Saturday, December 21, 2019

Raquel Welch's earring bomb: Passing thoughts on gun control

I like to watch old movies on television on Saturday afternoons, and I don't care whether the movie I watch is good or bad. This afternoon, I watched Fathom, a 1967 film starring Raquel Welch.

Raquel is involved in some sort of international terror plot. A guy with a British accent gives her a pair of lime green earrings, which happen to match the lime green bikini she is wearing. The left earring is a small bomb, the guy tells her. Just drop it down a ventilator shaft and it will explode in 30 seconds.

In the next scene, Raquel entices the villain, a creepy looking character wearing a green-tinted monacle, into the master suite of a luxury yacht.  He is so enchanted by Raquel's beauty that he doesn't notice her throw her left earring down a conveniently located ventilator shaft. Sure enough, in 30 seconds (maybe less), the earring explodes and sinks the yacht. Raquel gets away on a speedboat being driven by the guy who gave her the earrings.

This movie got me to thinking about gun control. I have a Remington 20-gauge shotgun for quail hunting and a  Remington 12-gauge shotgun for shooting ducks. I would be very sorry if Michael Bloomberg confiscated them should he be elected president. I wouldn't go postal, but I wouldn't be happy about it.

I'm a reasonable guy, and I'm not totally against all gun control. Nevertheless, I think the Democrats should start small with their campaign to take guns away from Americans.  Let them start by banning those dangerous earring bombs like the one Raquel Welch used to sink a yacht. I for one would not object.

Fortunately, earring bombs are rare. After the movie ended, I drove to my local Academy store and asked if they carried earring bombs. (I guilefully told the sales associate I was shopping for a Christmas present for my wife.)

The associate told me the store was sold out of earring bombs and wouldn't restock them until after the holidays.  He also said the lime green model had been discontinued.

Returning to my discussion of the movie Fathom, I highly recommend it. It is true the plot is a little thin but no thinner than an Ingmar Bergman movie. It is also true that Roger Ebert gave Fathom a "thumbs down." But the New York Times described the movie as "crackling good fun," and who would argue with the New York Times over matters of culture and the arts?


Raquel Welch, sans earring bomb.

Thursday, December 19, 2019

Let's kick California off the island: When bad things happen to a good state

You don't know me but you don't like me,
You say you care less how I feel
How many of you that sit and judge me
Ever walked the streets of Bakersfield?

Streets of Bakersfield
Sung by Buck Owens

I love California, which I've visited many times. Napa Valley is lovely and produces terrific wines. The landscape around Santa Barbara is the most beautiful in the world, surpassing Tuscany and the Li Valley in southwestern China, in my opinion.

Unlike (I suspect) California's politicians, I appreciate the great literature of California. I've read Frank Norris' The Octopus, Nathanael West's Day of the Locust, some of Joan Didion's essays, Richard Henry Dana's Two Years Before the Mast, and many of the works of Jack London and John Steinbeck. I love T.C. Boyles' California novels, particularly The Tortilla Curtain and Budding Prospects.

And Californians are great people. Although I haven't met them all, I've never met a Californian I didn't like. (I might not like Charlie Manson or HarveyWeinstein, but we don't run in the same circles.)

But let's face it. The Californians insist on sending wingnuts to Congress, and these nut jobs are ruining the country.  I'm talking Nancy Pelosi, Adam Schiff, Maxine Waters, etc., etc.  It's got to stop.

So let's vote California off the island. I realize a state can't secede from the Union, but with a constitutional amendment, we can surely vote to kick a state out of the club.

Who could oppose such a move? Texas? North Dakota? Hell, the Californians would jump at the chance to have their own nation.

If California was a country it could do whatever it damn likes. It could have open borders, free sex-change operations for illegal immigrants, and no-charge facelifts. It could require corporations to put convicted rapists on their governing boards and make it a criminal offense for Christians to go to college. The People's Republic of California could give citizens the constitutional right to crap on the sidewalks instead of restricting that privilege to San Francisco.  What's not to like?

Of course, my proposal has some limitations. First of all, the town of Bakersfield--home of Buck Owens, Merle Haggard and the Bakersfield sound--would continue to be part of America.  And the Ronald Reagan Library.  That goes without saying.

And America would keep the military bases and Disney Land.  But Hollywood would be happier if California were a separate nation, and Americans are tired of Hollywood movies anyway.

Think about it. Kicking California out of the USA would solve a lot of problems, and I can think of no downsides. And if Americans get nostalgic about the old California, they can watch classic movies: Vertigo, The Big Lebowski, and The Maltese Falcon.

The Dude abides, man.




Wednesday, December 18, 2019

College leaders are the new Marlboro Man--touting dangerous products to gullible Americans

I'm old enough to remember when a lot of Americans smoked cigarettes.

People smoked on buses and airplanes, they smoked in restaurants and bars, they smoked in movie theatres. People even smoked in hospitals and grocery stores. I remember seeing a guy pick up a head of lettuce in the produce section of my local supermarket, and he had a cigarette wedged between the fingers of the same hand that grabbed the lettuce. Hey, no problem!

It's not like people didn't know that cigarettes were dangerous to our health. We all knew people who died slow, painful deaths from lung cancer and emphysema. We all saw elderly people who were basically living skeletons with sunken chests, yellowish skin, and discolored teeth. We knew why cigarettes were called coffin nails. But we ignored all that to appear cool.

Meanwhile, the cigarette industry advertised their products on television. I must have seen the Marlboro Man a thousand times on TV--that rugged, ruddy-faced cowboy with a viral cigarette clamped in his perfect teeth. But the Marlboro Man was a cynical, vicious lie.  Robert Norris, the original Marlboro Man, didn't smoke.

America's college presidents are like the cigarette industry in the 1950s. Just as Madison Avenue pitched cigarettes as sexy,  university leaders blather on and on about the value of higher education, how American graduate schools are the envy of the world, and about the big income bonus that comes with a college degree. They dress up in clown suits (academic regalia) on commencement day as if they were bestowing a high honor on the rubes by handing them diplomas.

But for millions of Americans, higher education's cheery bullshit about the benefits of a college degree are lies. More than 45 million Americans are student-loan debtors; collectively they owe $1.6 trillion. Eight million people are in income-based repayment plans that can last as long as 25 years. Millions have defaulted on student loans that they can't discharge in bankruptcy. College debt hampers Americans from buying homes, getting married, and having children.

Pompous college presidents, administrators, and professors think of themselves as superior individuals with keenly attuned social consciences and highly developed intellects. But they are lying to themselves and the world at large. In reality, they're the new Marlboro Man, selling products that they know are often dangerous.

Cigarettes are sexy and American higher education is the envy of the world.

Wednesday, December 11, 2019

Moody's Investor Services says 1 in 5 small private colleges face "fundamental stress"

Moody's Investor Services reported recently that 1 in 5 small, private colleges face "fundamental stress" and that as many as 15 colleges will close by the end of the year (as reported by CNBC.com). Small liberal arts colleges in the Midwest and New England are particularly under pressure, and four
Vermont colleges have closed within the past year.

What's going on?

First, changing demographics provides part of the explanation. There are simply fewer people in the traditional college-going age, and this population decline is especially acute in rural areas where a great many small colleges are located.

Second, tuition costs have risen sharply in recent years, and potential students and their parents are experiencing sticker shock at the prospect of paying $60,000 to $70,000 a year to attend a small, liberal arts college. Even though liberal arts schools have been discounting their tuition by 50 percent or more, these slashed tuition rates are still often higher than the cost of attending a public university.

Finally, fewer students want to study liberal arts, which has traditionally been the core mission of small, private colleges.  For example, the University of Tulsa, a highly regarded private university, is shifting its mission from liberal arts to science and technology and intends to cut 40 percent of its programs--primarily in the humanities and natural sciences--in order to focus on STEM-related academic programs.

Without question, many small, liberal arts colleges are facing an existential crisis, and they have tried a variety of strategies to boost their enrollments. Some have invested in athletics programs, hoping to attract students who are interested in sports. Others have rolled out new vocation-based majors like criminal justice, sports management, and business administration.

But these tactics are often unsuccessful. A college that was founded to be a traditional liberal arts institution often finds it difficult to break into new areas of study, particularly those fields that have been offered by public universities for decades.

Furthermore, new majors usually require new faculty members--and that costs money.  Colleges cannot easily lay off tenured liberal-arts professors s in order to replace them with business and criminal-justice professors. Schools that try to cut faculty positions in order to balance their budgets often run into threats of litigation, as the University of St. Thomas in Houston recently discovered.

A fair number of private colleges are going to fail in the coming years, regardless of the tactics they employ to boost their enrollments.  Obscure liberal arts schools with religious affiliations seem especially vulnerable because the millennials are far more secular than previous generations. Many young people have no interest whatsoever in religion. Moody's estimate of a 20 percent attrition rate may understate the crisis.

While shopping for a college, potential students and their parents need to realize that the small, liberal arts college they may be considering could be closing in the near future. Does anyone want to take out student loans to attend a college that could be shutting its doors within the next five or ten years?

Tuesday, December 10, 2019

Murrell v. Educational Education Management Corp.: An Ohio Bankruptcy Court Misinterprets "Undue Hardship"

Calvin Murrell was thrown out of work in 2000 due to knee and back injuries. Murrell then attended Stautzenberger College, a private, for-profit community college with a total enrollment of around 300 students. He obtained a degree in web tech at Stautzenberger and then attended Spring Arbor College and Owens Community College, but he failed to complete programs at these schools.

Murrell took out almost $73,000 in student loans to finance his college studies, and in 2018,  he tried to discharge this debt in bankruptcy. He maintained that being forced to repay this debt would create an "undue hardship."

Judge John Gustafson, an Ohio bankruptcy judge, applied the three-part Brunner test to determine whether it would impose an undue hardship on Murrell if he were forced to repay his loans.

"Under the Brunner test," Judge Gustafson instructed, "the debtor must prove each of the following three elements: (1) that the debtor cannot maintain, based on current income and expenses, a 'minimal' standard of living for [himself] and [his] dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans."

To obtain a discharge of his student loans, Murrell was required to prove all three elements of the Brunner test. Educational Credit Management Corporation opposed the discharge, arguing that Murrell failed to pass any of the Brunner test's three elements. ECMC produced a witness who testified that Murrell was eligible to participate in an income-based repayment plan (IBRP) that would require him to pay between $63 and $94 a month.

Judge Gustafson observed that Murrell's family income was about $44,000, consisting of $32,893 earned by Murrell's wife and $13,068 in Murrell's Social Security Disability payments. Judge Gustafson concluded that with a little belt-tightening, Murrell and his wife could make monthly student-loan payments of $63 to $94 a month and still maintain a minimal standard of living. Therefore the judge refused to discharge Murrell's student loans in bankruptcy.

In my view, Judge Gustafson misapplied the Brunner test when he ruled that Murrell's student loans were nondischargeable. The Brunner test does not ask whether a debtor can maintain a minimal standard of living if required to make token loan payments under an income-based repayment plan.  Rather it asks whether the debtor can pay off the student loans and maintain a minimal standard of living.

If Murrell signs up for an IBRP that requires him to pay $63 per month for 25 years, he will never pay off his student loans.  Quite the contrary; his student-loan debt will grow larger with each passing month.

Let us assume Murrell makes monthly payments of $63 under an IBRP. And let us further assume that his student-loan debt accrues interest at 5 percent. Interest at that rate on $73,000 amounts to $304 a month--almost five times the amount of his monthly payments.

Under an IBRP, Murrell's debt will negatively amortize as unpaid interest accumulates and becomes capitalized. Thus, the $73,000 dollars Murrell owes in 2019 will grow to a much larger number by the time 25years have passed.

The essence of Judge Gustafson's ruling is that no one is eligible to discharge student loans in bankruptcy because it is always possible to make token monthly payments under an IBRP. Indeed, debtors in IBRPs who are unemployed and have no income are not required to make any payments on their loans.

Currently, there are 8 million student-loan debtors enrolled in IBRPs.  Virtually none of these people are paying down the principal on their loans. When their repayment obligations come to an end--after 20 or 25 years--they will owe considerably more than they borrowed. This amassed debt will be forgiven, but the amount of the forgiven loans will be taxable to them as income.

This is insane. The only purpose of these income-based repayment plans is to hide the amount of student-loan debt that is not being paid off--hundreds of billion dollars.

References

Murrell v. Educational Management Corporation, 505 B.R. 464 (Bankr. N.D. Ohio 2019).




Thursday, December 5, 2019

Bakersfield College v. California Community College Athletic Association: Court Rules That Mandatory Arbitration Clause is Unconscionable

   In late October, a California appellate court ruled that a mandatory arbitration agreement imposed by the California Community College Athletic Association against a member college was unconscionable and therefore unenforceable. The court concluded that the agreement had been imposed by the Athletic Association against a weaker party that had no power to negotiate and thus was procedurally unconscionable. In addition, the language of the agreement favored the Athletic Association at the expense of member colleges and was substantially unconscionable as well.

Facts

Bakersfield College, a California community college, operates a varsity football program. In order to participate in intercollegiate football competition, the college is required to be a member of the California Community College Athletic Association (the Athletic Association) and to abide by the Athletic Association’s constitution and bylaws.

   The Athletic Association’s constitution authorizes the commissioner of the Southern California Football Association (the Football Association) to impose sanctions and penalties on member colleges.  The constitution also states that a member college that objects to a sanction or penalty may appeal the commissioner’s ruling in a process that ends in binding arbitration.

In May 2013, Bakersfield College was penalized and sanctioned for violating the Athletic Foundation’s bylaws because “the College had provided football players with meals and access to work and housing opportunities not available to others students.” The College appealed this decision through the appellate process outlined in the Athletic Association’s constitution, but it declined to submit to binding arbitration. Instead, Bakersfield filed suit against the Athletic Association and the Football Association for breach of contract and breach of the fair procedure doctrine

   The two Associations argued that Bakersfield had failed to exhaust its administrative remedies by foregoing the binding arbitration process. Bakersfield responded by arguing that it should be excused from participating in binding arbitration because the arbitration provision was unconscionable under California law.  A California trial court sided with the two defendant Associations and ruled that Bakersfield’s lawsuit was barred because the college had not exhausted its administrative remedies.

The California Court of Appeal (Third District) Decision

   On appeal, the California Court of Appeal (Third District) reversed the trial court’s decision. In the appellate court’s view, the challenged arbitration agreement was unconscionable under California law and could not be enforced.   

   The California Court of Appeal began its analysis by stating the law of unconscionability in California. “Unconscionability consists of both procedural and substantive elements,” the court explained.  The court then examined whether the arbitration provision in the Athletic Association’s constitution was procedurally unconscionable.  “When the weaker party is presented the [arbitration] clause and told to ‘take it or leave it’ without the opportunity for meaningful negotiation, oppression, and therefore procedural unconscionability,” the court stated.

   In the case before it, the court continued, “the College had no ability to individually negotiate the terms of the contract at the time it was made. It could not opt-out of the arbitration provision as drafted by the Athletic Association. The uncontroverted evidence supports a finding of procedural unconscionability.” As the court pointed out, Bakersfield had to accept the Athletic Association’s terms if it wanted to participate in intercollegiate athletics, a matter of considerable importance to the college and its students.  “To provide this opportunity to its students, the College had no other alternative -- it had to be a member of the Athletic Association.”

   The court went on to consider whether the arbitration provision was substantially unconscionable.  In making this assessment, the court stated, the paramount consideration is mutuality. “An arbitration agreement requires a ‘modicum of bilaterality,’ meaning the drafter cannot require another to submit to arbitration to pursue a claim but not accept the same limitation when it would act as the plaintiff, without some reasonable justification for such one-sidedness based on business realities.”   

   In assessing the Athletic Association’s arbitration provision, the California appellate court found no mutuality. “The binding arbitration procedure applies only to appeals by member colleges of penalty and sanctions decisions. It is not an alternative dispute procedure applied evenhandedly to all disputes between the parties.” In particular, the provision did not require the Athletic Association to submit its disputes with member colleges to binding arbitration, and thus the provision lacked mutuality.

   The court pointed out other elements of the arbitration agreement that disfavored member colleges.  For example, one subsection authorized the arbitration panel to award costs and attorney fees against a college if the Athletic Association prevailed in arbitration, but there was no parallel language that authorized the panel to award costs against the Association if the college prevailed.   

   The court was also troubled by the manner in which arbitration panel members were selected. Although colleges could nominate panel members, “in practice, the entire master list was solicited, and appointed, solely by the [Athletic Association’s] Executive Director, with no input from member colleges.” In fact, the court noted, “the Athletic Association unilaterally selected all individuals on the master arbitration panel list and did so in secrecy, precluding the colleges from commenting on or objecting to any potentially biased panel member.” Such a procedure, the court state, “does not achieve the minimum levels of integrity required to enforce an agreement to arbitrate.”

   In conclusion, the California Court of Appeal ruled the arbitration agreement that the Athletic Association sought to enforce was both procedurally and substantively unconscionable. “The arbitration agreement is therefore unenforceable,” the court summarized, “and the trial court erred in compelling arbitration of the College’s claims.”

Conclusion

   The court’s decision in the Bakersfield College case has important implications for students who attend for-profit colleges. These colleges typically force students to sign mandatory arbitration agreements as a condition of enrollment. A student has no power to negotiate with a for-profit college regarding arbitration provisions—which are offered on a “take it or leave it” basis. Based on the reasoning in the Bakersfield College case, such arbitration agreements are procedurally unconscionable.   

    Likewise, the terms of a for-profit college’s arbitration agreement may disadvantage students who wish to resolve complaints against their college. For example, in Magno v. College Network, Inc., an arbitration provision forced California students to arbitrate their disputes with a for-profit education provider in Indiana.  Such language, a California court ruled, disadvantaged students in a way that made the arbitration agreement substantively unconscionable and unenforceable.   

   Arbitration agreements have traditionally been favored by the courts. In Dicent v. Kaplan University, an appellate court recently forced a student to arbitrate her claim against a for-profit college rather than litigate. The Bakersfield College provision, which invalidated an arbitration provision as being procedurally and substantively unconscionable, provides strong support for students attending for-profit colleges who want to invalidate a for-profit college’s arbitration agreement and proceed directly to litigation.

References

Bakersfield Coll. v. Calif. Community Coll. Athletic Assoc., __ Cal.Rptr.3d --, 41 Cal.App.5th 753, 2019  WL 5616682 753 (2019).

Dicent v. Kaplan Univ., 758 Fed. Appx. 311 (3d Cir. 2019) (per curiam).

Magno v. College Network, Inc., 204 Cal.Rptr.3d 829332 Ed. Law Rep. 1028 (Cal. Ct. App. 2016). 

NoteA longer version of this article has been published in School Law Reporter, a publication of the Education Law Association.

Friday, November 29, 2019

Lozada v. ECMC: Bankruptcy court is not required to consider a student-loan debtor's religious giving in its "undue hardship" analysis

In 2017, Rafael Lozada, age 67, filed an adversary proceeding in a New York bankruptcy court, seeking to discharge more than one-third of a million dollars in student-loan debt. Lozada acquired part of this debt for his own education expenses and part from a Parent Plus loan he took out to pay for his son's education. Lozada's debt accrued interest at an annual rate of 8.25 percent--about $27,000 a year.

Bankruptcy Judge Mary Kay Vyskocil refused to discharge Lozada's student loans, ruling that he had failed to pass the undue hardship test established by the Second Circuit's Brunner decision. In particular, Judge Vyskocil declined to take Lozada's religious contributions into account when determining whether he could maintain a minimal standard of living while making payments on his student loans.

As Judge Vyskocil noted, Lozada's religious giving was considerable. Together, Lozada and his wife had made religious contributions totally more than $20,000 a year over the four-year period of 2013-2016.

Judge Vyskocil found Lozada's commitment to charity laudable, but she "concluded that 'when [Lozada] elects to tithe rather than pay his nondischargeable debt, he is making donations using someone else's money."

In her ruling, Judge Vyskocil pointed out that Lozada and his wife received a monthly net income of $5,942 a month. After paying reasonable household expenses (not including religious contributions), Lozada enjoyed "a healthy monthly surplus" of $1,443 a month.

This surplus, Judge Vyskocil reasoned, allowed Lozada to make religious contributions of $600 a month (approximately 10 percent of his net monthly income) and still have enough money to make monthly student-loan payments of $826 a month under an  Income Contingent Repayment Plan (ICRP).

Lozada appealed Judge Vyskocil's decision to a U.S. District Court, where Judge Alvin Hellerstein affirmed the lower court's decision. In Judge Hellerstein's view, requiring Lozada to make student-loan payments under an ICRP would not constitute an undue hardship. Moreover, the judge ruled, Lozada failed the "good faith" element of the Brunner test. Indeed, Judge Hellerstein observed, Lozada's "excess charitable contributions, reaching 35 percent of his household income, coupled with a failure to consider contributing to his student loans, undermines any inference of good faith."

It is hard to argue with Judge Hellerstein's analysis in the Lozada case. Clearly, Lozada's household income was adequate for him and his wife to make charitable contributions equal to 10 percent of their household income and still make income-based student-loan payments under an ICRP.

Nevertheless, the Lozada case illustrates the insanity of the federal student loan program. It makes no sense whatsoever for the federal government to structure the federal student loan program in such a way that a 67-year-old person can amass student-loan debt amounting to a third of a million dollars, a debt that accrues interest at the rate of more than $2,000 a month.

Furthermore, it is insane to force a man who is past retirement age to commit to a 25-year, income-contingent repayment plan that allows him to make monthly payments that are less than half the amount of accruing interest.  By the time Lozada finishes his loan obligations, he will be 92 years old, and he will owe considerably more than he owes now--certainly more than half a million dollars.

No wonder that the Democrats' siren call for massive student-loan forgiveness is so appealing to many Americans. And why not forgive billions of dollars of student debt? After, all millions of student debtors will never pay back their loans, whether or not those loans are forgiven.

Image credit: Celebrating Financial Freedom



References

In re Lozada, 604 B.R. 427 (S.D.N.Y. 2019).

Lozada v. Educational Credit Management Corporation, 594 B.R. 212 (Bankr. S.D.N.Y. 2018), aff'd, 604 B.R. 427 (S.D.N.Y. 2019).

Monday, November 18, 2019

Pew Foundation says one out of four student-loan borrowers default within 5 years: But we already knew that.

The Pew Foundation issued a report recently with this snoozer title: Student Loan System Presents Repayment Challenges.  Really? That's like saying that icebergs posed a challenge to the Titanic.

The Pew Foundation's most interesting finding--picked up by the media--was this: Almost one out of four student-loan debtors default on their loans within five years.  But this should not be a shocker. Looney and Yannelis reached basically the same finding five years ago in their report for the Brookings Institution. These researchers reported that the five-year default rate for the 2009 cohort of borrowers was 28 percent (p. 49, Table 8).

And the Pew study probably understates the crisis. The report itself acknowledged that for-profit colleges were underrepresented in its study (p. 5), and we know that almost half of the students who attend for-profit colleges default within five years.

Most importantly, the Pew study did not address the "challenge" faced by more than 7 million college borrowers who are in income-based, long-term repayment plans (IBRPs). IBRP participants are not paying off their student loans even though they are in approved repayment programs. Why? Because people in IBRPs aren't making monthly payments large enough to pay down loan accruing interest, and this interest is capitalized and rolled into their loans' principal.

As much as it pains me to say this, Education Secretary Betsy DeVos gave a clearer picture of the student-loan crisis than the Pew Foundation.  A year ago, DeVos publicly acknowledged that only one out of four student borrowers are paying down principal and interest on their loans and that 43 percent of student loans are "in distress."

For me, the most disappointing thing about the Pew report was its tepid, turgid, and tedious recommendations for addressing the student-loan crisis, which I will quote:
  • Identify at-risk borrowers before they are in distress . . .
  • Provide [loan] servicers with resources and comprehensive guidance . . .
  • Eliminate barriers to enrollment in affordable repayment plans, such as program complexity . . .
Thanks, Pew Foundation. That was really, really helpful.

Note that the Pew Foundation said nothing about bankruptcy relief for distressed college borrowers, tax penalties for borrowers who complete their IBRPs, or the government's shameful practice of garnishing elderly defaulters' Social Security checks. Moreover, Pew said nothing about the Education Department's almost criminal administration of the Public Service Loan Forgiveness program.  And we didn't read anything about the out-of-control cost of higher education.

Let's face it.  College leaders, the federal government, and so-called policy organizations like the Pew Foundation refuse to acknowledge that the federal student-loan program is destroying the lives of millions of Americans. Instead, they are content to tinker with a system that is designed to shovel money to our bloated and corrupt universities.

America's colleges are addicted to federal money. Like a drug addict hooked on Oxycontin, they must get their regular fixes of federal cash.  After all, they've got to fund the princely salaries of college administrators and lazy, torpid professors.

Like first-class passengers on the Titanic who were sipping champagne when their ship hit an iceberg, the higher education industry thinks the flow of student-loan money will go on forever.  But a crash is coming.

Unfortunately, the people who created the student-loan crisis will be the ones floating away in the lifeboats--living off their cushy pensions and obscene retirement packages. The people who were exploited by the federal student-loan program, like the third-class passengers on the Titanic, will go down with the ship.

Lifeboats reserved for college presidents and DOE senior administrators


Wednesday, November 13, 2019

What happens to tenured faculty when a college shuts down?: Reflections on the closure of Marlboro College

Small liberal arts colleges are in trouble all over the United States, but the problem is most acute in New England and the Northeast. Scott Jaschik of Inside Higher Ed reported that 10 colleges are closing this year, and four of them are located in Vermont.

Small colleges with religious affiliations are also under strong pressure.  Among the 10 colleges that will close this year, five have religious ties. College of New Rochelle, Marygrove College, St. Joseph School of Nursing, and the College of St. Joseph are all Catholic institutions. Cincinnati Christian University, which will close next month, has Protestant ties.

Marlboro College, a tiny school with only 150 students, is one of the Vermont institutions that is closing this year. Marlboro transferred its $30 million endowment fund and $10 million worth of real estate to Emerson College, a Boston institution with about 4,500 students. In return, Emerson has agreed to accept Marlboro's students and all 27 of its tenured and tenure-track faculty.

As Lee Pelton, Emerson's president made clear, the transaction is not a merger. After next fall, Pelton said, "Marlboro will not exist."

Marlboro president, Kevin F. F. Quigley, said that Marlboro had "reached out" to a number of colleges before it did its deal with Emerson, but the other schools were not willing to employ Marlboro's faculty.

I took a quick look at Marlboro's faculty bios, and I was impressed. Many of the Marlboro professors are young and most have doctorates from prestigious institutions.

I was also impressed that Marlboro executed a plan that will allow the school to close with dignity while preserving the jobs of its tenured and tenure-track faculty. In essence, Marlboro turned over assets worth $40 million to a college that is willing to employ its professors.

In my view, Marlboro's closure is a model for other struggling liberal arts colleges. Most of them have declining enrollments and dwindling revenues. But many--like Marlboro--have significant endowment funds and own valuable real estate. What should a college do with those assets when it shuts down?

I can think of no better way for a dying college to divest itself of its material wealth than to devote it to the welfare of its tenured and tenure-track professors, many of whom have devoted a substantial part of their working lives to an institution that closes while they are in mid-career.

In this economic climate, even highly acclaimed tenured faculty members will have trouble finding comparable tenured positions if their college shuts down. Marlboro and Emerson performed a civic act when they worked out a deal to save 27 jobs and put Marlboro's real estate and endowment funds to good use.


Marlboro College
















Tuesday, November 12, 2019

College life in the 1960s: College kids try to kill themselves in a 1961 Chrysler Imperial--but botch the job

I ain't hurtin' nobody. I ain't hurtin' no one.

John Prine

I enrolled at Oklahoma State University in 1966, just as the Vietnam War was heating up. The rules were quite clear. Boys could avoid the draft for four years if they kept their grades up. But if they flunked out, they’d be drafted and probably go to Vietnam.

I still remember some of my dorm buddies who lived with me in Cordell Hall, a four-story neo-Georgian monstrosity located near the ROTC drill field. No air conditioning. Most of us were poor or nearly poor or we wouldn’t have been living there.

I remember Alton and Bobby, two freshmen from southwestern Oklahoma. Alton was from the little town of Amber; Bobby was from the nearby hamlet of Pocasset.  If you asked them where they were from, they both would say Am-Po, expecting you to know that they were referring to the Amber-Pocasset Metropolitan Area.

And there was another kid whose name I’ve forgotten who was clinically shy and morbidly frail. His skin was almost translucent, which gave him the appearance of a young girl. I’m ashamed to say the guys in the dorm nicknamed him Elsie. He never objected.

Everyone liked Elsie, partly because he had something most of us didn’t have: a car. His parents loaned him their 1961 Chrysler Imperial, perhaps the ugliest car ever made. It had all sorts of buttons and gadgets, including power windows, which I had never seen before.

Elsie was incredibly generous with his car and loaned it to just about anyone who asked. One Saturday during the fall semester, Alton wanted to go to Oklahoma City to see his girlfriend, and he asked Elsie if he could borrow the Chrysler. Oklahoma City was 120 miles away, but Elsie offered to drive him there. Several bored freshmen joined the expedition, and six or seven of us piled into the Imperial for the run to OKC.

But Elsie didn’t drive us. Alton insisted on taking the wheel, and when we got out on Interstate 35, he said, “Let’s see how fast this baby can go.” In an instant, we were hurtling south at 120 miles an hour. No seat belts.

I was terrified but I didn’t have the courage to tell Alton to slow down. Then I looked through the rear window, and I saw a Highway Patrol cruiser closing in on us--siren wailing.

Alton panicked when he heard the siren. In a desperate attempt to get his speed down to double digits, he stomped down on the brake pedal and jerked up the hand brake. That definitely slowed us down.

Alton laid down about 100 feet of skid marks, which you can probably still see on Interstate 35. In an instant, the whole car was filled with smoke and the smell of burning rubber and fried brake pads.

We’re in big trouble now, I thought. But the cop didn’t seem concerned about the fact that seven idiot teenagers were apparently trying to kill themselves in a Chrysler. The cop said hardly a word; he just wrote Alton a speeding ticket and drove away in his cruiser.

Am-Po Bobby also had a car, an old Chevy Nova; and every Monday night he chauffeured a bunch of freshmen to Griff’s Drive-In. Griff’s sold tiny hamburgers for 15 cents apiece, and on Monday nights it sold them for a dime. Pooling our resources, we could usually scrape up three bucks, which would buy us 30 hamburgers. We all ate four apiece, and a couple of big eaters would eat five. Oh, we were living high!

One Monday night, we were waiting in Griff’s drive-through lane and Bobby spotted a metal gasoline can behind Griff’s back door. Bobby got out of the car, shook the can, and confirmed there was fuel in it. Free gas! Bobby put the gas can in the backseat of his car, and we picked up our 30 burgers at the drive-through window.

Unfortunately for Bobby, an alert Griff’s employee witnessed the theft and called the Stillwater police. A cruiser arrived immediately, and an elderly officer gave us all a lecture on stealing. He confiscated the gas can and then walked to the back of Bobby’s car to jot down the license plate number.

And what did Stillwater’s finest see on the rear bumper? A sticker that said, “Support Your Local Fuzz.” Now we’re really in trouble, I thought. We’re going to be arrested, OSU will kick us out of school, and we’ll all wind up in Vietnam.

But the officer had seen moron college students before and knew we were basically harmless. He just shook his head when he saw the bumper sticker and drove off without even giving us a citation.

The 1960 Chrysler Imperial: Power windows!


Oklahoma Highway Patrol: "Let's be careful out there."


Griff's Hamburgers: 10 burgers for a dollar (but only on Mondays)


Monday, November 4, 2019

Crocker v. Navient Solutions: A small win for student-loan debtors

Crocker v. Navient Solutions, a recent Fifth Circuit decision, is a small win for student-loan debtors. Essentially, the Fifth Circuit ruled that a private student loan obtained to pay for a bar review  course is dischargeable in bankruptcy. (The opinion also includes an extensive analysis on a jurisdictional issue, which will not be discussed here.)

Brian Crocker took out a $15,000 loan from Sallie Mae to pay for his bar-examination prep course. Subsequently, Crocker filed for bankruptcy and his  Sallie Mae loan was discharged.

Navient Solutions, which assumed the legal right to collect on Crocker's debt, continued trying to collect on the $15,000 loan after Crocker's bankruptcy discharge, claiming the debt was not dischargeable in bankruptcy. In August 2016, Crocker filed an adversary proceeding against Navient in the same bankruptcy court where he had obtained his bankruptcy discharge. Crocker sought a declaratory judgment that his Sallie Mae loan had been discharged and a judgment against Navient, holding it in contempt for continuing its collection efforts after Crocker's bankruptcy discharge.

A Texas bankruptcy court ruled in Crocker's favor, and Navient appealed.  The Fifth Circuit identified three types of student debt that are not dischargeable in bankruptcy without a showing of undue hardship:

  • Student loans made, insured, or guaranteed by a governmental unit (11 U.S.C. § 523(a) (8) (i)), including federal student loans.
  • Private student loans to attend a qualified institution (11. U.S.C. § 523 (a) (8) (B)). 
  • Debt arising from "an obligation to repay funds received as an educational benefit, scholarship, or stipend" (11 U.S.C. § 523 (a) (8) (ii)).

Sallie Mae's loan to Crocker was not a governmental loan, so § 523 (a) (8) (i) did not apply. Navient conceded that the loan was not made to a qualify institution, and thus § 523 (a) (8) (B) did not apply.

Instead, Navient argued that the loan was nondischargeable under § 523(a) (ii). Navient maintained that the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act made all private student loans nondischargeable, including Sallie Mae's $15,000 loan to Crocker to pay for his bar-exam prep course.

The Fifth Circuit disagreed. The court pointed out that the statutory provision Navient relied on did not mention loans at all. Instead that provision "applies only to educational payments that are not initially loans but whose terms will create a reimbursement obligation upon the failure of conditions  of the payments."

Therefore, the court ruled, "The loans at issue here, though obtained in order to pay expenses of education, do not qualify as 'an obligation to repay funds received as an educational benefit, scholarship, or stipend' because their repayment was unconditional. They therefor are dischargeable."

As Steve Sather, a Texas bankruptcy lawyer, observed in a recent blog essay, the Crocker decision is only a small victory for student-loan debtors. It is nevertheless a significant decision because it is a reminder that not all private student loans are covered by the Bankruptcy Code's "undue hardship" provision.  Private loans taken out by law school graduates to pay for bar-examination preparation courses can be discharged in bankruptcy.

References

Crocker v. Navient Solutions, __ F.3d __, 2019 WL 5304619 (5th Cir. Oct. 22. 2019).

Steve Sather. Fifth Circuit Grants Small Victories to Student Loan Debtors, A Texas Bankruptcy Lawyer's Blog, October 26 2019, http://stevesathersbankruptcynews.blogspot.com/2019/10/fifth-circuit-grants-small-victories-to.html.





Thursday, October 31, 2019

In interest of "diversity," colleges drop SAT/ACT scores for student applicants. But are the colleges sincere?

More than 1,000 colleges have dropped the ACT or SAT test as an admission requirement. According to a Washington Post story, more than half of the top 100 liberal arts colleges (as selected by U.S. News and World Report) have dropped standardize tests as part of their admission process.

The colleges will tell you they are ditching ACT and SAT tests because the tests discriminate against racial minorities and the socio-economically disadvantaged (poor people). But I think this explanation is mere blather.  The colleges are dropping standardized tests in the admissions processes for two reasons that they dare not articulate.

First, most of the elite colleges are engaging in race discrimination in making their admissions decisions.  Harvard, for example, has been accused of discriminating against Asian applicants based on an analysis of enrollment criteria. Asians lost their discrimination claim against Harvard, but they are appealing in a case that is likely going to the U.S. Supreme Court.

It is much harder for disappointed college applicants to claim they were discriminated against based on race when the objective criteria of SAT and ACT scores are jettisoned. College admission officers will argue that standardized test scores interfere with the goal of achieving diversity, which is just a disingenuous way of saying their admissions decisions are subjective and often based on race.

Regarding the less selective schools, many are ditching the ACT and SAT exams because they are so desperate for students that they've lowered their admission standards and don't want anyone to know it.  By tossing out standardized test scores, it becomes harder to document the fact that many colleges will now admit anyone who has a pulse and some student-loan money. In fact, the pulse may be optional.

A great many of the 1,000 colleges and universities that have gone test-optional for student applicants are obscure institutions that are probably struggling to keep their enrollments up. For example,  Earlham College in Richmond, Indiana. only has about 1,000 students and is facing several financial problems. The Chair of the Earlham Board of Trustees released a letter to the campus  community in 2018, which acknowledged that the college had been "running substantial operating deficits" since 2008 and that its present level of cash flow was not sustainable.

I don't have inside information about enrollment challenges at the 1,000 colleges and universities that scrapped the ACT and SAT,  but I feel sure that many of them are scrambling to survive and that the chief motivation for most of them is to juice their enrollments and not to enhance "diversity."

Photo credit: Kayana Szymczak, New York Times









Sunday, October 27, 2019

Impeach DeVos, Not Trump: Democrats should focus on Betsy DeVos' outrageous mismanagement of the student-loan program

Let me start by saying this: I am a registered Democrat who voted for Bernie Sanders in the 2016 Democratic primary race in Louisiana. I will vote for a Democrat in Louisiana's 2020 primary election, although I am not happy with my choices.  I am neither a MAGA Republican nor a Never-Trumper; I just want a decent person to be President. Is that too much to ask?

I admit that I am just an old white guy who lives in Flyover Country--and a cisgendered old white guy at that. Nevertheless, I don't get the Democrats' obsession with impeaching President Trump. Congressman Schiff wants to impeach Trump over a phone call? What's that about?

I hate to be the one to break it to you, Adam, but impeachment is never going to happen.  Nancy Pelosi will never call for a vote on the matter, and the Senate will never impeach the President. The 2020 election is only 12 months away--12 months! Why don't the  Democrats focus on nominating a reasonable candidate who can defeat Trump in 2020?

On the other hand, Trump's Education Secretary, Betsy DeVos, is eminently impeachable and should be impeached. I've commented on her outrageously incompetent management of the federal student-loan program on several occasions. DeVos simply refuses to administer the government's various student-loan forgiveness programs in a competent manner. She's screwed up the Public Service Loan Forgiveness Program and the Borrower Defense program, and her agency opposes bankruptcy relief for distressed student-loan debtors--no matter how desperate a debtor's circumstances.

And now she has been held in contempt by a federal judge for defying a court order. U.S. Magistrate Judge Sallie Kim ruled that DeVos and DOE violated Judge Kim's preliminary injunction to stop collecting on student loans owed by students who attended Corinthian Colleges, a defunct for-profit college.

Judge Kim was actually pretty steamed about DOE's intransigence. At one point, the Judge said, "I'm not sending anyone to jail yet, but it's good to know I have that ability."

The unlawful collection activities were actually carried out by DOE's contracted student-loan servicers, not DOE itself. But DOE is responsible for the servicers' actions. Mark Brown, a senior DOE official, acknowledged a screw-up. "Although these actions were not done with ill intent," Brown said, "students and parents were affected and we take full responsibility for that."

If the Democrats were smarter, they would focus their impeachment energy on DeVos, not President Trump.  An impeachment inquiry could speed ahead with full compliance with due process.  There would be no need to hold secret hearings in the basement of the Capitol. DeVos' malfeasance is adequately documented by competent evidence, including several adverse court rulings against DeVos and DOE. And I predict that some Republicans in both the House and the Senate would support impeachment once the facts of her maladministration were brought to light.

And impeaching DeVos would publicize to every beaten-down student-loan debtor that the Trump administration doesn't care about them.  President Trump's total indifference to the student-loan train wreck could be exploited by the Democratic candidates who are calling for student-loan forgiveness.

But the Democrats' aren't interested in doing something sensible. Like Captain Ahab chasing the great white whale in Moby Dick, they scour the oceans of bureaucratic nonsense looking for some way to impeach President Trump.  And Trump, like Moby Dick, may wind up putting a great big hole in the Democrats' boat.

Will the Great White Whale sink the Never-Trumpers?








Friday, October 25, 2019

Education Department official says he will resign and calls for massive student-loan forgiveness: Does he have a good idea?

Mr. A. Wayne Johnson, the Department of Education's "chief strategy and transformation officer," announced his resignation this week and called for massive forgiveness of student-loan debt.

 Johnson, who was appointed to his DOE position by Education Secretary Betsy DeVos, proposes to forgive all federal student loan debt up to $50,000 per student. And he's also calling for a $50,000 tax credit for people who have already repaid their loans.

Senators Bernie Sanders and Elizabeth Warren, both presidential candidates, are also calling for wholesale forgiveness of student loans. Johnson's plan is more generous than Senator Warren's proposal, which puts income caps on student-loan forgiveness. On the other hand, Senator Sanders'  plan is even more generous than Johnson's. Bernie calls for forgiving all student-loan debt--about $1.6 trillion dollars with no income cap. Johnson's proposal would cost taxpayers less--an estimated $925 million.

Is massive student-loan forgiveness a good idea? I think it is. Johnson is right; the student loan program is "fundamentally broken." Even Secretary DeVos compared the program to a looming thunderstorm and admitted last year that only 24 percent of student debtors are paying back both principal and interest on their loans.

Indeed, virtually no one in the government's income-based repayment plans (IBRPs) will pay back their student loans because their monthly payments are not large enough to pay down accumulating interest on borrowers' underlying debt.  About 7.3 million people are in IBRPs, and millions more have defaulted on their loans or have them in deferment.

We know that massive student-loan indebtedness is hindering young people from getting married, having children, and buying homes. Researchers at Bard  College's Levy Economics Institute concluded that student-loan forgiveness would actually stimulate the national economy by freeing up money for student debtors to purchase houses and consumer goods.

Personally, I'm OK with all three student-loan forgiveness proposals: Johnson's, Warren's and Sanders'. Let's face facts; most of these loans will never be paid back.

But I think a better option would be for Congress to remove impediments to discharging student loans in bankruptcy, which it can easily do.  Congress just needs to pass a law that would remove the words "undue hardship" from the 11 U.S.C.  § 523(a) of the Bankruptcy Code.

Amending the Bankruptcy Code would allow federal bankruptcy judges to decide, on a case-by-case basis, which student-loan borrowers are truly insolvent and deserving of relief. These judges have the experience and the authority to weed out fraudulent claims and restrict debt relief to worthy candidates.

Massive student-loan debt relief without regard to individual circumstances would allow all 45 million student-loan borrowers to shake off their student debt--even those who obtained good value from their educational experiences and have the financial means to pay off their loans. I don't think that is good public policy.

Nevertheless, if the choice is between massive student-loan relief and the present system, I'm in favor of the plans put forward by Mr. Johnson, Senator Warren, and Senator Sanders. As I said, most of these loans will never be paid back and forcing millions of distressed student-loan debtors into 20- or 25-year income-based repayment plans just subjects them to a lifetime of stress, anxiety, and needless suffering.

A. Wayne Johnson will resign from Department of Education: Bye-bye, Betsy











Saturday, October 19, 2019

Betsy DeVos' Education Department is a clown car, but no one is laughing

For the last three years, the national political debate has focused on international issues: Russia, Ukraine, and now Syria. But look at what's happening at home. More than 45 million people are indebted by student loans, and more than half of these debtors cannot repay what they borrowed. In effect, they are victims of financial homicide.

Betsy DeVos, President Trump's Education Secretary, is spectacularly indifferent to this crisis, and she has made the crisis worse by her callousness and craven obsequence to the for-profit college industry. Without a doubt, she is guilty of malfeasance and venality. Let's summarize her reprehensible conduct:

Public Service Loan Forgiveness. The Department of Education has flatly refused to administer the Public Service Loan Forgiveness program (PSLF) competently.  More than three-quarters of a million borrowers were qualified for the  PSLF program by Navient, DOE's contracted loan servicer. But DOE has only approved roughly 1 percent of the applications for loan forgiveness. Apparently, DOE takes the position that 99 percent of the people who believed they were qualified for PSLF loan forgiveness were mistaken.

A federal judge ruled last February that DOE had administered PSLF arbitrarily and capriciously in a lawsuit brought by the American Bar Association. Later, the American Federation of Teachers sued DOE, arguing, like the ABA, that DOE was administering DOE in violation of the Administrative Procedure Act.  Has Betsy made amends? No.

Borrower Defense Program.  The federal government has a"borrower defense" process in place for student-loan borrowers to have their student loans forgiven if they can show that their for-profit college defrauded them. A few weeks ago, DOE issued new rules for administering the program. Betsy will allow the for-profit colleges to force students to sign covenants not to sue and waive their right to join class-action lawsuits. DOE's revised rules for processing borrower-defense claims are so onerous that DOE itself estimates that only 3 percent of applicants will get relief.

Student-Loan Bankruptcies.  DOE continues to take the position that distressed student-debtors are ineligible for bankruptcy relief, no matter how desperate the debtor's circumstances.  DOE has a policy in place (perhaps unwritten) that authorizes Educational Credit Management Corporation to assume the right to fight student-bankruptcy cases, and ECMC fights them all.  ECMC, by the way, has accumulated a billion dollars in unrestricted assets--a fat reward for naked brutality.

Betsy DeVos, a multi-millionaire who owns a huge yacht, presides over this clown car of an Education Department, which she has stuffed with cronies from the for-profit college industry. And the taxpayers provide her with a personal security detail that costs almost $8 million a year.

This clown car is not funny. Surely DeVos' maladministration of the Public Service Loan Forgiveness program, apart from everything else she has done or failed to do, provides ample grounds for impeachment.  I feel sure that if the Democrats voted articles of impeachment against her in the House of Representatives, some Republicans would vote for it.

And, if her reckless and lawless behavior was brought to the U.S. Senate, I think there would be enough bipartisan votes to remove her from office.

 Without question, 45 million student-loan borrowers would be interested in the outcome of any impeachment proceedings, and several million of these people are probably single-issue voters. In other words, millions of college-loan debtors will vote for the presidential candidate in 2020 who promises student-loan debt relief.  That candidate is not the guy who appointed Betsy DeVos to run the Department of Education.

Betsy DeVos's Education Department is a clown car.



Sunday, October 13, 2019

I smell trouble: The Trump economy is smoke and mirrors

The Trump economy is going gangbusters! Wages are rising, unemployment is low, and the stock market is near an all-time high. Real estate prices are going up, the bond market is in a rally--maybe we'll all get rich.

But let's look a little closer at this halcyon picture, starting with the unemployment rate, which is now below 4 percent. As Nicholas Eberstadt explained in Men Without Work, a book that more people should read, the official unemployment rate does not measure the percentage of people who aren't working and aren't looking for work. In the years 2006 to 2016, Eberstadt wrote, 17 percent of working-age men in their prime working years (ages 20-64) reported having no employment in the previous month. (p. 27)

As Eberstadt explained, America now has a "caste" of working-age guys who have decided not to get a job. "Members of this caste can, at least, expect to scrape by in an employment-free existence, and membership in the caste is, in an important sense, voluntary" (p. 35).

And then there are the millions of people getting paychecks who aren't doing anything useful. Just look at the universities, crammed with tenure-protected men and women who have good retirement plans and excellent health insurance, but who aren't doing much of anything to improve our society. Do we really need a professor to teach medieval European literature or the history of the Ottoman empire in classrooms to students who don't give a damn? And how are these parasites getting paid? We know how they are getting paid: students are taking out massive student loans.

It is true the economy seems to be humming along, but if things are so good, why can't Congress pass a balanced budget? If we can't live within our income when the economy is rosy, how can we pay the nation's bills when the economy heads south?

Of course, people are still buying expensive cars--SUVs with all kinds of marvelous gadgets--heated seats, automatic backup features, and entertainment systems that allow our kids to watch  Shrek while we're barreling down the interstate at 70 miles an hour.

But many car buyers have to take out long-term loans to pay for these marvelous new vehicles. According to the Wall Street Journal, the average car-loan term is now 69 months, and six-year loans and even seven-year loans are becoming more and more common. As WSJ writers Ben Eisen and Adrienne Roberts observed, "Car loans that are increasingly stretched out are a pronounced sign that some American middle-class buyers can't afford a middle-class lifestyle."

In his memoir Night, Holocaust survivor Elie Wiesel wrote that the Jews in his Transylvania village were warned that the Nazis were committing genocide in central Europe, but no one believed it.  Today, we have a clear sign that the American economy is a house of cards. Next week, the Trump administration will begin a new round of quantitative easing when it will buy $60 billion in Treasury bills. Correct me if I'm wrong, but this move basically means the feds have gone back into the money-printing business.

You can write me off as a grumpy old geezer, but that's only partly true. Actually, I'm a worried old geezer. My wife and I have savings, but we are largely dependent on our pensions and Social Security to maintain ourselves in our retirement years.

If the national and global economies fall apart, a lot of elderly Americans are going to suffer--and I don't just mean being forced to eat the senior breakfast at Denny's. President Trump's critics should spend more time examining the rot in the national economy and less time fulminating on Trump's phone call to Ukraine, about which nobody gives a damn.






Wednesday, October 9, 2019

Why doesn't Congress do something useful to relieve the student-loan crisis? A couple of modest suggestions

Some famous guy once said that people are prone to see the speck in another person's eye while ignoring the log in their own eye. That observation reminds of our national political scene--nothing but vitriol and no good being done.

But there are several things Congress can do--uncontroversial things in my opinion, which would help relieve the massive student-loan crisis.  For example, Steve Rhode recently wrote an essay on a new California law that requires colleges to give students their transcripts--including students who have unpaid debts to their college.

As Mr. Rhode quoted, the new law (AB-1313) states: "Schools and colleges have threatened to withhold transcripts from students as a debt collection tactic. The practice can cause severe hardship by preventing students from pursuing educational and career opportunities, and it is therefore unfair and contrary to public policy." Does anyone in Congress disagree with that statement?

The law's dictate is quite simple:
Whenever a student transfers from one community college or public or private institution of postsecondary education to another within the state, appropriate records or a copy thereof shall be transferred by the former community college, or college or university upon a request from the student.
Withholding transcripts and diplomas because a former student is indebted to the college is a common practice among the for-profit institutions, which prompts an obvious question. Why are colleges lending money to students in the first place?

There are two answers to that questions. Some for-profit colleges are not content simply to suck up Pell Grant money and federal student-loan money. They want more cash, and many have no qualms about forcing their students to take out loans--often at high interest rates--in order to continue with their studies.

Second, many for-profits have trouble meeting the Fed's 90/10 rule, which requires a for-profit college to receive no more than 90 percent of its operating revenues from federal student-aid money.  One strategy for getting the 10 percent of auxiliary funding that they need is to loan their students money.

California passed a sensible law, and Congress should adopt it so that the law's restrictions apply nationwide. I repeat--does any person in Congress disagree with what the California legislature did?

Just this morning, Steve Rhode  responded to a a man who claimed that his entire Social Security check was garnished by some outfit called Account Control Technology due to an unpaid student-loan debt. As Mr. Rhode pointed out, the Internal Revenue Service cannot deduct more than 15 percent of an individual's Social Security check as a garnishment. So there is a screw-up somewhere for this individual to lose his entire Social Security check.

But why should elderly Americans have any of their Social Security checks garnished due to unpaid student loans? As the General Accountability Office reported some time ago, these garnishments almost always go toward paying accumulated interest and penalties; and the sums collected do nothing to actually pay down the underlying debt. So what's the damn point?

Senators Elizabeth Warren and Clair McCaskill introduced a bill a few years ago to stop the practice of garnishing Social Security checks to collect on defaulted student loans, but the bill went nowhere. Why can't Congress get off its fat ass and pass that bill?