Forget the Russians: Democrats should focus their energy on removing Betsy DeVos from Trump's Cabinet

Almost 44 million Americans are student-loan debtors, and every single one of them should see Betsy DeVos as their mortal enemy. Since President Trump appointed her as Secretary of Education, DeVos has done nothing to ease the suffering of college borrowers. On the contrary, she has done everything she can to prop up the venal and corrupt for-profit college industry, which has preyed on vulnerable and naive students, many of them minority members or just plain poor.

We have known for years that the for-profit college racket is a cancer. Senator Tom Harkin's 2012 report on the for-profits made that fact absolutely clear. And we know that a high percentage of people who take out student loans to attend these shyster colleges default on their loans. Nearly half of a recent cohort of borrowers who attended for-profit colleges defaulted within five years. It was recently reported that more than half of the students who took out student loans to attend 1,000 colleges and schools had not paid down one dime of their student loans seven years into repayment. Most of those 1,000 institutions are for-profits.

Minorities have been especially injured by the for-profit colleges. Three quarters of African Americans who take out loans to study at a for-profit college and then drop out eventually default.

In my view, the Obama administration did not do a great job of reining in the for-profit racketeers, but it did make an effort. The combined efforts of the Obama Department of Education and several state attorney generals brought down two bad actors: Corinthian Colleges and ITT Tech. These two organizations had a total of a half million students and former students at the time they closed and filed for bankruptcy.

And the Obama administration put regulations in place to process students' fraud claims--claims against Corinthian in particular. But Betsy DeVos derailed those regulations and appears intent on protecting the for-profits from fraud claims. She's cooked up a bogus formula for resolving fraud claims, awarding only partial compensation to victims.

As Steve Rhode noted in a recent essay, the DeVos DOE has not provided relief to a single student borrower who was defrauded by a for-profit college, although it has approved around 13,000 claims by former Corinthian students (while rejecting 8,600 pending  claims).

DeVos also nullified an Obama-era regulation that would prohibit the for-profits from forcing their students to sign covenants not to sue as a condition of enrollment.  In addition, DeVos is slow rolling the Public Service Loan Forgiveness Program (PSLF), which provides debt relief to people who devote ten years to public service. Indeed, the Trump administration proposes to do away with the PSLF program.

And if that weren't enough, the Republicans sent a bill out of the House Education Committee that would do away with student-loan forgiveness altogether. DeVos has not formally endorsed this bill, but she called it a "starting point."  The bill, if it becomes law, would give student borrowers only two options--pay off their loans in ten years or go into a perpetual income-based program that would not end until the loans are paid off or the student borrower dies. Oh yes, and the bill would eliminate the authority of state attorney generals to police the student loan industry.

And what have the Democrats done in response to DeVos' shockingly obsequious behavior toward the for-profit college racketeers? Not a friggin' thing. Senator Elizabeth Warren--self-proclaimed consumer advocate, writes stern letters to DeVos and other government bureaucrats, but she can't point to a single accomplishment in terms of student-loan relief.

I give the Democrats grudging credit for at least introducing legislation that addresses the student-loan crisis. The Delaney-Katko bill (co-sponsored by 25 Democrats and one Republican) would open the bankruptcy courts to deserving student borrowers, which is really the only comprehensive solution to the crisis. But that bill will never make through a Republican dominated Congress that is totally beholden to the financial industry.

In my mind, the litmus test for Congress in terms of student-loan relief is the Warren-McCaskill bill that would bar the federal government from garnishing the Social Security checks of elderly student-loan defaulters. Passing this bill would at least alleviate the suffering of the 114,000 older Americans who are seeing their Social Security income reduced due to unpaid student loans.

 It is not enough for Senators Warren and McCaskill to simply file this bill; they need to get it to a vote. What Republican would vote against that bill? Can't Senator Chuck Schumer and Representative Pelosi walk across the aisle and get Warren-McCaskill bill signed into law with bipartisan support?

Frankly, if there is not enough good will between Republicans and Democrats to enact the Warren-McCaskill Social Security relief bill, which only provides puny student-debt relief, then student debtors should say the hell with both parties and form a third political party.

In the meantime, Democrats should focus on getting Betsy DeVos out of Trump's cabinet. I don't know if her slavish catering to the for-profit-college gang amounts to high crimes and misdemeanors for impeachment purposes, but this I know: Betsy has got to go.

Image credit: GQ Magazine

References

Douglas Belkin, Josh Mitchell, & Melissa Korn. House GOP to Propose Sweeping Changes to Higher Education. Wall Street Journal, November 29, 2017.

Jillian Berman. House Republicans seek to roll back state laws protecting student loan borrowers. Marketwatch.com, December 7, 2017.

Danielle Douglas-Gabriel. GOP higher ed plan would end student loan forgiveness in repayment program, overhaul federal financial aid. Washington Post, December 1, 2017.

Danielle Douglas-Gabriel. Dems raise concern about possible links betwen DeVos and student debt collection agency. Washington Post, January 17, 2017.

Steve Rhode. GOP Proposed Change to Higher Education Act to Gut Consumers and Debt Relief Companies. Get Out of Debt Guy, December 5, 2017.

Danielle Douglas-Gabriel. Elizabeth Warren wants the Education Dept.'s use of earnings data investigated. Washington Post, January 2, 2018.

Paul Fain. Half of black student loan borrowers default, new federal data show. Inside Higher Ed, October 17, 2017.

Andrea Fuller. Student Debt Payback Far Worse Than Believed. Wall Street Journal, January 18, 2017. 

Andrew Kreighbaum. DeVos on Higher Education Act Rewrite. Inside Higher Ed, December 15, 2017.

Jack Moore. Betsy DeVos may be Gearing Up to Screw Over Public Service Workers Who Expect Student Loan Forgiveness. GQ.com, August 3, 2017.

Representative John Delaney press release. Delaney and Katko File Legislation to Help Americans Struggling with Student Loan Debt, May 5, 2017.

Senator Claire McCaskill Press Release, December 20, 2016. McCaskill-Warren GAO Report Shows Shocking Increase in Student Loan Debt Among Seniors.

Senator Elizabeth Warren Press Release, December 20, 2016. McCaskill-Warren GAO Report Shows Shocking Increase in Student Loan Debt Among Seniors. 

Steve Rhode. Dept of Ed Puts Fraud First Over Students and Common Sense. Getoutofdebtguy.com, January 3, 2017.

United States Government Accountability Office. Social Security Offsets: Improvement to Program Design Could Better Assist Older Student Borrowers with Obtaining Permitted Relief. Washington DC: Author, December 2016).

United States Health, Education, Labor and Pension Committee. For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success. July 2012. Accessible at: http://www.help.senate.gov/imo/media/for_profit_report/PartI.pdf

James Howard Kunstler's negative assessment of American higher education is spot on

James Howard Kunstler posted an essay a few days ago containing his predictions for American higher education in the coming year. He predicts big trouble.

As Kunstler correctly observed, "college has become, most of all, a money-grubbing racket tuned to the flow of exorbitant student loans for exorbitant college costs."  In other words, as he has said before, higher education in the United States basically operates from a "criminal ethic" where costs have "developed an inverse relationship to the value of a college education."

Kunstler's essay also includes a withering assessment of college leadership: "The presidents, deans, and faculty of colleges around the country have turned into the most obdurate enemies of free thought since the Spanish Inquisition, a gang of cowards and villains who disgrace the meaning and purpose of higher ed[ucation]."

In fact, Kunstler's indictment of the people who run American colleges is too gentle. If these clowns lived in another age, they would be the people who staffed the French Vichy regime during Word War II--the bureaucrats who dutifully rounded up French Jews for the Nazis and shipped them from Paris to the German death camps. No courage, no intellect, no sense of decency whatsoever. They babble ceaselessly about trigger words, safe spaces and "white male heterosexual privilege" while they pick their students' pockets.

The federal student loan program is quietly and inexorably destroying the lives of millions of Americans; has anyone in higher education spoken up? Have the presidents of Harvard, Yale, University of Chicago, Brown, Johns Hopkins, or the University of Michigan uttered a single word of criticism about it? Has any university leader endorsed bankruptcy relief for overburdened student debtors?  Has any college president or dean criticized the government policy of garnishing Social Security checks of elderly student-loan defaulters? Has any higher-education leader of national standing called for the closure of the for-profit college industry?

No, our elite colleges and universities are almost as addicted to federal student-aid money as the sleaziest for-profit schools. In terms of dependency on federal money, there is not a dime's worth of difference between Harvard and Bob's Beauty Academy.

Kunstler predicts that "a shocking number of small four-year colleges will go out of business this year," and I share his view. Harvard professor Clayton Christensen said recently that half of American colleges will be bankrupt in 10 to 15 years.

In fact, the small liberal arts college is dead, although the leaders of some small colleges stubbornly keep their institutions on life support. Parents need to warn their children to stay away from these decaying institutions. It would be a grave mistake to borrow $100,000 to get a degree from a college that will close before its graduates pay off their student loans.

French officials registering French Jews.

References

Abigail Hess. Harvard Business School professor: Half of American colleges will be bankrupt in 10 to 15 years. CNBC.com, November 15, 2017.

James Howard Kunstler. Forecast 2018--What Could Go Wrong? Clusterfuck Nation, January 1, 2018.

James Howard Kunstler. Made for Each Other. Clusterfuck Nation, February 13, 2017.

Betsy DeVos says students defrauded by for-profit colleges may only get partial debt relief

As Martin Luther King wrote from the Birmingham Jail, justice too long delayed is justice denied. And of course justice that is not only delayed but incomplete is nothing more than a cynical parody of justice.

As everyone knows, hundreds of thousands of students took out student loans to attend for-profit colleges and paid too much for their educational experiences. Often they got no benefit from their studies. Student-default rates for these students are shocking. Almost 50 percent in a recent cohort defaulted within five years of beginning repayment. Three out of four African Americans who attended for-profit schools eventually default--which is a scandal.

And many students were defrauded by the for-profit colleges they attended. Last year, Corinthian Colleges had a judgment entered against it in California for more than a billion dollars based on findings of fraud and misrepresentation.

The Obama administration, to its credit, crafted regulations whereby students could apply to the Department of Education to have their student loans forgiven if they were defrauded by the college they attended. Thousands of students who were enrolled at one of the Corinthian campuses applied for loan forgiveness based on fraud claims.

Betsy DeVos stopped the implementation of the Obama regulations, saying she feared students would get "free money." She then appointed a panel of experts to draft new regulations, which won't be approved until next year. In fact, under the DeVos scheme, defrauded students will not be able to move forward on their claims until 2019 at the earliest.

And it appears, many students will not get complete relief from their loans even if they can prove they were defrauded.  DeVos is talking about giving partial relief based on a formula that will compare the defrauded student's earnings to the average earnings among people who participated in similar educational programs.

The cynicism of this approach is shocking. First of all, by delaying the administrative process until 2019, DeVos is giving fraud students only three options for handling their student debt. First, they can continue making loan payments on educational experiences that are worthless. Second, they can enter income-based repayment plans that will set monthly payments so low that the interest on their debt will continue to accrue, making their total indebtedness grow larger. Or third, they can default on their loans, which will ruin their credit and cause their debt to grow larger from fees and penalties that the debt collectors tack on to their original debt.

DeVos's tactic is nothing more than cynical manipulation to aid the for-profit industry. If Congress had a moral compass and some courage, DeVos's behavior would lead to a formal resolution calling for her resignation.

Betsy DeVos' summer home

References

Gail Collins. No Profit in Betsy DeVos. New York Times, October 27, 2017.

Maria Danilova. DeVos may only partially wipe away some student loans. Detroit News, October 28, 2017.

Andrew Kreighbaum. Education Department sets up standards for partial relief of defrauded borrowers. Inside Higher Ed, December 21, 2017.

Tamar Lewin. Questions Follow Leader of For-Profit Colleges. New York Times,May 26, 2011.

Bob Samuels. The For-Profit College Bubble: Exploiting the Poor to Give to the Rich. Huffington Post, May 25, 2011.

An anti-hazing foundation? Fraternity hazing will stop when hazers go to prison

Last August, Stephen and Rae Ann Gruver, a Georgia couple, sent their son Maxwell to LSU, where he pledged Phi Delta Theta fraternity. One month later, Max was dead, killed in a hazing episode. He had been forced to drink 190 proof alcohol in a fraternity exercise cynically titled "Bible study."

According to the coroner, Max had massive amounts of alcohol in his system at the time of his death--more than six times the legal limit. Experts said he asphyxiated in his own vomit but probably died painlessly because he was unconscious when he passed away.

Max's parents did what many parents do when they lose a child to a a senseless death; they threw themselves into a heroic effort to prevent others from dying the way their son did. In Max's honor, the Gruvers started an anti-hazing foundation, dedicated to raising public awareness about college hazing. They also distributed 30,000 silicon wristbands that say "Stop the Hazing."

In addition, the Gruvers endorsed a law that will grant "medical amnesty" to anyone who reports acute alcohol poisoning as a medical emergency. And they are calling for more transparency about fraternity hazing. If they had known about Phi Delta Theta's history of hazing, the Gruvers say, they never would have allowed Max to pledge that group.

LSU officials publicly support the Gruvers' efforts. I'm sure they were particularly pleased to hear the Gruvers' call for more transparency because "transparency" is a word college administrators dearly love. It rolls over the tongue so smoothly, like a single-malt scotch. And when college administrators use that word--and they use it often--they are never telling the truth.

Already, LSU is equivocating about some of the Gruvers' demands. Ernie Ballard, a school spokesperson, pointed out the problems with amnesty. "Every university struggles with the balance of amnesty and penalties," Ballard explained. If too many conditions are attached to amnesty, students discount its value. On the other hand, "if the amnesty is too broad, habitual offenders may not be held accountable."

LSU president F. King Alexander and Governor John Bel Edwards are talking about tougher penalties for fraternity hazing. But they are "concerned" that tougher sanctions might deter students from reporting bad behavior.

Apparently then, hazing is a conundrum--requiring long and tedious deliberation.

But here is the truth about fraternity hazing. More than forty states already have anti-hazing statutes, some of them dating back more than half a century. And many of these statutes contain amnesty or immunity provisions.

And the Clery Act, passed more than 25 years ago, requires all colleges and universities to file annual reports of criminal activity, including assaults, as a condition of receiving federal funds. The Clery Act was put in place to ensure transparency on college campuses--the very thing the Gruvers are demanding.

Nevertheless, in spite of anti-hazing statutes and the Clery Act, four college students died this year from hazing or criminally negligent drinking episodes.

Hazing won't stop on college campuses until the hazers are sent to prison. If one LSU fraternity boy were sent to Angola State Prison for pouring 190 proof alcohol down some poor kid's throat, LSU would have a lot less hazing.

And hazing won't stop until the universities are held liable for damages when hazing occurs. LSU has anti-hazing policies on its books, and it is willing to deliver a slap on the wrist to fraternities when hazing is discovered. But how much more serious would LSU be about hazing if the Gruvers obtained a quarter-of-a-billion dollar judgment against it?  A lot more serious, I warrant.

The Gruver tragedy will soon be forgotten. A few months from now, the local district attorney will conclude he has more important things to do than prosecute college boys for hazing. A deal will be struck of some kind, and no one will go to jail. LSU or some of its wealthy supporters will make a generous donation to the Max Gruver Foundation, and the Gruvers won't sue.

And next year, or two or three years from now, another college boy will die in his own vomit at a fraternity hazing exercise.  And then we will hear another call for more transparency.

Angola State Prison, where LSU hazers belong

References

Rebekah Allen. 'He would have done great things with his life.' 2017.The (Baton Rouge) Advocate, December 30, 2017.

Rebekah Allen, Grace Toohey, and Emma Discher. 10 booked in LSU fraternity hazing death case. The (Baton Rouge) Advocate, October 12, 2017, p. 1.

Lela Skene. LSU fraternity pledge Maxwell Gruver's 'off the charts' blood-alcohol level shocks experts. The (Baton Rouge) Advocate, October 11, 2017.

Student-loan debtors beware: Congressman Tom Garrett wants your Social Security check

Congress must think Americans are fools, and perhaps we are.

Earlier this month, the Republicans rammed through their so-called "tax reform" bill that will give middle-class families about ten bucks a week in tax relief. Meanwhile, Congress left the notorious carried interest rule in place--the rule that allows hedge fund managers to pay federal taxes at a lower rate than their secretaries.

If Americans are stupid enough to swallow the tax-reform caper, maybe they can be swindled out of their Social Security earnings. Representative Tom Garrett, a Republican congressman from Virginia, thinks its worth a try. Garrett introduced a bill he calls the Student Security Act, whereby college borrowers can surrender some of their Social Security earnings in return for student-loan forgiveness.

Here's how it works, in Congressman Garrett's own words:

For every $550 in student loan forgiveness . . . a Student Security participant would agree to raise his or her full-retirement age for Social Security benefits by one month. A student could get a maximum of $40,150 in debt relief. To get that, the person would delay the starting age for collecting Social Security benefits by 6 years and one month.

Most people need their Social Security income in order to retire, so essentially Representative Garrett is asking people to postpone their retirement by six years in return for some student-loan debt relief.

Of course the whole premise of the federal student loan program is the notion that a college degree is the ticket to a middle-class lifestyle and that borrowing money to get a college education is a good investment. Obviously, that premise is false for millions of people, including people who would postpone their retirement by six years just to get clear of their student loans.

Congressman Tom Garrett wants your Social Security check.

References

Tom Garrett. Let's allow our kids to use some of their future Social Security earnings to pay off their student loans. foxnews.com, December 29, 2017. 

No Exit: Graduates of bottom-tier law schools have mountains of student-loan debt and little prospect of ever paying it off

You say you went to law school to pursue a better life. Your LSAT scores weren't so hot, so you were turned down by the top law schools. Harvard and Yale tossed out your application with its other junk mail and sent you an elegant rejection letter, complete with a genuine-looking robo-signature from someone in the admissions office.

But a lower-tier law school welcomed you with open arms. Let's say it's a for-profit school like Arizona Summit or Florida Coastal. Or maybe a nonprofit, private law school like Thomas M. Cooley in Michigan, Thomas Jefferson in San Diego, or McGeorge in Sacramento. Or maybe you received an acceptance letter from a bottom-rung public law school like Southern Illinois or Texas Southern.

And so you went to law school. You were vaguely aware that job prospects for people who graduate from bottom-tier schools aren't good and a high percentage of graduates fail the bar exam. But you're special. You'll study hard, you'll prepare for the bar exam, you'll  pound on doors until a law firm offers you a good job. 

And when you get that J.D. degree, your life will suddenly change for the better. You'll drive a nice car, get married, and buy a craftsman-style house like the happy people who inhabit television commercials.

And of course you took out student loans. To your surprise, back-of-the-pack law schools are just as expensive as Princeton and Stanford. Total costs, including living expenses turned out to be $40,000 a year, $50,000 a year, or even $60,000 a year.

But in for a penny, in for a pound. You realized you can't work your way through law school like in the old days because no one can make enough money from a part-time job to pay a $40,000 tuition bill. So you took out loans every semester and when you walked across the stage to receive your law school diploma, you owed $200,000.

You studied hard for the bar examination and paid for a bar review course. But you didn't pass the exam.

And then you realized--fully realized for the first time--you owe $200,000 in student loans and you will never get a good job as a lawyer.

What's your exit strategy?

There is no exit strategy. You must pay back those student loans whether or not you get a good job or pass the bar exam.  You can stall for time by getting an economic hardship deferment that excuses you from making monthly loan payments. But the deferment doesn't stop interest from accruing. In a few years, the $200,000 you borrowed will grow to $300,000.  

Maybe you were enticed to enroll in a crummy law school based on misrepresentations about the law school's employment rate. Can you sue for fraud? Yes you can, but so far at least, fraud suits against law schools have been unsuccessful. Thomas Jefferson and Thomas M. Cooley both beat that wrap.

Can you discharge your student loans in bankruptcy? Maybe. Michael Hedlund, a graduate of Willamette School of Law, won a partial discharge of his student loans after 10 years of litigation. But several law-school graduates have struck out in the bankruptcy courts. Mark Lilly, a McGeorge law-school graduate, and Mark Tetzlaff, a Florida Coastal graduate, lost their adversary actions in spite of the fact that their law degrees did not enable them to get good attorney jobs. Heather Coplin, a McGeorge law-school graduate working as a waitress, only obtained a partial discharge of her student loans, which totaled almost half a million dollars.

*****

Law schools once operated as professional schools with high ethical standards. Today, however, a great many law schools are nothing more than elegant con games designed to rake in federal student-aid money.

So before you enroll in a third-rate law school, do some research. Read Paul Campos' article in Atlantic. This article was the inspiration for John Grisham's recent novel The Rooster Bar, which tells the story of a young man who attended a dodgy for-profit law school.  And read some of the bankruptcy cases that have been decided against law-school graduates who were unable to find good jobs as attorneys. In particular, read the Tetzlaff case and the Lilly case.

And if you still want to enroll at Florida Coastal or Arizona Summit or Southern Illinois or Thomas Jefferson or Thomas M. Cooley, check yourself into a psychiatric facility--because you probably need to have your head examined.

References

Paul Campos. Don't Go to Law School (Unless). Createspace.com, 2012.

Paul Campos. The Law School Scam. Atlantic Magazine, September 2014. 

Coplin v. U.S. Department of Education,  Case No. 13-46108, Adversary No. 16-04122, 2017 WL 6061580 (Bankr. W.D. Wash. December 6, 2017) (unpublished decision).

Steven J. Harper. Too Many Law Students, Too Few Legal Jobs, New York Times, August 25, 2015. Accessible at: http://www.nytimes.com/2015/08/25/opinion/too-many-law-students-too-few-legal-jobs.html

Hedlund v.Educational Resources Institute, 718 F.3d 848, 851 (9th Cir. 2013). 

Lilly v. IllinoisStudent Assistance Commission, 538 B.R. 45 (Bankr. S.D. Cal. 2013).

MacDonald v. Thomas M. Cooley Law School, 724 F.3d 654 (6th Cir. 2013).

David Segal, Is Law School A Losing Game? New York Times, January 8, 2011. Accessible at: http://www.nytimes.com/2011/01/09/business/09law.html?_r=0

Tetzlaff v. Educational Credit Management Corporation, 794 F.3d 756 (7th Cir. 2015).

Joshua Wright. The Oversaturated Job Market for Lawyers Continues and On-the-Side Legal Work Grows. EMSI blog, January 10, 2014.

Staci Zaretsky. Verdict Reached in the Alaburda v. Thomas Jefferson Landmark Case Over Fraudulent Employment Statistics. Abovethelaw.com, March 24, 2016.

Coplin v. U.S. Dep't of Education: Bankruptcy court orders single mother of 4 disabled children to repay $222,000 in student loans

Heather Coplin graduated from University of Pacific's McGeorge law school in 2009 and gave birth to triplets that same year. The infants were born prematurely and all three suffer from profound disabilities. At age 8, one triplet is incontinent and requires an electric wheelchair for mobility. The other two triplets have muscular issues that impair their mobility. Two triplets have required shunts to drain spinal fluid.

Coplin also has a 15-year-old child who suffers from autism. He is six feet tall, weighs 340 pounds and engages in "anxiety-induced acting-out behavior." Coplin has called the police on several occasions to deal with her son's aggressiveness.

Coplin herself is bipolar and has made several suicide attempts.

Although Coplin graduated law school in 2009, she was unable to pass the state bar exam until 2012. She practiced law for a time and even established her own firm. She found, however, that family issues prevented her from working as an attorney. At time of trial, Coplin was a night-shift waitress at the Muckleshoot Casino

Coplin filed an adversary proceeding in bankruptcy court to discharge almost half a million dollars in student-loan debt, some of it accruing interest at the rate of 10 percent. Navient, one of her creditors, agreed to discharge part of the debt, but three creditors opposed a discharge: ECMC, the U.S. Department of Education and University of the Pacific.

In a decision entered a few days ago, Judge Mary Jo Heston granted Coplin a partial discharge. Utilizing the three-pronged  Brunner test, Judge Heston concluded Coplin only met two prongs.

First, Coplin met the first prong, which required her to show she could not pay back her student loans and maintain a minimal standard of living.  She also met a second prong, requiring her to show she had handled her student loans in good faith.

Nevertheless, Judge Heston did not grant Coplin a full discharge. Coplin had about $1850 in discretionary monthly income, the judge pointed out.  She could put that amount toward paying off her student loans. Judge Heston ruled that Coplin could pay back $222,000 over a ten-year period; and thus she only granted Coplin a partial discharge.

It should be pointed out that the only reason Coplin had any discretionary income was that she was living in her fiancee's home rent free. In addition, I don't think the bankruptcy judge accurately estimated Coplin's ongoing medical expenses. Coplin said she visited doctors 6 or 7 times a week due to her children's medical issues.

These are my reflections on the Coplin decision:

First, I was struck by Coplin's strong work ethic. As Judge Heston noted, Coplin had worked continuously at a variety of jobs since graduating from law school. She practiced law, sold real estate, worked as a delivery driver, and finally wound up working the night shift as a casino waitress.  No one can say she didn't do her best to feed her family.

Second, I was shocked by the ruthlessness of Coplin's creditors. The creditors--including the U.S. Department of Education--argued Coplin should be denied a discharge because she had not lived frugally.  They pointed to the fact that she occasionally dined at fast food restaurants, had cable television, and had taken a modest vacation.

Is Betsy DeVos' Department of Education saying that a casino waitress with four disabled children is living extravagantly because she occasionally eats at McDonald's? Yes, it is.

Finally, I was astonished by the arrogance of University of the Pacific, where Coplin went to law school. One would think the university would be embarrassed by the fact that one of its law graduates racked up half a million dollars in student-loan debt (including accrued interest), took three years to pass the bar exam and was working as a waitress 8 years after obtaining her law degree. But no--UP wants its money--at 10 percent interest.

In sum, I found the Coplin decision disheartening. If a waitress with four disabled children can't obtain a complete discharge of her student loans in a bankruptcy court then it is difficult to see how any student-loan debtor is entitled to bankruptcy relief. God help us.

Muckleshoot Casino, where attorney Heather Coplin works as a waitress

References

Coplin v. U.S. Department of Education,  Case No. 13-46108, Adversary No. 16-04122, 2017 WL 6061580 (Bankr. W.D. Wash. December 6, 2017).

Graduate students' tuition waivers will become taxable income if the House's "tax reform' bill becomes law: Do the universities care?

The House of Representatives approved a "tax reform" bill last month. If the bill becomes law, graduate students' tuition waivers will become taxable income.

This is a big deal. Numerous research universities grant tuition waivers to their graduate students in return for useful work--instructing undergraduates, for example, or serving as laboratory assistants for professors' ongoing research projects.

Under current law, graduate students' tuition waivers are not considered taxable income, and the House's tax bill will hit these students hard. Tuition for many graduate programs can easily top $40,000 a year. If tuition waivers are taxed, most graduate students who receive them will be forced to take out larger student loans simply to pay their federal taxes and stay in graduate school.

This provision is not in the Senate version of the tax bill, so differences between the Senate's bill and the House's bill will be resolved by a joint committee.

This pernicious provision is solely the work of House Republicans, because no House Democrat voted for the bill. Apparently, the Republican legislators are clueless regarding the impact of taxing tuition waivers or they simply don't give a damn.

Will the research universities fight to keep the tuition waiver language out of the tax bill? I doubt it.

The big research universities are more concerned about their endowments than they are about graduate students' tax worries.  The Senate and House versions of the tax bill both call for a 1.4 percent excise tax on university endowments with funds in excess of a quarter million dollars per student.

Douglas Warner, a Yale trustee and retired investment banker, thundered against the proposed excise tax a few days ago. Such a tax would threaten Yale's ability to "build the human and intellectual capital the country requires to thrive as a global leader," Warner declared; but he didn't say a word about the tax bill's effect on graduate students.

 Let's face it. Universities aren't overly concerned about a tax on graduate students' tuition waivers because the harm falls on students, not the universities. The universities know graduate students will absorb this new tax simply by taking out more student loans.

Yale Trustee Douglas Warner: Don't tax Yale's Endowment!

References

Jared Walczak. Important Differences Between the House and Senate Tax Reform Bills Heading Into Conference. Taxfoundation.org, December 2, 2017/.

Douglas A. Warner. The GOP Tax Bill Will Hurt U.S. Universities. Politico.com, December 1, 2017.  

It's official: The Republicans hate student-loan debtors

A few days ago, Republicans introduced their bill for revising the Higher Education Act. Some provisions in the GOP proposal are astonishing in their cruelty and contempt for student debtors.

• Abolishing income-drive repayment plans. For starters, the Republicans want to end all student-loan forgiveness. Goodbye PAYE. Goodbye REPAY. Students who can't pay off their loans under the standard 10-year repayment plan will be forced into income-driven repayment plans that continue until their loans are paid off--which for many of them will be never.

• Abolishing the Public Service Loan Forgiveness Program. The GOP wants to abolish the Public Service Loan Forgiveness Program, which Congress created in 2007. Hundreds of thousands of students have entered into public-service jobs expecting to have their college loans forgiven after 10 years. If the Republican proposal becomes law, some of these people may be grandfathered into the PSLF program, but the program will be shut down.

• Forbidding states from enforcing consumer protection laws against student loan servicers. Buried on page 464 of the GOP's bill is a provision that forbids states from regulating the student-loan serving companies.  Some state AGs have vigorously pursued wrongdoers in the loan servicing business, and Republicans apparently want to shield the debt collectors from state consumer protection laws.

Where are these pernicious Republican ideas coming from? Representative Virginia Foxx (R-NC) is Chair of the House Education Committee, and she supports all these nasty proposals. But Foxx is not pulling the strings. These toxic proposals are coming from the heart of the Trump administration--and undoubtedly from Secretary of Education Betsy DeVos.

I don't know if these punitive GOP proposals will make it into federal law. But if they do, Republicans will push millions of college borrowers into a lifetime of indebtedness.  It's almost as if the GOP wants to create an underclass of sharecroppers.

President Trump and his fiendish Secretary of Education (who has financial ties to the debt collection business) may think their scheme to punish student borrowers will play to the Republican base. But if these proposals get through Congress, there will be hell to pay in coming elections.  

The Democrats are missing a golden opportunity if they don't take up the banner of student-debt relief.  In my view, they should forget Russia and turn their venom toward Betsy DeVos, who may be Trump's Achillese heel. The Dems need to educate college borrowers about the nation's venal Secretary of Education and rouse them to righteous fury.

Betsy DeVos summer home: Maybe you could get a job there as pool boy

References

Douglas Belkin, Josh Mitchell, & Melissa Korn. House GOP to Propose Sweeping Changes to Higher Education. Wall Street Journal, November 29, 2017.

Jillian Berman. House Republicans seek to roll back state laws protecting student loan borrowers. Marketwatch.com, December 7, 2017.

Danielle Douglas-Gabriel. GOP higher ed plan would end student loan forgiveness in repayment program, overhaul federal financial aid. Washington Post, December 1, 2017.

Danielle Douglas-Gabriel. Dems raise concern about possible links betwen DeVos and student debt collection agency. Washington Post, January 17, 2017.

Steve Rhode. GOP Proposed Change to Higher Education Act to Gut Consumers and Debt Relief Companies. Get Out of Debt Guy, December 5, 2017.

GOP proposal to abolish student-loan forgiveness is Looney Tunes

Representative Virginia Foxx (R-NC) looks like a kindly grandmother, and maybe she is. But she is also the Chair of the House Education Committee, and her committee's proposal for revising the Higher Education Act makes me wonder if she isn't a cartoon character from Looney Tunes.

Others have commented on the House Committee's proposal--Steve Rhode, Danielle Douglas-Gabriel, and a team of Wall Street Journal writers--all insightful and trenchant. I will limit my observations to one component of the Republican proposal, which is nuts.

The House Education Committee proposes to eliminate all student-loan forgiveness in the law to reauthorize the Higher Education Act.  That's right--all student-loan forgiveness.

Currently, student borrowers can enroll in income-driven repayment plans that last from 20 to 25 years. At the end of that term, the remaining balance on a borrower's student loan is forgiven.

The Foxx committee's proposal eliminate those plans and replaces them with a plan that allows borrowers to make income-adjusted payments on their student loans until they they are paid off. Interest will accrue on these loans during the first ten years of repayment, when the loan balance is capped. But borrowers will continue making income-based payments on their loans until they are paid off or they die.

In short, if the GOP proposal becomes law in its present form (which seems unlikely), student debtors will have only two repayment options: the standard ten-year plan or an income-driven plan that doesn't end until the loans are repaid--which for most people will be never.

Representative Foxx's committee labeled this lunatic proposal the PROSPER ACT (Promoting Real Opportunity, Success and Prosperity Through Education Reform), but a more accurate title would be the Slavery Reinstatement Act.

Let's look at the facts. Last year, 1.1 million student borrowers defaulted on their loans at the average rate of 3,000 per day. And that's just for 2016.

How many Americans defaulted on their loans in past years and never got them reinstated?  The Consumer Financial Protection Bureau reported that figure in its 2013 report, and it was 6.5 million.

Nearly six million more are in income-driven repayment plans, and several million borrowers are not making loan payments because they obtained economic hardship deferments. I estimate that from 18 to 20 million Americans are not paying down their student loans because they defaulted, obtained deferments or signed up for income-driven plans that only require them to make token repayments. Most of these people will never pay of their student loans.

And what's the GOP Education Committee's response to this catastrophe? An income-based repayment plan that never ends.

GOP advocates may argue that most borrowers in the proposed income-driven repayment plan will eventually pay off their loans. But that notion is delusional. Borrowers who can't pay off their student loans in ten years will likely never pay them off--no matter how long they make income-based payments.

The student-loan program in its present form is an unmitigated disaster. But Representative Foxx and her GOP cronies on the House Education Committee have done something I thought no one could do. They have come up with a plan that makes this disaster even worse.

Rep. Virginia Foxx (R-NC). We really stuck it to 'em this time, Paul.

References

Douglas Belkin, Josh Mitchell, & Melissa Korn. House GOP to Propose Sweeping Changes to Higher Education. Wall Street Journal, November 29, 2017.

Rohit Chopra. A Closer Look at the Trillion. Consumer Financial Protection Bureau, August 5, 2013.

Danielle Douglas-Gabriel. GOP higher ed plan would end student loan forgiveness in repayment program, overhaul federal financial aid. Washington Post, December 1, 2017.

Steve Rhode. GOP Proposed Change to Higher Education Act to Gut Consumers and Debt Relief Companies. Get Out of Debt Guy, December 5, 2017.

Senators Elizabeth Warren (D-MA) and John Kennedy (R-LA): Can these two lead a bipartisan effort for student-loan reform?

Congress is more divided along partisan lines than any time since Representative Preston Brooks caned Senator Charles Sumner on the floor of the Senate back in 1856.  No major legislation gets passed with bipartisan support, and Republicans and Democrats seem content to be obstructionists rather than try to do something useful.

Is there no public issue on which Republicans and Democrats can agree? I think there is.

More than 40 million Americans have outstanding student loans, and at least 20 million  can't pay them back.  Last year, 1.1 million college borrowers defaulted on their loans--that's an average rate of 3,000 people a day. People who borrowed to attend for-profit colleges have suffered the most. Nearly half of these hapless souls default within five years of beginning repayment. Among African Americans, the pain is even worse. Three fourths of African Americans who took out student loans to attend for-profit schools eventually default.

Big problems require big solutions. As I have said before, the student loan crisis will not abate until for-profit colleges are kicked out of the federal student-loan program and distressed student debtors are allowed to discharge their student loans in bankruptcy.  But these two fixes are politically impossible right now.

But Congress could approve smaller measures of relief  if our elected representatives would just work together. For example:

• Congress could pass a law barring the federal government from garnishing Social Security checks of elderly student-loan defaulters. Senators Elizabeth Warren and Claire McCaskill introduced a bill along these lines but it has gotten nowhere.

• All student loans should be refinanced at current, low interest rates, something Hillary Clinton endorsed during the 2016 presidential campaign. 

• Our tax code needs to be amended to make clear that people who complete income-based repayment programs are not taxed when the remaining balance on their loans is forgiven. Representatives Mark Pocan and Frederica Wilson (both Democrats) introduced a bill to accomplish this reform but it has not become law. 

Who in Congress--Republican or Democrat--could disagree with these reforms? Even our most Neanderthal representatives could not look their constituents in the eye if they voted against any of these proposals.

If this is so, how can Congress kick-start bipartisan student-loan relief?  Here is a feasible scenario: Senator John Kennedy, a Republican from Louisiana, could contact Senators Warren and McCaskill and offer to co-sponsor their bill to stop the government from garnishing Social Security checks of elderly student-loan defaulters.

Why do I nominate Senator Kennedy for this bipartisan overture? Because Kennedy has shown a commendable reluctance to follow the Republican party line on important policy issues. For example, he was one of only two Senate Republicans to vote against a law that allows financial institutions to force their customers to sign mandatory arbitration agreements.

If Senator Kennedy were to come on board for the Warren-McCaskill bill, other Republican Senators might also signal their support.  Once this bill received some publicity, I predict the Warren-McCaskill-Kennedy bill would be adopted into law without a single dissenting vote in either the House or the Senate.

After this small victory, Republicans and Democrats could join together to provide further relief to suffering college borrowers: lowering interest rates on current student loans, imposing restraints on the government's rapacious debt collectors, revising the tax laws so that participants in income-driven repayment plans aren't taxed on forgiven loan balances.

All these reforms are feasible; indeed they might all pass through Congress with little or no opposition. Some broad-minded legislator just needs to reach across the aisle to get the ball rolling.  Senator Kennedy,  please make that call to Senator Warren and assure her you will support the Warren-McCaskill bill.

Representative Preston Brooks canes Senator Charles Sumner, May 22, 1856

References

Danielle Douglas-Gabriel. The disturbing trend of people losing Social Security benefits to student debt. Washington Post, December 20, 2016.

James Gill. John Kennedy is quickly becoming 'Senator No' when facing Donald Trump.
Baton Rouge Advocate, December 3, 2017.

Anne Gearan and Abby Phillip. Clinton to propose 3-month hiatus for repayment of  student loans. Washington Post, July 5, 2016.

Melanie Lockert. Surprise! Here's When You'll Owe Taxes on Student Loan Forgiveness (and When You Won't). studentloanhero.com (blog), February 27, 2017.

The Wrong Move on Student Loans. New York Times, April 6, 2017.

The Rooster Bar: Why Won't the ABA Shut Down Bottom-Tier For-Profit Law Schools ?

John Grisham's latest novel, titled The Rooster Bar, tells the story of Mark Frazier, a law student who attends a for-profit institution called Foggy Bottom Law School. By the time he is a senior, Mark has accumulated $195,000 in student loans and concludes he made a bad investment.

FBLS's bar pass rates are embarrassing low, and few of its graduates obtains jobs that justify their enormous student-loan debt. By the time FBLS students are seniors, their morale has plummeted, and some even spare verbally with their professors in class. In fact:

To varying degrees, almost everyone Mark knew believed that (1) FBLS was a sub-par law school that (2) made too many promises, and (3) charged too much money, and (4) encouraged too much debt while (5) admitting a lot of mediocre students who really had no business in law school, and (6) were either not properly prepared for the bar exam or (7) to dumb to pass it.

Foggy Bottom Law School is a fictional for-profit law school, but it closely resembles the real ones. Infilaw, owned by an equity group out of Chicago, runs three for profit law schools; and all three are in trouble. Charlotte School of Law closed in August after it lost its license to operate. Arizona Summit Law School was placed on probation last March by the American Bar Association, and the ABA warned Florida Coastal School of Law in October that it was "significantly out of compliance" with the ABA's accreditation standards.

Not surprisingly, Infilaw wants to sell its two law schools that are still open. But why did the American Bar Association ever accredit these schools in the first place? The answer is illusive, but here is a key fact. In the 1995, when Bill Clinton was president, the U.S. Justice Department sued the ABA, claiming it was in violation of federal antitrust laws.  The suit was settled in 1996, and the ABA agreed not to deny accreditation to a law school solely because it was a for-profit entity.

That same year, a law professor named Don Lively started Florida Coastal Law School in Jacksonville, Florida. In 2004, Lively sold out to Sterling Partners, a Chicago-based private-equity firm. According to the Wall Street Journal, Sterling created Infilaw as a holding company for the law schools and lined up additional investors, allegedly including Harvard University's endowment fund.

By almost any measure, all three Infilaw law schools are sub-par institutions. If you want to see the data, visit Law School Transparency's web site.  All three schools charge high tuition rates similar to reputable law schools like Harvard and Yale. Yet these three schools have low bar pass rates and very few graduates find law jobs that justify the enormous student-loan debt they accumulated to get their law degrees.

The for-profit advocates say schools like the Infilaw trio offer opportunities to minority students who are often rejected by reputable schools because of mediocre undergraduate GPAs and low LSAT scores. But the top-tier schools bend over backward to attract minority students and have plenty of scholarship money to recruit them. Too often the people who enroll at for-profit law schools are not academically prepared to study law and often fail their bar exams.

As has been often reported in the media, the job market for recent law graduates is terrible; and the bottom-tier law schools are producing lawyers who run a high risk of failing the bar while facing dismal job prospects.

In short, the integrity of legal education has been seriously undermined by a herd of poor-quality law schools, including the Infilaw schools and several public law schools as well.  Apparently, even Harvard University contributed to this train wreck, although Harvard wouldn't confirm that its endowment fund invested in Infilaw's schools.

The American Bar Association is primarily responsible for this disaster, but is it taking steps to shut down the bottom-feeding law schools? No it is not. In fact, the ABA is considering a measure that would allow law schools to make LSAT scores an optional criteria for law school admission. The purpose of that action, perhaps, is to make it harder to measure just how low some law schools' admission standards really are.

References

John Grisham. The Rooster Bar. New York: Doubleday, 2017.

Andrew Kreighbaum. ABA Backs Testing Choices on law Admissions, Inside Higher Ed, November 7, 2017.

Andrew Kreighbaum. Report: For-Profit Looking to Sell 2 Law Schools. Inside Higher Ed, November 29, 2017.

Josh Mitchell. The Rise and Fall of a Law School Empire Fueled by Student Loans. Wall Street Journal, November 24, 2017.

Law School Transparency web site.

Angela Morris. GRE or LSAT? ABA Council's Latest Move Could Nix Tests Altogether. Law.com, November 3, 2017.

United States v. American Bar Association, 934 F. Supp. 435 (D.D.C. 1996).

 

Wells Fargo Facing Penalties Over Ignoring Student Loan Included in Bankruptcy. Essay by Steve Rhode

By Steve Rhode.  November 27, 2017

One of our very own student loan attorneys, Austin Smith, recently scored an important victory on a Wells Fargo student loan.

Austin said, “I confess when we filed this case, I was hoping Wells Fargo would quickly see that we were right, acknowledge the mistake, and fix it. And naively, I thought they might be willing to sit down and fix the problem for all their customers. Everybody makes mistakes, and this could have been a real opportunity for Wells to prove that they’ve changed their business culture. But now I fear that Wells Fargo has no intention of changing its culture or business practices despite their public protestations to the contrary over the last year. They have dug in their heels on this issue, and seem intent to keep doing what they’re doing, which is plainly a violation of the bankruptcy laws.”

In 2007 Ryan, the consumer, filed for bankruptcy. Following the bankruptcy Wells Fargo Bank sued Ryan and obtained a state court judgment to collect on the debt. Ryan had attended Capella University, a for-profit school.

Attorney Austin Smith jumped into the fray as part of a team and last year he reopened the case and sued that the debt had in fact been discharged and sought punitive damages for discharge violations.

At issue here are points raised previously in this article about private student loans are not all protected in bankruptcy.

In this case, Educational Financial Services, a division of Wells Fargo Bank, tried to make the argument the loan was not actually discharged in the 2007 bankruptcy.

When Wells Fargo sued Ryan in State Court to collect on the student loan debt included in Ryan’s bankruptcy they made no mention of Ryan’s previous bankruptcy and discharge. The consumer felt subsequently pressured into entering a consent judgment over the debt in 2008 and made monthly payments of $150 on the loan for the next seven years.

Finally fed up Ryan found legal help to reopen his previous bankruptcy case to commence an adversary proceeding and have this matter dealt with once and for all.

The valid point raised by Ryan, the Plaintiff, was “that the loans from Wells Fargo were discharged by operation of law on November 29, 2007, because the loans were not a student debt protected by any subsection of Section 523(a)(8).” More on this technical issue can be found here.

The Judge ruled that even though Ryan had previously repaid the debt through the State Court judgment he was not prevented from reopening his bankruptcy and filing an adversary proceeding to rule on the discharge of his non-protected private student loan debt. The issue at hand was if Ryan’s discharge had been violated because the loans were not student loans under Section 523(a)(8).

And while the Court said “Section 523(a)(8) is self-executing, a student loan debt is non-dischargeable absent a determination.” The Court also said, “However, the self-executing nature of Section 523(a)(8) is premised on the debt actually being one for a student loan, a determination that was not previously made by this Court or the State Court which had concurrent jurisdiction to do so.” – Source

This is why it is so important for anyone who includes student loans in a bankruptcy to pursue an adversary proceeding to get a ruling on the dischargeability of the loans. This key step is one that often gets overlooked.

Judge John Gregg ruled Wells Fargo could not easily have the Plaintiff’s complaint dismissed and the issue would have to proceed. As you can imagine, Wells Fargo has appealed the Judge’s ruling and hopes to get a different answer on appeal. – Source

In the appeal Wells Fargo raises the point Ryan’s loans should not be discharged because “he obtained funds from Wells Fargo and the government in excess of the cost of attendance.” But shouldn’t that be the job of Wells Fargo to determine? Because if private student loans are extended for more than the cost of attendance, all or part of the loans can be discharged thru bankruptcy.

Wells Fargo is most likely in a hurry to get this matter resolved in their favor because if they are found to have pursued the alleged discharged private student loan debt they could be facing a precedent and financial consequences.

Ryan’s amended complaint they are trying to get tossed out summarizes the issue at the heart of this case. It says, “Not all student loans are presumptively non-dischargeable in bankruptcy. In fact, the term “student loan” appears nowhere in section 523(a)(8). Instead, section 523(a)(8) makes certain educational debts presumptively non-dischargeable, including government issued educational loans, defaulted conditional government grants and scholarships, certain loans from non-profit institutions, and private education loans that are qualified education loans under the tax code. Section 523(a)(8) does not except from discharge a host of other types of traditional private, credit-based loans couched as “student loans” by for-profit lenders, including loans for K-12 programs, loans made to students at unaccredited trade schools, loans made for alcohol and drug rehab, and loans made in excess of the “cost of attendance.” This is reinforced by the plain language of the discharge order, which states that debts for “most student loans” are non-dischargeable. If debts for “all student loans” are presumptively non-dischargeable, then more than 10 million discharge orders have been issued with an erroneous legal conclusion since 2005.” – Source

The complaint also states, “Given Wells Fargo’s actual and constructive knowledge of the timing of the Plaintiff’s loans, the “cost of attendance” at Capella University, and the nature of the Loans it extended to the Plaintiff, Wells Fargo knew or should have known that the Loans were discharged in the Plaintiff’s bankruptcy.”

This is an interesting case and I can’t wait to get the final ruling after a lot more expensive court time. We’ll have to keep our eye on this one.

*****

Steve's essay was originally posted on The Get Out of Debt Guy web site.

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. 

Representative Alma Adams urges limited loan forgiveness for Charlotte Law School Students: Adams' plea does not go far enough

Representative Alma Adams, Democratic congresswoman from North Carolina, wrote a letter to Secretary of Education Betsy DeVos, urging DeVos to forgive student loans held by students who attended Charlotte School of Law (CSL) from December 2016 until the school was shut down last August.

Representatives G.K. Butterfield and David Price, also from North Carolina, joined Adams in the letter.  The three laid out a seething indictment of CSL, which has been in trouble for a couple of years. The American Bar Association put CSL on probation in October 2016 for misrepresenting the law school's accreditation status and bar passage rates. And the Department of Education yanked the school's eligibility for federal student aid a few months later. Finally, in August 2017, the North Carolina Board of Governors pulled CSL's license to operate--dealing a death blow to the school.

 Without question, CSL was a train wreck. The troubled school had high dropout rates and abominable bar passage rates. Only about a third (35 percent) of CSL graduates passed the North Carolina bar exam in February 2016, compared to 51 percent statewide.  According to Adams and her colleagues, this passage rate would have been even lower if the law school had not paid CSL students not to take the exam. Moreover, the North Carolina legislators alleged, CSL students racked up an average of $200,000 in student-loan debt. Those who were enrolled when the school closed have little hope of having their credits accepted at another law school.

Under current Department of Education regulations, students are eligible for student-loan forgiveness if they were enrolled at a school at the time it closed or up to 120 days prior to closure. The regulations give the Education Secretary the authority to extend the 120-day enrollment requirement if circumstances warrant; and Adams and her colleagues asked DeVos to grant loan forgiveness to all students were enrolled at CSL from December 2016 until the day it closed.

Representatives Adams, Butterfield and Price are to be commended for seeking relief for recent CSL students, but their petition does not go far enough. In my view, every student who attended CSL from the day it opened until the day it closed should be granted student-loan forgiveness--without exception.

Before it shut down, CSL was one of the worst law schools in the United States by almost any measure. Based on metrics developed by Law School Transparency, a public interest law-school monitoring organization, 50 percent of CSL's 2014 entering class ran an "extreme" risk of failing the bar exam, and additional 25 percent ran a "very high" risk of failing the exam.

And it fact, less than half of CSL's 2015 graduating class passed the bar. Moreover, less than 25 percent of its 2016 graduates obtained full-time law jobs; and the law school's underemployment rate for that class was 58.8 percent.

Without question, a lot of former CSL students believe they were defrauded by their law school. According to an Inside Higher Ed story, more than 500 former students filed "borrower defense" claims based on allegations of fraud, and several class-action suits have been filed against the school.

Based on CSL's abysmal record, the only fair thing DeVos can do is wipe out all student-loan debt for every individual who took out student loans to attend CSL. And then DOE needs to take a close look at the other for-profit law schools that are still operating. All law schools with bar pass rates below 50 percent should be closed.

Rep. Alma Adams (in hat). Photo credit: Scott Applewhite AP

References

William Douglas. N.C. Democrats urge Charlotte Law School student loan forgiveness.  The News & Observer, November 6, 2017.

Andrew Kreighbaum, Department Lays Out of Options for Charlotte Students. Inside Higher ED, August 25, 2017.

Andrew Kreighbaum, The Slow Death of a For-Profit Law School. Inside Higher Ed, August 16, 2017.

UC Berkeley students on food stamps: Are college students really suffering from "food insecurity"?

According to the media, more and more college students are going hungry.  Many universities are organizing food pantries to feed students suffering from "food insecurity."

The San Francisco Chronicle reported recently that more than 500 UC Berkeley students have applied for food stamps so far this year--up from only 111 during all of 2016. Thousands of UC Berkeley students rely on the university's food pantry; 1,549 students obtained donated food there during the month of September alone.

What's going on? Today, the typical college graduate is burdened with $37,000 in student loans. How can students borrow so much money to finance their studies and yet go hungry?

Here are my reflections on food insecurity at American colleges.

First, college students have struggled to feed themselves for more than a hundred years. Dorothy Day, for example, the founder of the Catholic social justice movement, wrote of going hungry during her college days at the University of Illinois back in 1914-1916. "At night," she wrote, "I could study in the university library. When I went back to my room I had to go to bed immediately, and when I was cold and hungry it was hard to get up in the morning."

I don't think Dorothy Day's college experience was atypical for her time. Even when I was in college more than 40 years ago, students heated Campbell's soup in their dorm-room popcorn poppers or made grilled cheese sandwiches by wrapping them in tinfoil and heating them with an electric iron.  And ramen noodles were a staple of many college students' diets.

As a college freshman, I recall eating at Griff's Drive-In with my dormmates on Sunday evenings, when Griff's sold hamburgers for ten cents each. We would pool our resources to buy 30 puny burgers (each garnished with exactly one pickle chip), and we would all eat about four.

Today, however, we have a new term--food insecurity--to describe students who live on limited budgets. Being food insecure doesn't mean students are starving; it just means they have too little to eat from time to time and are often forced to purchase substandard food (like Griff's hamburgers).

For example, the Chronicle featured one food insecure student who eats a typical lunch of "oatmeal, raspberries, chia seeds, flaxseeds, chocolate chips and coconut shavings, plus a spinach salad."  As Joseph Conrad might have put it, "The horror! The horror!"

And of course, college leaders would like the media to focus on their students' so-called "food insecurity" rather than the long-term suffering their graduates will experience when they try to pay off their student loans.  Maybe that's why Janet Napolitano, president of UC, pledged $302,000 to expand food pantries at UC campuses and help students sign up for food stamps.

Janet herself is not missing any meals. Her UC compensation was $3.7 million in 2014-2015, which makes UC's $302,000 contribution for food assistance seem puny in comparison.

 And the UC chancellors are doing OK as well. According to a 2016 newspaper report, nine UC chancellors received a total of $1.5 million in outside income for serving on various corporate boards during 2012-2014--that's in addition to their munificent salaries.

UC professors aren't worried about their next meal either. They draw handsome salaries, have top-notch health insurance, and expect to retire with generous pensions.

The reality is this. College students are not suffering unduly from food insecurity, even though some may be forced to eat spinach salads for lunch. Their suffering is in the future, when they graduate with massive student loan debt they can't pay back and can't discharge in bankruptcy. In fact, many college graduates will be eating ramen noodles for a long, long time.

References

Nanette Asimov. Many college students going hungry, need donated food groceries and food stamps. San Francisco Chronicle, November 23, 217.

Diana Lambert and Alexei Koseff. UC Davis chancellor apologizes, will donate textbook stock to student scholarships. Sacramento Bee, March 4, 2016. Accessible at http://www.sacbee.com/news/investigations/the-public-eye/article64041327.htm

Patrick McGreevy. University of California administration is paying excessive salaries and mishandling funds, state audit says. Los Angeles Times, April 25, 2017.