Showing posts with label Hillary Clinton. Show all posts
Showing posts with label Hillary Clinton. Show all posts

Monday, February 20, 2017

Hillary Clinton had a good idea for addressing the student loan crisis: The Trump administration should implement her plan

Although many people have forgotten, Hillary Clinton introduced a sensible plan for addressing the student loan crisis while she was campaigning for the Presidency. She proposed a 90-day moratorium on student-loan payments to give college debtors an opportunity to refinance their loans at a lower interest rate.

This is a good idea. Forty-three million people have outstanding student loans, and many borrowed at high interest rates--much higher than today's rates.

For example, in the Murray bankruptcy case, decided last year, a married couple in their late forties consolidated their student loans at an interest rate of 9 percent.  At the time of consolidation, the Murrays owed $77,000; and they paid back 70 percent of that amount. Nevertheless, there were periods when the Murrays did not make payments due to financial stress; and they now owe $311,000, with the growth largely due to their loan's high interest rate.

Likewise, Brenda Butler, whose bankruptcy case was also decided last year, borrowed $14,000 and paid back $15,000. Like the Murrays, Ms. Butler's loans were in deferment from time to time. By the time she entered bankruptcy--almost 20 years after graduating from college--she owed $33,000, more than double what she borrowed. Again, the growing loan balance was largely due to accrued interest.

As Senator Elizabeth Warren has pointed out, millions of student-loan debtors took out student loans at interest rates far above the federal government's current cost of borrowing money.  Therefore, if these people were permitted to refinance their loans at a lower interest rate, as Hillary Clinton proposed last year, their student-loan debt would be a lot easier to manage.

As I said, Hillary Clinton's idea is a good one, but I would like to propose an amendment.  In addition to allowing college borrowers to refinance their loans at lower interest rates, the government should forgive all the default penalties that have been assessed against student-loan  defaulters.

Currently there are 8 million people in default on their student loans, and most of them had a 25 percent penalty attached to the amount they borrowed plus accumulated interest. I have a friend whose daughter borrowed $5,000 to attend college, made loan payments for awhile and then defaulted. How much does she owe now? $12,000!

Are there any downsides to Hillary Clinton's proposal as I have amended it? Yes, the student-loan collectors who have gotten rich chasing down student-loan defaulters would make less money.

But there are no downsides for the government. Why? Because millions of student-loan defaulters and millions more in income-driven repayment plans will never pay off their student loans.  The income-driven repayment plans are nothing more than a fraud on the public that allows the government to claim that people in these plans are not in default.

But in actuality they are in default. Educational Credit Management Corporation, for example, wanted to put the Murrays into an income-drive repayment plan that would cost them around $900 a month. The bankruptcy judge, to his credit, rejected that idea, pointing out that the Murrays' debt was accruing interest at the rate of $2,000 a month. Even if the Murrays made regular payments for 25 years, their debt would balloon from $311,000 to about half a million dollars.

So here's my suggestion. Senator Elizabeth Warren should dust off Hillary Clinton's moratorium idea and propose it to the Trump administration, adding a proviso that default penalties would also be waived.

Donald Trump is not everyone's cup of tea, but I believe he comprehends the world of finance.  He will understand that the government is running a shell game, telling the public that the student loan program is under control when in fact it is a train wreck.

If Republicans, Democrats, and President Trump would adopt Hillary Clinton's amended plan, they would provide immense relief to millions of Americans who are being buried alive by their student loans.

Wouldn't that be a lovely outcome?



References

Butler v. Educational Credit Management Corporation, No. 14-71585, Adv. No. 14-07069 (Bankr. C.D. Ill. Jan. 27, 2016).

Anne Gearan and Abby Phillip. Clinton to propose 3-month hiatus for repayment of  student loansWashington Post, July 5, 2016. Accessible at https://www.washingtonpost.com/news/post-politics/wp/2016/07/05/clinton-to-propose-3-month-hiatus-for-repayment-of-student-loans/?

Murray v. Educational Credit Management Corporation, Case No. 14-22253, ADV. No. 15-6099, 2016 Banrk. LEXIS 4229 (Bankr. D. Kansas, December 8, 2016).

Ruth Tam. Warren: Profits from student loans are 'obscene.' Washington Post, July 17, 2013.




Tuesday, January 3, 2017

Governor Cuomo proposes free college education at New York's public institutions, but the for-profits and private liberal arts schools will likely oppose this plan

Earlier this week, New York Governor Andrew Cuomo announced his plan to offer a free college education at New York's public colleges and universities for all New York families making $125,000 or less. This plan is nearly identical to the proposal put forward by Hillary Clinton last fall during the presidential campaign.

In a press release, U.S. Secretary of Education  John B. King quickly endorsed Cuomo's plan, noting that it is similar to President Obama's proposal for a free community-college education.  "I applaud Governor Andrew Cuomo for his leadership in expanding the doors of opportunity for New Yorkers, particularly those who otherwise may not be able to afford [a college education]," King said.

Governor Cuomo's proposal is a sound idea, Hillary Clinton's proposal is a sound idea, and President Obama's proposal for a free community-college education is a sound idea as well. And, contrary to what critics have said about these plans, they are not financially irresponsible.

The federal government already spends $150 billion a year on student aid programs--Pell grants, student loans, work-study programs, etc. The states also spend billions on higher education every year. New York, for example, spends a $1 billion a year in tuition assistance for the state's students.

If all this money was dedicated toward offering a free college education at public colleges and universities, taxpayers might actually save money.  But none of these plans will work if the federal and state governments continue to subsidize the for-profit college industry and private nonprofit colleges.

If Governor Cuomo's plan moves forward, you can expect to see for-profit and nonprofit colleges oppose it. Catharine Hill, president of Vassar College, came out against free college tuition in a New York Times op ed essay last year--back when Bernie Sanders was the only politician endorsing the idea. And New York's association of private colleges has already expressed skepticism about Governor Cuomo's free tuition plan.

The next six months will be a time of great turmoil for higher education. A number of for-profit colleges have closed or gone bankrupt, and many more are hanging on by their fingernails, hoping the Trump administration treats them more kindly than the Obama administration did during its waning days.  Several nonprofit liberal arts colleges have closed as well and more are on the brink of closing.

If the for-profit college industry collapses and the nonprofit college sector shrinks dramatically, then proposals to offer a free college education at public colleges might actually work. But they will not work if federal and state governments continue to prop up the nonpublic college sector with public money.

Bernie & Andrew Cuomo support free college education at public institutions
(photo credit, Sam Hodgson, New York Times)


References

Catharine Hill. Free Tuition Is Not the AnswerNew York Times, November 30, 2015, p. A23.

Jesse McKinley. Cuomo Proposes Free Tuition at New York State Colleges for Eligible Students. New York Times, January 3, 2017.

Rick Seltzer. Free Tuition Idea Revived. Inside Higher Ed, January 4, 2017.

U.S. Department of Education Press Release. U.S. Education Secretary John B. King Jr.'s statement on New York Gove. Andrew Cuomo's free college tuition proposal. U.S. Department of Education, January 3, 2017.

Sunday, October 30, 2016

Huma Abedin: Hillary will throw her under the bus. A Catholic reflection on politics and fame as All Souls Day approaches and we remember our honored dead

Eleven days before the presidential  election, FBI director James Comey announced he is reopening the FBI investigation into Hillary Clinton's email scandal.

Those of us who live in fly-over country will never know all the facts about Hillary's private emails, but this much I believe we can safely conclude:

1) James Comey is a decent and honest man. Mr. Comey was fully aware of the political and legal risks he was taking when he sent a letter to Congressional leaders telling them the FBI had discovered new evidence on Anthony Weiner's computer about Clinton's private email traffic.

Attorney General Loretta Lynch objected to Comey's decision to alert Congress, and Comey sent the letter anyway. Surely he is a man of integrity and courage.

2) Whatever the FBI found on Weiner's computer must be significant. At the very least, I think Weiner's computer will show that Huma Abedin, Weiner's estranged wife and Hillary's closest confidant, lied to the FBI when she testified about Hillary's private server. And the new evidence may show that Hillary lied as well. Otherwise, why would Comey write such an explosive letter?

3) Regardless of who wins the election, this latest revelation will destroy Hillary Clinton's political career. Hillary may still win the election next week, regardless of what the FBI found on Anthony Weiner's computer, but this scandal won't go away until Hillary Clinton's political career is over.

4) Hillary will throw Huma Abedin under the bus. Hillary makes all her decisions out of expediency, and she has no sense of personal loyalty. If necessary, Hillary will throw Huma under the bus to save herself. I predict that will happen before election day.

5) Journalists and politicians who sold their integrity to support Hillary Clinton will never regain the public's trust. Bill Richardson, former governor of New Mexico and a Democrat, chastised Mr. Comey on Fox News this morning for sending a bombshell letter to Congressional Republicans just a few days before the election. But as the Fox News commentator quickly reminded Richardson, Comey sent the letter to both Republicans and Democrats. Richardson's characterization of the letter, like Hillary's, was a deliberate misrepresentation.

In my mind, Richardson's pathetic dissembling destroyed his credibility forever. And the same can be said for dozens of other obsequious Clinton supporters. For example, Froma Harrop, insinuated in an op ed column that Bernie Sanders is a racist when Bernie was running against Hillary in the Democratic primaries last spring. Bernie Sanders--a racist?

Will Froma Harrop ever recover her integrity after writing that sleazy essay? No, she won't.

The Cemetery at St. Francis Cabrini Catholic Church in Livonia, Louisiana

Yesterday, while Hillary's latest email scandal simmered and boiled, I drove to Livonia LA to visit the Catholic cemetery at St. Francis Cabrini Catholic Church near Bayou Grosse Tete. This is the weekend before All Souls Day; and in South Louisiana, every Catholic family has a duty  to place flowers on the graves of departed loved ones. I was determined to honor this tradition by placing bouquets of flowers on the graves of Ivy Alford, Sr. and his wife Mary Alice, my wife's grandparents.

To my surprise, fresh flowers had been placed on about  two thirds of the graves in Cabrini cemetery. The Cajuns were honoring their dead,  knowing the parish priest would sprinkle holy water on the grave sites on All Souls Day. No one wanted to appear indifferent to their ancestors as this Holy Day of Obligation approached.

Before leaving the cemetery, I noticed two men standing at Mr. Alford's grave; they were obviously paying respect to his memory. I introduced myself and the men told me a little about Mr. Alford, who had died 30 years ago. They testified to his kindness, his willingness to help anybody who needed aid. They recalled his humility and his sense of humor. A teardrop appeared on one man's face as he testified to Mr. Alford's extraordinary goodness.

Ivy Alford, Sr. was not a wealthy man; he left this world without leaving much of anything other than a good duck-hunting shotgun. But he was loved, and he is still remembered 30 years after his death.

Hillary Clinton will go down in history as America's most prominent woman politician. If she is elected President, she will have a presidential library; and win or lose,  scholars will write books about her for centuries to come. And when she dies, she will lie beneath a stately monument.

But no one will stand before Hillary's grave 30 years after her death and shed a tear for her remembered kindness. And so who lived the greater life--Hillary Clinton or Ivy Alford, Sr?




References

Froma Harrop. Bernie Sanders and Racism LiteSeattle Times, May 19, 2016. Accessible at http://www.seattletimes.com/author/froma-harrop/

Tuesday, October 18, 2016

Suicides and a Jail Death in Anadarko, Oklahoma: Bitter, Angry and Frightened, Oklahomans will not vote for Hillary

Last January, the Washington Post reported on a spate of suicides in Anadarko, Oklahoma. Four people committed suicide over a period of less than two months. All were young, all were racial minorities, and all killed themselves with guns.

And last April, Darius Robinson, an African American father of seven, was killed in his Anadarko jail cell, asphyxiated by jail employees. Jailers say Robinson was trying to escape, but the Oklahoma Medical Examiner ruled the death a homicide.  A small demonstration was organized a couple months after Robinson's death; about 50 people attended. Robinson, by the way, was not in jail for a violent crime; he was in the slammer for failing to pay child support.

You might think these tragedies would draw the attention of President Obama. Four desperate young people killed themselves with handguns--what a great opportunity for the President to talk about gun control. A black man strangled by his jailers while in police custody--that's as least as shocking as the death of Freddie Gray in Baltimore/

Nevertheless, as far as I can determine, Barack Obama has said nothing about these deaths, and Hillary Clinton has said nothing about them. And, to the best of my knowledge, neither Al Sharpton nor Jessie Jackson has shown up in Anadarko.

Why? Because the Oklahomans don't matter. The Democratic political operatives have written off Oklahoma, and well they should. In the Democratic presidential primary, Oklahoma Democrats voted overwhelmingly for Bernie Sanders--Bernie Sanders! And  God knows they didn't vote for Bernie because they are socialists. No, Oklahoma Democrats loath Hillary Clinton, and Bernie was their only alternative. And if Oklahoma Democrats loath her, you can imagine what Oklahoma Republicans think.

In truth, Oklahomans are bitter, angry and frightened. Outside a few pockets of urban prosperity--Oklahoma City, metropolitan Tulsa, and Bartlesville--the state is in deep depression. From the Winding Stair Mountains in the east to the short grass country of western Oklahoma, there are no jobs. Anadarko, my home town, may be the epicenter of Oklahoma's desperate condition. Abandoned houses, suicide, alcohol abuse, drug addiction--rural Oklahomans are among the casualties of the new global economy.

Hillary and Barack despise these people, and the Oklahomans know it.  Barack sneeringly dismissed poor white Americans generally when he said they comfort themselves with guns and religion. When Hillary condemned the "basket of deplorables," she was talking about the people I grew up with.

Eighty years ago, John Steinbeck wrote The Grapes of Wrath, a tribute to the strength and courage of the Oklahomans who were driven off their land during the Dust Bowl years and migrated to California in rattletrap cars. "We're the people that live," Ma Joad says in the novel. "They can't wipe us out; they can't lick us. We'll go on forever, Pa, 'cause we're the people."

Do you think Barack Obama or Hillary Clinton have read The Grapes of Wrath? Not likely. Do you think they give a damn about contemporary Oklahomans who are suffering now just as much as their ancestors did during the Great Depression? No, of course not.

Image result for darius robinson death
Darius Robinson: "We're the people"



References

Sarah Kaplan.'It has brought us to our knees': Small Okla. town reeling from suicide epidemic. Washington Post, January 25, 2016. It https://www.washingtonpost.com/news/morning-mix/wp/2016/01/25/it-has-brought-us-to-our-knees-small-okla-town-reeling-from-suicide-epidemic/


Xin Xin Liu. Protesters Gather At Caddo Co. Courthouse After Inmate's Death, new9.com, July 22, 2016. Available at
http://www.news9.com/story/32507009/protest-planned-at-caddo-co-courthouse-after-inmates-death

Sunday, October 16, 2016

Medieval America: Victor David Hanson correctly diagnoses the collapse of American liberal democracy

It is difficult to convey a brilliant insight in less than 2,000 words, but Victor David Hanson has done it. In a brief essay published last week, Hanson said it is inaccurate to compare our declining American civilization to the fall of the Roman Empire. In truth, Hanson argued, our nations is becoming like medieval Europe.

Like today's America, Hanson points out, medieval Europe could boast some fine universities where the sum of human knowledge increased. But the universities of that day, like our modern American universities, had strict speech codes. The sun revolved around the earth, and woe to any medieval scholar who argued otherwise.  And today of course professors are permitted to express only one point of view on important global issues like climate change.

Humanist scholars of medieval times "wrote esoteric treatises than no one read," Hanson writes. "These works were sort of like the incomprehensible 'theory' articles of university humanities professors who are up for tenure."

Hanson definitely got that right. Not to mention the 10,000 law review articles that law professors and their students publish every year even as the core principles of our legal system disintegrate.

In my view, Hanson's most trenchant comparison between contemporary America and medieval Europe relates to the economy. Today, as Hanson notes, one fifth of Americans own absolutely nothing or have negative worth, much like medieval serfs. In fact, 18 percent of adult Americans have student-loan debt, which they are permitted to work off by donating a percentage of their income to the government over 20 or 25 years--just like peasants.

Indeed, America becomes more like medieval society with each passing day. The middle class--once the glory of liberal democracy--gets smaller every year. The nation's elites fly in private jets, work in fortress-like offices, and are protected by private security agencies; they are truly lords and barons surrounded by modern-day moats. Their kids go to the best private schools. And the elites do a good job of protecting their income from taxes.

Meanwhile the rest of us ride the subway or commute to work on crumbling freeways. We pay taxes at a higher rate than either Donald Trump or Hillary Clinton, and we send our kids to mediocre schools.  Defined-benefit retirement plans are fast disappearing, and we put our puny savings into the stock market because the elite have declared that we can earn nothing on our savings if we invest anywhere else.

Everywhere, the non-elites are getting poorer, but the slide into serfdom is most evident in rural America. In my own hometown of Anadarko, Oklahoma, the little family shops and stores of my childhood are all empty and boarded up. If you want to buy something--almost anything at all--you must go to Walmart. Hundreds of houses have been abandoned, including the one I lived in as a kindergarten child. Drug addiction and suicide are up; decent jobs have disappeared.

Americans know in their hearts that our slide into medievalism will accelerate after the national election unless our economy is radically restructured. Let us hope President Trump can do what he promised he would do to restore jobs to middle-class and working-class Americans.


References

Victor David Hanson. Medieval America, Town Hall, October 13, 2016. Available at http://townhall.com/columnists/victordavishanson/2016/10/13/medieval-america-n2231213http://townhall.com/columnists/victordavishanson/2016/10/13/medieval-america-n2231213

Sunday, October 9, 2016

Hillary Clinton promises free college education and lower interest rates on student loans: These ideas won't solve the student-loan crisis, which is one hot mess

Prompted by Senator Bernie Sanders, presidential candidate Hillary Clinton made two promises to student-loan debtors. First, if she is elected President, all Americans with a family income of $125,000 or less will be able to get a college education for free from a public institution. Second, if elected, Hillary will slash interest rates on student loans.

These are both good ideas, and I endorse them wholeheartedly. But even if Hillary gets elected and keeps these promises, the student-loan crisis will still be one hot mess.

A Free College Education for Families of Modest Means: A good idea

Hillary has promised a free college education at a public institution for everyone whose family income is $125,000 or less. How much would that cost?

Catharine Hill, president of Vassar College, estimated that Bernie Sander's free-college plan would cost about $70 billion a year. The Clinton campaign estimates that her plan will cost less---about $50 billion a year.

Currently, the federal government gives out around $100 billion a year in student loans, and roughly a third of this money goes to for-profit colleges and private institutions. So if the government replaced $50 billion in loans with grants in the same amount, that would go a long way toward giving middle-class families access to a free college education at a public university.

But  Clinton's plan faces major hurdles. First, it will require Congressional approval from a Republican Congress, which seems unlikely. Second, Hillary's plans calls for state governments to contribute one third of the cost, and that assumption may not be realistic.

But let's assume Hillary gets this plan through. We still have a huge problem.  Millions of Americans will still have massive student-loan debt totally $1.3 trillion, and free college for future students will do nothing to relieve them of their suffering. People are having their wages garnished, their Social Security checks dunned, and their income-tax returns seized. Honest people who deserve bankruptcy relief are prohibited by law from getting it.

So if Hillary implements her free college plan she must do something to help the millions of people who are suffering from massive student-loan debt. In my view, she must push for bankruptcy reform that will permit honest but unfortunate student-loan debtors to shed their oppressive student-loan debts. And she should also endorse loan forgiveness for everyone who took out loans to attend an overpriced for-profit college and received no economic benefit from the experience.

Lowering Interest Rates On Student Loans: Another good idea

 Hillary also promises to slash interest rates on student loans if she is elected President, and she has called for a 90-day moratorium on student-loan payments to allow borrowers to refinance their debt. Ag ood idea.

Interest rates on student loans, currently around 4 percent, seem too high when ten-year treasury bonds are going for 1.7 percent. Lowering those rates will give student-loan debtors some relief.

But again, refinancing student loans won't relieve the massive suffering people are experiencing right now. Millions have seen their loan balances grow larger because they obtained economic-hardship deferments that caused unpaid interest to pile up. Others defaulted on their loans, and the loan guaranty companies slapped an 18.5 percent penalty to their loan balance. As a result, many people now owe two or even three times what they borrowed due to accruing interest, penalties, and collection fees.

A two percent interest rate on a $50,000 debt is certainly better than an 8 percent rate, but Hillary must stop the student-loan guaranty companies from imposing unreasonable costs and penalties to borrowers' loan balances. After all, the loan guarantee companies are supposedly charitable organizations, but four of them have each accumulated $1 billion in assets--most of acquired from their debt collection activities.

Conclusion: Hillary must acknowledge that the student-loan program is a catastrophe

Hillary's two proposals for reforming the federal student-loan program are good ideas, but free college in the future and lower interest rates won't relieve the hardship visited on American young people who borrowed too much money to enroll in educational programs that resulted in little or no economic benefit.

We must face facts. Millions of people were ripped off by shoddy and rapacious colleges. The victims of the student-loan program need to get back into the economy and begin building economic security for themselves and their families. That won't happen until massive amounts of  student-loan debt are forgiven.



References

Catharine Hill. Free Tuition Is Not the Answer. New York Times, November 30, 2015, p. A23. Accessible at: http://www.nytimes.com/2015/11/30/opinion/free-tuition-is-not-the-answer.html?_r=0

http://www.nytimes.com/2016/09/29/us/politics/bernie-sanders-hillary-clinton.html

Laura Meckler. Hillary Clinton's Free College-Tuition Plan Short on Specifics. Wall Street Journal, August 14, 2016. Accesible at http://www.wsj.com/articles/hillary-clintons-free-college-tuition-plan-coming-up-short-on-specifics-1471167001

Letter to the Honorable John King, Secretary of Education, from 23 Democratic Senators, September 15,2016. https://www.insidehighered.com/sites/default/server_files/files/9_15_16%20ITT%20Tech%20ED%20Letter%20(1).pdf

Dawn McCarty and Shahien Nasirpour. ITT Educational Services Files for Bankruptcy After ShutdownBloomberg, September 16, 2016. Accessible at http://www.bloomberg.com/news/articles/2016-09-16/itt-educational-services-files-for-bankruptcy-after-shutdown-it6byu6t

Reuters. ITT Educational Services Files for Bankruptcy After Aid CrackdownInternational New York Times, September 17, 2016. Accessible at http://www.nytimes.com/2016/09/18/business/itt-educational-services-files-for-bankruptcy-after-aid-crackdown.html?_r=0

Robert Shireman and Tariq Habash. Have Student Loan Guaranty Agencies Lost Their Way? The Century Foundation, September 29, 2016. Accessible at https://tcf.org/content/report/student-loan-guaranty-agencies-lost-way/




Monday, August 22, 2016

Paul Krugman exploits the Great Louisiana Flood of 2016 (Redneck Katrina) to promote Hillary Clinton: Krugman's cynicism knows no bounds

Who do you have to sleep with to get a Nobel Prize?

Or perhaps that's the wrong question. Why do the Swedes award Nobel Prizes to arrogant fools like Paul Krugman?

Krugman won the Nobel Prize for Economics, but everyone knows he's nothing more than a shill for the transnational financial oligarchs and a zombie cheerleader for the Clinton campaign.

So I was enraged this morning when I read his New York Times column trying to turn South Louisiana's catastrophic flood (which I have dubbed Redneck Katrina) into a political story that favors Hillary Clinton.

I've got a couple things to say about Krugman's shameless sycophantic journalism. First, Krugman claimed that President Obama's FEMA response to Redneck Katrina was "infinitely superior" to Bush's FEMA response to the 2005 Katrina disaster.

I'm not so sure about that. Our recent flood only took place about a week ago, and at least 110,000 homes and business were damaged. Let's see how FEMA does over the next couple of months before we hand out accolades to FEMA. How many refugees will be back in their homes 60 or 90 days from now?

Moreover, speaking as a person who was rescued by the Cajun navy, I think South Louisianians are in a much better position to judge the quality of Obama's FEMA than Mr. Krugman, who is snugly safe in Manhattan.

Second, Krugman has no right to criticize Donald Trump for coming to Louisiana to lend his support to our flood victims. Where does Krugman get off labeling Trump's gesture as "boorish, self-centered behavior"?  After all, President Obama is visiting Louisiana tomorrow.  I suppose Krugman will characterize Obama's gesture as the act of a magnanimous and caring President, when in fact Obama was playing golf on Martha's Vineyard while Louisianians were clinging to to their roofs.

Krugman mocked Trump for handing out toys to Louisiana children,  which he described as a"hamhanded (and cheapskate) effort to exploit Louisiana's latest disaster for political gain." I don't think Louisianians would agree. On the contrary, I think we are all grateful for any assistance we receive, whether it is a toy for our kids, a case of bottled water or a FEMA grant.

Finally, Krugman cynically turned our natural disaster into a campaign ad for Hillary Clinton. Krugman suggests that our flood is a consequence of global warning and that Hillary would make a better President than Trump because she yaks on and on about how she is going to counteract global warming  if she  becomes president while Trump doesn't say much about it.

Well, global warming may be a factor in Louisiana's recent floods and hurricanes.  I can buy that. But Hillary's gassy rhetoric about climate change doesn't change the fact that she is a scheming, money-grubbing political hack who is totally owned by Wall Street.

Personally, I am glad Trump visited Louisiana. I look forward to Obama's visit, and I hope Hillary will visit as well. If she does visit the Pelican State, I hope her advisers tell her not to wear her orange pantsuit. She might get mistaken for an escaped  prisoner from St. Gabriel's Women's Prison, and that would be awkward.

Image result for hillary clinton in pantsuits
Hillary, please don't wear orange around St. Gabriel's Women's Prison

References

Paul Krugman. The Water Next Time. New York Times, August 22, 2016. Available at http://www.nytimes.com/2016/08/22/opinion/the-water-next-time.html?_r=0

Friday, July 8, 2016

Message to Distressed Student-Loan Debtors: Don't Give Up! Change is In the Wind

Don't give up
'cause you have friends
Don't give up
You're not the only one
Don't give up
No reason to be ashamed
Don't give up
You still have us
Don't give up now
We're proud of who you are
Don't give up
You know it's never been easy
Don't give up
'cause I believe there's a place
There's a place where we belong
Don't Give Up
Lyrics by Kate Bush & Peter Gabriel 

If you are overwhelmed by your student-loan debt, discouraged, and don't know where to turn, take my advice. Go to your refrigerator, pop the cap off a Shiner, and then listen to Don't Give Up, written by Peter Gabriel and Kate Bush. Several artists have sung the song, but I prefer Willie Nelson's version.

Some of the lyrics prompt me to reflect on the millions of Americans who are burdened by their unpayable student loans. "Don't give up," Willie tells us. "No reason to be ashamed." You still have your friends.

And I personally believe that change is in the wind regarding the federal student loan program. I think the magnitude of the student-loan disaster has grown so enormous that the federal government can't ignore it.  I see faint signs that help is on the way.

Why do I think this?

First, the Department of Education is finally moving forward on banning mandatory arbitration clauses in student-enrollment contracts at the for-profit colleges. If DOE follows through, students who were defrauded by their colleges can sue and can even join class actions. This is a good sign, and could mark the beginning of the end for the rapacious for-profit college industry. 

Second, Hillary essentially embraced Bernie Sanders's call for free college education at public universities this week (with some qualifications). This is also a good sign, because no scheme to offer free tuition is workable without massive reform of the federal student-loan program.

Third, and more importantly, Hillary called for a 3-month hiatus on student-loan payments while students refinance their loans to take advantage of lower interest rates. Once the federal government begins a wholesale effort to refinance millions of loans,  it will be apparent to everyone that the student-loan program is a train wreck. Broad relief could emerge from Hillary's idea.

Fourth, the bankruptcy courts are beginning to remember their purpose, which is to offer a fresh start to honest but unfortunate debtors. The recent cases are all over the place, with some courts still issuing callous decisions. But there are a lot of good decisions: Roth, Hedlund, Krieger, Abney, McDowell, Fern, etc.

Fifth, the Department of Education issued an important letter in July, 2015 outlining when it would not oppose bankruptcy discharge for student-loan debtors. DOE said creditors should consider the cost of opposing bankruptcy discharges, whether or not they think a debtor can show undue hardship if forced to repay student loans.

So far, this letter has been largely ignored. In my opinion, DOE did not act in harmony with the letter when it opposed bankruptcy discharge in the Abney case out of Missouri.  But DOE is now on record that it recognizes a variety of circumstances when a bankruptcy discharge is appropriate for some student loan debtors.

Richard Precht used that letter to his advantage in a Virginia bankruptcy decision earlier this year. He presented the letter to a very receptive Virginia bankruptcy judge, and DOE agreed not to oppose a discharge of Precht's debt. 

I acknowledge that all these signs of hope are faint and that a lot of misery lies ahead for millions of college borrowers who now hold about $1.5 trillion in student-loan debt.

But this catastrophe will someday come to an end--it can't go on forever. I recall my father, who was captured by the Japanese on the Bataan Peninsula during World War II ad endured the living hell of a Japanese prison camp from April 1942 until August 1945.

Two thirds of the men who were captured with my father did not survive the war. Some were murdered, some starved to death, and a few committed suicide. But my father survived, and the war ended.

Likewise, the federal student-loan program will eventually collapse, and millions of deserving college borrowers will get relief.  So, remember Willie's advice: Don't give up. 

And keep a six-pack of Shiner on hand  in your refrigerator. (My advice, not Willie's, but I'm sure he would agree.)

Image result for shiner beer
Don't give up: You've still got your friends

References

Stephanie Saul and Matt Flegenheimer. Hillary Clinton Embraces Ideas From Bernie Sanders's College Tuition PlanNew York Times, July 6, 2016. Accessible at http://www.nytimes.com/2016/07/07/us/politics/hillary-clinton-bernie-sanders-education.html?_r=0

Anne Gearan and Abby Phillip. Clinton to propose 3-month hiatus for repayment of  student loansWashington Post, July 5, 2016. Accessible at https://www.washingtonpost.com/news/post-politics/wp/2016/07/05/clinton-to-propose-3-month-hiatus-for-repayment-of-student-loans/?hpid=hp_special-topic-chain_clinton-loans-11pm%3Ahomepage%2Fstory

Thursday, July 7, 2016

Hillary embraces Bernie Sanders' plan for a free college education: God bless Senator Sanders

You did it! You did it! You said that you would do it, And indeed you did. I thought that you would rue it; I doubted you'd do it. But now I must admit it That succeed you did. 

                                                         lyrics from My Fair Lady

Hillary Clinton announced this week that she favors a tuition-free college education at in-state public colleges for all families with annual incomes up to $125,000. As the New York Times correctly noted, by taking that step, Hillary "largely embraced" Bernie Sanders's core position about a free college education at public institutions for all Americans.

God bless Bernie Sanders! As the Democratic primary season ground on, attacks by Hillary's supporters became more and more vicious. Froma Harrup insinuated he was a racist, Barney Frank accused him of McCarthyism, and a New York Times reporter suggested he was a sexist.  I think someone in the Clinton camp would have accused him of antisemitism were it not for the fact that he is Jewish.

All shameful poppycock. But doughty Bernie went the distance, and the Democratic Party has essentially adopted one of his core campaign issues.

What does this mean?

If Clinton is elected President, which seems likely, Congress will be forced to grapple with real reform for the federal student-loan program.  Clinton crossed the Rubicon when she endorsed Bernie's free-college tuition proposal. There is no going back. And by calling for a 3-month moratorium on student-loan payments to allow college borrowers to refinance their college loans, Clinton has forced the Democratic Party and the American public to face the fact that the student loan program is a train wreck.

As Winston Churchill said after the battle for Egypt, "Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

A calamity has descended on American higher education. In the coming years, the for-profit sector will collapse,dozens of  small liberal arts colleges will close, and millions of Americans will be forced into 20-and 25-year repayment plans. The student-loan program as we now know it will unravel.

It's going to be ugly, but at least Hillary's two recent pronouncements about higher education finance are an acknowledgement that we have to embrace radical change. And we can thank Senator Bernie Sanders of Vermont for pushing America's most important domestic policy issue to the front and center of American politics.

And let us not forget what I have been arguing for 20 years: There is no way out of this morass without allowing millions of student borrowers to shed their student loans in bankruptcy.

Image result for "bernie sanders"

References

Stephanie Saul and Matt Flegenheimer. Hillary Clinton Embraces Ideas From Bernie Sanders's College Tuition Plan. New York Times, July 6, 2016. Accessible at http://www.nytimes.com/2016/07/07/us/politics/hillary-clinton-bernie-sanders-education.html?_r=0

Anne Gearan and Abby Phillip. Clinton to propose 3-month hiatus for repayment of  student loansWashington Post, July 5, 2016. Accessible at https://www.washingtonpost.com/news/post-politics/wp/2016/07/05/clinton-to-propose-3-month-hiatus-for-repayment-of-student-loans/?hpid=hp_special-topic-chain_clinton-loans-11pm%3Ahomepage%2Fstory

Wednesday, July 6, 2016

Hillary Clinton proposes a three-month moratorium on student-loan payments and massive loan refinancing: A good idea, but difficult to implement

According to the Washington Post, Hillary Clinton has proposed a three-month moratorium on student-loan payments to allow borrowers time to restructure their student loans at lower interest rates.

Let me say flat out that this is a good idea. As the press has widely reported, about 40 percent of college-loan borrowers who are in the repayment phase of their loans aren't making payments. These people are seeing their loan balances go up as interest accrues on unpaid debt, and they desperately need repayment options they can afford.

In addition, millions of people who are making their loan payments would benefit from repayment plans that would lower monthly payments and take advantage of lower interest rates.

Hillary's proposal underscores this stark fact: The federal student-loan program is in chaos. There are currently eight income-based repayment plans, and even experts are confused about how the different options work and which students are eligible for the various repayment plans. Giving students a three-month hiatus to sort all this out is an excellent idea.

But why is Hillary making this proposal now? Was she prompted by pure politics--making a play for young people's votes? Is her proposal an attempt to win over Bernie Sanders' supporters?

Obviously, Hillary's proposal was driven by political consideration. But I think there is something more going on--namely panic. I think Hillary and the Democratic establishment finally realize that millions of Americans are overwhelmed by unmanageable student-loan debt. These distressed debtors are frustrated, demoralized and angry; and they won't vote for Hillary unless they think she will provide them with tangible relief if she is elected President.

In short, the Democrats see blood in the water; they know they must do something substantive to keep young voters in the Democratic column in the November election.   And even Hillary's fiercest critics must admit that her massive student-loan refinancing proposal is substantive and significant.

Nevertheless, I don't see how Hillary's plan can be effectively implemented. The federal student loan program is like a massive battleship plunging across a raging ocean at full speed--it can't be turned around quickly.  Here are some of the problems:

First, simply determining who is eligible for Hillary's refinancing program will be a huge challenge. More than 40 million Americans have outstanding student loans, and most of them are in the repayment phase.  Just figuring out who is eligible to stop making loan payments and who is not will be an enormous headache.

For example, a lot of borrowers took out private student loans that aren't part of the federal student loan program.  Of course, private loans won't be covered by Hillary's moratorium. But research has shown that many borrowers don't know whether their loans are federal or private, and some have both kinds of loans. If Hillary implements a moratorium, a good many borrowers will stop making payments on their private loans, which will get them in trouble with their lenders.

And 5 million borrowers are already in income-based repayment plans under very favorable terms. Can these people stop making payments for three months? If not, who is going to notify them that they are not eligible to participate in the moratorium?

Second, the Department of Education may not have the capacity to meet the bureaucratic challenge of refinancing millions of loans over a three-month period. There are 43 million people with outstanding student loans, but many borrowers signed multiple promissory notes--perhaps a dozen or more. And some of these documents date back 20, 25, and even 30 years.  

Refinancing all these loans will be a gigantic undertaking, the bureaucratic equivalent of launching Obamacare. I seriously doubt whether DOE or the various creditors have the resources to refinance all these loans over a three-month period. After all, DOE has had great difficulty coping with Corinthian Colleges' former students who sought loan forgiveness in the wake of Corinthian's bankruptcy. 

Third, once college borrowers are given license to stop making payments for a brief period, it will be very difficult to get them back in the repayment mode. In some ways, Hillary's proposal is like the European Union's decision to accept refugees from the Middle East. Once the stream of migrants began moving, the Europeans found themselves unable to handle the volume of refugees that crossed into the EU. And there was no effective way to regulate the flow.

Likewise, Hillary's proposal to allow millions of college borrowers to stop making loan payments while they refinance their student loans will create a massive upheaval in the federal student loan program. If her plan goes forward, I think we will see millions of people stop making loan payments, whether or not they are eligible for Hillary's moratorium. 

Finally, Hillary's student-loan refinancing plan may be nothing more than a way to shove borrowers into 20- and 25-year repayment plans.  The Obama administration has been aggressively pushing college borrowers into long-term income-based repayment plans. It has said it hopes to have nearly 7 million people in IBRPs by the end of 2017.

Hillary's pan will accelerate the movement of student borrowers into long-term repayment plans.  If it is implemented, we will surely see 10 million people or more in IBRPs, which will effectively make them indentured servants to Uncle Sam, paying a percentage of their income to the government for a majority of their working lives just for the privilege of going to college.

As I have said repeatedly, IBRPs are a bad idea and nothing more than a way to keep a lid on the student-loan crisis. It would be very disappointing if Hillary implemented a student-loan refinancing plan that has the primary effect of lengthening the loan repayment period for millions of Americans.

Conclusion: In spite of its drawbacks, Hillary's loan refinancing proposal is a good idea. In spite of all the drawbacks to Hillary's refinancing idea, I hope she goes forward with it if she becomes President. Almost anything is better than the present state of affairs.  Lowering interest rates will give millions of borrowers some relief from their debt. And even if her plan forces more borrowers into IBRPs, that option is better than having them continue to shoulder monthly payments that are so large as to be unmanageable.

Besides, Hillary's scheme, if implemented, will expose the utter chaos of the federal student loan program, which the federal government has hidden from the American people. Once the public realizes how many millions of people are suffering from their participation in the federal student loan program, maybe we will see real reform--which is nothing more and nothing less than reasonable access to the bankruptcy courts. 

References

Anne Gearan and Abby Phillip. Clinton to propose 3-month hiatus for repayment of  student loans. Washington Post, July 5, 2016. Accessible at https://www.washingtonpost.com/news/post-politics/wp/2016/07/05/clinton-to-propose-3-month-hiatus-for-repayment-of-student-loans/?hpid=hp_special-topic-chain_clinton-loans-11pm%3Ahomepage%2Fstory

Josh Mitchell. More than 40% of Student Borrowers Aren't Making Payments. Wall Street Journal, April 7, 2016. Accessible at http://www.wsj.com/articles/more-than-40-of-student-borrowers-arent-making-payments-1459971348

Alia Wong. When Loan Forgiveness Isn't Enough. Atlantic Monthly, June 15, 2015. Accessible at http://www.theatlantic.com/education/archive/2015/06/government-corinthian-college-loan-plan-problems/395513/