Attention All Michigan Higher Education Student Loan Authority (MHELSA) Borrowers!

A BIDER reader has sent me information about Michigan Higher Education Student Loan Authority (MHELSA) ending a borrower benefit program that guaranteed a 0% interest rate. Our source wrote a very detailed letter which explains how MHELSA dangled this carrot to entice students to take out these loans only to take away the offer, their excuse being that there isn't sufficient funding. Bullsh*t.

I've uploaded a copy of the letter our source received and the Q & A PDF from MHELSA's website. On page 2, under "Michigan Students First", it refers to the benefit program, i.e., the 0% interest incentive. Another lesson for those attending school in the fall that you cannot trust these lenders, even if they promise you a low interest rate in your contract.

Hi Hardknocks,

You know, you start to get the sense that someone flushed the toilet when they really shouldn't have. We're circling the drain.

I have attached a letter I received today from one of my lenders. Here are the basics:

One of my federal lenders in Michigan offered a borrower benefit program by which you could obtain a 0% interest rate if you made so many payments on time and signed up for direct withdrawal from your checking account. It was a reason why I decided to go with this particular lender. It was even recommended to me. At the time, in 2003, of course, these banks were doing everything they could to get student business, and for these guys, this was part of their pitch. And, to be sure, the prospect of 0% interest is a great pitch. But, today's letter says in part:

Originally, announced in 2002, this subsidy known as a 'borrower benefit' was achieved by meeting certain payment conditions. Under the program, MHESLA's ability to offer the borrower benefits was contingent upon sufficient funding. MHESLA obtains the funds to make or acquire student loans by borrowing money through bond issuances. The borrower benefits programs began at a time when it was less costly for MHESLA to borrow and excess interest earnings were available. Recently though, the severe and ongoing credit crisis has forced MHESLA to pay more in interest costs for its funds. Changes in federal laws, including the College Cost Reduction and Access Act of 2007, have also resulted in a decrease in MHESLA's available funding for borrower benefits programs.

Basically, they're exercising their opt-out on one of the carrots they dangled in front of us to get us to sign up with them. Now, I get the concept of opt-out provisions, but this smacks of over-reaching. It's absolutely infuriating that credit cards do this kind of shit. But, really, that's way more arms-length than student lending is. You can discharge credit card debt in bankruptcy, and so, there is some risk for the lender there. When you're bending over backwards to get students to sign up with you, though, these kinds of illusory promises (That's exactly what it is here.) are wholly abusive. There is absolutely no risk for the lender here. If you had to justify not being able to discharge student loans in bankruptcy, the lender, of course, would argue that almost any college or graduate student in need of a loan could not be offered one if it decisions were made on the basis of credit-worthiness. They're unsecured debt! That may or may not be true, of course, because the lenders would seem to be adequately protected by either the government guarantee or the inability to discharge the debt in bankruptcy. They don't really need both, though they want them; but I digress again.

Anyway, I completely disagree with the kind of practice used here. It's not appropriate for student loans. Not even close to appropriate. As far as I was concerned, this was a right I had under the agreement, and, if they want to end the program going forward, that's fine. But that should apply to new loans, and not to existing promises they've already made. How is the cost for funds to run the program my problem? Other than the abusive practices and contract language (which you know was going to be nearly uniform across the industry), why are their profits my concern? The fact is, if you wanted to go to law school, you most likely needed a loan. All the lenders used the same language, or close to it, and the only difference was in the "benefits" they offered and MARKETED to students so that they could get their dirty little hands on federal dollars. Now, it turns out the promises were illusory. The contract is changed, and what they once did discreetly, they're now doing openly: making profits off vulnerable students backs.

I'm either going to try to consolidate them and do Income Based Repayment and/or default on them, so, there's not much point. My objection has to do with the fact that as a student you never really deal with these people, and it's not an arms-length transaction by any stretch of the imagination, especially when you consider the percentage of students who have to take loans to attend law school. All you have, really, is your school's financial aid officers, their recommendations, and the material they produce that lists advantages of certain lenders and the disadvantages of others. If anyone claims that these law school administrators sat them down and set out - in specific detail - the benefits the borrowers can take advantage of against the things the lender was irrevocably promising to provide them, then they're lying. It is redeeming that MHESLA is not ending the program for those who made the requisite number of payments before they ended it, but they sure as shit got my business as a direct result of offering a program whereby the interest fell to 0% if you paid on-time for three years. That's a great incentive, and to rip it out from under us years after the loan was made is pretty under-handed.

MHELSA



BenefitQA_324448_7

How Much Are They Paying You, Dawn Connor?

I can only hope that the for-profit scam artists and their friends on Capitol Hill are paying you, Dawn Connor, or at least forgiving some of your student loans for shilling on their behalf. Either you will make millions continuing to lobby on the behalf of for-profit colleges, or you will be back in Eau Claire neutering cats and dogs for the rest of your life -- if you're lucky.

This makes my blood boil, but this looks like the few options for-profit graduates have these days. Either become part of the industry that scammed you, or end up thousands in debt with no job prospects.

A few months ago, Dawn Connor was just another college student, attending night courses to become a veterinary technician and practicing her trade by spaying and neutering dogs and cats from a local shelter.

These days, the 33-year-old from Eau Claire, Wis., is shaking hands on Capitol Hill and speaking at news conferences in Las Vegas, the new public face of the satisfied for-profit college student.

Standing closely behind her is the Career College Association, a lobbying group for for-profit schools that provided the organizational muscle to launch the grassroots-sounding Students for Academic Choice at a time when for-profit colleges are under fire.

The Career College Association helped the students establish a website, draft bylaws and set up an online election that resulted in Connor being elected the group's president — all at a time when for-profit colleges are intensifying lobbying efforts against tougher federal regulations expected to be proposed in the coming days.

Who is Dawn Connor? The article lists her "credentials" which include enrolling in three different nonprofit colleges without earning a single degree. She is the face of the for-profit industry because, really, what else would she have done to pay off her student loan debt without her new job rubbing elbows with politicians to make more money for the for-profit thieves?

Connor was a collegiate drifter. She said she graduated early from high school and enrolled at three different nonprofit colleges, changing majors a few times without earning a degree.

Then she found the Eau Claire campus of for-profit Globe University, which offered a flexible schedule that allowed her to attend class at night while she worked full-time in a health care job.

It wasn't cheap. Tuition to complete a two-year associate's degree in veterinary technology at Globe runs $44,820, and lab fees and books are extra. Connor said it cost her less because she had transfer credits.

Even so, she said the state-of-the-art surgical suites and small classes is worth the extra expense.

Connor seems to come off as the type of person who never should have went to college, would have been better off working for the last ten years instead of drifting from one crappy for-profit to the next, but continued to rack up student debt at any "college" that would take her in. She is the perfect example of why these nonprofit schools should be closed down and a warning to students like her. Do you want to be 33-years-old, still in school with no job skills, and owe thousands of dollars in student debt?

The article does not state how much student loan debt she owes. I wouldn't be surprised if she owes upwards of $100k after attending four different colleges before finding her calling as a for-profit shill for a so-called student organization that Lauren Asher of the Institute for College Access & Success calls "an industry-sponsored group".

Any last words, Ms. Connor?

Connor said lower tuition "would be great. In the real world, that would be great if we could lower the price for everything. But that's just not an option at this point in time. That's not the point we're trying to get to right now."

She is an idiot and a clueless hack, which makes her perfect for the for-profit industry in their propaganda. I suggest Connor to milk as much as possible from these thieves while she still can or convince her for-profit school to hire her as a spokesperson, because there is no way she will be able to survive in the "real world" as a 33-year-old with no work experience and a Global University associate's degree. Good luck paying off that $45,000 loan and whatever else you owe to those three other diploma mills.

Census Worker Horror Stories and the May Jobs Report

The May jobs report is being touted as good news by the government just like the "good news" that was reported in the April and March jobs report. Haven't found a job yet? Well, it's probably because 411,000 of the 431,000 jobs created in May were temporary Census jobs with little improvement in private-sector employment. So without the crappy Census jobs, only 20,000 jobs were created last month for the millions of unemployed and underemployed looking for a job. The decrease in the unemployment rate was because of a decline in the participation rate. This is not good.

And if you've found a Census job, there is still a chance that you will find yourself without a job within several weeks of being hired to inflate the job numbers. Yes, I know it is FOX News, but listen to one whistleblower claim the Census Bureau is using temporary layoffs to pump up employment numbers. “What they do is hire you, they train you like a few weeks — 35, 40 hours of training and give you six hours of productive work and lay you off.”



The New York Post also published other census worker horror stories that backed up Maria's claims:

* I was hired four times by the Census Bureau: spring 2009 for address canvassing; fall 2009 for general quarters verification; late winter 2010 as a quality assurance clerk; and, spring 2010 [as an] enumerator non-response follow-up. I've just been laid off. In each case I spent more time training and going to meetings than actually working. Please don't use my name, I still may be called back.

* I was hired four times, counting last year and this. There's lots of waste and poor management. I've wondered about the handheld computer (used by door-to-door workers.) I've no idea how many of these were purchased. They were only used last year in one effort and my understanding is there were a lot of problems.

* I'm in south Orange County in Southern California and I'm going door-to-door to people the Census says have not turned in their form. At least 60 percent of the people I speak to swear they've turned it in. We are supposed to visit a residence three times. (If we can't contact anyone) we are supposed to try up to three proxies (neighbors or other people) to get information on a particular resident. So basically your neighbor can report how many people live in your home.

* Everything you reported is absolutely true. I was fired three times and rehired. I earned more going to training classes than (working). Several classmates didn't get any work after completing training.

* I was hired by the Census on March 16 and my last day was April 19 at the bilingual question answering center in Rome, Ga. We had two days of training, of which one was just to get hired officially as a federal employee. I had a total of two people come by my location and ask a question -- costing taxpayers $250 per question.

* I am a Census worker. I, too, can confirm that they are checking and checking. I checked homes that have already been checked by the "enumerators." The next phase is to go and re-check the checks that we already did twice..

* It's not much better in Florida. Our first day of training was a total joke. The supposed crew leader knew nothing. She didn't even open the manual to prep herself. We spent four hours signing six pieces of paper, one of which we signed on the day of the initial test ing. The nightmare didn't end when we got to the field. No work was available so we would sit in a meeting waiting for work for hours, which went on our timesheet.

* I have personally experienced the very same thing (in Missouri)) and have said from the beginning that this is strictly political and for jobs numbers. It is a waste of our tax monies. Our area appears to be very disorganized. However, I believe that it is intentional. Just another way to increase outlays and jobs.

I'm not wasting another year of my life waiting for the employment situation to improve. My pessimism about the future seems to have rubbed off several of my friends who are unemployed or hate their slave wage jobs and they are looking into the few good opportunities abroad that are left. If you're thinking about it, do it fast before more unemployed graduates with student debt jump on the bandwagon and those jobs become nonexistent as well.

More Rankings from the ABA. Who Cares?

A fan of our blog sent along an email they received from the New York Bar Association. This is what - we'll call our fan, Unemployed, Esq - had to say:

I don't even know why I opened the below email since I usually delete anything from the NY Bar but I accidentally clicked this and was like WTF?!?!? Why do I care about the US News and World Report ranking law firms at the local, state, and national level. SERIOUSLY? This is the biggest concern right now? Why does this matter when nobody can even get a job? I stopped reading it after the second paragraph but I just had to share.

Thanks for sharing your outrage, Unemployed. I was about to write a rant for this but you pretty much said it all. The New York Bar Association clearly cares two shits about the thousands of laid off attorneys and unemployed law school graduates in their state. You said it, Unemployed. Who cares about rankings when we have an unemployment crisis to deal with?

Is this all the law school lemmings and the ABA really care about? Rankings at the local level?! Who needs that kind of information besides the law school lemmings who will brag about getting into the 2nd highest ranked law firm in Podunk? And what about pretending that they don't know why the law school rankings are flawed? As if the ABA and law schools are innocent of helping produce these rankings. This just looks like another opportunity for the ABA to work with USNWR and Best Lawyers to put out falsified information about employment statistics and earnings at law firms. The letter is posted below. Thoughts?

Office of the President

Dear Unemployed, Esq.:

I am writing to follow-up on an e-mail I sent you on February 17, 2010, to advise that the American Bar Association adopted a resolution sponsored by the New York State Bar Association directing the ABA to examine efforts to rank law firms and law schools. A number of people have said that they did not see the earlier e-mail so I am writing again. You can read the earlier e-mail by clicking on www.nysba.org/lawfirmlawschoolranking.

The resolution requiring the ABA to study law firm rankings arose out of the efforts by US News and World Report working with Best Lawyers to publish for the first time a ranking of law firms at the local, state and national level. The ranking would be like the current ranking done by US News for law schools with law firms being ranked as one, two and three on down in each community.

It continues to come to my attention that many of the law schools are concerned that there is a significant random error in law school rankings based upon a flawed methodology. Our concern is that if the same problems of validity, reliability and volatility in ranking law schools occur in the ranking of law firms, the reputations of law firms will be damaged in their community if they are unfairly ranked in relationship to others with the danger of present and future clients being misled.

The proposed rankings by US News and Best are based in part upon information to be provided by law firms at the request of US News including client lists, how partner compensation is calculated, how fees are calculated, the size of matters handled and other otherwise confidential or proprietary information.

Law firms can decide whether to provide information for ranking. We continue to urge caution in deciding whether to do so. There is a choice to be made. Law firms may choose not to submit information and advise their clients and the public that they are not participating in any ranking program until the completion of the ABA study. It is anticipated that the ABA will speak out and provide guidance on this issue based upon the Resolution referred to at the outset of this letter. The New York State Bar Association shall continue to encourage the ABA to do so expeditiously so that lawyers throughout the country can be guided by its findings. We anticipate that we will be joined by other State Bar Associations in this effort.

I take this opportunity to thank past State Bar President, A. Vincent Buzard, and other members of our Association who took part in our efforts to bring this before the American Bar Association and who continue to work with the ABA on this important matter.

Best regards,

Michael E. Getnick
President, New York State Bar Association
Getnick Livingston Atkinson & Priore, LLP

Kaplan: Law School Expert and Big Fat Lying Company

Wow!  This press release summarizes so many of the themes that have come up in our blog.  It's press release that is put out by Kaplan, and probably a paid-for advertisement, about how law students are flocking to law school because of the recession.  Ironically, they feel great about their prospects, but not the prospects of their classmates. Doesn't the term "press release" connote NEWS of some sort?  Correct me if I'm wrong...

So, we've got the following themes covered:

• Lawyers are narcissists.  The reason why they do not heed our advise is because they always say, "That may have been what happened to you, but I will work harder and that won't happen to me." or "Somehow, I'm different, better, smarter than you are--so I will find a job."  They are such narcissists that individual law students are willing to say that people who are similarly situated will end up in a vastly different position than themselves.  This is an irrational, pompous attitude--that has no relation to real life.  If you jump of a bridge and die, can I expect to fly if I do the same thing?
• The Educational Industrial Complex pays for newspaper articles and reputable press such as "Market Watch" publish these articles without so much as a disclaimer.  Kaplan is not a law school expert--but a profiteer of college graduates' misfortunes.  They perch like eagles outside of college graduation ceremonies and offer students who majored in enjoyable, but useless, topics like literature and sociology a "great way to become marketable."  Hogwash.  I wouldn't trust an article put out by Pro-Lifers about how happy mothers are to have had a baby. Nor would I believe the accuracy of an article put out by NOW about how women who choice to have an abortion were so much better off without a child.  The irony is, if a reputable publication decided to put out one of the above articles, it would lose its' credibility. It would be considered one-sided.  But somehow, the Educational Industrial Complex is given different treatment. It's okay to put out lies that fool the most vulnerable of our society, the young, into being shackled with a lifetime of debt.   Look at this prize quote: "If given the choice of submitting as part of their law school application a perfect 180 on the LSAT, a perfect 4.0 GPA or a letter of recommendation from a Supreme Court justice, 80% would opt for a perfect LSAT score."  This can also be read as follow:  "Take Kaplan so you can score a perfect LSAT score." Or, it can read as follows:  "You can still go to law school although you had nothing close to a perfect GPA."  OR, "You can be a no one and know nobody and go to great law school."  BULL!  You must have an excellent GPA, a great LSAT and know someone of importance in the legal industry to make it as a lawyer.  Anything short of that, will park you in your parents' basement until you're 35.
• Most pro-law school press has no real facts regarding the legal industry.  This article is filled with great little tidbits of hope for future law students that causes them to heard into TTThird TTTier TTToilets like cattle such as:  "Pre-law students' attitudes are in keeping with research showing that students aged 18-29 are more optimistic about their economic future -- despite a sluggish job market -- than past generations."  It also states: "52% report that they are 'very confident' that they will find a job in the legal field after graduating law school and passing the bar..." Of course, what the article fails to state, which seems to be standard modus operandi, is what the reality of the legal job market is. It even alludes to finding a non-legal job. Why aren't there any cold and hard numbers relating to the post-law school job search instead of what a bunch of lemmings think, feel and hope.  Am I the only person that finds it ironic that people would attend law school to not work in the law?  Would I go through the trouble of medical school to be in HR? 

I am angry now and never reading Market Watch again.