You should have bought Navient stock a year ago: Navient settles deceptive lending claims for $1.85 billion

 Forty state attorneys general sued Navient Corporation for deceptive lending practices in its student loan business. Navient settled the lawsuits last week for $1.85 billion.  

The loan giant admitted no wrongdoing, saying the claims against it were "unfounded."

The participating states will split $145 million, and Navient will forgive 66,000 private student loans.  In addition, Navient will pay $260 apiece to 350,000 federal student borrowers whose loans were serviced by Navient.

Did this settlement bring Navient to its knees? No, it did not. 

Almost exactly one year ago, Navient stock was worth about eleven dollars. What's it worth today? Twenty-one bucks.

During the past year, Navient sold its federal student-loan servicing business to an outfit called Maximus, which already had its tentacles in the healthcare industry. Then it settled lawsuits for deceptive lending, which cost it $1.85 billion.

But Navient will stay in the private student-loan business, which must be profitable. After all, Navient's stock price nearly doubled within the last year.

If you were one of the 350,000 student borrowers who will be getting a $260 check, lucky you! You'll be able to pay your light bill next month.

A measly 260 bucks

Why does Oklahoma have 8630 licensed marijuana growers and only 471 dairy farms?

 When I was in college, it was a felony to possess marijuana in any amount. If the cops caught you with it, you could go to the state penitentiary for a very long time.

When I was a child, Oklahoma prohibited the sale of hard liquor. Okies could drink 3.2 percent beer (usually Coors), but they couldn't buy a bottle of whiskey or order an Old Fashioned in an Oklahoma restaurant.

When I was growing up, there was no legal gambling in Oklahoma: no lottery, no casinos, no slot machines, and no video poker. 

My, how times have changed!

Medical marijuana has been legalized, and you can buy it in special dispensaries all over the state. The dispensary in my hometown of Anadarko is on Main Street.

Indeed, Oklahoma now has 8,630 licensed marijuana growers--18 times the number of dairy farms. The state lists them on a website, and ten growers give their addresses as Anadarko.

Once considered a grave sin in the Sooner State, gambling is now legal. The Native American tribes have casinos all over Oklahoma. One does business just two miles outside my hometown.

If you want to drink while you gamble (and who doesn't?), you don't have to find a bootlegger anymore. You can order a cocktail at the casino bar.

Ain't life grand? 

Even better, hardly anyone goes to church now. When I was a child, I got up on Sunday mornings, shined my shoes, put on my clip-on bow tie, and trotted off to Sunday School. 

My teachers kept track of attendance, and if I had a perfect attendance record for one year, I received a lovely ceramic pin for the lapel of my little sports coat.

Everyone went to church in those days, and adults dressed up for the occasion. Most men owned one suit, which was reserved for weddings, funerals, and church.

Of course, a few people still attend church on Sundays in my hometown--primarily old people. But the church parking lots are no longer full.

Anyway, what do the pastors preach about now?  Don't drink? Don't gamble? Don't do drugs? Oklahoma's politicians tell us all that stuff's OK.

When I was a child, some evangelical ministers preached that going to the movies was a sin (and they may have been right!).  But there are no movie theatres in my hometown anymore, so why bring up the subject?

I wish I could say Oklahomans are happier now that they can drink, gamble, and smoke marijuana. But I don't think they are.

Feel like praying? Go to the Prayer Teepee.

"A nation is not conquered until the hearts of its women are on the ground": I return to Anadarko

 I grew up in Anadarko, a small town settled near the banks of the Washita River in southwestern Oklahoma's Caddo County.

Anadarko was a thriving community when I was a child. Family shops lined Broadway, the town's main street. Farmers and their families came to town on Saturdays to do their weekly shopping, and elderly Plains Indians gathered on the sidewalks, talking to one another in Kiowa and Comanche.

Our town boasted a fine Victorian courthouse, as elegant as any county courthouse in Texas. The town square had a bandstand and a statue honoring the Caddo County boys who died in the Great World War.

And what a statue! A life-size bronze figure of a doughboy stood on a granite pedestal, where the names of all the dead were listed. The soldier wore a campaign hat and a uniform with puttees. In one hand, he held the staff an American flag. In the other, he clutched the barrel of his Springfield rifle. 

Facing the courthouse square stood the First Methodist Church, erected in 1917 in the Greek Revival Style. A Tudor-style Presbyterian church and the First Baptist Church also faced the square. All these churches were full when I was a child.

I returned to Anadarko a few days ago, and the town of my boyhood is gone. The county bureaucrats tore down the Victorian courthouse in the 1950s and replaced it with a concrete structure built in the mid-century modern style--which, of course, is no style at all.

The Presbyterian church still stands but is closed-- not enough Presbyterians to pay the light bill. The Methodist church can't afford its own preacher anymore and shares a minister with a nearby town. The Baptist church stands abandoned, although a new church was erected at the edge of town.

The bandstand is gone, and so is the bronze doughboy. All the local businesses are closed, wiped out by Walmart, which sells everything a rural Oklahoman could ever need.

Anadarko’s losses are sad, but the new town is sadder still.

I drove by the home my father built with his own hands in 1953. It is empty now and looked abandoned, just one of a few hundred abandoned houses in the town.

Anadarko had two movie houses when I was a kid, as well as a drive-in movie theater. They are all gone—killed off by television.

Of course, there are new things for the townspeople to do. The Plains Tribes are now in the gambling business, and the citizens of Anadarko can gamble with the Kiowa, the Comanche, the Fort Sill Apache, or the Wichita. Most casinos are open until 2 AM if they can’t sleep and want to play the slots.

When I was a kid, a person could be sent to state prison for possessing a single marijuana joint. But times have changed. 

Now there’s a medical marijuana dispensary on Anadarko's Main Street. Of course, you have to have a medical prescription, but I don’t imagine it is difficult to find an accommodating doctor.

And my hometown's marijuana might have been grown locally. Oklahoma has hundreds of licensed marijuana-growing sites, and ten are near Anadarko.

Perhaps these marijuana greenhouses brought new jobs to Anadarko, which would be good. But no, growers bring in workers from outside.  Someone told me that some of the guys who grow marijuana in Caddo County are Chinese.

But at least the landscape of my childhood is still lovely—the stunning Oklahoma sunsets, the red-dirt hills, and the timeless vistas of the Great Plains.

But again, no. Corporate America has built hundreds of wind turbines in Caddo County—scarring the landscape I once believed could never be changed. 

Anadarko—abandoned homes, closed businesses, a marijuana dispensary, and nearby gambling dens. No wonder many of the people I saw looked clinically depressed. The town has a high suicide rate—primarily young people.

As I stood in the courthouse square, I saw an empty lot where someone had painted a mural on the side of a building—a mural that proclaimed this cryptic message: 

A nation is not conquered until the hearts of its women are on the ground.

I do not know if the hearts of Anadarko’s women are on the ground. But if they are not, the town has some goddamned strong women.

Administrative bloat at American universities: Why it costs so much to go to college

 During my years at the University of Houston, I parked my modest Honda in the faculty parking lot next to other modest cars driven by UH professors--mostly Hondas, Toyotas, Nissans, and Fords.

Then I would walk through the parking lot reserved for administrators, and all the vehicles were luxury cars: Audis, Lexuses, BMWs, and expensive SUVs. Those cars reminded me of the university's priorities--and they didn't include teaching. 

I finished my career at the University of Louisiana at Lafayette, where I volunteered to teach a class of first-year students. I remember a young freshman telling me that my class was his only class taught by a professor. His other teachers were poorly paid adjuncts and instructors who weren't even earning a living wage.  

Yesterday, Robert Kuttner posted an article pointing out that administrative bloat is a significant reason college tuition prices keep going up. He pointed out that Harvard has thirteen vice presidents. 

Mr. Kuttner is right. Universities are crammed full of administrators packed like sardines in campus administration buildings. Vice presidents for technology, enrollment management, diversity, and fundraising. Deans in charge of fraternity and sorority affairs, directors in charge of investigating sexual misconduct, associate deans to generate the paperwork demanded by the various accrediting bodies. And on and on.

Most of these bureaucrats make more money than associate professors. Administrative ranks are growing while universities shift more and more teaching to part-time instructors who are paid a pittance and don't get health insurance or retirement benefits.

"Executive bloat," Kuttner observed, "has gone hand in hand with the usurpation of the historical role of the faculty as the university's governing body, in favor of a corporate model."  Again, Kuttner is right.

Today's professors have very little say about how the universities are run. Faculty senates are purely advisory bodies and have about as much power as the Reichstag had when Hitler was Chancellor of Germany.

Kuttner suggests that the federal government limit college's non-instructional costs. The money spent on administrators cannot exceed a set ratio compared to instructional costs. That's a great idea, but the universities won't stand for such a rule. 

 Kuttner compares modern universities to hedge funds. But I think of them more like medieval fiefdoms where administrators lord it over student peasants who are forced to pay annual tribute to the manor lord with money borrowed from Uncle Sam.

image credit: Medievalists.net

Princeton bars students from leaving Mercer County: False Imprisonment?

You've seen those old crime movies. Detectives wearing fedoras arrive unannounced at some poor schmuck's home and accuse the guy of committing murder.

"Am I under arrest?" the schmuck askes nervously.

"Not yet," a detective snarls, "but don't leave town."

American universities are beginning to act like movie detectives. To stem the tide of COVID, they have become dictatorial and autocratic.  Last December, hundreds of students were quarantined in their dorm rooms and forbidden to walk their campuses due to the COVID crisis.

For example, the Washington Post recently reported on Oscar Lloyd, an undergraduate at Columbia University, who was isolated in a cell-like room for ten days after testing positive for COVID. The university fed him and presumably let him out to shower, but he was not allowed to leave his assigned room to exercise. His life for ten days must have been very much like being in jail.

And at Princeton, the university recently took the extraordinary step of confining all students within the boundaries of Mercer County, where Princeton is located.  

What will happen if a Princeton student breaks out of stir and makes a run for Hoboken? Will the campus police pursue him, sirens wailing and guns blazing, like a scene from a Jimmy Cagney movie?

False imprisonment is a civil offense under the common law. According to the Restatement (Second) of Torts, people are subject to liability for false imprisonment if they confine a person within fixed boundaries against that person's will and the confined person knows he is confined. 

Can universities be sued for false imprisonment when they quarantine their students? I doubt it.

After all, the detained student can always elect to drop out of school and leave the campus. And a genuine health emergency can sometimes justify draconian measures.

Nevertheless, the COVID pandemic is in its second year, and colleges and universities are becoming increasingly inhospitable and tyrannical. 

In my view, elite colleges can't justify tuition rates at extortion levels while forcing their students to take online classes, submit to being quarantined, or be restricted from moving freely when they are off-campus.

It costs students almost $80,000 a year to study at Princeton. Do you think a student laying out that kind of bread wants to be confined to Mercer County?

You're not under arrest yet, but don't leave Mercer County.

Is 2022 the year when young people should postpone college?

 "Nobody thinks of anything as long as his luck is good," Kurt Vonnegut observed in one of his novels.  "Why should he?"

American colleges have had a remarkable run of good luck. For half a century, they've enjoyed a steady supply of students and a cornucopia of federal money flowing into their coffers. International students flocked to American universities in ever larger numbers, and they obligingly paid their tuition bills with no complaints about the cost.

Salaries for university presidents rose ever upward, and administrative staffs became more and more bloated with overpaid administrators--vice presidents and associate vice presidents, deans and associate deans, provosts, and executive vice provosts.  

Universities launched aggressive building programs: luxury dorms, ostentatious athletic facilities, world-class student recreation centers.  Wealthy alumni made fat contributions to have their names on all these gleaming edifices.

Tuition went up every year to pay for all this, but students paid their bills with federal and private student loans, and no one complained. 

Those were the gravy days!  

Then, in March 2020, the black swan arrived. COVID swept across the country, forcing universities to close their campuses. College leaders shuttered all those glittering student rec centers, emptied out the posh student dorms, and canceled college sporting events. 

Still, no worries. The coronavirus pandemic wouldn't last forever. How could it? In a year or so, the crisis would be over, and everything would be back to normal in the halcyon world of academe.

In fact, University leaders patted themselves on the back for responding to the pandemic so nimbly. In a matter of days, virtually every college in America had kicked their students off-campus and forced them to finish the spring semester by taking courses on their home computers. 

But students weren't happy about taking classes online, and they filed hundreds of lawsuits, demanding refunds for their tuition and fees. More than 300 lawsuits were filed.

And the COVID virus did not go away. In fact, many American schools are starting the 2022 spring semester with online classes--even such snooty joints as Harvard. Stanford and Georgetown.

Now student enrollments are declining--especially in the for-profit sector, the community colleges, and the non-elite private schools. For reasons that college presidents can't seem to understand, students don't want to pay $70,000 a year to attend online classes from the parents' basements.

In addition, universities across the country have been mired in scandals and litigation: sexual misconduct by varsity athletes, bribery in the admissions offices, and accusations of race discrimination.

In sum, American higher education's run of good luck has run dry.

So, if you are a young person, is 2022 a good year to postpone going to college? A good year to let things settle down?

I think it is. Unless you clearly understand how your college education will improve your life, don't take out crushing student loans to pay tuition at a college that won't let you on its campus.

Just leave your tuition check on the doorstep.

Why Doesn't the Federal Government Just Cancel All Student Debt? To Find the Answer, Take a Look at Our National Balance Sheet

 When Joe Biden was running for President, he said he would cancel $10,000 of every college borrower's student debt if Congress consented. But Congress hasn't acted.

Senators Elizabeth Warren and Charles Schumer have urged President Biden to cancel $50,000 of every borrower's federal student loans, saying he has the executive power to do so. But that hasn't happened either.

Why not? Given the hardship that student debtors are experiencing--especially since the COVID crisis began--why not just wipe the slate clean and cancel all $1.7 trillion in federal student debt?

In my opinion, President Biden and most members of Congress would like to cancel all student debt. After all, there are about 45 million student borrowers, and canceling their student loans would make them all very happy. 

But Congress can't do that, and neither can President Biden. And here's why.

Student loans are carried on the nation's balance sheet as assets. As of September 30, 2020, the United States held almost $6 trillion in assets, and about a quarter of that amount is listed as outstanding student loans. 

As of September of last year, total national liabilities amounted to roughly $32 trillion, resulting in a national debt of around $26 trillion (give or take a few trillion).

Thus, if Congress simply wiped out all those student loans or President Biden canceled them through executive action, the nation's balance sheet would look significantly worse than it already does.  Instead of holding total assets of $6 trillion, our government would have only a little more than $4 billion.

Simply put, the federal government pretends that all that student-loan debt--closing in on $2 trillion--will be paid back.  And that fiction cannot be maintained if Congress wipes out all student debt or allows large numbers of distressed debtors to discharge their student loans in bankruptcy 

If you are a student-loan debtor, you have benefited from the moratorium on making monthly loan payments--a moratorium that won't be lifted until May 2022.

But just because you haven't made any student-loan payments over the past two years, don't get your hopes up that Congress will simply forgive all federal student debt.  It won't do it because it can't do it. The Federal government's balance sheet simply can't take the hit.