Obama expands income-repayment plans: Sharecropper Nation

The Obama administration announced yesterday that it wants to enroll 2 million more people in income-based repayment plans (IBRPs) within the next year.

I'm sure President Obama will reach that goal.  About 4.8 million people are in IBRPs now, up from just 3.9 million last summer.  It is virtually certain that 7 million people will be 20-year or 25-year repayment plans by the end of 2017.

But this is insane! Putting people in long-term income-based repayment plans basically makes them sharecroppers, forcing them to pay a percentage of their income to the government over the majority of their working lives.

Many people in IBRPs didn't even complete the education programs that dragged them into debt. How can that be good for our economy--to have millions of people making monthly payments  for two decades or more for educational experiences that are worthless to them?

And let's not forget that most people don't sign up for these long-term repayment plans immediately after they finish their studies. Generally, they initially try to make loan payments under the standard 10-year repayment plan. It is only when they fall behind on their payments or default that they sign up for an IBRP.

Brenda Butler, who recently lost a court battle to discharge her student loans in bankruptcy, is a case in point. Butler graduated from Chapman University in 1995 and tried to keep current on her student loans for almost 20 years. Eventually, she signed up for a 25-year repayment plan and filed for bankruptcy.  Although the judge ruled that Butler had acted in good faith, she denied Butler a discharge.  Butler is now in a 25-year repayment plan that will not be completed until 2037--42 years after Butler graduated from college!

President Obama and Secretary of Education John King tout IBRPs as beneficial to college-loan borrowers. As Secretary King put it in a conference call to reporters, "The goal is to get all of the folks who would benefit from income-based repayment into one of the plans that make sense for them."

But of course, these long-term repayment plans are nothing more than a cynical scheme by our government to sweep the student-loan catastrophe under the rug. Virtually everyone in these plans is making payments that are so low that the payments don't cover accruing interest. In other words, most people in these plans will be seeing their loan balances go up, not down, as the years go by.

In short, most people in IBRPs are not paying down their student loans at all; they're basically just paying a 20-year penalty for making poor educational choices when they were young. For all practical purposes, people in IBRPs--soon to be 7 million people--have defaulted on their loans; and we can add that 7 million to the 10 million who officially defaulted or are delinquent in their loan payments.

So if you borrowed too much money to go to college and didn't find a good job, this is your likely future: You will eventually join an IRBP and become a sharecropper.

Sharecroppers

References

Josh Mitchell. White House to Push Student Borrowers to Get Into Debt-Relief Plans. Wall Street Journal, Apri 28, 2016.  Accessible at http://www.wsj.com/articles/white-house-to-pushes-student-borrowers-to-get-into-debt-relief-plans-1461816062

Michael Stratford. Obama Admin Sets New Income-Based Repayment Goal. Inside Higher Ed, April 28, 2016. https://www.insidehighered.com/quicktakes/2016/04/28/obama-admin-sets-new-income-based-repayment-goal?utm_source=Inside+Higher+Ed&utm_campaign=c63d1912bd-DNU20160428&utm_medium=email&utm_term=0_1fcbc04421-c63d1912bd-198565653

U.S. Department of Education. Income-Driven Repayment plan Enrollment Jumps, Delinquency Rates Drop in New Student Loan Data, August 20, 2015. Accessible at http://www.ed.gov/news/press-releases/income-driven-repayment-plan-enrollment-jumps-delinquency-rates-drop-new-student-loan-data

Why Student Debtors Go Unrescued. New York Times, October 7, 2015. Accessible at http://www.nytimes.com/2015/10/07/opinion/why-student-debtors-go-unrescued.html?_r=0

A Bernie Sanders Supporter Who Will Vote For Donald Trump: Cry Havoc!

You ask me if I'll get along.

I guess I will, someway.

I don't like it but I guess things happen that way.

Guess Things Happen That Way

Johnny Cash

I am a die hard Bernie Sanders fan. As I said in an earlier blog, I will support him until the last dog dies, right through the California primary election.  I have harshly criticized Donald Trump on my Catholic blog site because I think Donald's stand on immigration is contrary to Catholic teaching. And I'm not taking my anti-Trump posts down.

But here's a message for Hillary. If I am faced with a choice between Donald Trump and Crooked Hillary, I'm voting for the Donster.

Hillary claims to be a progressive but her brand of progressivism allows her to collect a quarter million dollars a pop making secret speeches to corporate oligarchs. 

Hillary's brand of progressivism is Secretary of the Treasury Jacob Lew's brand of progressivism. Lew took more than two thirds of a million dollars as an exit bonus when he left New York University, the most venal and expensive higher education institution in America. But he's a progressive because he wants Harriet Tubman's face on the dollar bills he lines his pockets with.

Hillary's brand of progressivism is Arne Duncan's brand of progressivism. He bleated repeatedly about the student-loan crisis but did nothing to rein in the for-profit college industry while he was Secretary of Education. In fact, at the direction of his boss, Duncan cynically constructed a modern-day form of serfdom whereby millions of distressed student-loan debtors pay a percentage of their income to the federal government for 20 and even 25 years.  And when he finished picking his nose at the Department of Education, Duncan toddled off to the Brookings Institution, where he will probably write policy papers defending the status quo in higher education and rake in money sitting on corporate boards.

Hillary's brand of progressivism is the New York Times' brand of progressivism, which tells the people of North Carolina how to go to the bathroom while it organizes Luxury Conferences and peddles obscenely expensive New York real estate in its advertising pages.

Hillary's brand of progressivism allows her to think Americans are so stupid that she can mock Donald Trump for flying in a private jet, while she flies in a private jet that is almost identical.

Yes, and Hillary's brand of progressivism is Barack Obama's brand of progressivism, which allowed Barack to  cozy up to Wall Street for eight years while the death rate for working-class white people went up--driven by suicide, liver disease, and drug abuse.

In short, I reject Hillary and all her empty promises.  I would much prefer to vote for Bernie Sanders in November, but if I must choose between Hillary Clinton and Donald Trump, I'm pulling the lever for Trump. As Johnny Cash put it, "I don't like it, but I guess things happen that way."

Will Donald Trump bring chaos to the United States? Perhaps. But I think Hillary and the political elites are going to find that millions of Americans would rather risk chaos than be manipulated by an old political hack and her Ivy League cronies for the next four years.  

Indeed, Shakespeare expresses my sentiment exactly: "Cry 'Havoc!"

Jacob Lew, Secretary of the Treasury: I want my cash in small bills, preferably with Harriet Tubman's picture on it

References

Andrew J. Chirlin. Why Are White Death Rates Rising? New York Times, February 22, 2016. Accessible at http://www.nytimes.com/2016/02/22/opinion/why-are-white-death-rates-rising.html

Danny Hakim. Obama's Treasury Nominee Got Unusual Exit Bonus on Leaving N.Y.U. New York Times, February 25, 2013. Accessible at  http://www.nytimes.com/2013/02/26/nyregion/lew-treasury-nominee-got-exit-bonus-from-nyu.html?_r=0

Paul Krugman ranks Hillary as best presidential candidate to handle an economic crisis: Why am I not surprised that Krugman ignored Bernie?

In 1928, Myles Connolly (1897-1964), wrote a brilliant Catholic novella entitled Mr. Blue. The title character is a sort of modern-day St. Francis who delivers a series of zingers about secular American culture. Books, Mr. Blue observes at one point in the narrative, are for people who have already made up their minds or have no minds to make up.

We might say much the same thing about the New York Times.  Day after day it dishes out its so-called "progressive" drivel, lecturing the whole world on how to behave--from the North Carolina legislature to Vladimir Putin.  Without a doubt, the Times is the publication of choice for people who have already made up their minds or are totally incapable of doing their own thinking.

So I was not surprised to read Paul Krugman's recent op ed essay in the Times arguing that Hillary Clinton would be the best President to deal with a major economic crisis.  Although he purported to make logical arguments, Krugman was totally dismissive of Donald Trump and Ted Cruz. "The Donald doesn't know much," Krugman sneered contemptuously, "but Ted Cruz knows a lot that isn't so" (stealing a line from Mark Twain).

Krugman essentially writes the same essay over and over, for which the Times compensates him handsomely. Day after day, he assures his idiot readers that Barack Obama does everything right and that massive deficit spending is the smartest way to manage the American economy.  And now of course he lavishes the same fawning praise on Hillary Clinton that he slathered on Obama for the last eight years.

Normally, I wouldn't comment on Krugman's screeds, but his latest piece on Hillary deserves a response.  First of all, although Krugman expressed utter contempt for Donald Trump and Ted Cruz in his essay about presidential qualifications, he didn't even mention Bernie Sanders, the only presidential candidate who has articulated a coherent and principled economic policy.

I feel sure Krugman's omission was intentional. Ignoring Bernie was Krugman's insinuating way of suggesting that Bernie is such a minor political figure that he doesn't even deserve comment. After all, Krugman doesn't dare offend Hillary in the slightest way by giving even an iota of credibility to her dogged opponent.

Second, Krugman basically acknowledged that a major economic crisis is coming to the United States. But look at where he predicts it will come from. "China has a severely unbalanced economy," he tells us, and there's also a potential for an oil crisis.

Basically, Krugman is already laying the groundwork for putting the blame for the next economic crisis on forces outside President Obama's control.

What sophistry! Americans have some pretty good ideas about where the next economic storm is coming from, and they didn't need a Nobel Prize in Economics to figure it out. Here are some things to worry about that Krugman did not bother to mention:

• Radical Islam. Jihadists from the Middle East are brutal nihilists who will do anything to destroy what we once charmingly called Western Civilization. If they get the capacity to deliver a cyber attack on our global financial network, they will certainly launch one. If they can figure out a way to inflict massive casualties on American civilians, they will certainly do it. 
• The collapse of the European Union under the relentless tide of Islamic refugees, which could trigger a fascist backlash as Europeans see the erosion of their ancient cultures.
• A global financial crisis caused by chicanery and greed in the international banking industry.
• War between Israel and Iran, which will soon be a nuclear power.
• The destruction of the American middle class as American working people are sacrificed to satiate the greed of  the global oligarchs and young people are suffocated by student-loan debt they acquired to obtain worthless undergraduate and professional degrees.

Krugman did not mention any of these possible scenarios--scenarios that keep Americans up at night-- because a catastrophe from any of these sources could be fairly blamed at least partly on President Obama--the liberal elite's Sun King. 

So keep reading Paul Krugman if you believe the political, academic and media elites know what's best for us or if you are so intellectually lazy that you want someone else to do your thinking. After all, that's exactly what the Times and its columnists are there for--to do your thinking for you.

Paul Krugman: Bernie who?

References

Paul Krugman. The 8 A.M. Call. New York Times, April 25, 2016.  Accessible at http://www.nytimes.com/2016/04/25/opinion/the-8-am-call.html?_r=0

Cokie & Steve Roberts urge Bernie to take a fall for Hillary: Old croakers with outmoded ideas about what is good for America

Cokie and Steve Roberts published an op ed essay today urging Bernie Sanders to back off on his presidential campaign so he won't hurt Hillary Clinton's chances of beating Donald Trump in November.

"If you want to stay in the race to propound your policy ideas, fine," the Roberts couple counseled Bernie. "But don't keep undercutting the one candidate who can save the party--and the country--from a President Trump."

I read the Roberts' op ed essay in the Baton Rouge Advocate, where it appeared under a photo of Cokie and Steve looking like they are in their 40s. But Cokie is 72 years old,and Steve is 73! Frankly, their ideas are as outmoded as their media photos.

In essence, the Roberts are arguing that Bernie should either get out of the presidential race or tone down his energy so that Hillary will be assured of beating Donald Trump.  Indeed, they are pointedly urging him to take fall for Hillary in order to save the Democratic Party.

But most Bernie supporters don't want to save the Democratic Party if it means propping up a corrupt gang of cronies and insiders who are all beholden to the corporate interests. I for one don't give a damn about the Democratic Party. I registered as a Democrat for the first time in December for no other reason than to vote for Bernie in the Louisiana Democratic primary.

The Roberts also urge Bernie to get out of the race or take a powder so that Hillary will be in a stronger position to beat Donald Trump in the fall. But many Bernie supporters don't see Hillary as an improvement over Trump. The Roberts themselves admit in their op ed essay that only 19 percent of voters think Hillary is honest. Even among Democrats, only 40 percent of Democratic voters trust her.

Donald Trump has big negatives for sure. But his negatives are going down in the polls, and Hillary's are going up. I predict by September, about the same percentage of Americans will find both candidates odious.

Cokie and Steve don't realize that the United States has changed. Establishment politics is totally unacceptable to a great many Americans--particularly young Americans. If it is a choice between the Donster and Crooked Hillary, millions of fair-minded progressive American voters will have a great deal of trouble deciding which candidate is the lesser of two evils.

Cokie and Steve want Bernie to take a fall for Hillary

References

Cokie & Steve Roberts. For party's sake, time for Sanders to back off. Baton Rouge Advocate, April 25, 2016, p. 5B. Online version of essay accessible at http://www.uexpress.com/cokie-and-steven-roberts/2016/4/20/time-for-bernie-to-back-off

The student-loan crisis and Presidential politics: Bernie needs to up his game on student loans to attract young votes

Bernie is very popular with young voters. He out polled Hillary by almost 4 to 1 among the twenty-somethings in the New York Democratic primary, and he's done even better with young voters in other primaries. Young people sense almost instinctively that Hillary is just a political hack, and that Bernie has ideas that might really make their lives better.

In fact, Bernie is the only presidential candidate to offer a realistic plan to address the student-loan crisis, which is crushing millions of Americans. Bernie's plan for a free college education at a public college is eminently sensible, and cheaper than what we are doing now, which is to loan $165 billion a year to college students and only get about half of it back.

In contrast, Hillary's student-loan reform plan is to pump an additional $30 billion a year into the nation's bloated and corrupt higher education industry.  That's Hillary's solution to every problem--let's shovel some money at it and make sure the insiders get most of the loot.

And let's not forget that Hillary tweeted young voters last summer, asking them; "How does your student loan debt make you feel? Tell us in 3 emojis or less." Let's see if I can find three profane emojis to send her.

And Cruz is no friend to student-loan debtors. He represented the lender in the famous Espinoza case, in which a bankrupt baggage handler argued that he should only be required to pay back the principal on his debt and should be relieved of the accrued interest.

Espinoza's argument was very reasonable; after all it is the accrued interest and penalties that are crushing most distressed student-loan borrowers--not the amount they actually borrowed. But Cruz's client prevailed before the Supreme Court--a 9 to 0 decision against poor Mr. Espinoza.

So if you are one of 20 million overwhelmed student-loan debtors, Bernie is the only game in town.  Unfortunately, you and I know that Bernie's free-college plan will never be enacted, because too many political interests benefit from the status quo.

But there are other student-loan reforms Bernie could propose that are less ambitious than his free-college plan but which would resonate with young voters.  Here are a few ideas for him:

1) Let's force the for-profit colleges to stop making their students sign arbitration agreements that cut off students' right to sue for fraud.  DOE Secretary John B. King favors regulations to stop colleges from putting arbitration clauses in their student contracts. Bernie could reasonably support King's efforts.

2) The government could require all loan servicers--including Educational Credit Management Corporation and Navient--to disclose the compensation packets for their senior executives and their debt collectors and to disclose on a public web site the amount they pay their lobbyists, the attorneys who hound student-loan debtors, and the recipients of all their campaign contributions.

3) The government could stop garnish Social Security checks of elderly college-loan borrowers who defaulted on their loans. This is a logical extension of the Obama administration's decision to forgive loans of disabled borrowers.

I think if Bernie would add a just couple of additional features to his plan to solve the student-loan crisis, he would see an even bigger surge of support among young voters--maybe enough of a surge to assure a victory in California.

And of course my ideas for appealing to young voters are open to any of the Presidential candidates: Hillary, Cruz, Kasich and Trump could take these ideas and run with them. But Bernie is the only presidential candidate who shows any interest in solving the student -loan crisis.

Ted Cruz: No friend of student-loan debtors

How does Hillary's emoji on student loans make you feel?

References

United Student Aid Funds, Inc. v. Espinosa, 130 S.Ct. 1367 (2010).

Arbitration clauses in student-loan documents:the sad case of Sierra Roach v. Navient Solutions, Inc.

In 2015, Sierra Roach sued Navient Solutions, Inc. for violations of the Telephone Consumer Protection Act and the Fair Credit Reporting Act.  Navient had been pursuing Roach to collect on five student loans totaling almost $69,000--money that had been disbursed to Bowie State University, not Roach.

Roach disputed the debt and claimed she was being repeatedly called by debt collectors. She also claimed that credit reporting bureaus were  issuing inaccurate credit reports about her.

Navient filed a motion asking a federal court to stay Roach's suit and compel her to arbitrate pursuant to an arbitration clause that was buried in the promissory notes she allegedly signed. (Roach claimed not to remember signing the notes.)

Roach's defense to Navient's arbitration demand was that she had signed the promissory note with another entity, not Navient.  But Navient presented evidence showing it had power to collect the debt, and a federal court granted Navient's arbitration demand in an order issued last December.

Roach had some other claims against Navient, but she apparently submitted them late and inartfully. After all, she had sued Navient without an attorney and was unfamiliar with the niceties of practicing law.

Some judges deal leniently with people who go to court without lawyers, but not Roach's judge. She had filed a "surreply memorandum," which the judge refused to consider, saying "sureplies are highly disfavored."

Although it is not entirely clear, she also apparently argued that the arbitration clause buried in the promissory notes had not come to her attention and that she did not realize that she had waived her right to sue when she signed the promissory notes.

The judge did not like this argument at all. In a footnote, he cited language from another decision that said: "[T]he fact that [plaintiff] may have chosen not not to access or read the  language of the Arbitration Agreement does not render it invalid or non-binding."

In short, the judge forced Roach to arbitrate her claims against  Navient.

Scholars and commentators largely agree that arbitration generally favors corporate parties. That's why banks, financial institutions, and student-loan lenders force people to sign arbitration clauses in routine documents. Like Ms. Roach, most people do not understand that they are signing away their right to sue for wrongdoing when they agree to arbitrate.

Two comments on the Roach case:

1) Many student-loan debtors are losing in the courts because they are not represented by competent lawyers. Roach's best argument for invalidating the arbitration clause was that it is an "adhesion contract" that she was forced to sign as a condition for getting federal loan money. Courts have ruled for fifty years or more that agreements waiving the right to sue can be nullified if the party signing the waiver is the weaker party with no opportunity to negotiate and no choice but to sign in order to receive a service. But Ms.Roach probably knew nothing about adhesion contracts.

Distressed student-loan debtors ought to have access to pro bono (free) legal services. There are literally hundreds of thousands of unemployed lawyers right now--and most of them have massive student-loan debt themselves. Their talents should be harnessed to help people like Ms. Roach.

2) The fact that student-loan lenders and for-profit colleges are allowed to put arbitration clauses in student-loan documents and college-enrollment forms is a scandal. Secretary of Education John B. King announced recently that he opposes this practice and will draft regulations that will put some limits on it.

But the regulation revision will go through a negotiations process, and any regulations DOE adopts are likely to be watered down. After all, the finance industry and the for-profit colleges have powerful lobbyists and sharp lawyers, and they make campaign contributions to powerful politicians.

For now at least, millions of people are jeopardizing their financial futures when they borrow money to attend college. Even if they are defrauded or get substandard educational experiences, they are barred from filing suit. And if they file for bankruptcy to get a fresh start, the creditors' attorneys are waiting for them to make sure these distressed debtors get booted out of bankruptcy court.

References

Roach v. Navient Solutions, Inc., 2015 WL 8479195 (D. Maryland, Dec. 10, 2015).

U.S. Department of Education. U.S. Department of Education Takes Further Steps to Protect Students from Predatory Higher Education Institutions. March 11, 2016. Accessible at http://www.ed.gov/news/press-releases/us-department-education-takes-further-steps-protect-students-predatory-higher-education-institutions?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

Hillary cackles over her victory in the New York Democratic Primary: But the Upstate rubes went for Bernie

If you go to a map depicting how New York Democrats voted in yesterday's Democratic primary election, you will be shocked. At first blush, it looks like Bernie Sanders won a landslide victory. In fact, with the exception of Buffalo, Rochester, Syracuse, Long Island and New York City and its nearby suburbs, Bernie carried the whole state.

A  view of a map showing voting patterns in the Massachusett Democratic primary shows a similar pattern. Eastern Massachusetts--Boston and its  affluent suburbs--went for Hillary and the western part of the state voted overwhelmingly for Bernie.

Of course this pattern is easily explained. Most voters live in the cities, and a lot of city people like Hillary.

But why is this so? Why do the voters of Boston and New York City support Hillary while the rural and small town folks back Bernie?

Basically, the people who have prospered in the global economy are urbanites. People in banking and financial services, the media elites, academics, techies and entertainment moguls have done pretty well in the 21st century economy, and they know Hillary will maintain the status quo. Her fans aren't offended by the fact that she compulsively stuffs corporate money into her pants suit because they are doing the same thing.

On the other hand, Americans in the nation's small towns and rural areas are hurting economically; and they are hurting badly. Bernie's straightforward message about economic reform resonates with these people. Even in Oklahoma, perhaps the most conservative state in the Union, Democrats voted overwhelmingly for Bernie with the exception of voters living in two affluent urban clusters. Having grown up in Oklahoma, I can tell you, the Okies are suffering in the post-recession economy. The word socialist does not frighten them at all.

I don't think Hillary cares whether the rubes like her. She thinks she's holding all the cards. But there are more poor people in the U.S. than rich ones. And there are millions of people who aren't poor now but soon will be--including 20 million people who can't pay off their student loans.

If more poor people wake up the fact that Hillary is just a huckster--a shill for the global oligarchs--they will look for someone else to vote for. But Hillary is counting on sliding into the Oval Office before the rubes figure out that the game is rigged against them and that Hillary helped rig it.

New York Democratic Primary: The brown splotches went for Hillary

Oklahoma Democratic Primary: The brown splotches went for HIllary

Ditto for Massachusetts