Wednesday, December 2, 2020

Williams v. U.S. Department of Education: How does someone run up $400,000 in student-loan debt?

 In Greene v. U.S. Department of Education, Judge Richard Posner, a universally esteemed jurist, remarked that the criteria for determining "undue hardship" in student-loan bankruptcy cases are complex. Nevertheless, Judge Posner observed, "[t]he size of the debt is relevant--the larger it is, the more likely that imposing full liability on the debtor will produce an undue hardship . . ."

That makes perfect sense. Nevertheless, federal courts have refused to allow student-loan debtors to discharge their loans in bankruptcy even when the size of their college-loan debt is enormous and virtually impossible to pay off.

Williams v. U.S. Department of Education is a case in point. As the Seventh Circuit Court of Appeals explained, Williams began his college studies in 1982. "[O]ver the next three decades,[he] obtained a bachelor's degree in mathematics, a master's in communication, and a master's in business education." He financed these educational endeavors with student loans. By the time he filed for bankruptcy, he had run up $400,000 in student debt.

As the Seventh Circuit noted in its 2019 opinion, Williams had worked only part-time as a seasonal worker at a flower shop over the six previous years. His annual income was just $10,000.

After filing for bankruptcy, Williams entered into a 25-year, income-based repayment plan. Since his income was so low, he was required to pay nothing under that plan.

Williams tried to discharge this massive debt in an Illinois bankruptcy court, but he got nowhere. The bankruptcy judge refused to forgive his student loans, and the Seventh Circuit, in an opinion joined in by Judge Amy Barrett, affirmed the bankruptcy judge's decision.

Perhaps Mr. Williams was not the most attractive candidate for bankruptcy relief. As the Seventh Circuit pointed out: "If Williams continues what he has done for the last 6 years, which he concedes he can do, he need not pay anything on his debts for the next 25 years, at which point at least half the debt will be forgiven. That suggests no hardship."

Moreover, the Seventh Circuit continued, Williams had not provided any admissible evidence of a good-faith effort to repay his student loans.

Those efforts [ the appellate court observed] were virtually non-existent.  Despite his three degrees and his admitted ability to work full-time, he has worked only part-time in a floral shop for the last six years.  No admissible evidence explains the lack of higher-income work or why he has not, with about $3000 of annual net income, paid more than $140 toward lowering his debts.

My point regarding the Seventh Circuit's opinion in Williams v. U.S. Department of Education is not to argue that Williams should have gotten bankruptcy relief from his student loans.

Instead, it is simply this:  It is crazy for the federal government to issue student loans to an individual for three decades of college studies and then force that person into a 25-year repayment plan that allows him to pay nothing.

Surely we can all agree that this nutty system is unsustainable.

References

Greene v. U.S. Department of Education,  770 F.3d 667, 670 (7th Cir. 2015).

Williams v. U.S. Department of Education, 752 Fed.Appx. 363 (7th Cir. 2019).

The federal student loan program is nutty.


Monday, November 30, 2020

Hlady v. Educational Credit Management Corporation: Another Heartless Bankruptcy Judge Denies Relief to a Distressed Student-Loan Debtor

 Cherie Ann Hlady graduated from Hofstra Law School in 2006. She passed the New York bar exam and began practicing law. Unfortunately, Hlady could not make ends meet as a practicing lawyer. Ten years after getting her law degree, she filed for bankruptcy.

Hlady took out student loans totaling $40,000 to finance her legal education, a reasonable amount considering that she attended an expensive private law school. 

Sadly, Helady's solo law practice did not generate enough income to pay off her student debt.  Judge Louis Scarcella, who heard her case, noted that Hladly's net profit in 2016 was only $321. In the five years leading up to her bankruptcy, she had never made a profit of more than $17,691.

Meanwhile, interest on her student loans was accruing at an annual rate of 6.88 percent.  By 2017, Hlady's debt had grown to $140,000--more than three times what she borrowed.

Educational Credit Management Corporation (ECMC) held an interest in part of Hladly's student debt, and it opposed bankruptcy relief. ECMC told Judge Scarcella that Hlady was eligible for a 25-year, income-based repayment plan that would allow her to make monthly payments of zero due to her low income.

In Judge Scarcella's opinion, this fact--and this fact alone--was enough to make Hdlady ineligible to discharge her student loans in bankruptcy. "[I]t cannot be said that an obligation to pay $0 on the ECMC  Loan under the income-based repayment option would cause [Hlady] to fall below a minimum standard of living."

But wait a minute. Judge Scarcella admitted himself that Hladly's net income in 2016 was only $321. Doesn't that put her below a minimum standard of living?

Not in Judge Scarcella's view. Apparently, he was skeptical of some of the expenses that Hlady had listed on her federal income tax return. "Here," the judge wrote, "[Hlady] has not presented the Court with concrete evidence from which her current financial condition can, with any degree of certainty, be known."

Moreover, in the judge's opinion, Hlady had not shown that she could not increase her income in the future. Nor had she demonstrated that she handled her student loans in good faith. "[Hladys] unwillingness to be inconvenienced by having to report her annual income for the next 25 years does not provide sufficient justification to discharge her student loan obligation."

With all due respect, Judge Scarcella's reasoning is nutty. How can he say Hlady hadn't established that she cannot pay off her student loans while maintaining a minimum standard of living when ECMC itself concluded she was so broke that she didn't have to pay anything on her loans due to her low income?

How could the judge conclude that Hladly might someday pay off her student loans when the amount she initially borrowed had tripled since the time she graduated from law school? If Hlady could not pay off $40,000 in student loans over 14 years, how will she ever pay $140,000 over the next 25 years, especially since her loan balance grows by $20 a day in accruing interest?

As Judge Scarcella observed, Ms. Hlady is 48 years old. Her 25-year repayment plan will terminate when she is 73.  By that time, her loan balance will be more than a quarter of a million dollars.  This amount will be forgiven, but the forgiven debt will be taxed as income unless Hlady is insolvent at the time.

So what's the friggin' point?  

The point, obviously, is this. ECMC, as an agent of the federal government, does not want anyone to discharge student loan debt in bankruptcy. And, apparently, Judge Louis Scarcella feels precisely the same way.

References

Hlady v. Educational Credit Management Corporation, 616 B.R. 257 (Bkrtcry E.D.N.Y. 2020).





Tuesday, November 24, 2020

Parent Plus Loans: A despicable government program cruelly drives mom and pop into poverty so their kids can go to college

If you are not outraged by the federal government's Parent Plus student-loan program, you have a heart of stone.

According to The Hechinger Report, 3.5 million parents have taken out federal student loans to help their kids pay for college. Collectively, these parents owe almost $100 billion in outstanding debt, and about 12 percent have gone into default.

In other words, if you take out a Parent Plus loan to help finance your child's college education, you are running about a 1 in 8 chance of having your life ruined by debt you can't repay—pretty grim statistics.

Nevertheless, colleges and universities still offer Parent Plus loans as part of their individual student aid packages, and parents continue to take them out. Often parents do not realize that these loans are almost impossible to discharge in bankruptcy.  Even if mom and pop lose their jobs or are hit with significant hospital bills, they are still obligated to send Uncle Sam a monthly check.

The Hechinger Report tells the story of Jay and Tina Rife, who borrowed $40,000 so their son and daughter could attend public universities in Indiana. The loan balance has grown over 20 years, and they now owe $100,000. Their Parent Plus loan payment is bigger than their mortgage payment.

The Rifes' daughter, Stacy, is 41 years old and has her own student-loan payments. Meanwhile, Stacy's mother goes without health insurance so that she and her husband can make their Parent Plus payments.

The Hechinger Report quoted Amy Laitinen, a policy expert at New America, regarding Parent Plus loans.  "I don't think these loans should be presented with the financial aid offer at all," Laitinen said. "I think it speaks more to the school's desire to bring in the student than to what's best for the family . . . .To present [a Parent Plus Loan] as if it's really a way for paying for college when there's no way for those parents to pay it back is shameful and harmful."

Exactly. 

There is only one way to deal with this reprehensible government program, and it's a two-part response.  The Parent Plus program should be shut down immediately, and every parent who has been trapped by this despicable sham should be able to shed their Parent Plus debt in bankruptcy. 





Monday, November 23, 2020

Toilet-paper college degrees paid for with toilet-paper money: DOE's expert says taxpayers on hook for $400 million in student loans

 Our old friend, the U.S. Department of Education, released an internal report showing that the U.S. government will probably lose about $435 billion in unpaid student loans.  

As Josh Mitchell pointed out in a Wall Street Journal article, this amount approaches the amount of money private lenders lost during the 2008 home-mortgage fiasco.  Unlike 2008, however, the student-loan crisis will probably not trigger a financial meltdown.  The feds will simply borrow billions of new dollars to absorb the loss. The taxpayers won't even notice.

But I think the student-loan debacle is worse than DOE's internal report admits.  Nine million people are in long-term, income-based repayment plans (IBRPs), and almost all of them are not making monthly loan payments that are large enough to cover accruing interest on their underlying loans.  DOE's report estimates that IBRP borrowers will only pay off about half the amount of their loan balances. But the loss must be larger than that if the vast majority of people in these plans aren't paying down their loans.

Millions of people are taking out student loans to finance their college degrees--betting that their education will land them a good job. Too often, they lose the bet.

Meanwhile, people who skip college for a vocational school or an apprenticeship in the trades are making more money than college grads and aren't mired in student-loan debt. As Zero Hedge Fund put it, "there are plenty of hard working plumbers earning six-figures, who didn't take on a mountain of debt for a toilet-paper degree."

As conservative economists keep warning us, the Unites States will soon experience a spike in inflation unless the government stops printing money and running deficit budgets. When that occurs, students will have the bitter satisfaction of paying off their loans for toilet paper degrees with toilet-paper money. 

This is what hyperinflation looks like.







Thursday, November 19, 2020

Joe Biden wants Congress to give all student borrowers $10,000 in debt relief: Too little? Too much?

 This week, Joe Biden called on Congress to give all student borrowers $10,000 in debt relief on their federal student loans.  "It should be done immediately," Biden said.

Senators Elizabeth Warren and Charles Schumer say Mr. Biden's plan is not bold enough. They want him to use his executive powers to give all student borrowers $50,000 in debt relief.  Senator Schumer said that relief of that magnitude would wipe out all federal student-loan debt for 75 percent of college borrowers and provide at least partial relief for 95 percent. 

So--is Biden's proposal too little or too much?

As I have said for years, a flawed relief plan is better than no relief plan. I support any congressional or presidential action that would grant some relief to the nation's 45 million student-loan debtors, who collectively owe $1.7 trillion in college loans. If $10,000 in debt relief is the only arrow in Mr. Biden's quiver, I say he should let it fly.

But both the Biden plan and the Warren-Schumer proposal are flawed. First of all, a $10,000 write-off of each individual's student debt will do almost nothing for the nearly 9 million borrowers in income-based repayment plans. Their debt grows larger by the day because the loan payments aren't large enough to pay off the accruing interest.

Moreover, Mr. Biden wants Congress to approve the deal, which will take weeks, if not months.  After all, the student-loan catastrophe is a political hot potato that Congress might not want to pick up.  

The Warren-Schumer proposal is far more comprehensive than Biden's. As Senator Schumer said, this would eliminate all (federal) student-loan debt for most Americans. But Warren and Schumer want Biden to take this action on his own hook.  Does he have the authority to forgiveness $50,000 in student loans for millions of debtors?  

Who knows?  Ultimately, a federal court would have to rule on that question.

As Senator Schumer averred, a $50,000 Christmas present would relieve most recent college graduates of all their federal student-loan obligations. For those folks, their college degree would turn out to be free--or almost free. That would make many young Americans very happy, and most of those who bothered to vote cast their ballots for Joe Biden.

But there are moral hazards to the Warren-Biden scheme that are not inconsequential.  I think it is a mistake to allow college graduates to walk away from their student loans while doing nothing to force the universities to bring their costs down. 

Giving a few million Americans a get-out-of-jail-free card on their student loans will only encourage the universities to continue charging too much for a college degree and perhaps even tempt them to raise prices further. What do tuition costs matter if the government is going to step in from time to time and give students a free ride on their loans? 

And once the feds step in once with a $50,000 bailout, students will get it into their heads that they will do it again. So why worry about those student loans? How will kids pay the rent on their luxury student housing?

No. It would be much better for Congress to pass legislation--with the next President's support--that would give distressed debtors easier access to the bankruptcy courts. Let the bankruptcy judges sort out who is really broke and deserves debt relief.

Regardless of what Congress or the next president does, the student-loan scandal will not be fixed overnight.  It is the huge friggin' elephant in the room that has blighted millions of Americans' lives.

But I think it would be a mistake for our national leaders to wipe out perhaps a trillion dollars of student debt and leave the taxpayers stuck with the bill. 

Americans have grown skeptical about the value of a college experience at universities mired in sexual-assault scandals (Penn State, UCLA, Baylor, Michigan State, LSU, etc.). They wonder why our elite schools harbor so many blowhard professors who teach students nothing more than most of them are victims of societal bigotry.

Ain't there at least some good things about American society--its culture, literature, democratic values, respect for human rights--some American virtues worth studying and nurturing?

If not--if America is in the toilet and worthy of nothing but contempt, why must students spend four or five years in college and borrow $50,000 or $60,000 to get a bachelor's degree in cynicism? Didn't they learn to be cynics in high school?




Tuesday, November 17, 2020

I'm in 12-step plan to swear off American politics: I vow never to watch or read any more political news--ever!

 I've known a few alcoholics over the course of my life, and several told me they were saved from destruction by Alcoholics Anonymous.  

I'm not an alcoholic, but I admit that I became addicted to politics during the recent presidential campaign.  I watched television news obsessively, and I worried about our country's future no matter who won the presidential election. My friends are divided politically, but almost everyone I know has been distressed by recent political events. I found we couldn't talk to each other about our concerns for fear of losing a friendship.

And then on Wednesday morning--the day after the election, I realized that I don't care who gets sworn into the office of the presidency in January.   I don't care who is appointed to cabinet positions, and I don't care who controls Congress.

Like a recovering alcoholic, I realized that I was powerless over the national political scene and that America--like the life of an alcoholic--has become unmanageable. Like a recovering alcoholic, I came to believe that only a Power greater than the American people can restore us to sanity.  

As an elderly white guy who lives in Louisiana, I now realize that our national politicians don't give a damn about the people who live in Flyover Country. 

They don't give a damn about the jobs that have been lost in the Midwest--the jobs that went to China.

They don't give a damn about the opioid epidemic that has swept through rural America.  

They don't give a damn about the strip mining destroying the heartland or the wind turbines that have turned the high plains into a vast junkyard. 

They don't give a damn about the spike in mortality rates among working-class Americans--rates fueled by drug overdoses and suicide.

They don't give a damn about the fact that American universities have become criminal rackets run by academic gangsters.

They don't give a damn about a global economy that is destroying the American middle class.

And you know what? I don't give a damn about the global elites who have turned our country into a moral cesspool.

So--I'm not going to read the friggin' New York Times, the friggin' New Yorker, or the friggin' Washington Post. I'm not going to watch the friggin' cable news shows or the friggin' Hollywood movies. I'm not going to read the friggin' op-ed essays in my local newspaper. 

Instead, I'm going to cultivate a garden, learn to hunt deer, and watch international movies on Amazon and Netflix like Far From Men, The Load, and Black '47. I'm going to root for the New Orleans Saints and read the sports page. I'm going to try to be a better husband, brother, and grandfather. I'm going to learn to smoke a better brisket. 

And I will continue trying to ease the burden of our nation's 45 million student-loan debtors, which is the only professional interest I still care about.

And I will continue to pray for the canonization of Dorothy Day, the greatest American Catholic of the twentieth century.  If we all aspired to live like Dorothy, our nation would be healed. I urge you to read her book, Loaves, and Fishes, and you will see that I am right.

I have been on this new path for only about ten days, and so far, it feels pretty good.  Not great, but pretty good.

Servant of God Dorothy Day





Monday, November 16, 2020

Dead man walking: The small liberal arts colleges are in a death spiral

 Experts say that the Americans most at risk of dying from the coronavirus are elderly people with serious underlying health problems such as diabetes, obesity, and hypertension.

Something similar might be said about America's colleges. The schools most at risk of closing due to the COVID pandemic are small, private liberal-arts colleges that had severe financial problems even before the coronavirus forced most of them to close their campuses last spring. These are the little schools that were struggling with budget deficits and declining enrollments.

Common Application, an organization that processes a standard application form primarily for liberal arts schools, confirms this view.  So far this year, Common App received 8 percent fewer enrollment applications from first-year students than at the same time last year (as reported by Inside Higher Ed).

But some colleges suffered steeper declines than others. Colleges and universities in the Northeast and the Midwest, where the small liberal arts colleges are concentrated, suffered a 14 percent drop in applications. 

And small colleges lost more ground than big ones. First-year college applications were down the most among schools with fewer than one thousand students.  They also are seeing a 14 percent decline.

If next year's entering class drops by a corresponding rate, then a small college of 1000 students will enroll only 860 students, which would be an existential catastrophe.

But enrollments probably won't drop that much. Why? Because many colleges are lowering their standards to attract less qualified students---students who might have been rejected a few years ago.

Presently, a majority of colleges and universities do not require applicants to submit ACT or SAT scores.  They say they took this measure to offer more enrollment opportunities to first-generation and minority students.  

But I think they are lying. I think the colleges are abandoning standardized test scores to attract students who don't do well on those tests. By doing away with the ACT and SAT, the colleges can obscure that they are scraping the bottom of the academic barrel to get enough tuition-paying students to pay the light bill. 

Also, by giving applicants the option of not submitting a standardized test score, only people with good scores will provide them.  And this will cause the colleges' average test scores to go up--making them look better in the US News and World Report rankings.

In a way, American colleges in the age of  COVID are like the German Wehrmacht during World War II.  When the war began, Germany had plenty of healthy, young Aryan soldiers with blue eyes and blond hair--men who just couldn't wait to get their legs blown off in the service of the Thousand Year Reich.

But as the war wore on, millions of those ideal soldiers were killed in North Africa, the Western Front, or Russia.  The Soviets captured about three million Germans soldiers (mostly men but some women) and allowed them to starve to death.

By the time the Russians got to the suburbs of Berlin in 1945, most of those poster-perfect German soldiers were gone, and the Gestapo was rounding up young boys and old men to man the barricades.

Likewise, many small liberal arts colleges are willing to enroll just about anyone who can pay their tuition bill--whether or not the applicants are qualified under the admissions standards of yesteryear.  

Unfortunately, many of these unqualified students are taking out student loans that they will never pay off.  

In my view, many of these struggling little colleges should close their doors rather than stagger on for a few more years by signing up students who take out student loans for an educational experience that will do them very little good. 

Hey little guy, how would you like to get a bachelor's degree in gender studies?









"I've always depended on the kindness of strangers": An Athabaskan woman and six Mexicans saved me from freezing to death in Alaska's Copper River Basin

 "I've always depended on the kindness of strangers," Blanche DeBois said in Streetcar Named Desire. I know what Blanche was talking about. Several times in my life, I was saved from catastrophe by someone I did not know.

Many years ago, when I was a young Alaska lawyer, I was driving a rental car through the Copper River Basin on my way to a school board meeting in the little town of Glenallen. It was winter, and the temperature on the Richardson Highway was 20 below zero.

I wasn't speeding, but I was driving too fast for the road conditions. I hit a patch of black ice and rolled my car into a snowbank. I wasn't hurt, but I was dangling from my shoulder harness. I released the seatbelt and climbed out through the passenger side window.

It was about three in the afternoon, and dusk was falling. I had my so-called survival gear in the car's backseat  (parka, Sorel arctic-pack boots, heavy wool pants). I began putting it on as a heavy snowfall began, almost immediately obscuring my rolled car, which was white.

Before I got my cold-weather gear on, I realized I would not survive the night. The temperature would drop to 40 below, and no one was likely to travel Richardson Highway at this late hour.  My cold-weather gear was utterly inadequate for what lay ahead.

As my terror began to rise,  I saw a car creeping down the highway at about 20 miles an hour. An Athabaskan woman was driving, and she gave me a lift. I still remember the feel of her car's warm cabin with hot air blowing toward me through the air vents.

Improbably, the Athabaskan lady was traveling to visit her boyfriend, who was working on a seismic crew somewhere out in this frozen waste. Before long, we found him. He was Mexican (also improbable), one of a crew of six guys who spoke Spanish. 

The boyfriend and his comrades had some sort of enormous industrial vehicle.  I couldn't make it out in the darkness, but I recall it was so large that I had to climb a ladder to get into the cab.  We drove down Richardson Highway until we found my car.

Our little group pondered the car's situation. It was lying on its side with all four wheels exposed. 

"Anybody hurt?" the leader asked.

"No," I replied.

"Thanks be to God," he said and made the sign of the cross.

After diagnosing the situation, the Mexicans attached a chain to the car's underbody and pulled it out with their behemoth machine.  Then they pushed it over until it was upright on the road.  They cleared the snow out of the engine compartment and told me to try to start the engine.

I turned the ignition key, and the car started. All of a sudden, my near-death experience became an amusing personal anecdote. I told them I would buy them a case of beer, but one of my rescuers demured.  "No, no," he said. "Jack Daniel." 

I was not Catholic at the time, and I found the Mexican's sign of the cross to be charmingly childlike. I did not realize that the Athabaskan woman and the Mexican seismic crew were angels dispatched by St. Joseph to save my life.

But why did St. Joseph bother with me? I still don't have a clue.


Richardson Highway in winter



Friday, November 13, 2020

Guilford College, a liberal arts school, cuts some liberal arts programs: Does that make sense?

 After 12 years of declining enrollments and a massive budget deficit, Guilford College is taking drastic action. President Carol Moore proposes laying off 15 tenured faculty members and cutting undergraduate programs in chemistry, physics, political science, philosophy, economics, history, mathetics, sociology, and anthropology. 

In an unsigned statement, Guildford announced that it would maintain 23 programs, including African and African American Studies: Women's, Gender and Sexuality Studies, and Exercise and Sport Sciences.

Naturally, Guildford's statement did not list the programs it was cutting. I had to find that out by reading a story in the Christian Science Monitor.

Was this a good idea?

Not in the view of some faculty members. Thom Espinosa, chairman of Guildford's Physics Department, had this to say. "This plan does not reflect on the school's philosophy in any way," Espinosa told a reporter.

Historically, Gulford has maintained a peaceful balance among science, arts, humanities, and social sciences, as is appropriate for both a Quaker school and a liberal arts institution. If this plan represents any philosophy or vision, it must be [President Carol Moore's].

 I am in total sympathy with Professor Espinosa, but President Moore had to make some difficult decisions. It is not tenable for a small college to lose enrollment over a long period of time and operate on unbalanced budgets.

In a way, Guilford College is in the same position as the German army when it invaded Russia in 1941. The Germans captured 3 million Soviet soldiers before the Russians rallied and cleaned the Germans' clock.  But the Wehrmacht had no ability to care for all the enemy troops who surrendered and basically allowed most of its prisoners to die from starvation, disease, and exposure in open fields surrounded by barbed wire.

The German army's position was that someone has got to eat, and it will be us.

I don't mean that as harshly as it may sound, but it is now clear that hundreds and perhaps thousands of tenured professors are going to lose their jobs at struggling liberal arts colleges.  I think that is inevitable.

In my view, colleges in financial trouble should spend at least some of their dwindling resources to help laid-off professors find other jobs or at least provide them with decent compensation as part of their termination packages.



Declining enrollments, a barrage of Title IX litigation and now COVID 19 lawsuits: Weak colleges will succumb to multiple woes

 How many times have we seen those nature programs showing thousands of wildebeests thundering across the African plains, trailed by hungry lions just waiting for a chance to pull down a sick or injured animal?

Many beleaguered American college presidents must feel like those wildebeests--desperately hoping to outrun the hungry lions of financial reality.

First of all, enrollments dropped precipitously at many colleges and universities over the past few years due to various reasons, including demographics. There just aren't as many college-aged individuals as there were a few years ago.  In Pennsylvania, for example, enrollments in the state's university system have dropped 20 percent in the last few years. 

Small, private colleges have suffered the most from this demographic downturn, which has forced some of them to close. Their situation hasn't been helped by a declining interest in the liberal arts and the humanities.  These little colleges' mission is to prepare students for adulthood by providing a sturdy liberal arts education. Now the kids don't want a degree in history or English.  They elect to become business majors.

Secondly, universities across the United States have been hit with a spate of lawsuits brought mostly by male students who were suspended or expelled for sexual misconduct.  These students have charged colleges with kicking them out of school without giving them a fair hearing, and several federal courts have responded sympathetically to that argument.  Quite a few of these cases have made it into the federal appellate courts.

In a 2018 scholarly article, Diane Heckman listed fifteen federal-court decisions in 2018 involving claims that a college mishandled its sexual assault hearings. Five of these opinions were at the federal appellate court level. I haven't seen the numbers, but I feel sure this litigation has accelerated. 

And then the coronavirus pandemic showed up.  The universities spent lots of money to keep their campuses safe, but a new COVID outbreak seems to break out every day at one college or another.

Students who test positive for the virus are being quarantined in their dorms, making them unhappy campers. After all, the whole point of going to college for many young people is to drink beer and party in the new hook-up culture.  Can't go out at the weekend?  That's a bummer, man.

Parents are understandably leery about putting their sons and daughters in a college dorm where they live cheek to jowl with peers who engage in risky behavior. Consequently, fewer students are choosing to live in the residence halls. This is a huge problem for the universities because they need dorm revenues to service their student housing debt.

And now the colleges have been hit with a tidal wave of class-action suits brought by students who want a refund or at least a partial refund for their spring tuition.  They argue, quite plausibly, that the quality of their education deteriorated when the universities closed their campuses last March and switched instruction from face-to-fact to an online format.

How many of these lawsuits have been filed? According to a law firm that keeps track of this litigation, students have filed more than 160 lawsuits demanding tuition refunds.  If a college loses one of these suits, it will be required to reimburse all its students for part of their spring tuition and fees--a crushing cost for most schools.  In fact, a court order requiring a college to give students their money back will likely be a death sentence for a small, private liberal arts school.

Hardly anyone saw the coronavirus coming, so no one can reasonably blame the universities if they failed to respond perfectly to the pandemic. We still don't know a lot about this plague, and the nation must steel itself for millions of more cases before a vaccine becomes widely available.

Nevertheless, many weak collegiate wildebeests will be dragged down over the next 12 to 18 months.  A few professors who believed they had lifetime job security will learn that they can be laid off if their employer experiences a genuine financial emergency. And those small-town businesspeople who depend on college students showing up every fall with their parents' credit cards will see their standard of living drop.  Those people, too, will find they have become the metaphorical equivalent of a weak and wounded ungulate running for its life from a pack of hungry lions.

References

Diane Heckman, The Proliferation of Title IX Collegiate Mishandling Cases Involving Sexual Misconduct Between 2016-2018: The March to the Federal Circuit Courts358 Education Law Reporter 697 (2018).







Monday, November 9, 2020

Was the Good Samaritan a Cajun?

When I was a child, my family were 80-proof Methodists. Every Sunday, I would wriggle into my little plaid sports coat, adjust my clip-on bow tie, and head to Sunday School.  

Looking back, I think Sunday School was good for me. My Sunday School teachers were all women--mostly young moms. We sang lovely children's songs--"Jesus loves me, this I know"--and we listened to the same Bible stories hundreds of times. 

I especially liked the tale of the Good Samaritan. What impressed me most about this biblical character was his generosity. He spent his own time and money helping a stranger who got mugged out on some lonesome highway. I knew I would never be as good as the Good Samaritan, but he became my ideal.

Let's face it. We don't meet many generous people today. Very few people will stop to help a mugging victim. In fact, many Americans want to defund the police--the people we pay to protect us from muggers.

Indeed, a lot of Americans have become muggers.  I'm not talking about the hoodlums who lurk in dark alleys. I'm talking about the bankers who take a cut from every financial transaction. I'm talking about university professors who do no useful work but have lifetime job protection. I'm talking about the politicians who fly around in private jets and stir up racial strife. All these people are muggers.

But last weekend, I went deer hunting up in Claiborne Parish near the Arkansas border. There were nine of us at my friend's deer camp, and about half the group were true Cajuns.

No one shot a deer that weekend, but no one was bummed out. We spent time in the woods, and in the evenings, we shared fellowship and a meal together.

No one argued about who was entitled to sit in the best deer blind. In fact, everyone offered to take the worst blind. No one argued about how to split the ticket at the Mexican restaurant. A couple of guys just picked up the check. No one worried about who might be drinking someone else's beer.  If there was beer in the fridge--well, buddy,  that beer is for you. 

If someone writes another modern-day version of the Bible, I hope the Good Samaritan will be called the Good Cajun.  And instead of loaves and fishes, Jesus will hand out gumbo and jambalaya.

As we start the third decade of the 21st century, America is becoming a nasty place to live. Thank God, there are still a few good-hearted Americans, some cheerful Americans, and some generous Americans. A lot of these good people live in Flyover Country, and a good many are Cajuns.









Monday, November 2, 2020

Student-housing and meal plans at American universities: Another reason college students are taking out large student loans

College students take out more and more student loans to pay their tuition bills with each passing year because tuition has risen at twice the inflation rate for more than two decades. But tuition is only part of the cost of going to college.  

When you add in books, housing, and food, not to mention incidental costs like a cell phone, the cost of going to college for one year can be well over $30,000--even at a public university.

Let's look at Louisiana State University, located just down the street from me. LSU requires its first-year students to live on campus unless they qualify for an exemption. This means that most of the 6,400 students who enroll for the first time will live in a dorm.  First-year students must also purchase a meal plan.

According to LSU's own calculation, the typical first-year student needs to come up with 24 grand just to pay tuition, room, and board.  How many Louisiana families have $24,000 lying around to pay for their child's first year at college?

And students have other costs besides the money that goes directly to the university. LSU estimates the total annual cost for an in-state student is $33,590! How many Louisiana families have that kind of money sitting in the bank?

Of course, many families figure out ways to spend less than $30,000 a year for their children to attend college. Students with good high-school academic records and good ACT scores can qualify for a TOPS scholarship that covers most college-tuition costs in Louisiana. 

But even a first-year student who gets a "free ride" and pays no tuition must still come up with $12 thousand to pay for room and board.  And in most instances, at least part of that money will be borrowed.

Now stretch these costs over four, five, or six years. A typical student who graduates from LSU in four years will have spent $130,000 to finance their studies. But only about two-thirds of LSU students graduate in six years! A student who pays in-state tuition and spends six years living in an LSU dorm will rack up costs totally almost $200,000.

Obviously, that's far too much. And offering students free tuition at a public university (as Senator Bernie Sanders proposed) doesn't provide a total solution.

Of course, tuition must come down, but students need to spend less time hanging out on college campuses.  Spending six years to find oneself, financed with student loans, is a disastrous way to become an adult. And this is particularly true for students who spend six years in college to get a degree in art history, sociology, or gender studies.

How would you like to spend six years here?

Friday, October 30, 2020

Oh my God! LSU Football Coach Ed Orgeron takes 5 percent pay cut

 COVID-19 socked higher education right in the gut last spring.

Freshman enrollments dropped 16 percent this fall, and the universities are closing their under-enrolled programs: philosophy, sociology, art history, etc.  

Even the credit rating agencies smell trouble, and of course, the rating companies are always the last to know.  Moody's predict a revenue downturn for colleges and universities--yah think?

But we know higher education is in real trouble when the football coaches take salary cuts--and that's what's happening at Louisiana State University. Yesterday, the LSU Athletic Department announced that all employees making $80,000 or more will take a 5 percent pay cut.

And that includes Saint Ed Orgeron--who led the LSU Tigers to the National Championship last year--opening up the heavens and inspiring the angels to sing celestial hallelujahs.  Ed makes $6 million a year and is giving up $300,000.  

But there's more.  No bonuses for the coaches who have winning seasons.  Staff layoffs. According to the Baton Rouge Advocate, Jason Suitt, the Assistant Athletic Director of Fan Engagement, will lose his job.

I wonder what the Assistant Athletic Director of Fan Engagement does. Is he the guy who priced the stadium beer at six bucks a bottle?

Don't get me wrong. I love college football. In fact, I just completed a language emersion course in conversational football and can now talk confidently about the red zone, the bootleg play, and running the ball up the gut.  I even know what "pick six" means.

And I don't want to see people lose their jobs.

But even college football's most avid fans must realize that things have gotten out of whack.  Forty-five million Americans now owe $1.7 in student-loan debt. Until this year,  colleges did almost nothing to keep costs down. Meanwhile, the universities built palatial athletic facilities and paid coaches princely salaries.

And now my local newspaper tells me that the Tiger Athletic Foundation is urging wealthy fans to contribute to a "Victory Fund" to shore up LSU's sports programs.  Their donations will be tax-deductible.

Think about that. Two of my relatives work at LSU and haven't received a pay raise in years. Recently they learned that their property taxes are going up.

There's something wrong with the world when university employees struggle to pay their bills while their employer's athletic foundation encourages rich people to make tax-deductible donations to support the friggin' football program.




Thursday, October 29, 2020

Colleges of Education--Higher Education's Cash Cows--are Suffering from Malnutrition

Colleges of Education have been higher education's cash cows for more than half a century, but the cash cows have gotten sick.

 Fifty years ago, the education schools were packed with undergraduates--mostly young women--working on their bachelor's degrees in elementary education. Many of them wanted to spend their careers teaching children, and others chose to major in education because they knew it was easy. 

Graduate programs in education also attracted a lot of students. In most states, an educator was required to have a master's degree in educational administration to become certified as a school principal.  That requirement kept the educational administration programs well supplied with working-adult students. 

In the old days, school districts often gave teachers automatic raises if they obtained a master's degree. Many school districts would actually pay a teacher's tuition to get a graduate degree in curriculum studies or educational administration.  Most teachers said, "Why not?"  Free tuition and a pay raise were all the incentives they needed to enroll at a nearby public university.

Universities loved their education colleges because they usually carried large enrollments, and the universities didn't have to pay the education professors very much. Also, public universities often received additional revenues for their graduate programs, so all those enrolled in M.Ed. and Ed.D. programs generated extra income.

But in recent years, the cash cows have gotten sick. Enrollments in education colleges are drastically down at universities all over the United States. According to the National Center for Education Statistics, undergraduate degrees have plummeted over the past 50 years--from 176,000 in 1970-1971 to only about 83,000 in 2017-2018. Graduate-program enrollments have also dropped sharply.

What in the hell happened?  First of all, young people aren't going into the field of education. During the same 50-year period, when education degrees dropped by half, degrees in business more than tripled. In 2017-2018, more than four times as many people obtained business degrees than degrees in education.

Secondly, non-university certification programs proliferated at the expense of the education colleges.  Instead of sitting through a battery of boring college courses before getting a teaching certificate, people with college degrees found out they could immediately get a teaching job and work on their teaching credentials while drawing a salary. These programs were often operated by regional service centers and--in some states--even by the school districts themselves.

No wonder then that the University of South Florida demoted its college of education to a school within a larger college that included non-education programs.  Louisiana State University, where I first began teaching, took that step more than ten years ago.

Why have young people become less inclined to be teachers and school administrators?  Poor pay is one reason.  In Louisiana, teachers are severely underpaid, and the state doesn't participate in Social Security. Why would anyone invest their career in education knowing it will be damned difficult for them to retire comfortably?

Secondly, a public-school classroom is often not a nice place to be anymore--especially in the inner cities. Student discipline is a serious problem in some (but not all) schools.  Standardized testing has put teachers under stress to deliver good test scores. The bureaucratic maze of providing services to students with disabilities has made teaching a lot less satisfying for many educators.

My father was a cattle rancher, and when one of his cows got sick, he got out his spring-loaded "pill gun" and tossed a bovine-grade antibiotic pill down the ailing cow's throat.

But universities do not have an equivalent remedy for their sick cash cows.  For professors and students alike, the education business suffers from a malady for which there is no known cure.






Tuesday, October 27, 2020

Did you major in liberal arts? You may be the 21st-century equivalent of a blacksmith

 I grew up in a small western Oklahoma town where middle-class families worked at jobs that no longer exist. People owned their own gas stations in those days, and a man could make a modest living by selling gasoline (regular or ethyl), repairing cars, and fixing flats. 

I recall two appliance stores in the little town of Anadarko: Zerger's Appliances and Roberts' TV and Appliances.  Two families owned gift shops: Graham's and Lovell's.  

And there were 10 or 12 little grocery stores in my hometown. Everyone lived within walking distance of at least one. These were mostly run by widows who supplemented their modest Social Security checks by selling milk, bread, and canned goods in the front room of their homes. And soda pop. As a kid, I'm sure I bought at least one Grapette at every one of those little stores.

All these businesses are long gone--wiped out by Walmart and corporatism in general. 

Something similar is happening in the field of liberal arts. People who get college degrees in the humanities, liberal arts, or the social sciences will find it damned difficult to find a job. And people who went into debt to get a degree in comparative religions or sociology may have committed financial suicide on the day they selected their majors. 

People who get Ph.Ds in those fields are not likely to find jobs either--at least not teaching jobs at the university level. As the New York Times reported today, colleges across the country are slashing budgets in response to the coronavirus pandemic. And they are laying off faculty members--both tenured and untenured. Most of those laid-off faculty members teach in the liberal arts.

Not too long ago, tenured faculty members had rock-solid job security. Unless they committed a violent felony or said something unforgivable like "All Lives Matter," they could be assured of keeping their job until they tottered off to a comfortable retirement, made possible by a fat pension and lifetime health insurance.

But no more. Universities are enrolling fewer students, and those students are more likely to major in business than the humanities. Professor Whatshisname still teaches his seminar on the causes of the Crimean War (his dissertation topic), but nobody wants to borrow tuition money to listen to his lecture.

In his cautionary book about going to law school, Paul Campos warned against the snowflake syndrome.  You may think you are special.  You may think you will beat the odds and find a great job at a prestigious university, where you will teach fawning students all about the progressive era in American history. Or you will teach English while you write the great American novel.

But you won't. If you pursue a doctorate in liberal arts intending to become a professor, you are probably on a fool's errand. Like the blacksmith of yesteryear, no one will want to hire you. And if you borrowed money to pursue your foolish dream--you are a dead person walking--at least in terms of your financial wellbeing.




Friday, October 23, 2020

"We escaped Commie-fornia": Californians are leaving the Sunshine State in search of a better life

 Driving home from New Mexico a couple of weeks ago, I stopped for gas at the Love Truck Plaza in Tucumcari, New Mexico. A guy pulled up at the gas pump next to mine, driving a good-sized vehicle and pulling a large storage trailer.

As I walked behind his rig, I notice a sign on the back of the trailer: "We Did It!! We Escaped Commie-Fornia. We back the Blue!!"

I've got to meet this guy, I said to myself. So I chatted with him a bit while he was gassing up. He turned out to be a real nice guy with a big smile and a sunny disposition.  He said he and his wife were moving to Florida to be nearer their grandkids.

I didn't want to intrude on this man's privacy, so I broke off our conversation without asking him about his political views.  I don't think he was some right-wing zealot.  I read him as a guy with mild political views who just wants to move to a place where life is a little easier. 

And who can blame him? I'm not making a political statement when I say that California appears to be rolling downhill like a snowball headed for hell (to paraphrase Merle Haggard). The forest fires are out of control despite everything the Californians have done to manage their public lands.

I'm not saying these massive fires--4 million acres burned this year alone--are anyone's fault.  I agree with Governor Newsom that climate change is probably the biggest contributor to the state's forest fires.  Who's done more to combat climate change than the Californians?

Nevertheless, it must be terrifying to live in a neighborhood that could be engulfed at any time during the fire season by a holocaust fire.  That little fire extinguisher you bought at Home Depot won't do you much good when the big one comes roaring down the street at 20 miles an hour.

Then, there is the growing problem of homeless, which is out of control in San Francisco and a few other California cities.  I'm not blaming that on anyone either. I have thought a lot about the homeless crisis, and I've done some volunteer work at food banks.  

I don't know how to solve the homelessness problem--made almost intractable by the fact that so many homeless people suffer from mental illness. Nancy Pelosi doesn't want homeless people living in her neighborhood, and I can't really blame her.  The image of some bum peeing in her hot tub is too horrible to contemplate.

But something else is going down on the West Coast--beyond the forest fires and the homelessness. The California legislature appears to be dominated by lunatics who, unfortunately, are not homeless. The California university system is a mess and seems to have forgotten how to teach young people how to think and reason.  

Crime.  I read that Walgreen's closed its third store in San Francisco due to high levels of shoplifting. 

The state pension funds are underwater and will someday collapse.--when, nobody knows. Who is going to bail out the California pension funds--the taxpayers of Ohio?

I find it ironic that hundreds of thousands of Americans from the Midwest came to California as refugees during the Great Depression--the Okies and others who rolled down old Route 66 in beat-up cars and trucks.  And the Californians tried to keep them out.

Now, Californians are baling on the Sunshine State and are moving east to the Rocky Mountains states, Texas, and Florida. They can count their lucky stars that the people who live in these states are mostly decent and compassionate Americans who will greet them much more warmly than the Californians greeted my ancestors when they went west in the 1930s to escape the Dust Bowl.


Thursday, October 22, 2020

A "mostly peaceful"Trump parade on Paseo del Pueblo Norte in Taos, NM: A non-partisan field report

I was dining al fresco with my wife at Martyr's Steakhouse in Taos, NM. The weather was lovely on the restaurant patio, and I was enjoying a heart-healthy lunch and a margarita grande.

Suddenly, I heard shouting and blaring car horns coming from the direction of the Taos Plaza. Then, to my utter amazement, I saw a Trump parade appear on Paseo del Pueblo Norte--passing right in front of the restaurant.  Trump supporters, mostly driving pickup trucks and SUVs, were shouting and waving flags: the American flag and big Trump-Pence banners.

What the hell, I thought. The northern Rio Grande valley has been a Democratic stronghold for decades. I would have been surprised if there were even a dozen Trump supporters in all of Taos County.  But here they were--a gaggle of Trumpsters, chortling and cheering on a fine autumn day.

These folks must be Texans,  I concluded---maybe people from the town of Red River, where a lot of Texans have New Mexico summer homes. But no. All the cars had New Mexico license plates. They were locals.

Judging from the reaction of my fellow diners, most of the people sitting around me were Never-Trumpers. "Fascists!" one guy shouted from the table next to me. "Racists!" a woman screamed from another table.

Two young women seated near the Paseo spewed forth obscenities at the Trumpians, but this only seemed to heighten their merriment. One Trump supporter in the back of a pickup truck responded to the curses by saying, "You can't trust Joe." His voice didn't have a hostile tone. Actually, he sounded calm and reassuring, as if he was trying to talk someone off a ledge.

In a moment, the parade passed by, and we turned our attention back to our lunches. But then another Trump parade passed by--more flag-waving, more cheering, more horn honking.

Are these more Trump fanatics disturbing our midday repast, I wondered? Or did the first group circle back on Don Fernando Street for a second appearance to create the illusion of greater numbers?   

It was hard to tell. These Trump zealots all look alike.

And then a third Trump parade went by the restaurant, this one coming from a different direction. This group included an equestrian unit. Two men wearing western hats came by on horseback. One held the pole of a large American flag, and the other waved an equally large Trump-Pence flag.

Behind these two rode a little girl, who looked to be about 11 years old. She was wearing a large, red Make-America -Great-Again hat. And when I say large, I mean enormous. It was a gag hat, with a  brim about half the size of a coffee table and a crown that extended at least six inches on either side of her head.

By this time, the restaurant patrons conceded defeat. No one said anything as the third unit of Trumpsterism passed by on horseback. Perhaps the guy next to me thought it would be unseemly to shout "Fascist!" at a child--even a child wearing a MAGA hat.

Thus concludes my non-partisan and unbiased report on a Trump demonstration in the northern Rio Grande valley.  It was "mostly peaceful," as a CNN reporter might say. Nobody got shot. I saw no signs of arson or looting. 

And this was disappointing. If a riot broke out, I planned to break into the art gallery on Bent Street and steal a Victor Higgins painting. 

This Victor Higgins painting would look great in my home office.











Wednesday, October 21, 2020

Our Lady of Sorrows looks worried: Reflections in a historic New Mexico plaza

If  Madalyn Murray O'Hair were alive today, she would turn over in her grave.  

O'Hair spent her whole life trying to stamp religion out of public life. Now she is dead, and a statue of Our Lady of Sorrows stands confidently in the town plaza of Las Vegas, New Mexico.

As all good Catholics know, our Lady of Sorrows bears seven sad burdens, including Christ's crucifixion. Some statues have seven daggers circling her heart, but the statue in  Las Vegas has but one dagger, which represents all seven sorrows.  It is an impressive statue--12 feet high, and Our Lady looks totally at home in the Las Vegas town plaza.

I have viewed this particular Marian image many times on my journeys through the Sangre de Cristo Mountains to my family's cabin near Taos. On my last visit, I examined her again, and it appeared to me that Our Lady of Sorrows looked worried.  Of course, she is always sorrowful about the seven tragic episodes of her life, but I thought I detected new distress.

Well, she has a lot to be worried about, and I worry with her. Americans are killing themselves at a shocking rate. Suicides are up, death rates are rising among working-class white people, and 71,000 Americans died from drug overdoses last year--more people than were killed during the entire Vietnam War, which lasted 11 years.

Perhaps Our Lady is also worried about the disintegration of our universities, which have turned into lunatic asylums. Nihilistic professors spout racist bigotry and give all their students an "A" grade because, they say, the grading system promotes white supremacy.  Students borrow money to pay for this drivel, which they can't pay back--setting themselves up for a lifetime of penury.

Many of our judges no longer dispense justice but decide cases based solely on their political affiliations. Judge Emmet Sullivan refuses to throw out a criminal case against General Michael Flynn, even though the Justice Department admits he was framed and asked for the case against him to be dismissed.

Our newspapers, which once understood the difference between an editorial and a news story, have adopted the journalistic ethics of Joseph Goebbels, who just made up the news from day to day to fit the Nazi narrative.

Yes, Our Lady of Sorrows has a lot to be worried about.  And perhaps, like me, she worries most about our grandchildren. 

I grew up in an optimistic world. People believed their future would be better than their past. My grandchildren will live in a world of growing divisions around class and race, growing disparities in wealth and opportunity, growing bitterness and conflict. My grandchildren's lives will be harder than mine was because my generation strangled the American dream--strangled it through greed, sloth,  mendacity, and viciousness. 

One day, our grandchildren will curse us. Maybe Our Lady of Sorrows will curse us too. Perhaps she will shake off her mantilla of sadness and wrap herself in the tilma of wrath. That's what we deserve.






Monday, October 5, 2020

Chong v. Northeastern University: No tuition refund to students whose classes were switched to remote learning due to COVID-19

American universities were dealt a severe blow last spring when the coronavirus pandemic hit. Almost all of them were forced to switch from face-to-face instruction to an online format in midsemester. 

Students at several universities filed lawsuits demanding a refund of tuition and fees. They argued that the quality of online teaching was inferior to classroom instruction, and they wanted their money back.

A few days ago, Judge D. J. Stearns, a federal district judge in Massachusetts, issued a decision in one of these cases: Chong v. Northeastern University. Plaintiffs had filed a class-action lawsuit against Northeastern to get a refund of tuition and fees, but Judge Stearns sided with Northeastern University.  In his view, Northeastern had not breached its contract with students by shifting to an online teaching format, although he allowed the plaintiffs to proceed with their claim for a refund of the campus recreation fee.

I think Judge Stearns made the right decision, and I predict other judges will rule in favor of universities when they decide similar cases.  After all, it is not the universities' fault that the nation was virtually shut down by COVID-19 last spring. The colleges pursued their only reasonable option--which was to convert all instruction to a distance-learning format.

I am sure that complaining students are often right when they say that online instruction is inferior to face-to-face teaching. Nevertheless, new technologies like Zoom have improved the quality of video-conferencing.  I have taught via Zoom over the past several months, and I don't think my students' learning experience was hurt because I was not in the same room with them.

As I said, I think American colleges will win students' lawsuits demanding tuition refunds because their instruction was shifted to an online format. But that does not mean the colleges will skate through the coronavirus crisis unscathed.

Thane Gallo, one of the named plaintiffs in the suit against Northeastern, paid a tuition bill of $26,210 for the 2020 spring semester. Manny Chong, a graduate student in  Northeastern's counseling psychology program, was charged $23,400 to enroll in spring classes. That's a lot of money to take online courses.

All across America, universities will find that the coronavirus awoke students and their parents to the fact that the cost of attending an American college is too damned high. Undergraduate tuition at Northeastern is $52,000 a year, and students must pay additional money for room and board, textbooks, and assorted fees. 

That simply is not reasonable--especially when students are taking classes from their home computers.  In the months to come, colleges and universities may discover another symptom of COVID-19 not yet officially identified: sticker shock.

Snap out of it!


Saturday, October 3, 2020

Trump versus Biden: I don't want to vote for either of 'em

 Ever since I was a kid, I have enjoyed reading political commentaries. My parents subscribed to Newsweek back in the 1960s, and I remember reading George Will's essays, which always appeared on the magazine's back page. Fifty years later, Mr. Will looks exactly like he did when I was in high school. Meanwhile, I've become an old man!

As an adult, I subscribed for years to the New York Times, and I followed all their prominent columnists: Thomas Friedman, Paul Krugman, etc.  But the Times has degenerated into a hack political screed, and I don't read it anymore.

Today, I primarily read two commentators: Steve Rhode (Get Out of Debt Guy) and James Howard Kunstler (Cluster Fuck Nation). I find their writing refreshing, honest, and reliably stimulating.  I am distressed, therefore, that Rhode and Kunstler disagree about whom to vote for in the upcoming presidential election.

Steve Rhode posted a commentary a few days ago summarizing the Trump administration's woeful malfeasance regarding the federal student-loan program. Under the venal leadership of Secretary Betsy DeVos, the Department of Education has consistently acted in favor of debt collectors and for-profit colleges--always at the expense of student borrowers.  DeVos's team has misdirected the Public Service Loan Forgiveness Program and the Borrower Forgiveness Program. It has opposed bankruptcy relief for even the most distressed and downtrodden student-loan debtors.  Last year, DeVos's DOE was sanctioned by a federal court for disregarding a federal judge's court order.

Steve Rhode argued in a recent commentary that no student-loan debtor could reasonably vote for Trump in the next election, and his arguments are irrefutable.  I myself have called for Betsy DeVos's impeachment--and Trump is the person who installed as Education Secretary.

I have argued for bankruptcy relief for suffering college debtors for more than 30 years. How can I vote for Trump, whose administration has demonstrated again and again that it doesn't give a damn about the millions of people who are burdened by student loans they can never pay off?

On the other hand, James Howard Kunstler wrote a provocative essay awhile back titled "Bill of Particulars," in which he outlined the efforts of Deep State operatives to overturn the results of our last lawful presidential election. Kunstler described these shenanigans as seditious, and he is right.  In my mind, there is no doubt at all that government agents in the CIA and FBI, in league with Democratic Party insiders, tried to overthrow the Trump presidency.  

Mr. Kunstler's arguments, like Mr. Rhode's, are irrefutable; and Kunstler began his essay by saying he would vote for Trump. I admire Mr. Kunstler's courage, and I agree with everything he said. Besides, I am convinced that Joe Biden, who is supported by the very people who tried to overthrow Trump, is not in full command of his senses. And I am also convinced that he is a crook who used his elected office as Obama's VP to benefit his family--and not just his son Hunter.

In short, Kunstler and Rhode are both right. Neither Trump nor Biden are worthy of my vote. It is sad and scary to contemplate, but America will be ill-served if either man is elected President.

Americans should not throw their votes away by sitting out the election or voting for some nonentity.  One of these screwballs will be President, and we have a moral obligation to pick from the lesser of two evils.

I don't know how I will feel on election day, but I can tell you right now that I don't like my choices.







Leary v. Great Lakes Educational Loan Services: Bankruptcy judge slaps student-loan servicer with a $378,000 contempt sanction

 A few weeks ago, Bankruptcy Judge Martin Glen slapped a huge contempt penalty on Great Lakes Educational Loan Servicers--$378,629.62! Why? Because Great Lakes repeatedly refused to comply with Judge Glen's directives in a student-loan bankruptcy case.  

Leary v. Great Lakes Educational Loan Servicers: The facts

In 2015, Sheldon Leary filed an adversary action in a New York bankruptcy court, seeking to discharge over $350,000 in student-loan debt. He amassed this debt to pay for his three children's college education (p. 1). 

 Mr. Leary represented himself and properly served Great Lakes, his student-loan servicer. He didn't know, however, that he needed to sue the U.S. Department of Education as well. Great Lakes passed Mr. Leary's complaint on to DOE, but neither DOE nor Great Lakes answered Mr. Leary's lawsuit. In fact, Great Lakes forwarded fifteen pleadings to DOE, but neither DOE nor Great Lakes made an appearance in Judge Martin's court for quite some time (p. 3).

In 2016, Mr. Leary obtained a default judgment against Great Lakes for failing to respond to his lawsuit, and Judge Glen discharged Leary's student-loan debt.  DOE ignored this judgment and sent Mr. Leary two letters threatening to garnish his wages (p. 5).

More than four years after filing his lawsuit, Leary moved to reopen his adversary proceeding and asked Judge Glen to find Great Lakes in contempt. Great Lakes still did not respond, and on April 29, 2020, Judge Glen held the loan servicer in contempt and assessed sanctions against it for $123,000.

Great Lakes did not pay this assessment, and Judge Glen held a second contempt hearing last August. At this hearing, Great Lakes made several arguments to avoid sanctions. First, it argued that it could not be held in contempt because it had not acted in bad faith. Judge Glen rejected this defense. Whether or not Great Lakes had acted in bad faith, the judge reasoned, it had ignored "clear and unambiguous" court orders and had not diligently tried to comply with them (p. 9). 

Great Lakes also argued that it transferred its loan processing job to another collection agent after Mr. Leary's lawsuit was filed, thus relieving itself of the obligation to respond to court pleadings. But that fact, the judge ruled, did not relieve Great Lakes from its duty to comply with court orders in Mr. Leary's lawsuit (p. 5).

Finally, Great Lakes argued that sanctions were not warranted because Mr. Leary had not been hurt by its five years of noncompliance with court orders.

But Judge Glen didn't buy that argument either. In fact, he pointed out, Great Lakes' inaction had significantly injured Mr. Leary by causing him to suffer "aggravation, pain and suffering, negative credit ratings, loss of sleep, worry and marital strain" (footnote 11).

Judge Glen:  Great Lakes was "grossly negligent"

In short, Judge Glen ruled, Great Lakes' inaction had been "grossly negligent" and "really much worse" (p. 1). As for Great Lakes' claim that its legal department was unaware that it was a named party in Mr. Leary's lawsuit, the judge found this argument "unbelievable[e]" (p. 11).

The judge ordered Great Lakes to pay most of its sanction to DOE, in an amount sufficient to pay off Mr. Leary's student-loan obligations. Thus, in the end, Leary got the relief he sought in 2015.  

Judge Glen did not find it necessary to hold DOE in contempt, but he did not find the agency blameless. As he noted in a footnote:

It should not be lost on anyone . . . that DOE's inaction with respect to Mr. Leary--especially when DOE had knowledge at multiple steps along the way that Great Lakes was ignoring its obligations to Mr. Leary as a named defendant in the adversary proceeding--is disappointing to say the least.

Another example of DOE arrogance and heartlessness

Judge Glen's decision fingered Great Lakes as the bad guy in the Leary case, but he found DOE's conduct to be "highly questionable" (footnote 4). As the judge pointed out, Great Lakes "sat by, regularly monitoring Mr. Leary's bankruptcy docket until his case was closed and Great Lakes could return his student loans to normal servicing status" (p. 10).

Obviously, DOE's lawyers knew what Great Lakes was doing and made no objection. It is hard to escape the conclusion that DOE allowed Great Lakes to flout Judge Glen's orders and thereby circumvent Mr. Leary's bankruptcy action.

 Great Lakes' behavior and DOE's complicity are despicable. All this shameful conduct must have been approved at the top levels of Betsy DeVos's administration. I say again, Secretary DeVos should be impeached.


References

Leary v. Great Lakes Educational Loan Services, Case No. 15-11583, Adv. Proc. No. 15-01295, 2020 WL 5357812 (S.D.N.Y. Sept. 8, 2020).

Friday, October 2, 2020

If You Have Problem Debt and Student Loans – Do Not Vote for Trump--Essay by Steve Rhode

 


Written by Steve Rhode

The 2016 election is a cantankerous event. What surprises me most are the people that want to decide who to vote for based on what they see on social media or one political learning media outlet.

Strictly speaking from a consumer debt point of view, who to vote for isn’t even close.

And frankly, if you care about creditors being responsible for abusing consumers or you are drowning under student loan debt then there is only one candidate to vote for.

Under Trump--Student Loans

The DeVos Department of Education has gone out of its way to punish student loan debtors at every opportunity. In fact, the level of aggressiveness by the Department has made it look like they want to punish all debtors and go back on the word of the government to help people to see light at the end of the tunnel.

Abusive Schools – The Department has removed or eliminated rules that require schools to be responsible for abusive practices and fraud that let to enrolling students who are then on the hook for federal student loans.

The Department of Education all but stopped processing valid claims for the elimination of federal student loans under the government policy that is known as the Borrower Defense to Repayment.

Student Loan Servicers

Student loan servicers have been allowed to give debtors poor advice, bad advice, or self-serving advice with little consequences. The Department has asserted that States can’t go after student loan servicers for abusive and deceptive practices. Since the servicers are acting on behalf of the federal government.

Public Service Loan Forgiveness

The first wave of debtors eligible to have their student loans forgiven under the President Bush initiated the Public Service Loan Forgiveness program, which came due under the current Department of Education.

Secretary DeVos has done a lot to prevent people from getting the promised forgiveness. Roadblocks and hurdles have been artificially created to prevent people from getting the forgiveness they worked towards for ten years. One of the more ridiculous measures was the position that even though a person is eligible for loan forgiveness after 120 payments, it was stated the person must continue in eligible employment for however long afterward it takes for the Department to review the application for forgiveness. Given the current delays, that could be a year or more stuck in a lower-paying job.

Another person ran into an issue where they made the payment the monthly statement from the loan servicer said to make and it was found the servicer statement was off by less than a dollar so none of the 120 payments were eligible to be counted towards forgiveness.

You can see the crazy things the Department has done in these past posts.

Sliding Scale Forgiveness

Even when a school was found to be fraudulent or deceptive and the Department of Education was supposed to forgive the debt, the Department came up with an arbitrary sliding scale of forgiveness that left students harmed by the school, to hold a life of debt. And these are for schools that the courts determined were fraudulent scams. The previous position of the Department of Education was to grant full forgiveness.

Bankruptcy Discharge for Federal Student Loans

The Department of Education has fought bankruptcy discharge for debtors that are clearly in hardship and distress. Even though they have a policy to not do this.

Instead, the current administration has wanted people to enroll in Income-Driven repayment plans that will never repay the debt but make it continue to grow. For more articles on this, see these posts.

A Bankruptcy Judge even said the lifetime of unpayable student loans creates a prison of emotional confinement. While students are left to struggle the schools that enrolled them face little to no consequences for putting the student in federal student loan debt.

The Judge said, “It is this Court’s opinion that many consumer bankruptcies are filed by desperate individuals who are financially, emotionally, and physically exhausted. Sometimes lost in the discussion that the bankruptcy discharge provides a fresh start to honest but unfortunate debtors is that, perhaps as importantly, it provides a commensurate benefit to society and the economy. People are freed from emotional and financial burdens to become more energetic, healthy participants.”

CFPB

Through the Trump presidency, the Consumer Financial Protection Bureau has been under assault to gut their abilities, power, and protection of consumers. Efforts had been put forward to restrict the protection of consumers.

For example, the CFPB terminated the consumer advisory board members and then made meetings secret.

The CFPB Financial Law Taskforce claimed “to have established the Taskforce to obtain recommendations about how to improve and strengthen consumer financial laws and regulations. The Taskforce’s objective therefore goes to the heart of the Bureau’s mission—and positions the Taskforce to provide a blueprint for the CFPB to revise the laws that protect financial consumers across the United States.” – Source

“None of the selected Taskforce members has a background advocating for consumers, nor does any appear to believe that the CFPB should vigorously protect consumers from dangerous and confusing financial products.”

The meetings led by creditor representatives are closed and secret. Who knows what is going on.

Trump: F-

If you want to see people go further in debt, live lives of student loan financial slavery, and have fewer protections against the interest of creditors and banks, vote Trump.

Biden

Since former Vice President Biden is not currently in office, I have to turn to what his policies state.

Student Loans

  • Stop for-profit education programs from profiteering off of students. Students who started their education at for-profit colleges default on their student loans at a rate three times higher than those who start at non-profit colleges. These for-profit programs are often predatory – devoted to high-pressure and misleading recruiting practices and charging higher costs for lower quality education that leaves graduates with mountains of debt and without good job opportunities. The Biden Administration will require for-profits to first prove their value to the U.S. Department of Education before gaining eligibility for federal aid.
  • The Biden Administration will also return to the Obama-Biden Borrower’s Defense Rule, forgiving the debt held by individuals who were deceived by the worst for-profit college or career profiteers.

    Finally, President Biden will enact legislation eliminating the so-called 90/10 loophole that gives for-profit schools an incentive to enroll veterans and servicemembers in programs that aren’t delivering results.


  • Crack down on private lenders profiteering off of students and allow individuals holding private loans to discharge them in bankruptcy. In 2015, the Obama-Biden Administration called for Congress to pass a law permitting the discharge of private student loans in bankruptcy. As president, Biden will enact this legislation. In addition, the Biden Administration will empower the Consumer Financial Protection Bureau – established during the Obama-Biden Administration – to take action against private lenders who are misleading students about their options and do not provide an affordable payment plan when individuals are experiencing acute periods of financial hardship. – Source

More than halve payments on undergraduate federal student loans by simplifying and increasing the generosity of today’s income-based repayment program. Under the Biden plan, individuals making $25,000 or less per year will not owe any payments on their undergraduate federal student loans and also won’t accrue any interest on those loans. Everyone else will pay 5% of their discretionary income (income minus taxes and essential spending like housing and food) over $25,000 toward their loans. This plan will save millions of Americans thousands of dollars a year. After 20 years, the remainder of the loans for people who have responsibly made payments through the program will be 100% forgiven. Individuals with new and existing loans will all be automatically enrolled in the income-based repayment program, with the opportunity to opt out if they wish. In addition to relieving some of the burden of student debt, this will enable graduates to pursue careers in public service and other fields without high levels of compensation. Biden will also change the tax code so that debt forgiven through the income-based repayment plan won’t be taxed. Americans shouldn’t have to take out a loan to pay their taxes when they finally are free from their student loans.

Affordable Education

For too many, earning a degree or other credential after high school is unaffordable today. For others, their education saddles them with so much debt it prevents them from buying a home or saving for retirement, or their parents or grandparents take on some of the financial burden.

  • Providing two years of community college or other high-quality training program without debt for any hard-working individual looking to learn and improve their skills to keep up with the changing nature of work.
  • Creating a new grant program to assist community colleges in improving their students’ success.
  • Tackling the barriers that prevent students from completing their community college degree or training credential.
  • Invest in community college facilities and technology.

We have a student debt crisis in this country, with roughly more than 44 million American individuals now holding a total of $1.5 trillion in student loans. One in five adults who hold student loans are behind on payments, a disproportionate number of whom are black. Thus, student debt both exacerbates and results from the racial wealth gap.

This challenge is also intergenerational. Almost one in ten Americans in their 40s and 50s still hold student loan debt. But, college debt has especially impacted Millennials who pursued educational opportunities during the height of the Great Recession and now struggle to pay down their student loans instead of buying a house, opening their own business, or setting money aside for retirement.

There are several drivers of this problem. The cost of higher education has skyrocketed, roughly doubling since the mid-1990s. States have dramatically decreased investments in higher education, leaving students and their families with the bill. And, too often individuals have been swindled into paying for credentials that don’t provide value to graduates in the job market. As president, Biden will address all of these challenges.

Biden’s plan to make two years of community college without debt will immediately offer individuals a way to become work-ready with a two-year degree or an industry certification. It will also halve their tuition costs for obtaining a four-year degree, by earning an associate’s degree and then transferring those credits to a four-year college or university. And, as a federal-state partnership, it will ensure states both invest in community colleges and give states some flexibility to also invest in college readiness or affordability at four-year institutions.

Public Service Loan Forgiveness

Make loan forgiveness work for public servants. Public servants do the hard work that is essential to our country’s success – protecting us, teaching our children, keeping our streets clean and our lights on, and so much more. But the program designed to help these individuals serve without having to worry about the burden of their student loans – the Public Service Loan Forgiveness Program – is broken. Biden will create a new, simple program which offers $10,000 of undergraduate or graduate student debt relief for every year of national or community service, up to five years. Individuals working in schools, government, and other non-profit settings will be automatically enrolled in this forgiveness program; up to five years of prior national or community service will also qualify. Additionally, Biden will fix the existing Public Service Loan Forgiveness program by securing passage of the What You Can Do For Your Country Act of 2019. Biden will ensure adjunct professors are eligible for this loan forgiveness, depending on the amount of time devoted to teaching. – Source

I would expect a Biden Department of Education to honor the promise of Public Service Loan Forgiveness for people under the past program.

Bankruptcy

  • Make it easier for people being crushed by debt to obtain relief through bankruptcy.
  • Expand people’s rights to take care of themselves and their children while they are in the bankruptcy process.
  • End the absurd rules that make it nearly impossible to discharge student loan debt in bankruptcy.
  • Let more people protect their homes and cars in bankruptcy so they can start from a firm foundation when they start to pick up the pieces and rebuild their financial lives.
  • Help address shameful racial and gender disparities that plague our bankruptcy system.
  • Close loopholes that allow the wealthy and corporate creditors to abuse the bankruptcy system at the expense of everyone else. – Source

Biden: You Give Him the Grade

So if student loan debt and consumer protections are important to you and if facts matter, then I welcome you to make your own informed decision based on the information above. But given what the positions and policies are, clearly, Biden would be the logical choice if these issues matter to you.

But here is the bottom line, if you vote for Trump, don’t complain later when your student loan servicer lies to you, your loans aren’t dealt with as promised, and you find yourself stuck in a life of debt without consumer protections.

You get what you vote for.

******

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.  You can read this essay on Mr. Rhode's web site at https://getoutofdebt.org/153979/if-you-have-problem-debt-and-student-loans-do-not-vote-for-this-candidate#respond.