The Indentured Educated Servant Class of St. John's University: Driving Dean Chang

Remember Dr. Chang?  She was the St. John's University Fundraiser that raised funds to gamble, shop and put her son through law school.  She was charged with grand larceny and forgery, consequently.

Well, she's baaaaaaaaaack and the story has become so much juicier.  We are all "educated indentured servants"--"They are trapped, and their choices are restricted by debt. Many recent graduates feel that they lack the freedom to pursue entrepreneurial endeavors, start families, stay at home with children, or choose lower paying jobs that may be a better fit. Financially, this puts them at a distinct disadvantage." Sound like you?  It should, because it's you and every other person browsing this article right now.

But, for Dr. Chang, some of the students at St. John's were actual servants--maids, cooks and chauffeurs.  Believe it or not, students that were on scholarship at St. John's were told that they had to complete work-study programs at Dr. Chang's home or they would lose their scholarships:

Many of those tasks were to help with Taiwanese dignitaries visiting Ms. Chang’s house, where she frequently entertained out-of-town guests for fund-raising purposes, Mr. Rubenstein [Dr. Chang's defense counsel] said.

“The fact that this is even a crime is shocking,” he said outside court. “Cooking a meal doesn’t sound at first blush like work-study, but wait till the trial. I’m not going to give you the defense now.”

According to the complaint, one student, identified only as CI1, “drove Chang to the hair salon, to restaurants and to the airport.”

“As a driver,” it adds, “CI1 was also responsible for taking out the garbage and shoveling snow at Chang’s residence.” 

This is our future folks.  Dr. Chang cut out the middle man, but we all wipe Sallie's ass every month.  She said, forget Sallie, come over and cook me dinner or you're screwed.

Sign of things to come? Maybe not, but is this story would be the first in Angel's Fables: Stories Designed to Teach the Educated a Lesson in Life.  Truth is much stranger than conjecture and hyperbole.

Okay, this video is not entirely related, but someone needs to go Taxi
Driver on Sallie's Ass.

Bad Debt v. "Good" Debt?

A BIDER tipster sent me a funny story about debt.  The question addressed in this fluffy "news" article by Jeff Brown is "when is it okay to carry debt?"  It makes some good points:

Don't use an 18% credit card to fund a home addition that will take years to pay off. If you must borrow for that, take out a home-equity loan. The rate is likely to be half as much. Installment loans average about 8%, according to the BankingMyWay survey...

In a real emergency, you can justify almost anything. A legitimate emergency is a serious illness, or a car problem that will keep you from getting to work, a leaky roof that will ruin your home.

The need for a vacation is not an emergency. Basically, an emergency is something that will seriously undermine your life for years, not something that will put a little damper on your lifestyle.

Very good points, Jeff.  My parents raised me to think of credit card debt as evil.  Unfortunately, I didn't listen.  But my debt exists primarily because of my emergency situation, being laid off.  When you have to support yourself with credit card debt, is that a justifiable emergency?  But then Jeff totally loses me with this next line:

The best policy: borrow only for a home and an education, two purposes with benefits outweighing the costs. If necessary, borrow to get basic, essential transportation, not to get luxuries like leather seats and navigation systems. 

I bolded 'education' so you'd see that our message has not spread far enough.  There are so many contingencies that need to be mentioned before one makes a bold statement like 'borrow only for an education because the benefits outweigh the costs.'  It depends on where you go to school, how much of it is financed by your parents, whether you major in something worthwhile, etc., etc.  You cannot make an absolute statement about education being worth something.  Sometimes, it's utterly worthless.  Irresponsible journalism such as this fluff piece by Jeff Brown is responsible for many dumb 18 year olds  feeling safe about borrowing $25K to attend an expensive private school to major in Art History.  Where is the disconnect?  Sometimes, it is worth it not to get an education, so that working at the local Walgreens can sustain your lifestyle.  Sometimes that is the more intelligent choice.  When you have no debt, life is freeing.  You can work a job that actually sustains your lifestyle.
A home may be worthwhile, because you can live in and will always be able to live in it... and one day, you will own it free and clear.  But an education may make you overqualified and underpaid from the second you get your diploma.  It's almost as bad as the notoriously depreciating asset, the brand new car.

Try again, Jeff.  Most debt isn't "okay."  I wish I could get him to read our blog where thousands of educated people could tell him that he's wrong unless he qualifies his statement.  Oh yah, the federal deficit is wrong too.  I wish we could have crowned Clinton king.  Oh well...

Another NYU Graduate with Six-Figure Debt. Quelle Surprise!

Or not. New York is an expensive city, folks. If you go to an elite school there (NYU or Columbia) expect to fork over your life savings unless you get a lot of financial aid and scholarships.

The New York Times has found another student loan slave in the Big Apple, not really a difficult task. I have a friend who is getting her second Master's degree at NYU. I don't understand why anyone needs two Master's degrees, but this is what happens when young people can't find a job and buy into the higher education myth that an elite degree is sure to bring in the big bucks after graduation, which we have learned is no longer the case.

Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.

Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.

I don't think most graduates in a similar position as Ms. Munna are idiots or irresponsible. They were misinformed like the rest of us. Students and their parents invest $100k for a degree from an elite institution because they believe it will land them a job that pays enough to pay off those loans in a reasonable amount of time. No one plans to default or flee the country when they sign up for a student loan. You get a degree from an Ivy League or top tier college and you expect to get a decent paying white collar job. I can't speak for third tier graduates, but back in the good ol' days, the majority of graduates from my college and law school found jobs that paid more than factory line workers. That is why people, and especially working class people with academically gifted children, believe higher education is a good investment - perhaps the only investment - that will allow their children to enter a comfortable upper middle class lifestyle.

I don't understand why people are beating up on Ms. Munna in the comments for majoring in Religious and Women's Studies. And? I know people who are unemployed who majored in Humanities and Science. T14 law students are graduating without any job offers. Does your college major really matter that much anymore unless you are in Pre-Med or Engineering? Any degree in the Humanities is going to end you up in the unemployment line these days, whether it be Women's Studies or Political Science. More people should start questioning the financial aid offices and banks who take advantage of clueless teenagers by allowing them to take out a $40k loan in the first place.

Which is why I am glad the author questions how Munna was allowed to take out a $40k Citibank loan when she was only 17-years-old. In the process, the article reveals a bit of the the higher education scam at work, and why students are able to take on massive debt without any warning or advice from the financial aid office (emphasis mine):

The financial aid office often has the best picture of what students like Ms. Munna are up against, because they see their families’ financial situation splayed out on the federal financial aid form. So why didn’t N.Y.U. tell Ms. Munna that she simply did not belong there once she’d passed, say, $60,000 in total debt?

“Had somebody called me and said, ‘Do you have a clue where this is all headed?’, it would have been a slap in the face, but a slap in the face that I needed,” said Cathryn Munna. “When financial aid told her that they could get her $2,000 more in loans, they should have been saying ‘You are in deep doo-doo, little girl.’ ”

That’s not a role that the university wants to take on, though. “I think that would be completely inappropriate,” said Randall Deike, the vice president of enrollment management for N.Y.U., who oversees admissions and financial aid. “Some families will do whatever it takes for their son or daughter to be not just at N.Y.U., but any first-choice college. I’m not sure that’s always the best decision, but it’s one that they really have to make themselves.”

The complications here go well beyond the propriety of suggesting that a student enroll elsewhere. Colleges don’t always know how much debt its students are taking on, which makes it hard to offer good counsel. (N.Y.U. does appear to have known about all of Ms. Munna’s loans, though.)

Then there’s a branding problem. Urging students to attend a cheaper college or leave altogether suggests a lack of confidence about the earning potential of alumni. Nobody wants to admit that. And once a university starts encouraging middle-class students to go elsewhere, it must fill its classes with more children of the wealthy and a much smaller number of low-income students to whom it can afford to offer enormous scholarships. That’s hardly an ideal outcome either.

Finally, universities exist to enroll students, not turn them away. “Aid administrators want to keep their jobs,” said Joan H. Crissman, interim president and chief executive of the National Association of Student Financial Aid Administrators. “If the administration finds out that you’re encouraging students to go to a cheaper school just because you don’t think they can handle the debt load, I don’t think that’s going to mesh very well.”

That doesn’t change the fact, however, that the financial aid office is still in the best position to see trouble coming and do something to stop it. University officials should take on this obligation, even if they aren’t willing to advise students to attend another college.

Is Munna to blame or should we start criticizing the universities and banks for lending young people money knowing that students usually start college with little idea of how to manage their finances or any sense of their income prospects in 4 years. What do you think?

Purdue Graduate Tries to Sell His Diploma on Ebay

Do you feel this way about your degree?

Back in February of this year, a Georgetown Law graduate attempted to sell his JD on Ebay for $59,250 to pay off the remainder of his student loans.

Today, Purdue University graduate Nick Enlow attempted to do the same thing, placing an ad for his 2008 B.A. in psychology for $36,000 to cover his $470 monthly loan bill to Sallie Mae. He also has a degree in philosophy from Indiana University–Purdue University Indianapolis (IUPUI). Enlow works as a substitute teacher and lives with his fiancé who is working for Teach America. This is what Enlow had to say(emphasis mine):

"Going to college made my life worse," Enlow said Wednesday from near Jacksonville, Fla., where he lives. "That is something that I don't keep to myself. I tell everyone."

His line of thinking isn't the kind that Purdue officials find amusing, nor are they too keen on the auction itself.

But Enlow, 29, said he considers himself stuck in indentured servitude to Sallie Mae, his lender, because he is unable to get a decent-paying job with his current degrees to start paying a $470 monthly student loan bill. In addition to the Purdue diploma, he obtained a philosophy degree from IU through IUPUI. That one is not for sale.

The eBay sale is part stunt and part hopeful act of desperation that an "eccentric millionaire" will pick up the tab. Either way, the Indianapolis native is serious about kick-starting conversations on the worth of a college education and how it can be paid off.

"The universities are handing out too many degrees that have zero real-world application," Enlow said. "It seems to me, almost any major in the humanities or liberal arts will not gain you employment with a bachelor's degree."

Enlow admits to not having a clear post-college career path. During school he fell in love with learning -- reading classics and learning history -- and he assumed that after earning a diploma a job would come easily.

"I think that some of us still believe that when we walk across the stage and get that diploma that we are going to have some type of social status and businesses are going to look at us differently," he said. "But that is not true."

I hope Enlow finds BIDER and the other school scam blogs just so he knows that he is no alone and that he is even better off than most law and graduate school graduates who owe much more than $36,000 in student loans. Several days ago, Angel posted a CNN story about a NYU graduate who owed $275,000 in loans. Of course, Enlow's alma mater is not amused and fired back with a lame response that didn't address the student loan and unemployment crisis facing most graduates today:

"A degree in the liberal arts is not an automatic ticket to a job, but then again, no degree is," said Irwin Weiser, interim dean of Purdue's College of Liberal Arts."However, studying any of the disciplines in the arts, humanities, or social sciences prepares students to be successful because they learn to think creatively, critically and ethically, and to communicate what they think effectively."

"However, studying any of the disciplines in the arts, humanities, or social sciences prepares students to be successful because they learn to think creatively, critically and ethically, and to communicate what they think effectively."

Ebay later took down the sale today which violated its terms of use. Enlow even caught Sallie Mae's attention. The loan company contacted him yesterday to "discuss payment options". Hah. They contacted him to make sure he has enough money for next month's payment. Just another publicity stunt to act like they actually care.

Enlow said he would not contest eBay's decision.

"The dialogue has been started," he said. "What's done is done."

Ode to Sally May! A Story of Hope and Loss.

I enjoy reading the comments, more than you enjoy reading BIDER.  Especially when I find poetry from those that have been inspired by life circumstances.  An Anonymous comment blew me away this morning and I thought I should post it.  Thank you, Anonymous Commenter, for making me smile and reading our blog.  Enjoy:

Anonymous said...

Well, I'll just say this because it's a better day than most. Not because the sun is shining or because there is any hope that my law degree will get me a job, but, look, at this point, I'm sitting at the table, I'm on a losing streak, I'm down more money than I've ever had in my life, my wife/girlfriend has got pissed off and left the casino, I would be sleeping on the couch (if I had not lost it in the previous hand), and I've only got my car key to go all in, so, I'm throwing it on the pile. I'm all in, and I will be all in every hand after this because I'm a man with nothing to lose. It's the first bit of enthusiasm I've had for a couple of years now. You're going to have to forgive me.

I'll play fair. I'll be up-front. I'll be honest. I'll play by the rules. But, one rule no one can change is that when you've got nothing to lose, losing the next hand doesn't move you. You find yourself right back in the same place. it's funny, that. So, my law degree is staying on the wall. It's worthless. I know. But fuck me if it didn't suck trying to get it. It's staying to remind me that I work for myself. That was what it was supposed to represent at some point. Misled I was, but the fact is that the reason I thought I was going to law school was to chart my own course.

Forgive me if I haven't changed my mind about doing that. There are no debtors' prisons. What has been taken away from me, and I suppose from all of us, is nothing more than the incentive to live a lower middle-class life. The Sallie Mae death-zone makes me a slave, and quite frankly, she can go fuck herself. I'm not going to work for her, the harlot. I'll work to take care of what I need, but I'm not going to do 80-hour weeks at $15/hour so Ms Mae, the tart, can garnish 55 of them until I'm dead and gone.

So, get this: I'm gone. I'll tell you where when I get there, wherever it will be. I'm going to keep in touch. Don't you worry your pretty little head about that. But, I'm also going to take obscene career risk after obscene career risk until one of them banks. And, if it never happens for me, well, then, I guess, Sallie, you're just going to have to live on less, now aren't you.

Economically, is that not the rational, cold-blooded business decision? Tell me it's not. Tell me there is a reason I should live my life in your death-zone. Tell me this is not what some of the major banks just did when they walked away from mortgages and leases and then refused to let under-water homeowners do the same thing. Know what? I'm too big to fail. So go fuck [sic.] yourself. No, my debts won't be discharged in bankruptcy. No, I'm not going to disappear on you and the kids. And, yes, I'm going to try my best. But, look, one thing I learned in law school is that the interests and debtors and creditors are not always aligned, however much you say you really want to work "with" me. That tends to happen when you over-reach and when you create necessitous men. Maybe you should have thought of that before now, because I've only got so much money, and you can't starve me into a better job (though, no doubt, you'd try).

Eliminating the Middle Man in Student Loans

I was unaware of this issue before running across this broadcast.  The Federal Government is eliminating private banks in direct lending of Government Money to students.  The money that they are saving by eliminating this outsourcing will be funneled back into the system in the form of pell grants to the neediest students.  I'm not sure if this is a bad thing or a good thing.  I know that banks have not been as responsive and obliging as one would think a private company should be to its customers, i.e. when you can't pay, they don't care.  The government is notorious for red tape and bad customer service--but at the end of the day, they are accountable to the citizens of this country.   The interest rates on these loans will be set by Congress, at a whopping 6%.  However, it's even higher with private lenders--12%. I guess we will see how this plays out come the Fall. Maybe the Government will have a problem with the constantly increasing costs of education in this country.  Let's hope this is a step in the right direction.

What Would You Do to Avoid Paying Your Debt?

We've all heard the stories.  Debt collectors can be brutal when trying to get you to pay on outstanding debts.  I've heard of debt collectors (specifically Sallie Mae) sending as many as 17 letters a day asking you to pay on your past due student loans.  I've heard of senior citizens being told that they will be hauled off to jail if they don't pay on credit card debt. Of course, I wrote about Michelle Bisutti who found her loans compounding with every payment she couldn't make.  The debt collectors call you daily
--multiple times a day--they call your parents, your employers and even your neighbors in pursuit of  payment on debt. What can you do to get away from the debt collectors?


Well, an English man had the ingenious idea of becoming a female to avoid his debt.

One was the case of man from the West Midlands area who decided to have a sex change in a bid to dodge debt collectors.
The man is believed to have gone through with the operation, but is now thought to be in the process of sorting out his debts and paying off his creditors.
He is thought to have built up the massive debt – around £50,000 – after falling behind on his mortgage payments and credit card bills after losing his job.

I have no idea why this would do the trick. It's my understanding that one must change his birth certificate to reflect the new genitalia and change his name--but in this country, the social security number haunts you.  Maybe that isn't the case in England.  Lucky bastard.  He definitely gets points for creativity. I hope he doesn't miss his penis too much.


At this point, I almost wish they would bring back the debtor's prisons.  Wouldn't it be nice if you spent a year behind bars and came out free and clear?  Just an idea.  

Can You Even Eat on That Kind of Money?

by guest blogger The Angry Future Expat

The overeducated and overindebted are well aware of the loneliness, despair, and financial desperation associated with pay cuts and joblessness. The feeling was summarized by Toiletlaw in the best couple sentences blogged recently:

...sending out resumes is a lot like being on a deserted island. Except in this version of castaway, we’re third tier toilet grads supping on ramen noodles, and instead of a painted volleyball, Wilson is instead the name of the Sallie Mae bill collector calling every 30 minutes asking when their money will come in. Other than that, metaphorically, we’re living the same meaningless life with little to call our own...

The literary professions are particularly hard hit during these times as set out in the post below - actually, come to think of it, where's my fucking paycheck Hardknocks?!?! - but I digress. Times are tough all over, and even Aunt Sallie's own are getting a taste of the toilet. Its CEO will need to somehow get by with a 35% pay cut:

An Associated Press calculation shows student loan provider Sallie Mae's CEO got compensation of $5.4 million last year, down 35 percent from 2008. The biggest cut was in the value of stock and options CEO Albert L. Lord received -- $3.1 million in 2009, down from $6.6 million...

Wow, brutal. Hey Al, if you need some recipes involving pasta, ramen, peanut butter, or cans of tuna, feel free to give me a shout. I'm here to help buddy. But Sallie Mae's executives aren't the only ones suffering:

When the government cuts corporate welfare, the business sector's loss is the taxpayers' gain.

Still, "it's tough when somebody eliminates 90 percent of your business through legislative mandate," Christopher Chapman, president and chief executive of Access Group Inc. in Wilmington, told me.

Yeah, that is tough. Real shame. Of course, I know how that feels since my business took about a 90% header following the Lehman Brother's failure, and I didn't even have a business model designed to ladle non-dischargeable debt onto unsuspecting 22 year olds. But, in any case, I feel for you, man.


Of course, on the bright side, graduates of New York Law School won't be quite as lonely!

Access has already cut 50 workers as the volume of new
loans drops, and is trying to keep the other 365 staffers busy
servicing old loans, Chapman told me.

Looks like Access Group debtors can look forward to a collection call every 15 minutes, instead of 30. That should help with the loneliness.

Defaulting on Student Loans is One Way to Prevent Identity Theft

by guest blogger The Angry Future Expat


One of the largest student loan guarantors and collectors ECMC - which if Google is to be believed has close ties to Aunt Sallie - was robbed last week. Personal data for more than 3.3 million borrowers, including names, addresses, social security numbers, and other info were taken and are now, presumably, in the hands of the Russian mob.

ECMC is the designated guarantor for loans in Oregon,
Virginia and Connecticut, but borrowers from all states could be
affected.


The 3.3 million social security numbers that were stolen from ECMC
represent 8.9 million loans, Mr. Kelash said. One borrower may take
out multiple loans.

Indeed, Mr. Kelash, one borrower may take out multiple loans, examples include just about every reader of this august blog. But even more interesting is that whoever orchestrated the theft seems to have known what not to take:

ECMC services and insures more than $11 billion in student loans for the U.S. Department of Education. ECMC also owns Premiere Credit LLC, a federal student-loan collection agency. No Premiere accounts were affected by the theft, Mr. Hawn said.

There you have it kids. A consolation prize for defaulting on your student loans and getting kicked over to the collection arm.

WANTED! ATTORNEYS WILLING TO TAKE ON STUDENT LOAN MACHINE PRO BONO IN NEW YORK CITY!

I received an email this morning from a friend who has a friend who is drowning in student loans and has no place to turn to.  Apparently, she feels that she needs representation and cannot deal with the harrassment anymore.  I'm wondering if anyone who reads my blog knows of an attorney who takes on these sort of cases pro bono or for an affordable rate, or some sort of non-profit that will assist lawyers who are being ruined by student loan debt?

We all know or heard of how much harassment the student loan machine can delve out.  There's actually a lawsuit that you can join if they are calling your cellular phone to collect on late payments:

Sallie Mae Autodialer Calls Complaints and Class Action Lawsuit



On February 2, 2010, a Seattle resident filed a nationwide class action lawsuit against the student-loan giant SLM Corporation, popularly known as Sallie Mae, over alleged unauthorized autodialer calls to the cell phones of borrowers who took out student loans with the national lender. The class action complaint, entitled Arthur v. SLM Corporation, seeks both injunctive relief and money damages.


Congress adopted the Telephone Consumer Protection Act ("TCPA") to stop abusive telephone practices by lenders and marketers, and in particular placed strict limits on the use of autodialers to call cell phones. The complaint charges that Sallie Mae has deployed automatic telephone dialing systems to make pre-recorded, non-emergency calls to customers who did not expressly consent to be called on their cell phones within the meaning of the TCPA.

"Nobody should be subjected to repeated, intrusive autodialer calls at all hours from their lender, especially on their cell phones," commented Jonathan D. Selbin of Lieff Cabraser. "We hope the lawsuit brings some relief to borrowers who have enough to worry about these days without receiving harassing calls like these."

So, in addition to this law firm, does anyone know of attorneys in New York City who are willing to represent a lawyer down on her luck?

Thank you kindly.  Remember, if we don't look out for one another, no one will look out for us.

Saturday Student Loan News (Updated)

I wanted to share several more articles I came across this morning at Alternet and at Cryn's blog Education Matters.

Education Matters linked to a BBC article that brings up the actual cost for an education in the US these days: $200,000. We've all come across articles and op-eds from people like the U.S. Secretary of the Department of Education who use the $23,000 average student loan statistic, which we all know is baloney. Everyone I know owes more than $30,000 in student loans, even the ones who only went to college and not graduate school.

The second article I came across is by Les Leopold at Alternet called Stop Student Loan Sharking, Make College Free. Thank you! Finally, someone arguing that a college education should be virtually free for anyone who wants it. Leopold make some great arguments for making education free. I just put Les Leopold's book on my must read list. He's one of the few people out there making sense right now.

For a fleeting moment I thought Congress was going to do something really wise: Get out of the student loan-sharking business. Recall that only a few days ago, the House and the Senate were going to fast-track the student loan reform bill by attaching it to the health care package. It was supposed to be a sure thing. What was I smoking?

Our current student loan system could have been invented by Tony Soprano. We taxpayers guarantee the loans and the government does most of the underwriting, rate setting and paperwork. Then private banks step in, impose their extra charges on needy students, and walk off with all the profits. Not only do the feds donate tax dollars to these banks (what else is new?), but the banks bribe college officials to send students their way. Bada Bing!

If the bill passed, eliminating Tony as middleman, the government could have saved from $37 to $87 billion dollars over the next decade for use in supporting more Pell grants for low-income students.

To be sure, Republicans, en masse, are opposed to eliminating the no-account middlemen because that would amount to a socialistic takeover of free-enterprise. But, they also are joined a group of Democrats including Senators Thomas R. Carper of Delaware, Blanche Lincoln of Arkansas, Ben Nelson of Nebraska, Bill Nelson of Florida, Mark Warner of Virginia and Jim Webb of Virginia. The banks in question just happen to be employers in their states and campaign contributors as well. (See New York Times)

Unfortunately we’re having the wrong debate here. The important question isn’t who should be saddling students with enormous debt — the government or private banks. It’s why anyone should be saddling them with enormous debt. As of 2008, 62 percent of all students at public 4-year colleges and universities took out loans. By graduation they owed a median of $17,700. (See CollegeBoard.com).

Allow me to offer this radical concept: They should graduate with no debt. Going to a public college or university ought to be free.

It used to be that way, at least for vets. The Servicemen’s Readjustment Act of 1944 (GI Bill of Rights) sent 7 million Americans to school for free after WWII. In 1988, a Congressional committee determined that for every dollar invested in that program, $6.90 was returned to the US economy. No reason we couldn’t repeat that performance today. Why isn’t universal free higher education on the political agenda? Here are some of the reasons:

1. Students won’t value what they don’t pay for.
Can’t you just see it? We let students in for free and they trash the place. If we’re not careful, we’ll get the ’60s all over again. But of course, this argument doesn’t apply to students from wealthy families who don’t have to pay a dime for college or run up any loans at all. Why the double standard?

More importantly, education is a necessity, not a privilege for the few. Our society always has recognized the need for free public education. As early as the 1600s, the New England colonies provided it. By the 20th century K-12 free public education became the norm. Nobody argued that only those who could pay for it should be allowed to go to high school. Times have changed a bit: Today people need a college degree or advanced vocational training if they’re going to do well in the world.

2. The GIs earned it. Why should everyone get it for free?
The original Servicemen’s Readjustment Act of 1944 was actually opposed by Franklin Roosevelt. Why? Because he believed that everyone in the country had been part of the war effort–factory workers and farm hands were as important as front-line soldiers. So why reward just the vets with a free college education? But Roosevelt soon realized we had to send the 7 million vets to college for free, or else unemployment might soar after demobilization. No one wanted a replay of the Great Depression.

And we don’t want this Great Recession to continue either.. Right now more than 29 million of us are without work or forced into part-time jobs. We need more than 100,000 jobs every month just to keep up with population growth. Free higher education would surely take the pressure off–and it would have that extra bonus of actually educating people and enriching their lives. Unemployed workers of all ages would go back to school if tuition were free.

3. We can’t afford it.
Wrong. What we can’t afford is what we’re doing now: loading up students with debt and slamming the academy’s door in people’s faces. We need as many people as possible to get a college and advanced vocational education. It’s the key to prosperity and a better quality of life. The smarter we are at work, the better the life that we can create for ourselves and our kids. How are people going to tackle global warming, the health care crisis, and all our other challenges without an education?

Also, we need to get a whole lot smarter about economics and governance. Our current economic mess shows just how dumb we are when it comes to protecting people’s livelihoods. Millions lost their jobs because we were too damn stupid to stop Wall Street’s gambling spree. Worse still, most of the economics profression justified it asit was happening. We’ve got to figure out how to keep our free-enterprise economy from turning into a billionaire bailout society, which is where we’re heading. And our political system needs a little work too. For instance, how about educating some people to come in and fix the U.S. Senate, one of the most dysfunctional institutions ever? (While we’re at it, the Texas curriculum board could use a little help too.)

4. There’s really no public support for free higher education.
Are we sure? Few have tried to move the issue on a national level.

But if we asked parents and kids, we’d find out that free higher education is a no-brainer. It would be a good idea even if the federal government had to go deeper into debt to finance it. We’ve pumped more than $8 trillion into Wall Street with our loans, asset guarantees and liquidity programs. God knows how much we squander each year on military boondoggles. Yet, it might cost from $50 billion to $100 billion a year–a relative pittance–to cover all public higher education tuitions. And it would be a huge investment in a brighter future.

But the fact is, we don’t have to run up a tab to get free higher education.

Imagine turning a fee on Wall Street gambling into a “college education for free” card for every American. A small financial transaction tax on bankers’ speculative deals could fund free higher education in perpetuity. To jump start the program, we could put a windfall profits tax on the $150 billion in bonuses Wall Street executives are now collecting, thanks to our bailout. (Or, if we had the nerve, we could place a 10 percent income tax surcharge on those earning more than $3 million a year.)

The GI Bill’s free tuition program was a key factor in building our post-WWII prosperity. If we want our nation to grow smarter and stronger again, we need universal free higher education right now.

Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

Update: This was my response to Jadz idea about focusing more on vocational training in the comments section:

I agree most with Jadz' opinion. In my perfect world everyone would have equal access to health care and education. I know this will probably never happen, at least in the US, so I think we should at least have a cap on tuition fees and more of a focus on apprenticeships and vocational training like in some European countries.

I think $23k is still too much to attend most colleges outside of the top 50. The same goes with law schools outside of the top 20. The current economic situation is a perfect example of a college and graduate education being worth less than $23k for the thousands of graduates who can't even find a minimum wage internship.

I found the students fees for 2009-10 in the UK on the BBC website:

STUDENT FEES (2009-10)
England: £3,225 pa
N Ireland: £3,225 pa
Scotland: free for Scottish residents, £1,775 to others in UK
Wales: £1,285 for Welsh residents, £3,225 to others in UK
Students from elsewhere in the EU pay the same as those locally
Those from outside the EU pay whatever the university charges

I met an Oxford University graduate who owes less than £10,000. This would be considered virtually free in my opinion to attend one of the best universities in the world. Third tier college and law students in the US often have to pay more than 10 times that amount for a completely worthless degree. Its time to eliminate the student loan sharks and slash professors' six figure salaries. I agree with L4L that instead of paying useless, overpaid ivy league grads who have never practiced law, practicing attorneys should be teaching those classes instead at a third of the cost.

PS - If you're just stopping by to spew Tea Party/Libertarian/ "life isn't fair"/ you're a stupid socialist/Obama is a socialist nonsense, your comment will be deleted so don't bother writing.

Added note. When I say college should be free or low cost to anyone who wants it, let me explain what I mean. And no, I don't think everyone should go to college or has the book smarts or talent to attend Harvard, Yale, Columbia, Stanford, Princeton, Brown, UPenn, Cornell, Dartmouth, Berkeley, Michigan, Virginia, or Julliard:

College shouldn't be the path for everyone. Nor do I think colleges should open its doors to any Jane or Joe who clearly doesn't have the desire or the book smarts to take college seriously.

Rich kids will always have the advantage of going to college whether they want to or not, usually on their parents' dime, and a lot of them will use the opportunity as a four year frat party. Those aren't the people I'm concerned with or this article addresses. Poor kids who don't take school seriously will either not go to college or end up in community college anyway and those are the people who will benefit the most from apprenticeships and trade schools after high school. It's the poor and middle class kids who have the potential and smarts to work in academia or become doctors, teachers, lawyers, writers, and scientists who are getting the shaft.

Our tax dollars will be better spent on work training and education programs than paying for prisons and wars. And that is exactly where a lot of these kids wind up when they don't have access to education and vocational training. Billions of our tax dollars are wasted on the most idiotic programs, yet people scream socialism when some of us actually want to put that money to good use back in our communities to help people stay healthy, safe, and happy.

I've always advocated closing down most of the law schools outside of the T20 because I understand how the proliferation of crappy, low ranked schools devalues the worth of a degree. The same goes for colleges. With fewer schools, colleges and graduate schools will become more competitive and people who don't make the cut can get a low cost education at community college or vocational school part time and work in an apprenticeship to pay off the tuition easily. Those who go to college should have the privilege of attending for free or at a low capped rate depending on financial need and merit-based scholarships both from the government and the university.

We really wouldn't have these problems if our government gave us BACK our tax dollars (rather than to Goldman Sachs) to use for education, vocational, job creation, and community health programs. I see it less as socialism and more as getting back what we pay for to invest in our communities.

Sallie Mae Workers Protest Student Loan Reform

H/T to The Jobless Juris Doctor for posting this story yesterday. It's so outrageous that I had to share it with our readers here. The Pioneer Credit Recovery debt collection firm, which is owned by Sallie Mae, sent 300 of their workers on six buses to Buffalo, NY to protest student loan reform outside the district offices of Sen. Kirsten Gillibrand, D-N. Y., and Rep. Louise Slaughter, DFairport. Unbelievable!

Across from the Larkin at Exchange building, home to Gillibrand’s office, employees wearing matching blue shirts chanted “Save Our Jobs!” and carried signs with similar messages.

Sallie Mae has previously reached out to lawmakers to get the point across, said Jeff Mersmann, vice president of operations for Pioneer Credit. “This takes it to another level,” he said.

Participation in the rally was voluntary, with employees offered the option of signing up to ride a bus to Buffalo, he said.

Conwey Casillas, a Sallie Mae spokesman, said employees have been tracking the reform issue for about a year and were asking for other ways to get involved. “They are concerned about their jobs, and they wanted to communicate that,” he said.

This story should have made the headlines of every college paper in America only to remind students and graduates what we are up against. Student groups should be planning to do the same thing, bussing hundreds of students to protest Sallie Mae in their state's capitol. These scumbags will do anything, pull any ploy they can think of, to stop student loan legislation from being passed. What are students and graduates planning to do about it to counter Sallie Mae's noise machine?

I am so glad I didn't borrow from Sallie Mae when my law school sent students a spreadsheet of private loans to choose from like it was a damn lunch menu. A close friend even had a Sallie Mae teddy bear - goodness knows where she got it from - and had it sitting on her nightstand or propped on her bed whenever I visited her dorm room. She really had no idea what she was getting herself into. She thought Sallie Mae was a decent organization that helped poor families buy homes and poor students attend college. That's why she would always hug that little bear with it's Sallie Mae logo when I wanted to rip its head off.


Here is Grandma Hardknocks' response to the 300 workers who have traded their morals for a dirty paycheck and manage to sleep at night knowing full well that they are helping to prevent legislation that could help save millions of young people from financial ruin:

And a Word from the U.S. Secretary of the Department of Education, Arne Duncan

My rants are in blue.  This baller, turned Government Official, has some ideas about how to improve the education system in this country.  He has a bone to pick with Sallie Mae as well, but I'm not so sure that his plan will change life for those students who are currently in default.  Read on....

Direct student loans: A better way to invest in education

By Arne Duncan
Friday, February 26, 2010
For too long, bankers have gotten a free ride from the U.S. Department of Education.  Really, Captain Obvious?

Under current law, taxpayers provide as much as $9 billion each year to subsidize guaranteed student loans issued by banks. The banks earn profits on the interest; if students default, taxpayers take the loss, not the banks. In other words, working Americans pay while bankers get rich.  Not clear on which taxpayers he's talking about. It's my understanding that the only taxpayers that suffer are those who are unable to pay their loans.  Otherwise, like death and taxes, this money is paid back to the lender (and therefore the Government). 

Meanwhile, educators, engineers and computer scientists -- the backbone of the new economy -- face crushing debt from six-figure college tuitions. A study of national postsecondary student aid found that in 2008, two-thirds of college seniors graduated with debt averaging more than $23,000. That number will rise as public and private college tuition costs escalate.  What about Lawyers and those that choose to go to Graduate School?  I  know that JDs are FAR from the back bone of society, but lawyers, on average, graduate with $90K in debt. $23K is child's play.  Way to make a major problem seem minor, Mr. Duncan!

The banks have had plenty of help with government bailouts and other subsidies while working families and students are increasingly squeezed. President Obama wants to eliminate the subsidy for banks and use that money to help poor and middle-class students and adults attend college.  I wish that Pres. Obama would not use the money to help students go to college.  Geez... it's just more free money that will be soaked up by the Educational Industrial Complex.  He needs to stop extending government help to students so that colleges will be forced to be competitive.  Lah di dah di... you know my spiel.

The president also wants to strengthen community colleges, give grants to states that improve college completion rates and boost early-learning programs. I hate to break it to you, but not everyone who goes to college should.  Those that can't complete it, aren't dropping out for lack of funds.  With guaranteed returns, banks will lend money to students who want it.  They are dropping out because they missed their calling, i.e. are not "college material."  Why push people to finish something that costs money and doesn't necessarily better one's job prospects.  I'm not knocking it. I consider them the lucky ones.  He wants to lower maximum monthly payments for student loans from the current 15 percent of income to 10 percent to make college debt more manageable. How about 5%?  At 10%t, a person who earns $40K will pay $400?  That's a bit steep to me.  I paid about 6% of my monthly salary to student loans (when I had a job) and I really thought that was reasonable.

Not surprisingly, the banks are working hard to block our common-sense proposal. Sallie Mae, the largest player in the student lending business, has spent millions of dollars to lobby Congress and run ads in several states, claiming that our proposal will cost jobs and inhibit service. These claims must be challenged.  If by service you mean, people who call you mother, place of business, cell phone and neighbors to harass you to pay your loans... I think that Sallie Mae could handle a little less service.  And I don't give a shit about the jobs that will be lost.  If you are the type of person that can go to work every day and fleece students from their hard earned money, thereby prohibiting them from eating, getting married and buying homes... you deserve to be homeless.  Morality, people.  Look into it. I wouldn't take a job where I'd step on kittens. How is this different?

The president's plan actually creates jobs and draws on free-market principles by selecting private companies through a competitive process to service student loans issued directly by the Education Department. These private companies, including Sallie Mae, compete for our business and are evaluated on the quality of their customer service and their default rates.  This is where our dear Secretary of Education loses me.  Are we accusing Sallie Mae of having bad customer service?  Is that what they have done to hurt students in this country?  Try this, Mr. Duncan: we will set up a committee to investigate and prosecute Sallie Mae for predatory lending.  That's the kind of reform I'm looking for.  Being concerned about which servicing company has the best customer service is like being concerned about whether the executioner is swift with his sword.  He's still going to kill you.  And Sallie Mae or other mysterious private companies are still going to rape you.  We need to force their hands and have them work with students so that there won't be defaults anymore. If someone provides proof of income and reasonable expenses... and they really can't afford to pay more than $50 a month, why can't the Government force Sallie Mae to take $50 a month. 

Loan servicing is a growing industry as more and more Americans pursue college degrees. Under our contract, the high-performing companies will get more business over time while poor-performing companies will get less. The market will play, and students and taxpayers will win.  This is a riot.  So, those with loans, will graduate from college and work for companies that collect on student loans from their peers.  I guess it's a job (for the greedy and black-hearted).  I'm sure that the jobs in this growing industry will be shipped to India before long, when college grads with $50K in debt demand to be paid more than minimum wage so that they may service said debt.  "Hello, this is Debbie calling from Bangalore.  How may I be helping you today.  I see that you be late with your payment. Thank you.  Please.  Transferring you to manager. Be patient."  Imagine the head tilt.  Ha.

It's no wonder that the banking industry is pushing back hard to protect its taxpayer subsidy. Over the years, this giveaway has generated billions in profits for banks and hundreds of millions of dollars in compensation for bank executives.

The banking industry's claims that it wants to protect American jobs are also suspect. The fact is, Sallie Mae sent thousands of American loan servicing jobs overseas in 2007 to further increase profits, and it agreed to bring them back last year only to compete for our loan-servicing business.  Wow.  So happy that you MADE them hire Americans.  Really!   This is the best thing that I've read all day.

The Education Department has issued more than $187 billion in student loans since the Direct Loan Program was created in 1993. The number of universities participating in the program has more than doubled, to 2,300, in just the past three years. There is no justification to continue wasteful subsidies to banks. It is time to complete the shift to direct lending.  So, there will be more subsidized loans?  Is that what he's saying?

The president's proposal, which has passed the House and awaits Senate consideration, represents the ideal hybrid of public investment and market-based management. Through direct lending, we get a bigger bang for taxpayer bucks while using competition and private-sector expertise to improve customer service.  Once again, this focus on "customer service" throws me for a loop.  Don't get it at all.

The writer is the U.S. secretary of education.

What do you guys think?  Is he full of crap?  Is this a good plan or a non-plan?  Will it change anything at all?  Chime in! 

Martha Tells Me This is Insider Trading...

I was alerted to this wacky story, and I'm wondering why I never knew about it prior to today.

Apparently, Chairman Lord (Oh, the irony!) of Sallie Mae sold 400,000 of Sallie Mae stock--days before Bush released his 2008 budget which called for $18 billion dollars in subsidy cuts for the lending industry.

Does anyone know if this bastard served any time in Federal Prison for Insider Trading?  You can't tell me that he didn't hear that his stock was going to tank.  

For those of you that are too lazy to click on the link, here's the story:  

Scrutinizing a Sallie Mae Stock Deal

February 14, 2007

Consider it another sign that the new Democratic Congress is making good on its vow to ramp up its oversight of the student loan industry.

Tuesday, Rep. George Miller (D-Calif.), chairman of the House of Representatives Education and Labor Committee, and Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said they had requested information from the company, the White House , and the Education Department about the sale of 400,000 shares of Sallie Mae stock by the student loan behemoth's chairman, Albert L. Lord. The stock was sold only days before President Bush released his 2008 budget, which contained proposals to cut into lender profits that sent Sallie Mae stock plummeting 9 percent. $18 billion in subsidy cuts and fee increases for the lending industry , and markets responded by sendingSLM Corp. stock spiraling downward from $46.46 to $42.37 -- the lowest closing price in two years.

“Given the timing between your stock sale and the public announcement of lender cuts, we seek additional information about these events,” the two members of Congress wrote in the letter to Lord . The letter asks for all communications about the lending industry dating to last November 1 between Sallie Mae and the Department of Education, including phone and meeting logs, e-mails, and meeting minutes.

“We look forward to responding to any questions that members may have on this matter,” said Tom Joyce, vice president for corporate communications at Sallie Mae. “The timing was completely and utterly coincidental.”

Joyce said that Lord had notified the corporate board during a regularly scheduled meeting on January 23 that he planned to sell some personal stock to fund several private business ventures.

“It’s undoubtedly in the board minutes,” he said of Lord’s announcement on the stock sale. Lord sold 400,000 shares, netting $18.3 million. Joyce said that this is a little less than 5 percent of the stock that Lord is allowed to own.

Miller and Frank's letters to the company, the Department of Education and the White House ask for written responses within 10 days.  The letters follow the introduction in the Senate this month of theStudent Loan Sunshine Act, which its sponsors, Sen. Edward M. Kennedy (D-Mass.) and Sen. Richard J. Durbin (D-Ill.), say is designed to force lenders and colleges to disclose information about any "special" arrangements in which institutions have agreed to offer products from certain lenders to their students, among other things.

— Paul D. Thacker

Time to Get Fired Up for the Weekend!

Hey!  Where the hell are my Lobbyists????  That was my reaction when I read this article about how Sallie Mae is lobbying the shit out of the Government to counteract everything Obama seeks to do regarding Student Loans, as stated in the State of the Union.

"President Obama called the idea a “no-brainer” last fall, predicting it would take billions of dollars from the profits of private lenders and give it directly to students, and many colleges were already moving to get loans directly from the federal government in anticipation of the next move by Congress."


"But an aggressive lobbying campaign by the nation’s biggest student lenders has now put one of the White House’s signature plans in peril, with lenders using sit-downs with lawmakers, town-hall-style meetings and petition drives to plead their case and stay in business."

Who in the heck is going to sign a petition agreeing that students should be screwed because they irresponsibly went to school and incurred debt instead of becoming a compulsive gambler or shopaholic--let's say.  The Private Lenders are the evil middlemen... And the government would be in a better situation to give kids a break, than heartless Sallie Mae.  Reps of Sallie Mae probably attend your funeral to make sure you're dead before they stop calling you for your payments.

"Sallie Mae, a publicly traded company that is the nation’s biggest student lender with $22 billion in loans originated last year, led the field in spending $8 million on lobbying in 2009, more than double the year before, and other lenders spent millions of dollars more, according to an analysis prepared for The New York Times by the Center for Responsive Politics."

How many students' loan payments did it take to pay for $8 million dollars worth of lobbying efforts?  This is worse than buying sneakers made by child laborrrs in Indonesia.  At least the child laborers don't have a vendetta against you.  Sado-Masochist takes your money and flogs you with it until YOU DIE.

"The student loan industry, which would be forced out of the loan origination business if the proposal became law, is seeking to cast the administration’s plan as an ill-conceived government takeover that could put thousands of people out of work at private lending centers around the country at a time when unemployment is hovering around 10 percent."

For some reason, I don't give a shit.  I don't care if we put the producers of child porn out of business either.  Nor do I care if drug traffickers join the realm of the unemployed. If you are in an evil business that makes money off of the torture of innocent people, then you deserve to be out on your ass, joining the bread line.

“We anticipated this,” Arne Duncan, the education secretary, said of the lending industry’s lobbying efforts. “They’ve had a sweet deal. They’ve had this phenomenal deal that taxpayers have subsidized, and that’s a hard thing to give up.”

Bravo!  Calling a spade a spade.  The jig is up, fellas.  I hope to God your evil scheme of buying our legistlature doesn't make our elected officials blind to the fact that students are defaulting left and right and there is no where for people to go.

"At the same time, Sallie Mae and other lenders have staged a series of town-hall-style meetings at their job centers around the country to help mobilize opposition to the White House plan and collect thousands of signatures for a petition drive in support of their own plan."

WHO THE FUCK IS GOING TO THESE MEETINGS?  ARE THEY DEAF, DUMB OR STUPID???    This is not a socialist agenda put out by Obama.. this is Corporation that is on welfare from the government, screaming entitlement.  I wouldn't want to give up those perks either.  They are worse then big business, they are big business--minus risk.

Look, I don't like Obama's plan either.  But something needs a'fixin.  In fact, if my plan for education went through, it would be the end of education and lending as we know it. So, until my liberatarian principles are followed.. let's do something different, PLEASE!

Creative and LEGAL Ways of Avoiding Loan Repayment: Lesson #1

Some of my readers will agree... Law School was a worthless waste of money and it didn't result in a career, as promised by those myriad of pretty glossy brochures that were sent to all of us, our senior year of college.  But would it be so bad if it were free?  Or at least cheaper?  Well, one of my readers has figured out how to make law school worth it. Read on, my friends:


Hi, I've read your blog on a couple of occasions and appreciate your thoughts and think there should be more blogs like it out there. I'm an '06 TTTT grad whose been out of the law since April 2008 with mountains of debt, mostly from my idiotic college days when I went to an overpriced private school and ran up my credit cards. I probably spend a good half hour per day reading blogs like yours, Tom the Temp's, or seeing if there are any new articles referencing student loans or Sallie Mae's splendid business practices. I'm doing relatively well right now, but not well enough to pay for all my past sins. After all my deferments ran out, I basically have stayed enrolled half-time at a random community college - the latest being some school in Oregon that charges about $500 per quarter - to keep from having to pay about 2k in student loans per month. At this point, I feel beyond ripped off by higher education that I've basically decided that Sallie Mae or any of my other lenders will never see a dime of my money unless I somehow become ridiculously wealthy. Anyway, if you'd like to chat with another disgruntled "attorney," let me know!


Attorney-at-lol
 
He really got me thinking... We should all use the internet--or at least my blog--to share ways in which to avoid loan repayment in a slightly underhanded or off-color, yet legal, way.   I don't think this sort of info is widely available.  If you look up forebearance on google, you are directed to a bunch of loan/government sponsored websites, like these: 
www.staffordloan.com/repayment/forbearance.php 
www.collegescholarships.org/loans/forbearance.htm 
https://www.studentloan.com/
www.fafsa.com/
 
That's not helpful!  They want you to pay them eventually so they aren't going to tell you how to avoid them forever. 
 
I have a method:  Smoke a pack a day, drink and party like a rock star.  With any luck, I'll die before the loans are paid and, VOILA, discharged upon death!  I think that Attorney-al-LOL's suggestion is better for your health, but what is health when you're a contract attorney with no benefits???
 
Do you have any ideas?  If so, email me at angelthelawyer@gmail.com and we can discuss the merits of your way.  BTW, what the hell is up with my formatting??? Sorry for the tech difficulties.