Wednesday, April 20, 2016

Karen Blumenthal, Hillary's Biographer, Insults the Intelligence of Young American Women by Calling Them Naive For Supporting Bernie

Last night, as I was driving home across the Atchafalaya Basin, I listened on my radio to a BBC interview with Karen Blumenthal, Hillary Clinton's biographer. The BBC reporter asked Blumenthal to explain why the vast majority of young American women who were voting in Democratic primaries were supporting Bernie Sanders for President, and not Hillary.

Blumenthal admitted that she was mystified by this trend. And then she added that young female Bernie supporters were "naive" and lacked a proper appreciation of Hillary's record in the fight to advance women's rights.

How insulting to young American women!

Essentially, Blumenthal was expressing the same view as the two old crones Hillary wheeled out to scold young American women a few months ago: Madeleine Albright and Gloria Steinem. Remember Albright's famous quote? "There's a special place in hell for women who don't help each other."

In my view, young women who support Bernie are not naive. On the contrary, a lot of them are politically quite sophisticated.They know Hillary is totally indifferent to the concerns of young Americans and that's why they are voting for Bernie.

They know, for example, that Hillary's campaign slogan, "Fighting for Us," is nothing more than a bald misrepresentation concocted by Hillary's spin doctors.  Hillary isn't fighting for us; who could believe such a wild story? After all, she sat on Walmart's board of directors for six years, and she made $11 million in less than two years making speeches to corporate pirates.  Last year alone, Hillary and Bill raked in $28 million; that's 100 times more than Bernie and Jane Sanders' income in 2014.

Second, young voters know Hillary will do nothing to alleviate the student-loan crisis. In fact, Hillary's only plan for addressing this enormous problem is to shovel more money toward the bloated and corrupt higher education industry. If elected President, she won't rein in the for-profit college industry, which has exploited millions of young Americans.She accepted nearly a quarter of a million dollars from a for-profit education corporation for making a single speech. And another for-profit college company paid Hillary's husband Bill more than $16 million for serving as its "honorary chancellor."

Karen Blumenthal may dismiss Bernie's young supporters as naive, but it is Blumenthal herself who is naive if she thinks young American women need to wise up and support Hillary. In my opinion, these women will never support Hillary Clinton; and if Hillary is elected President, the Democratic Party will lose a whole generation of thoughtful and highly concerned young women voters--both men and women. After all, in last night's New York primary election, people in their 20s voted for Bernie over Hillary by a margin of nearly 4 to 1.


Karen Blumenthal,  doing her Hillary Clinton  imitation (in costume)
References

Katie Dreyer. How Madeleine Albright and Gloria Steinem Betrayed Women Everywhere. Huffington Post, February 8, 2015. Accessible at http://www.huffingtonpost.com/katie-dreyer/madeleine-and-gloria-betrayed-women-everywhere_b_9190676.html

Chuck Ross. Madeleine Albright Tells Young Women Women Voters 'There's A Special Place In Hell' For Them If They Don't Support Hillary. Daily Caller, February 2, 2016. Accessible at
 http://dailycaller.com/2016/02/06/madeleine-albright-tells-young-women-voters-theres-a-special-place-in-hell-for-them-if-they-dont-support-hillary-video/#ixzz46NbEitok

Jonathan Swan. Sanders Wins Young Voters, Clinton Older Voters in NY Exit Polls. thehill.com, April 19, 2016. Accessible at http://thehill.com/blogs/ballot-box/presidential-races/276924-sanders-wins-young-votes-clinton-older-voters-in-ny-exit

Tuesday, April 19, 2016

Hillary Clinton's ties to the for-profit college industry: If she becomes President, expect the status quo

The for-profit college industry has had a good run. For years, it has sucked up about a quarter of all federal student-loan money, while only enrolling about 12 percent of the nation's students.

The for-profits have reaped big profits, and why not? Some of them spend more on recruiting than they do on instruction.  Most of their revenues (nearly 90 percent for most for-profit colleges) come from the federal student-loan program, and their docile students passively sign the  loan documents that are pushed in front of them by the for-profits' efficient student processors.

And if anyone accuses them of fraud or misrepresentation--hey, no problem. Most for-profits force their students to waive their right to sue somewhere in the enrollment documents.

For years, the for-profits have greased the wheels on their gravy train by making strategic campaign contributions to important people in Congress and by hiring Washington lobbyists to protect their interests. Everyone from Mitt Romney to Florida Congresswoman Debbie Wasserman Schultz got a little money from the for-profits, and so adequately regulating this gang of pirates is out of the question.

Will things change if Hillary is elected President? It's very unlikely. Here are a few tidbits of information about Hillary and Bill Clinton's ties to the for-profit industry that come from a recent article by Michael Stratford.

  • Bill Clinton worked for Laureate Education, which has for profit colleges all over the world. According to Stratford's article, Bill earned $16.5 million between 2010 and 2014 working for Laureate. In fact, Bill Clinton served as honorary chancellor for Laureate International Universities  until last year, when he resigned  shortly before Hillary launched her campaign. 
  • Hillary earned $225,000 making a speech to Academic Partnerships, a for-profit company that makes big bucks partnering with public universities and turning face-to-face courses into online courses that Academic Partnership oversees. 
  • Several of Hillary Clinton's campaign-fund bundlers have worked as lobbyists for Apollo Group, the parent company of University of Phoenix. (And by the way, Barack Obama's "best friend," Martin Nesbitt, is making plans to buy Apollo Group.)
David Halperin, an investigative reporter who has done a good job reporting on the for-profit industry, praised Hillary for taking a "strong, principled stand against predatory for-profit college companies," but I am highly skeptical.

When I was growing up, I was taught that there are only two kinds of snakes: dead ones and live ones. Similarly, with perhaps a few exceptions, there are only two kinds of for-profit colleges: the ones that exploit the student-loan program to the detriment of their students, and the ones that have closed.

Former President Bill Clinton speaks to students at Laureate’s Universidad Latina in Costa Rica.

References

Frank Cerabino. Failed medical college was reliable source of campaign money. Palm Beach Post, November 2, 2015. http://www.mypalmbeachpost.com/news/news/cerabino-failed-medical-college-was-reliable-sourc/npD6Q/

David Halperin. Top Democratic Lawyer Pushed Pentagon to End U. of Phoenix Suspension. Huffington Post, March 17, 2016. http://www.huffingtonpost.com/davidhalperin/top-democratic-lawyer-pus_b_9487600.html

Richard Rubin. Hillary and Bill Clinton Mad $139 Million in Eight Years. Bloomberg.com, July 31, 2015. http://www.bloomberg.com/politics/articles/2015-07-31/hillary-and-bill-clinton-paid-43-million-in-federal-taxes

Charles M. Smith and Dina Rasor. For-profit colleges are bankrolling Romney to keep to keep student loan money flowing. Truth-out.org, June 14, 2012. http://www.truth-out.org/news/item/9790-for-profit-colleges-are-bankrolling-mitt-romney-and-other-republicans-to-keep-their-public-student-loans-flowing

Michael Stratford. Hillary Clinton's ties to for-profit education companies. Inside Higher Education, April 18, 2016. https://www.insidehighered.com/news/2016/04/18/hillary-clintons-ties-profit-education-companies

Saturday, April 16, 2016

The Immorality of American Graduate Education: A Look At the Fields of Law and Education

When commentators write about the student-loan crisis, they often focus on people who attended for-profit institutions. And indeed, almost half of the students who borrowed to attend a for-profit college default on their loans within five years.

Law schools: Declining admission standards and too many graduates for the job market

But people who borrow to get graduate degrees from respectable institutions are also suffering in huge numbers. Let's start with the field of law, where the job market for full-time attorney jobs has collapsed. According to an article by Joshua Wright, there are more than two attorneys for every law job (based on 2012 data).

Many potential law students have figured this out, and law school enrollments have plummeted.  First-year enrollment in American law schools in the fall of last year was 30 percent lower than 2010. As Aaron N. Taylor pointed out in a Chronicle of Higher Education essay, this decline represents the equivalent of about 60 law schools in 2010.

How have law schools responded to this downturn? In order to keep classroom seats filled, many have been admitting a larger and larger percentage of applicants. As Taylor explained it, the median admission rate among law schools in 2015 was 54 percent, "meaning that applicants at more than half the law schools in the country had better than 50-50 odds of gaining admission." According to Taylor, 24 law schools had admission rates of 70 percent or higher! In other words, some American law schools are drifting pretty darn close to having open admission policies.

And as a recent report from Law School Transparency documents, admissions standards are falling at law schools with a number of schools admitting students with LSAT scores so low that they are at extreme risk of failing the bar exam.

All this is happening as law-school tuition has skyrocketed. The average JD graduate enters an anemic job market with $140,000 in debt.

Obviously, law schools should cut their tuition prices drastically and some law schools should be closed. For example, Southern University Law School in Baton Rouge and Texas Southern University's law school have shockingly low admission standards and their graduates have very low pass rates when they take their bar exams. Why do these schools remain open?

Graduate programs in Education: Declining demand and low quality

But let's not just pick on law programs. Let's look at graduate programs in Education, which is my own field.

The National Science Foundation reported recently that that doctorates in education declined 27 percent in just 5 years: from 6,528 to 4,793. Furthermore, in 2014, less than two thirds of Education doctoral graduates had jobs in their fields or postdoc commitments. Perhaps most disturbing, doctoral graduates in Education had the highest mean debt loads among graduates in all doctoral fields. According to NSF, their mean cumulative debt was $36,260 in 2014, and 23 percent had debt loads of $70,000 or more.

We have far too many colleges of education--around 1200. The National Commission on Excellence in Educational Administration recommended closing three-fifths of the nation's graduate programs in Educational Leadership (the programs that train school principals and superintendents), and it is surely right. Arthur Levine, who published a much discussed report on graduate programs in Educational Leadership, found that most of them were competing in a "race to the bottom," with many Educational Leadership programs having low admission standards, low graduation standards, weak faculty, weak research production, and "irrelevant" curricula.

But have universities improved the quality of graduate programs in Education? Have they closed weak programs or redundant schools of education? By and large, they have not. In Louisiana, where I teach, every four-year public institution has a college or school of education, far more than the state needs. And--based on my own experience working in colleges of education at four public universities, admissions standards are going down for doctoral programs. At the University of Houston, where I worked a few years ago, the Educational Leadership program had several doctoral student with GRE scores in the bottom 10th percentile.

Conclusion

The student-loan crisis has many dimensions, and millions of victims. Students who attended for-profit colleges are among the casualties, but many people who obtained graduate degrees at reputedly respectable institutions are also among the wounded.  Thousands of law school graduates and people with graduate degrees in Education have accumulated massive levels of debt for educational experiences that didn't lead to well-paying jobs.

Do we need to clean up the for-profit college industry? Yes we do. But we also need to close a lot of law schools and graduate programs in Education.

References

Arthur Levine. Educating School Leaders. Education Schools Project, 2005. Accessible at http://www.edschools.org/pdf/Final313.pdf

Aaron N. Taylor. Are Financially Desperate Law Schools Using a 'Reverse' Robin Hood Scheme' to Stay Afloat? Chronicle of Higher Education, April 20, 2016. Accessible at http://chronicle.com/article/Are-Financially-Desperate-Law/236041

Joshua Wright. The Oversaturated Job Market for Lawyers Continues, and On-The-Side Legal Work Grows. Economicmodeling.com, January 10, 2014. http://www.economicmodeling.com/2014/01/10/the-oversatured-job-market-for-lawyers-continues/

National Center for Science and Engineering Statistics. 2014 Doctorate Recipients From U.S. Universities. National Science Foundation, December 2015. Accessible at http://www.nsf.gov/statistics/2016/nsf16300/digest/nsf16300.pdf


Wednesday, April 13, 2016

Feds will forgive student loans of disabled borrowers: Doing the right thing in the right way (cutting through red tape)

The Department of Education announced this week that it will write customized letters to 387,000 disabled student-loan borrowers to inform them they are eligible for loan forgiveness. Good for the feds. DOE regulations authorize student-loan forgiveness for borrowers who are permanently disabled, but most people eligible for forgiveness don't apply. In fact, according to an Inside Higher Ed article, almost half of all disabled borrowers (179,000) are in default!

I applaud DOE for doing the right thing and reaching out to people who are entitled to have their student loans forgiven. This is a stark and pleasing contrast to the Department's position in Myhre v. U.S. Department of Education, when DOE opposed bankruptcy discharge for a quadriplegic debtor whose expenses exceeded his income because he had to pay a full-time caregiver to feed, dress, and bathe him.

Apparently, DOE is going to streamline the loan-forgiveness process for disabled borrowers. According to an article by Jillian Berman in Marketwatch:
The borrowers identified by the Department won’t have to go through the typical application process for receiving a disability discharge, which requires sending in documented proof of their disability. Instead, the borrower will simply have to sign and return the completed application enclosed in the letter.
DOE is to be commended for cutting through red tape to forgive these loans.  Perhaps this streamlined approach can be expanded to include student-loan borrowers who were defrauded by the college they attended--particularly students who attended one of the Corinthian Colleges institutions. Thousands of former Corinthian students have applied for loan forgiveness, but the administrative process has been tedious.

This latest development provides more evidence of the massive suffering experienced by millions of distressed student-loan borrowers. Nearly 400,000 of them are permanently disabled!

References

Jillian Berman. Why Obama is forgiving the student loans of almost 400,000 people. Marketwatch.com, April 13, 2016. Accessible at http://www.marketwatch.com/story/why-obama-is-forgiving-the-student-loans-of-nearly-400000-people-2016-04-12

Tuesday, April 12, 2016

Henry Fernandez of Fox Business News says 40% of students aren't paying back their student loans. Is Fernandez correct? Does it matter?

Henry Fernandez of Fox Business News published a story last week reporting that 40 percent of college borrowers aren't paying back their student loans.  Here's what he said:
There's new concern over student loans as more than 40% of people who borrow from the government are not making their payments. That's nine million of the 22 million people with student loans who may never be able to pay their loans.
Is Hernandez correct?

Is Hernandez's analysis correct? And if so, does it matter?

Although the Fernandez did not cite a source for  his 40 percent statement, I think he's right. Looking at data from multiple sources, here's how I get to a 40 percent nonpayment rate.

First of all, 43 million people have outstanding student loans. As the New York Times accurately observed last year, 10 million student borrowers have either defaulted on their loans or are delinquent.  It is true that some people with delinquent loans will eventually bring their loans current, but a lot of them won't because unpaid interest will accrue during the delinquency period, making the loans grow larger and more difficult to repay.  Theoretically, defaulters can also bring their loans current, but the penalties assessed against defaulting borrowers are unbelievably onerous; and once defaulters have penalties attached to their loan balances they are doomed.

Then we have 4.6 million people who have entered income-based repayment plans (IBRPs) that extend loan repayment periods out to 20 or even 25 years. Most of these borrowers are making payments so low that interest will continue to accrue, which means a very high percentage of borrowers in IBRPs will never pay off their loan principal.  And this number grew by 140 percent in just due two years! I think it is safe to predict that within a year, at least 5 million people will be in IBRPs of some sort. So let's add 5 million to the 10 million people whose loans are delinquent or in default.

Finally, there are about 9 million people who are in economic-hardship deferment programs or loan forbearance programs of some kind that excuse them from making loan payments.  Again, interest is accruing on these loans.

When we consider this data together, we can understand why more than half of college-loan borrowers are seeing their loan balances go up within two years of beginning the repayment stage (as reported by the Brookings Institution). This is a clear sign that a lot of borrowers are either not making any payments or are making payments so low that they are not paying down their loan balances.

Based on the analysis I just outlined, it is clear that Mr. Hernandez is right and that at least 40 percent of student borrowers are not repaying their loans, and most never will.

Does it matter?

From the perspective of society as a whole, does it matter whether students pay back their college loans? Yes it does. Steve Hayward, a professor at Pepperdine University, who was interviewed for Fernandez's story, said that colleges are delivering an inferior product, "and I think there is a bubble coming." In fact, Hayward went further and said if colleges were publicly traded, he would short them.

Hayward has it right.  Let's look at Apollo Education Group, the owner of the University of Phoenix. Apollo once traded at $80 a share and now trades for about $8.  If you had shorted Apollo, you would have made some money.

Basically, I think what Hayward was suggesting is this: The government cannot go on forever loaning billions of dollars a year to college students when a high percentage of college borrowers are receiving inferior educational experiences and aren't paying back their loans.

In fact, higher education is in a bubble right now. Hundreds of private liberal arts colleges and for-profit colleges are struggling to survive and could not survive 30 days without federal student aid money. They are like drug addicts who must have federal dollars flooding into their coffers just to survive from month to month.

But the government cannot keep loaning more than $150 billion a year in student-loan money if 40 percent of the borrowers don't pay back their loans.

The Obama administration and the entire bloated college industry are relying on a single strategy to keep the gravy train rolling: long-term income-based repayment plans.  If they can force the kiddies into 20-year or 25-year repayment plans with lower monthly payments than the standard 10-year repayment period, they think the party will go on forever and the bubble will never burst.

But the party won't go on forever, and the bubble is about to burst. Within five years, we will see dozens of colleges close their doors because more and more students will simply refuse to pay outrageous tuition prices for degree programs that don't lead to good jobs. And we will see nonpayment rates go higher than they are now, and they already pretty damn high.

In fact, the student-loan bubble is already causing more suffering than the home-mortgage bubble. According to the text at the end of the movie The Big Short, about six million people lost their homes during the home-mortgage crisis of 2008  But those people could file for bankruptcy and get a fresh start. More than 20 million people are burdened by unmanageable student-loan debt, and most of them cannot get relief in the bankruptcy courts..

References

Henry Fernandez. 40% of Students Aren't Paying Back the Government. Foxbusiness.com, April 8, 2016. Accessible at http://www.foxbusiness.com/features/2016/04/08/40-students-arent-paying-back-government.html



Saturday, April 9, 2016

Trump, Clinton, Cruz & Sanders: "The Grace of God is in Courtesy"

Of Courtesy, it is much less
Than Courage of Heart or Holiness,
Yet in my Walks it seems to me
That the Grace of God is in Courtesy.
Courtesy
Hilaire Belloc

I became profoundly uneasy about Donald Trump when I saw him treat Jeb Bush so contemptuously a few months ago, mocking him on the debate stage. It seemed to me then--and seems to me now--that a person who publicly humiliates a political opponent with school-yard taunts does not have the temperament to be President.

And Mr. Trump has done nothing to alleviate my doubts about his character in the months following his first Presidential debate. And now we are presented with the disgusting spectacle of Donald Trump and Ted Cruz (or their supporters) insulting each other's wife. Even the most bare-knuckle ward politician knows that there is one line that cannot be crossed--no political candidate with any claim to decency can disparage an opponent's spouse.

We must have a president who is honest and not venal, and Hillary Clinton does not qualify by either measure. But we also must have a President who is not a bully.

Increasingly, I am swayed by Hilaire Belloc's profound little poem, Courtesy. Surely Hilloc is right: the grace of God is in courtesy. And by that standard, the only top contender who is qualified to be our President is Bernie Sanders, who declined, perhaps to his disadvantage, to scold Hillary Clinton for her email scandal.

Hilaire Belloc
"[T]he Grace of God is in Courtesy."

Friday, April 8, 2016

Artist burns student loan records at private university in South America: What a cool idea!

A friend recently sent me an article from The Guardian about an artist using the name Fried Potatoes (Papas Fritas in Spanish) who sneaked into the vault of Universidad del Mar, a private university in Chile, and burned all the documents pertaining to the university's student loans.  Yep, a half billion dollars in student debt went up in smoke.

What a cool idea!

Of course, destroying all loan documents pertaining to private college loans would be impossible in the United States. There are literally millions of student-loan documents in the U.S. involving hundreds of for-profit colleges. Most are in electronic format and the government  maintains records of these debts, since the government guarantees all loans issued through the federal student-loan programs.

Still, some variation of this idea is worth considering. Let's start with Corinthian Colleges, which filed for bankruptcy last year and now has a $1.2 billion judgment against it for false advertising and misleading lending practices. A California judge ordered Corinthian to pay most of the judgment ($820 million) as restitution to former students who were victimized by its scam. The bulk of this money represents federal loans students took out to pay their tuition bills at one of Corinthian's campuses.

But of course Corinthian doesn't have the money to pay the judgment. At the time it filed for bankruptcy, it claimed to have only $20 million in assets--about one sixtieth of the total California judgment.

Department of Education regulations allow students to apply for loan forgiveness if they were students at a college that closed or if they were defrauded by the college they attended. Thousands of Corinthian alums have applied for relief under these regulations.

But the administrative process for resolving these claims has been tedious, and so far only a small number of ex-Corinthian students have had their loans forgiven.

Why doesn't the Department of Education do what Papas Fritas did and just dissolve the debt? Of course, DOE wouldn't need to actually burn all those loan documents, although I'm sure a bonfire would be personally satisfying to Corinthian's former students. But the loans could be forgiven by government fiat. And that is what DOE should do.

After all, Corinthian's former students will never pay back those student loans. In fact, almost half of all students who attended for-profit colleges eventually default on their federal student loans. Wouldn't it be easier and more just for the government to simply decree that any student who took out federal loans to attend a for-profit college will have those loans forgiven if the college is found guilty of fraud or misrepresentation?

Of course it would, but DOE will never take that straightforward step because the amount of money involved is enormous. It would rather deal with student claims through a cumbersome administrative process, knowing that most students won't go to the trouble of filing a claim.

And here's a better idea. Given the high levels of fraud, misrepresentation, price-gouging and totally worthless educational experiences connected with the for-profit college industry, I think we should simply allow anyone who took out student loans to study at one of these shyster for-profit institutions to discharge those loans in bankruptcy under the same standards that apply to other unsecured debt. In other words, people who are otherwise qualified for bankruptcy relief should have their student loans discharged through the routine process of a bankruptcy filing without the need of filing an adversary proceeding.

Image result for crowd around bonfire

References

Jonathan Franklin. Chile students' debts go up in smoke. The Guardian, May 23, 2014. Accessible at http://www.theguardian.com/world/2014/may/23/chile-student-loan-debts-fried-potatoes

Matt Hamilton. Corinthian Colleges must pay nearly $1.2 billion for false advertising and lending practices. Los Angeles Times, March 23, 2016. Accessible at http://www.latimes.com/local/lanow/la-me-ln-corinthian-colleges-judgment-false-advertising-20160323-story.html