they have? 

A recent study by the Government Accountability Office offers some clues. According to the GAO report, many schools are making financial aid offers to prospective students that misrepresent the actual costs. Specifically, GAO found that 41 percent of colleges in its study did not include the net price of attendance.  And half the schools reported a net price that did not include key costs.

For example, many schools include student loans and even Parent PLUS loans as "student aid," thus blurring the line between grants and loans. Unsophisticated families may not realize that the supposedly generous financial aid offer they received from an expensive private school might require them to take on burdensome levels of debt.

I'm not saying Cazenovia misrepresented the actual cost of attendance. Its financial aid offers may have been perfectly candid and totally in keeping with best practices. 

If so, it is in the minority. The GAO "estimate[d] most colleges do not provide students all of the information necessary in their financial aid offers to know how much they will need to pay for college."

Cheer Up! A Liberal Arts Degree May Enitle You to Work on a Cruise Ship

I recently returned from a river cruise down the Rhône River in France. Most of the cruise-ship workers hailed from eastern and central Europe--Bulgaria, Romania, the Balkan states, etc.

I had many opportunities to watch the crew members at work, and I was impressed by their efficiency, courtesy, and professional demeanor. The ones I talked with spoke English well, and I concluded that most had the skills to work in professional jobs instead of waiting tables and cleaning passenger cabins on a cruise ship.

Why, I asked myself, were so many crew members from eastern Europe? And why were they stuck in such menial jobs? After all, working on a cruise ship might be described as living in a floating purgatory--long hours, low pay, and cramped living conditions.

The answers are obvious, of course. Most cruise-ship workers have limited economic opportunities. Few have college degrees, community ties, or family connections that could help them get better jobs.  Their primary qualifications are their language skills and willingness to work under challenging conditions.

If you are an American college student squandering your youth in a liberal arts program at a mediocre college, you should think about these European cruise ship workers. 

What skills will you bring to the workplace after you obtain your bachelor's diploma? Will you have learned how to work under stress, meet deadlines, and communicate well?  Will that degree in medieval literature help you get a professional job that pays well enough to buy a home, raise a family, and save for retirement?

If not, your career prospects will be like many hardworking eastern Europeans--not very good. In fact, you may be worse off than the young Romanians and Bulgarians busing tables on cruise ships.

At least the eastern Europeans have a strong work ethic and an ability to work cheerfully for long hours. You may not have picked up those skills at the frat house, the student rec center, or the bullshit sessions that masquerade as academic courses in the liberal arts.

And the eastern Europeans will have one more advantage if you compete with them for low-skill jobs. They won't be burdened by student loans.

Life as a cruise ship worker.

It's Good to Be Shifty in a New Country: Young People Should Be Cautious About Going to College

 "It's good to be shifty in a new country," Huckleberry Finn observed in Mark Twain's most famous novel. 

What does it mean to be shifty? I think Twain meant that people should be cautious in a strange environment and suspicious about entrusting their safety and wellbeing to strangers--not to mention their pocketbooks.

You will be entering a new country if you enroll in college for the first time this fall, and it will behoove you to be shifty and cautious.  Higher education is in a tumultuous--even calamitous transition, and you don't want to get buried in the wreckage.

First, college enrollments are down, and the universities are scrambling to replace their lost revenues and lure more tuition-paying butts to sit in their lecture halls.  In fact, the small, non-profit schools discount tuition on average by more than 50 percent. That's how desperate the colleges are to snag new students.

In fact, many small non-profits are on the edge of closure and surviving almost solely on federal student-loan money. Religiously-affiliated colleges and schools with enrollments of less than 1,000 students are especially vulnerable. 

If you are wise, you will not enroll at a nonselective, nonprofit school unless you know how a degree from St. Nowhere College will help you get a job and pay off your student loans.

And for God's sake, don't attend a for-profit school owned by a hedge fund or trades on the stock exchange. The creeps who own these schools are focused on money--not your welfare. 

Second, college towns are becoming more dangerous, especially the big cities, where many prominent public universities are located. Violent crime--rape, robbery, and carjackings--is spiking upward in urban areas.

If you plan to live off campus, do some research. Find out which neighborhoods are safe and which are not. If you come to college with a car, keep your vehicle locked and be cautious if you park in an isolated parking lot. Be vigilant when pumping your own gas. 

Finally, don't take out more student loans than absolutely necessary. President Biden has done more than any previous president to ease the student-loan crisis, and his administration has introduced many good reforms.

Nevertheless, it would be a mistake to take out student loans based on the expectation that government won't make you pay them back. 

The Biden student-loan relief efforts are commendable, but the feds have done nothing to bring down the cost of going to college. Tuition rates are continuing to climb, and naive young people who borrow a hundred grand to get a humanities degree at an obscure private college may be committing economic suicide.

So remember Huck's advice and be shifty in a new country. When you get to college, you will soon find that many of the people who are making a good living in the higher-education racket are not looking out for your welfare. 

It's good to be shifty in a new country.

California Coast University v Aleckna: College liable for student debtor's attorneys' fees after it refused to send her a complete transcript

 Jaime Aleckna was a student at California Coast University until 2009, and she met all the academic requirements for graduating. However, she still owed CCU $6215 when she filed for bankruptcy in 2012. Under the Bankruptcy Code, her bankruptcy petition triggered an automatic stay on all collection actions.

CCU filed an adversary complaint against Ms. Aleckna, arguing that her student loans were non-dischargeable in bankruptcy. Then, while the bankruptcy proceedings were pending, Aleckna asked CCU to send her college transcript.

CCU sent Aleckna an incomplete transcript that did not note her graduation date. The university argued that she had not technically graduated because CCU had put a "financial hold' on her account.

Aleckna then filed a counterclaim against CCU in the bankruptcy court, charging the university with violating the automatic stay provision when it failed to send her a transcript that included her graduation date. She argued that CCU had unlawfully attempted to collect on a  pre-petition debt by withholding her full transcript.  Aleckna asked the bankruptcy court to award her damages and attorneys' fees. 

CCU filed a motion to dismiss Aleckna's counterclaim, which the bankruptcy court denied in 2013. The university then withdrew its adversary complaint against Aleckna. According to the Third Circuit Court of Appeals, CCU's withdrawal "was essentially a confession that Aleckna's debt was dischargeable under the Bankruptcy Code . . . ."

CCU and Aleckna ultimately went to trial on her claim that the university had willfully violated the automatic stay provision and was liable for her damages and attorney fees. CCU lost the case in 2016 and faced a potential judgment for Aleckna's fees.

CCU appealed to the Third Circuit Court of Appeals, where it argued that it had complied with any legal obligation to give Aleckna her transcript when it sent her a  transcript that did not include her graduation date.

A panel of Third Circuit judges didn't buy CCU's arguments. In a 2021 decision, the panel agreed with the bankruptcy court that "'a final transcript, with no graduation date, [is] akin to a letter of reference with no signature,' and was essentially useless."

The Third Circuit also agreed with the bankruptcy court that "providing an incomplete transcript is tantamount to providing no transcript at all."  The Third Circuit affirmed the lower court ruling that CCU's action was a willful violation of the automatic stay provision, making the university liable for Aleckna's damages and attorney's fees. 

The end result? CCU's foray into a Pennsylvania bankruptcy court was costly.  In a failed effort to recover $6,215 from Aleckna, it wound up being liable for her attorney fees--which the Third Circuit estimated to be around $100,000! And, of course, CCU's own attorney fees were undoubtedly substantial.

Perhaps a lesson can be gleaned from California Coast University v. Aleckna. A college would be wiser to write off a small debt owed by a bankrupt former student rather than litigate in the federal courts for eight years.

Why? Because, as philosopher Forrest Gump might have put it, bankruptcy court "is like a box of chocolates. You never know what you're gonna get."

References

California Coast University v. Aleckna, 494 B.R. 647 (Bankr. M.D. Pa. 2013).

California Coast University v. Aleckna, Adversary No. 5:12–ap–00247–RNO, 2014 WL 4100702 (Bankr. M.D. Pa. 2014).

California Coast University v. Aleckna, 543 B.R. 717 (Bankr. M.D. Pa. 2016).

California Coast University v. Aleckna, 3:16-cv-00158, 2019 WL 4072405 (M.D. Pa. 2019).

 California Coast University Aleckna, 13 F.4th 337 (3d Cir. 2021).

Under Water On Your Student Loans? Don't Count On Your Parents to Bail You Out

 In the 1990s, Wendi LaBorde took out student loans totaling about $75,000, but she could not repay those loans. Over time, interest accrued on the debt. 

In 2010, the Department of Education obtained a judgment against Ms. LaBorde for approximately $395,000--five times what she borrowed.

In 2014, LeBorde received the proceeds from her late mother's life insurance--$485,902, which was enough money to pay off the judgment on her student debt.

LaBorde didn't use the insurance money to pay off her student loans. Instead, she created a trust that named Connie Christine LeBorde, her daughter, the beneficiary. The trust bought a condo in California and then sold the condo and purchased a home in Riverside County, California, for $403,000. 

In 2020, the federal government sued LaBorde, accusing her of making a fraudulent transfer to avoid paying the judgment against her for her unpaid student loans. The feds pointed out that LaBorde's daughter, the trust beneficiary, lived in Arkansas and LaBorde lived in the Riverside County house. 

A federal court agreed with the federal government. Late last month, the court ruled that Laborde's transfer of life insurance money to the trust was fraudulent. It ordered that LaBorde be named the owner of the Riverside County house, making it subject to the government's lien for $437,000--the amount of her unpaid student loans plus accrued interest.

What happens next?  The federal government will enforce its lien on the California home where LaBorde was living. Ultimately, the house will probably be sold, and most of the proceeds will go to Uncle Sam.

Millions of Americans are burdened by college loans they can't repay. Many have given up even trying to pay off their student debt. Meanwhile, interest continues to accrue. It is not uncommon for people to owe three, four, or even five times the amount of their student loans due to penalties and accrued interest.

Undoubtedly, many of these debtors are counting on an inheritance from their parents or life insurance benefits to bail them out. Perhaps they intend to use inheritance money or life insurance proceeds to help prepare for retirement or purchase a modest home.

Unfortunately, as the LaBorde decision demonstrates, the feds can claim life insurance proceeds to satisfy a judgment for unpaid student loans. Moreover, the same logic that applies to life insurance may also apply to inheritances. At least one court has held that a student-loan debtor was not entitled to discharge student loans in bankruptcy because she did not use inheritance money to help pay off her student loans.

In retrospect, Ms. LaBorde's mother would have been wise to have made her granddaughter, Connie Christine LeBorde, the beneficiary of her life insurance policy. Connie could then have used the insurance proceeds to purchase a house and rent it to her mother at a modest price.  Structuring the transaction in that way would have avoided an allegation of fraud.

In my view, the LaBorde decision is unfortunate. I do not believe student-loan defaulters should be deprived of their inheritances or life insurance proceeds for the sole reason that they were unable to repay their student loans.

I want your house!

Three-Year College Degrees: Is That a Good Idea?

 I recently stopped off at my local natural food store to pick up a box of my favorite organic breakfast cereal. The stuff tastes like maple-flavored cardboard, which I prefer to strawberry-flavored cardboard.

This cereal is expensive, and when I picked up the box, I noticed it seemed too light--like it was only half full. I realized then that the cereal manufacturer was hiding its rising costs by giving me less for my money instead of charging me more.

Something like that is happening in higher education. According to Inside Higher Ed, "Higher education thought leaders" and several colleges are developing three-year college degree programs. 

Why? Because a college education has gotten intolerably expensive, and a three-year program would theoretically reduce the cost of a college education by 25 percent.

Several models would slash the total number of credit hours from 120 to 90. Sort of like my breakfast cereal. Colleges keep their costs down by offering students fewer courses.

Is this a good idea?

Maybe. Most people agree that many students are taking required courses that don't interest them in the least. Why should an engineering student have to take a course in biology?

But the "thought leaders" are forgetting one critically important fact. Most students don't complete their college degrees in four years. In fact, only a little more than half the students at public universities  (57.6 percent) get their degrees in six years!

Private colleges have a slightly higher graduation rate.  Still, only about two-thirds of private-school students graduate within six years.

That tells me that most college students are in no hurry to complete their degrees and enter the world of work.

Some experts think that three-year college programs have significant drawbacks. A Connecticut college discontinued its three-year program because it "did not allow for the psychosocial and academic development of 18- to 22-year olds" that would occur if students were on campus for four years.

In an article published ten years ago, the Washington Post reported that three-year college programs are not catching on. Some students dropped out of the three-year option, the paper said, because they wanted more time to participate in student activities.

I applaud any effort to cut the cost of going to college. And maybe some of those required classes should be dropped. When I was a student (in the previous century), I took required courses in history, geography, biology, and chemistry.

Except for my American history course, which I loved, the information I got from my required classes went in one ear and out the other. I remember selling my chemistry text within an hour after finishing my final exam. (I got a C.)

Let's keep working on ideas to cut the cost of going to college. We've simply got to get tuition prices down and keep students from taking out student loans they can't repay.  Three-year college programs may be part of the answer.

But let's not cut history courses from the college curriculum. I took an American history class when I was a college freshman, and I still remember why Washington crossed the Delaware.

Why did Washington cross the Delaware, and who cares anymore?

College students: Don't Take Out Student Loans to Pay for a Luxury Apartment

 When I was a child, my parents were poor. That was OK because almost everyone in my little Oklahoma town was poor, and we all told each other that we were in the middle class.

By the time I graduated high school, my parents had clawed their way into the actual middle class, and they sent me off to Oklahoma State University to be "educated."

I moved my stuff (a few clothes and an electric popcorn popper) into Cordell Hall, an enormous and depressing men's dorm. I could have signed up to live in a newer dorm--one that had air conditioning, but that would have cost my parents more money.

Reflecting back on that experience, Cordell Hall wasn't so bad. My roommate and I installed a window fan that kept our dorm room temperature down to a comfortable 85 degrees, and I became friends with dozens of guys who were sweating it out with me in Cordell Hall.

Today, college kids have more housing options. They can live in a university dormitory or move into a "luxury" student apartment complex.

What is a luxury apartment complex? Based on the advertising, it is an apartment building with a "resort-style" swimming pool, a fitness gym, in-unit clothes washers and driers, granite kitchen counters, and big televisions. 

What does that cost? A lot. A one-bedroom apartment with a bath can cost $1100 a month or more. Older apartment complexes are cheaper, and students can always cut their costs a bit by sharing a unit.  In Baton Rouge, the luxury apartment complexes have lots of five-bedroom apartments for rent.

Millions of young people from low-income families arrive on their college campuses with access to more cash than they've ever seen before--cash in the form of federal student loans.  If they use some of that loan money to rent a luxury apartment, they can live better than their parents.

What does it matter how much an apartment costs if students take out student loans to pay the rent? And if they max out on the amount of federal loan money they need, they can get their parents or grandparents to take out Parent PLUS loans.

But hear these words of caution. Students should not take on more college debt just to live in a luxury apartment complex with a swimming pool and a fitness gym.  

Why? Because it is easy to get used to so-called luxury living while in college. And students who take out loans to pay for a classy address may graduate to find they can't get a job that pays enough to support their upscale lifestyle.

If that happens, these hapless students will wake up to the shock of seeing their standard of living go down after they graduate.  They may wind up having to vacate their luxury apartment to move into a dump on the wrong side of town--the dump where they should have lived while they were in college.

The Vue: Another Luxury Student Apartment Complex is Coming to Baton Rouge

"Only pay for what you need": College students are paying for products or services they don't need

 Perhaps the most inane car insurance commercial ever aired is one by Liberty Mutual: "Only pay for what you need." 

Apparently, Liberty Mutual wants auto drivers to believe that it is the only insurance company that allows customers to buy car insurance tailored to their needs.  But doesn't every insurer do that?

Nevertheless, the slogan makes sense. No one should be forced to purchase services they don't need.  

But college students pay for things they don't want or need every time they pay their tuition bills.  That's a significant reason why tuition has gone up more than the rate of inflation for the past 25 years.

Let's take Louisiana State University, for example. A full-time undergraduate student will pay about $4,000 in tuition to attend LSU this fall. But  LSU also tacks on various required fees that bring the total cost to almost $6000. In other words, LSU's fees represent about a third of a student's total bill. 

LSU's website lists 41 separate fees that the university charges students in addition to tuition. Of course, some of these fees only apply to graduate students.  Law students and veterinary students pay fees that don't apply to undergraduates. And some of the fees are optional.

Nevertheless, required fees amount to a considerable chunk of change. All LSU's full-time undergraduates must pay a "Student Excellence Fee" and an "Academic Excellence Fee" that total $1,500 a semester.

The days are over when college tuition basically covered the cost of academic programs and a modest administrative staff. Today, universities are as large as midsize American cities.  Major universities pay a lot of money for campus police forces, medical facilities, mental health services, diversity officers, and platoons of attorneys who handle everything from sexual assault complaints to intellectual property deals.

And the students are paying for all of this--mostly with federal student loans. Surely there is a better--and cheaper--way for America to run its colleges and universities. 

Nystrand v. Kingdom of Sweden: Another underemployed lawyer seeks bankruptcy relief

A common saying when I was young (in the last century) was the old adage that lawyers are people who wish to make a lot of money but are risk-averse. 

That observation certainly rang true when I went to law school in the 1970s. I graduated from the University of Texas School of Law with a class of 500 students, and nearly all of us found decent jobs as lawyers.

Even better, my classmates and I finished law school with little or no debt. Tuition was only $500 a semester. Working part-time as a law clerk for the Texas Attorney General's Office, I avoided student loans. I started my legal career debt-free, and  I quickly found a good job practicing law.

But law school tuition has shot up dramatically since the days I went to law school. Tuition at UT's School of Law is now $36,000 for in-state students--36 times what I paid. 

And the job market for lawyers is terrible. Many people now leave law school with enormous debt and little prospect of finding employment in their field.

And this brings me to the case of Nystrand v. Kingdom of Sweden, filed last spring in a Tallahassee bankruptcy court. 

Anneli Nystrand, a Swedish immigrant, graduated from the University of Miami School of Law in 1995. In my opinion, she did everything right. 

Nystrand attended a respectable law school and paid off her student loans, although it took her 15 years. She passed the Florida bar exam and landed a job with the Florida Department of Banking and Finance, probably a pretty good gig.

Unfortunately, as the years rolled by, Ms. Nystrand's financial situation deteriorated.  In 2013-2014, approximately 18 years after graduating from law school, she was on the job market. Although she applied for more than 200 attorney positions, she did not get a single interview.

In 2016-2017, she found a law job that paid only $39,000 a year. In 2017-2018, she worked for a law firm and made $50,000 a year.

In 2019--more than 20 years after graduating from law school-- Ms. Nystrand began accepting court-assigned cases for a flat fee. If she took a juvenile delinquency client, for example, she only received $377, which is less than the hourly rate of a corporate lawyer in a top-flight firm. 

Her total income for 2019 was only $20,000. In 2020, Nystrand did a little better, earning $46,000 before deducting expenses.

In April of this year, Ms. Nystrand filed an adversary complaint in a Florida bankruptcy court against the Kingdom of Sweden, seeking to discharge student loans owed to that Scandanavian country.

I have no idea what that is about. Nystrand's complaint does not state the amount of the debt or how it was incurred.  

Nevertheless, I am on Ms. Nystrand's side. I hope she is successful in clearing her debt to Sweden.  

Anneli Nystrand is one among hundreds of thousands of underemployed or unemployed attorneys who left law school with enormous debt. Now they are trying to build their careers in a soft job market--particularly for lawyers who attended second- or third-tier law schools. 

Florida has 11 law schools--far too many. Ms. Nystrand is forced to compete in a job market for attorneys saturated with people looking for work. 

All these unemployed or underemployed lawyers deserve reasonable access to bankruptcy courts. Senators Durbin and Cornyn's bill would allow distressed student-loan debtors to get bankruptcy relief ten years after their student loans become due.

If that bill becomes law, people like Anneli Nyastrand would immediately benefit.

But one more thing needs to be done. The American Bar Association, which allegedly regulates legal education, needs to get off its ass and close down some law schools. 

References

Nystrand v. Kingdom of Sweden, Case No. 21-400006-KKS (Bankr. N.D. Fla. Apr. 16, 2021 (adversary complaint).

 

Jornada del Muerto: People who take out student loans but don't graduate are on "the route of the dead man"

 Jornada del Muerto is a hundred-mile stretch of the Camino Real, which once ran from Mexico City to the northernmost outpost  of the Spanish colonial empire.  

There was no water on this stretch of the Camino, no livestock forage, and no firewood.  Literally, the Jornada del Muerto was the "route of the dead man."

Nevertheless, travelers in the 17th and 18th centuries could survive the Jornada if they prepared by taking plenty of water, watering their horses just before embarking, and traveling quickly over this desert road.

Many young people believe their college years will be an exciting journey that leads to a good job and a middle-class life. But people who leave college with a lot of debt and no diploma may find that they would have been better off financially if they had not gone to college at all.  In fact, their trip through college could turn out to be a modern-day journey of death--at least financial death.

As Professor Phillip Levine put it, college dropouts "ma[ke] an investment that ha[s] no return." They take out student loans but never obtain the credential that enables them to land a good job.

Not surprisingly, non-completers have high student-loan default rates--three times higher than individuals who graduate. 

In my view, too many young people look upon their college years as a golden time of unbridled freedom, casual sex, and binge drinking--all paid for with student-loan dollars.

That could be a big mistake--especially for students who take on too much college debt and never get a diploma.

El Jornada del Muerto: Don't take a dead man's route through college.

Will a degree from a fancy, private college improve the quality of your life? Maybe, but maybe not.

 I occasionally see television and print advertisements for weight-loss programs. Invariably, these ads show a slim, young, attractive woman with perfect teeth or a handsome young man with great hair and six-pack abs. We are encouraged to believe that these beautiful people were once fat.

But we know better. We know that no matter what diet plan we go on, we will never be as beautiful as the people in the weight-loss ads.  We'll buy the product and still have crooked teeth and a little flab around our bellies.

America's private colleges are like the weight-loss companies. Enroll at our prestigious institution, study on our cool campus, interact with our brilliant but kindly professors, and you'll be on the road to a fabulously better life.

For example, here is some puffery from Quinnipiac University's website:

From your first day, Quinnipiac’s expansive resources and passionate professors will help you flourish and build a foundation for success. You’ll create your first memories as a Bobcat on this campus, and find supportive resources throughout your journey.

How much will this journey cost you? Only about $70,000 a year in room, board, fees, and tuition.   That's more than a quarter of a million dollars for a bachelor's degree.

But, hey, you'll probably get a scholarship of some kind, and you can take out student loans. And if you need more cash to finance your studies, your parents can take out a Parent Plus loan.

Just remember, no matter where you go to college, you will still be you. And there are probably many people willing to help you reach your dreams who will charge you a lot less than a quarter of a million dollars.

Were these people ever fat?

 

Want fries with that burger? Don't go to a college that doesn't at least teach you time-management skills

 Looking back over half a century on my college years, I remember absolutely nothing about the courses I took--130 vacuous credit hours. 

I can't say it was my college's fault. I had no clear idea about what I wanted to do for a living. I changed majors twice and took courses almost at random.  I took religion courses--enough for a minor. I took my university's first course in African American studies, and I got an A.  I even took two classes in the college of agriculture: horse production and livestock feeding. I must have had some vague idea about going back to work on my father's farm.

But I understand now that my college years were not a complete waste. Why? Because I learned to manage my time and weave my way through the bureaucratic maze of academia, and those skills are not to be disparaged.

In my first semester in college, I took five courses: mandatory ROTC, biology, history, freshman English, and a class in swimming. And I had a part-time job as a student custodian. 

I had to get up on time in the morning, get to classes held all over a sprawling campus, and study enough to pass the written exams. I had to figure out a way to amass enough of the courses I needed to graduate. I had to get my ROTC shirts pressed, and I had to learn to do my own laundry.

After getting my undergraduate degree, I gradually discovered that the world of work is often dull, colorless, and even meaningless. To make a living, I had to manage my time and learn the bureaucratic rules of the workplace.  I can see now that I learned those skills by spending four mind-numbing years at a university.  

But maybe colleges are not teaching time-management skills anymore.  According to Inside Higher Ed, a recent survey found that about one-fifth of recent graduates say their college education did not prepare them for their first job. Less than one in four graduates said they learned people-management skills while in college, and only a third said they learned time-management skills. 

These findings are scary. A college degree is becoming more and more expensive with each passing year, and most students now take out student loans to pay for their studies--loans many will never be able to pay back.

The very least we should expect from our universities is to teach students how to manage their time.  A young person who graduates from college with burdensome student-loan debt and no time-management skills would have been better off working at McDonald's.  

At least McDonald's teaches its employees to show up for work on time, smile, and not overcook the french fries.   

Do you want fries with that college degree?

Elon Musk says MBA degrees are overrated: Does it make sense to go to graduate school?

 Elon Musk says MBA degrees are overrated, and he should know.  Musk doesn't have an MBA, and he's worth $166 billion.

Here is what Musk said in a recent interview:

The path to leadership should not be through an MBA business school situation. It should be kind of work your way up and do useful things. There's a bit too much of the somebody goes to a high-profile MBA school land then kind of parachutes in as the leader but they don't actually know how things work. They could be good at, say PowerPoint presentations or something like that, and they can present well, but they don't actually know how things work. They parachute in instead of working their way up. 

Not surprisingly, many MBA teachers disagree with Musk. Robert Siegel, who teaches at the Stanford Graduate School of Business, said Musk is "completely off base talking about M.B.A.s." Siegel challenges Musk's charge that MBA  courses don't teach people how to be entrepreneurs. 

But a Canadian professor of management studies admitted that "[t]he MBA trains the wrong people in the wrong ways with the wrong consequences." And Jessica Stillman, writing for Inc., suggests that people could save a lot of money simply by reading ten well-known books about business. 

Musk's skepticism about MBA degrees falls within a larger debate about the value of graduate degrees in general. Speaking as a person who is embarrassed to have two graduate degrees from Harvard, here is my take on this topic.

First, don't go to graduate school unless you believe a graduate degree will improve your job prospects.  Public-school educators in some school systems get an automatic raise if they have a master's degree in education, so it may make economic sense for a teacher to pursue an advanced degree in education regardless of whether there is any substance to the program.

Second, don't pay too much money to get a graduate degree--especially a degree from a non-elite institution. Many colleges introduced expensive MBA programs after Congress introduced the Grad PLUS program that lifted the cap on how much people could borrow for graduate school.

Northeastern University, for example, offers an online MBA program costing $78,000, which Northeastern claims is "an affordable option" compared to other programs, which charge as much as $200,000. 

Maybe that is so, but ask your friends who have MBAs if they think the experience was worth the cost.  You may be surprised by some of the responses you will get.

Third, don't get a graduate degree that might actually hurt your job prospects.  For example, many law schools offer master's degrees, which require an additional year of study beyond the basic J.D. degree. Some law schools offer graduate degrees in law for people who do not intend to practice law. 

I've known people who pursued a graduate degree in law because they didn't excel in law school and didn't get a good law job after graduating.  An extra law degree, they think, will enhance their job prospects.

But employers can sniff out the motivation for that strategy. If the job applicant had a brilliant career in law school, that person would probably be pulling down a six-figure salary in a prestigious law firm instead of hanging around a law school for an additional year.

And an online graduate degree from a for-profit school may be absolutely worthless in the job market. I've sat on many faculty hiring committees and heard committee members reject any job candidate who obtained a doctoral degree from a for-profit school.

Finally, weigh the opportunity costs of going to graduate school. Are you gaining experience in your present job that will likely pay off later in salary increases and promotions?  If so, why leave the job market and take out student loans to go to graduate school?

This is the bottom line. Don't take out student loans to go to graduate school unless there is absolutely no other way to achieve your professional goals. Millions of Americans have had successful careers without graduate degrees, and millions more have graduate degrees and don't know nuthin'.

College students: Don't take out student loans to get a degree in an easy discipline

"Easy money lays light in the hand," Solzhenitsyn observed, "and doesn't give you the feeling you've earned it."

We can say the same thing about easy college courses and easy academic majors. 

It is quite feasible for a student to get an easy college degree. Universities have ditched rigorous admission standards so that anyone can get into college, and grade inflation has made it possible to pass through a university without studying and without learning anything. 

Every university has a few academic majors that are known not to be challenging. And every college has a few professors who are too lazy to engage in rigorous grading.  

Twenty years ago, when I was teaching at the University of Houston, a professor in my department taught multiple sections of a general education course--a course that students from across the university could count toward their degree requirements. Semester after semester, his classes were packed because he did not grade any assignments, and he gave every student an A. 

Young people may think they are playing it smart by choosing nonchallenging classes and easy academic majors. Why enroll in a class taught by a brilliant professor if the prof is a hard grader?  Why not sign up for classes taught by an indolent professor who gives out puffball assignments and then doesn't grade them?

I confess that I am not speaking from the pinnacle of academic rigor. I majored in sociology--the painful enumeration of the obvious. I made straight As my last semester without even buying textbooks.  And I learned absolutely nothing.

Then I went to law school, where the professors graded on a strict curve. Only 5 percent of first-year students received As, 10 percent got Bs, and 75 percent had to settle for a C (or worse).

To my surprise, I excelled in this rigorous environment, and I graduated with honors from the University of Texas School of Law. Forty years later, this is still my proudest professional accomplishment.

Please take my advice and don't choose the easy path while in college, especially if you are taking out student loans. After four, or five, or six years of study, you will wind up with a vacuous degree and no job skills.  

You may then decide to get a master's degree and select a graduate program with low admission requirements. That choice will lead to a second worthless degree.

Then where will you be?  You will find yourself buried under a mountain of debt you cannot pay off. Those mindless courses and that easy major will embarrass you, and you will feel like a fool. 

As Solzhenitsyn put it, "There [is] truth in the old saying: pay short money and get short value."

Don't let college professors persuade you that learning to speak Standard English is optional

I've been to Georgia on a fast train honey,

I wudn't born no yesterday.

Got a good Christian raisin' and an eighth-grade education

Ain't no need in y'all a treatin' me this way.

Billy Joe Shaver 

A while back, I met an elderly man who told me he had grown up in the Texas Panhandle back in the 1950s.  As a child, he spoke with a strong West Texas accent. But then his family moved to Arizona, and no one could understand him at his new school.

Fortunately, the man recounted,  an Arizona teacher began tutoring him on a one-to-one basis and taught him to speak standard English without a Texas accent. "If it hadn't been for that teacher," he said, "I would never have made a success of my life."

This man's story made an impression on me because I grew up in western Oklahoma, where the people speak very much like the West Texans.  To this day, I have some range dust in my diction; and I think at least some of my classmates at Harvard wrote me off as hick when they first heard me speak.  

Now there is a movement to de-emphasize standard English because it disadvantages minorities--particularly African Americans.  For example, Professor Asao Inoue of Arizona State University argues that students should not be graded based on the quality of writing but "purely by the labor students complete . . ." 

Why should professors stop grading students on the quality of their writing? "Because, Professor Inoue maintains, "all grading and assessment exist within systems that uphold singular, dominant standards that are racist, and White supremacist."

 Rebecca Walkowitz, chair of the English Department at Rutgers University, is on Professor Inoue's wavelength. She sent an email recently, announcing an initiative to incorporate "critical grammar" into the department's pedagogy.

Critical grammar pedagogy, Professor Walkowitz's email stated, "challenges the familiar dogma that writing instruction should limit emphasis on grammar/sentence-level issues so as not to put students from multilingual, non-standard 'academic' English backgrounds at a disadvantage."

Professors Inuoue and Walkowitz's views on language are in harmony with the ebonics movement, which asserts that Black English should be regarded as a language in its own right and not a substandard dialect of proper English.

I sympathize with the academics who argue that we should show more respect for non-standard English. Indeed, some of America's greatest literature contain expressions in non-standard dialect. Huckleberry Finn, for example. And the lyrics of country music (which I love) are full of non-standard English phrases.

When Merle Haggard wrote Hungry Eyes, he penned, "us kids was too young to realize."  Should we give him a C- because he didn't write "we children were too young to realize"? And Elvis--should he have sung "You are nothing but a hound dog"?

Nevertheless, I believe all Americans should strive to master standard English in both their speech and their writing. After all, shouldn't we endeavor to build a common culture? And if that is so, isn't a common culture built on a common language?

I acknowledge that some Americans grew up in subcultures that did not value standard English. Those subcultures should not be denigrated.  I said "y'all" as a kid, and I still say "y'all." 

But standard English is not that hard to learn. I keep Strunk and White's Elements of Style on my desk, which I consult occasionally; and I subscribe to Grammarly, an online editing tool that checks my writing for spelling and grammar. All our commuters have a spell check function.

Besides, every young American must eventually leave academia, where grammar and spelling are being emphasized, and get a paying job. American employers may insist that their employees write and speak in standard English. Indeed, job candidates who misspell words on their job applications and converse in an obscure dialect may not get hired.

In my view, academics who want to deemphasize standard English grammar and diction are doing their students a disservice. Millions of young people are graduating from universities with crushing student loans. If they leave college speaking and writing no differently from when they entered, what was the point of all that education?

When did university book stores become T-shirt shops?

 I live about a mile from the Barne & Noble bookstore, the official bookstore for Louisiana State University. Yesterday, I walked over for a cup of hot chocolate at the bookstore's Starbucks coffee shop.

While the barista was constructing my cocoa (a laborious business), I contemplated the murals above the counter. Overhead, I saw some of the great English-language authors: Faulkner, Hardy, Joyce, Kipling, Melville, Nabakov, Shaw, Whitman, and others. 

I found myself wondering whether Barnes & Noble sold any books by the authors who are celebrated at Starbucks.  It is a college bookstore, after all.

So I went upstairs to the store's tiny "fiction and literature" section and looked for works by these famous writers.  Most of them I couldn't find: no Kipling, no Nabakov, no Whitman. 

I did see some comic books, however, in a section titled "graphic novels."  And I saw a hell of a lot of  $20 LSU T-shirts, $70 LSU sweatshirts, and hundreds of LSU ballcaps, selling for $25 a pop.

I also saw $9 LSU wine glasses and $27 LSU waterbottles. And I saw a pile of stuffed animals depicting Mike, the LSU tiger mascot.

In fact, as I scanned both floors of LSU's bookstore, I realized that Barnes & Noble's campus address isn't a bookstore at all; it's a T-shirt shop.  Yes, it sells some textbooks in an obscure corner, but most of the space is dedicated to overpriced souvenirs. 

I am not saying LSU students should be reading the authors who are memorialized at the Starbooks coffee shop.  I've read some Faulkner, some George Bernard Shaw, some of Henry James's excruciatingly dull novels. In my opinion, students can skip all that.

But I find it unsettling to see LSU students swiping their credit cards to buy exorbitantly priced junk and $5 lattes. Why? Because I know many of these students are purchasing that stuff with their student-loan money. 

If these students graduate and can't find good jobs--and many of them won't--what will be their best option? For millions, it will be to sign up for a 25-year income-based repayment plan. That's a high price to pay for an LSU T-shirt.

Neal v. Navient Solutions: A simple student-loan dispute ends up in 12 years of litigation

 Trey Neal took out a private student loan with JP Morgan Chase Bank in 2008.  Neal and Chase signed a promissory note agreeing that interest on the loan would be governed by Ohio law. 

Later, Neal concluded that he was being charged interest at a higher rate than Ohio allowed.  So he sued Chase for damages.

Mr. Neal ran into two problems in getting this dispute resolved. First, he had difficulty determining the proper party to sue.

Chase sold Neal's loan to Jamestown Funding Trust, which assumed Chase's interest in the loan. Jamestown is "related" to Navient Credit Finance, an affiliate of Navient Solutions. Navient Solutions then became Neal's loan servicer. Apparently, Neal was uncertain about who owned the loan because he dropped Chase from the lawsuit and added four Navient entities as defendants to his suit.

Neal's lawsuit had a second problem: he had agreed to arbitrate any dispute over his student loan rather than litigate.

The Navient entities asked a federal court to order Neal to arbitrate his claim under Neal's credit agreement with Chase. A federal district court rejected Navient's request, concluding Navient did not have the legal right to enforce the arbitration clause.

But Navient appealed that decision to the Eighth Circuit Court of Appeals, which reversed the lower court's decision.  The appellate court ruled that Navient did have the right to compel arbitration under Ohio law. So Neal must submit his interest-rate complaint to an arbitrator, and Neal will probably be required to pay half the arbitrator's fees to get the matter resolved. 

A couple of points. First, Neal's complaint about the interest he was charged on his loan is a simple dispute, but it wound up before a federal appellate court that did not rule until 12 years after Neal took out his loan.

Second, Neal's private student loan became ensnared in a web of entities: 1) Chase Bank, 2) Jamestown Funding Trust, 3) Navient Solutions, 4) Navient Corporation, and 5) Navient Credit Finance Corporation, and Navient Private Loan Trust. No wonder Neal had trouble figuring out whom he was dealing with.

So Mr. Neal must submit his complaint to arbitration. 

One thing seems sure. Whether Mr. Neal wins or loses, his transaction costs will likely be far greater than the sum of money at stake. 

Thus, Neal v. Navient Solution teaches us all this message: Don't mess with the student-loan industry because it won't be worth your while.

References

Neal v. Navient Solutions, LLC, 978 F.3d 572 (8th Cir. 2020).

Jamie Mudd v. U.S. Department of Education: A Nebraska bankruptcy court discharges a grandmother's student loans

 Between 2006 and 2015, Jamie Mudd took out 41 student loans to attend Heald College, a for-profit institution, and San Joaquin Delta College, a public institution. In 2015, she rolled these loans into two consolidated federal loans, totally about $72,000. 

Mudd put her student loans into an income-based repayment plan (IBRP) that established her monthly payments at zero due to her low income.  Under this plan, she was obligated to certify her income on an annual basis. Evidently, she forgot to do this because the U.S. Department of Education (DOE) removed her from the IBRP and reset her monthly payments at almost $800 per month. 

Mudd was readmitted into an IBRP, but she again failed to certify her income, and DOE set her new monthly payment at $963.

According to Bankruptcy Judge Shon Hastings, Mudd never earned more than $13 an hour, and she often worked two jobs to make ends meet. She lived in a one-bedroom apartment and incurred regular expenses caring for a grandson with disabilities. She also suffered from significant health problems.

Ms. Mudd filed an adversary proceeding, hoping to discharge her student loans, but DOE objected. First, DOE said Mudd's financial circumstances would probably improve, enabling her to make modest payments in an IBRP.  Second, Mudd was a smoker, and DOE said she should save her cigarette money and use it to pay down her student loans. DOE also claimed that Mudd's expenses for her grandson's video streaming were unnecessary.  Indeed, DOE disapproved of any money Mudd spent on her grandson.

Fortunately, Bankruptcy Judge Shon Hastings was considerably more compassionate than DOE. In a decision issued last month, Judge Hastings discharged all of Mudd's student-loan debt.

In ruling in Mudd's favor, Judge Hastings applied the "totality of circumstances" test approved by the Eighth Circuit Court of Appeals. This is a summary of his reasoning:

Mudd has made a good faith effort to maximize her income. Mudd works approximately 53 hours per week at two jobs. . . . Overall, Mudd's expenses are necessary and reasonable and consistent with a minimal standard of living. . . . She has no savings, owns no assets of significant value (except her used car in which she holds no equity), lives in a one-bedroom apartment and obtains food and toiletries from local nonprofit organizations to make ends met. Her medical expenses are higher than budgeted, and she anticipates that her health care costs will continue to rise due to her high cholesterol and diabetes.  

In short, Judge Hastings concluded, Mudd did not have sufficient disposable income to pay on her student loans. Thus, the judge discharged all of this debt.

Judge Hastings specifically rejected DOE's suggestion that Mudd should not be credited for the expenses she incurred for her grandson. "[T]he Court finds it entirely inappropriate to find or suggest that Mudd should not care for her grandson or to weigh undue burden factors against her for doing so." 

Judge Hasting's ruling should not surprise us. Clearly, Jamie Mudd was in dire financial straits and entitled to discharge her student loans in bankruptcy.

What is shocking is the fact that DOE objected. Mudd v. U.S. Department of Education is just one more example of the federal government's heartlessness toward college-loan debtors, heartlessness that borders on viciousness

References

Mudd v. U.S. Department of Education, Adversary No. 19-04048, 2020 WL 7330054 (Bank. D. Neb. Dec. 9, 2020).

Post-Modern America is as vicious and dysfunctional as Victorian England, the Weimar Republic, and 17th century France

If you get your news from network television, you are being bombarded by commercials about prescription medicines and financial services. 

These ads typically show prosperous older Americans who look remarkably fit, live in lovely homes, and spend their days cooking gourmet meals, wind-surfing, and flyfishing with their adorable grandchildren.

These advertisements purport to show life in 21st century America--the best of all possible worlds where everyone is healthy, happy, and financially secure.

But I don't live in that America, and you don't either. Instead, most of us live in a society that is remarkably similar to dysfunctional regimes of bygone centuries.

Our government is printing money at a frightening pace to prop up the financial markets, much like the Weimar Republic did in the 1920s. And we know how that turned out. Germany experienced runaway inflation that set the stage for Adolph Hitler.

We may celebrate the fact that the United States abolished debtors' prisons, but 21st century America treats debtors much the way England treated them in the Victorian age. 

We don't deport debtors to Australia or put them in jail as England did in Charles Dickens' time, but we've created a virtual prison for student-loan borrowers, millions of whom are trapped in income-based repayment plans that last 25 years. Compounding student-debtors' misery, our supposedly benevolent Congress has made it almost impossible for insolvent student-loan debtors to get relief in the bankruptcy courts.

And the American tax system is remarkably like the tax regime in Louis XIV's France. W.H. Lewis, who wrote a masterful social history of seventeenth-century France, described the French tax structure this way;

[T]he whole fiscal system was in itself radically and incurably vicious; as a contemporary remarks, if he Devil himself had been given a free hand to plan the ruin of France, he could not have invented any scheme more likely to achieve that object than the system of taxation in vogue, a system which would seem to have been designed with the sole object of ensuring a minimum return to the King at a maximum price to his subjects, with the heaviest share falling on the poorest section of the population.

Doesn't that sound like the American tax system? Sure it does. As financial tycoon Warren Buffett has repeatedly observed, he pays federal taxes at a lower rate than his secretary.

And the COVID pandemic didn't change the system at all. Indeed, the latest coronavirus relief package includes 100 percent deductibility for the so-called "three-martini lunch." Think about it: wealthy Americans can write off extravagant meals that can cost more than $1,000, while the working stiff gets a $600 coronavirus-relief check.

 In short, although Americans may deceive themselves into believing that our society is evolving into a paradise based on the principles of equity, diversity, and inclusion, in fact, we live in a world not so very different from Victorian England, Weimar Germany, and 17th century France.

Louis XIV: Is everybody happy?