Debt Collection Company Uses Fake Courtroom to Frighten Consumers Into Making Payments

File this under "why should anyone be surprised that debt collectors use illegal tactics to threaten consumers into making payments"?

From the Pennsylvania Attorney General's office:

Attorney General Tom Corbett today announced that a consumer protection lawsuit has been filed against an Erie debt collection company accused of using deceptive tactics to mislead, confuse or coerce consumers - including the use of bogus "hearings" allegedly held in a company office that was decorated to look like a courtroom.

Corbett said the civil lawsuit was filed by the Attorney General's Bureau of Consumer Protection against Unicredit America Inc., with corporate and business offices located at 1537 West 39th St., Erie, also identified as the "Unicredit Debt Resolution Center."

"This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection," Corbett said. "Consumers also allegedly received dubious 'hearing notices' and letters - often hand-delivered by individuals who appear to be Sheriff Deputies - which implied they would be taken into custody by the Sheriff if they failed to appear at the phony court for 'hearings' or 'depositions'."

These fake courtrooms were used to intimidate victims into giving Unicredit access to their bank accounts and even surrendering vehicle titles and assets. Unicredit must have hired a few unemployed theatre graduates to do the set design because the description of this fake courtroom sounds like they covered all the details to make this look real enough to fool a lot of people. I would love to see photographs of this mess:

The fake courtroom allegedly contained furniture and decorations similar to those used in actual court offices, including a raised "bench" area where a judge would be seated; two tables and chairs in front of the "bench" for attorneys and defendants; a simulated witness stand; seating for spectators; and legal books on bookshelves. During some proceedings, an individual dressed in black was seated where observers would expect to see a judge.

I reported in June about a bill collector who threatened to blow up a man's house for not paying his $308.09 Verizon cell phone bill. I knew then that this was just the beginning because $308.09 is chump change to the $300,000 some graduates owe for their college and graduate school education. If someone's life could be threatened for that small amount, these debt collectors are capable of anything to get their money.

If any of you have been scammed by Unicredit, you can call the Attorney General's Consumer Protection Hotline at 1-800-441-2555 or file an online consumer complaint.

Another Toilet to Add to Nando's Collection: Phoenix School of Law

Another month, another ABA accreditation. Let's face it: law school no longer has any value now that anyone with the money to invest in a building and a law library to entice a few hundred lemmings from the local for-profit school can call itself ABA accredited. The Phoenix School of Law was just accredited on June 11th:

The Phoenix School of Law has announced today that it has received full accreditation from the American Bar Association (ABA). The Law School, which received ABA provisional accreditation in June 2007, is only the fourth for-profit law school in the country to be granted full accreditation and in the shortest time frame possible – less than six years.

The press release goes on to name the other two accredited toilet schools that Phoenix School of Law will join in Arizona:

There are only three fully accredited law schools in Arizona: Phoenix School of Law, the Sandra Day O’Connor College of Law at Arizona State University and the James E. Rogers College of Law at the University of Arizona. PSL is Arizona’s only stand-alone law school – not affiliated with a university.

How did PSL become accredited? One reason, according to PSL propaganda, is the school has the highest Bar Exam passage rates in Arizona. I checked online and apparently PSL's bar passage rate for first timers is 83.3%.

The Phoenix School of Law demonstrated high benchmarks to win the approval of the ABA’s Accreditation Council, including achieving the highest Bar Exam passage rates in the State for February’s exam; a career placement rate of 97% within nine months of graduation; and receiving the Law School Admissions Council’s “2010 Diversity Matters Award” for its efforts to attract students from racial and ethnic groups underrepresented in the legal profession.

However, in this Phoenix School of Law Official ABA Data document (PDF File), the numbers are even more far-fetched. The document states that 96.88% of Phoenix graduates pass the bar on the first try and that 88.2% find employment after 9 months -- 60% with law firms!

How much does this newly accredited law school cost?

Fall 10 - Spring 11 academic year, the ESTIMATED COA for Financial Aid purposes ONLY is as follows:

Full Time (13-16 credit hours each semester) Fall and Spring total

• Tuition: $34,396
• General Fee: $1,570
• SBA Dues: $70
• Books: $2,184
• Room and Board: $12,316
• Transportation: $4,116
• Personal/Misc: $7,664
• TOTAL: $62,316

Part Time (7-12 credit hours each semester) Fall and Spring total

• Tuition: $27,516
• General Fee: $1,570
• SBA Dues: $70
• Books: $1,300
• Room and Board: $12,316
• Transportation: $4,116
• Personal/Misc: $7,664
• TOTAL: $54,552

Anyone gullible enough to believe the official ABA data will also believe that attending Phoenix is worth spending a grand total of $186,948. Luckily, if you are reading this and other scam bloggers on a regular basis, you are smart enough to realize that the ABA data and The Phoenix School of Law statistics are make-believe and that taking out $190,000 in student loans to attend ANY law school right now is absolute self-destruction. Putting an ABA accreditation on a toilet is like putting lipstick on a pig -- it's still a pig --and Phoenix is still a toilet.

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.

News We Already Know: College Degrees Fail to Lift Low Income Youth Out of Poverty

You can also add JD, MA, MS, PhD, and LLM along to the long list of degrees that will not lift you out of poverty. So much for the brainwashing from teachers and family my entire life that I could achieve anything with a college education. A study from the Institute of Higher Education Policy shows that an increasing number of low-income youth are pursuing higher education, but remain poor (Hi CLEO Pre-Law Institute for minorities *waves*).

Increasing proportions of low-income young adults are pursuing higher education, but some remain poor even with a postsecondary degree, according to a new report from the Institute for Higher Education Policy.

In 2008, among Americans ages 18 to 26 whose total household income was near or below the federal poverty level, 47 percent were or had been enrolled in college, compared with 42 percent in 2000. Eleven percent of them had earned a degree, a proportion roughly equivalent to that eight years ago, according to the report, which is based on data from the U.S. Census Bureau's American Community Survey.

The institute is a nonprofit group in Washington that conducts public-policy research to encourage access and success in higher education.

In introducing its report, the group called into question President Obama's declaration in his State of the Union address in January that "the best anti-poverty program around is a world-class education." Poor students go to college academically unprepared, the report says, and, amid competing family and work obligations, they accumulate debt "that could have been avoided by pursuing a different type of degree or a credential."

None of the 11 percent of low-income graduates should remain in poverty, said Gregory S. Kienzl, director of research and evaluation at the Institute for Higher Education Policy. "If you have a degree, you should no longer be poor," he said.

Across all racial and ethnic groups, greater proportions of low-income young adults were or had been enrolled in college in 2008, compared with 2000. Hispanic students showed the largest percentage-point increase, to 37 percent from 29 percent. Low-income Asian and Pacific Islander and white students enrolled at the highest rates in 2008, 62 percent and 51 percent, respectively; the greatest proportions of low-income degree holders were also from those groups.

The report, "A Portrait of Low-Income Young Adults in Education," is the first in a series financed in part by the Bill & Melinda Gates Foundation. The next report will focus on attendance and enrollment patterns among low-income students, Mr. Kienzl said, including that black and Hispanic women more often attend for-profit institutions than public four-year colleges.

The article also leaves out the little inconvenience of having thousands in student loans to pay back, especially for children from poor and low-income families who have no way of helping them pay off those loans. As someone from a working class neighborhood, I can say from firsthand experience how heartbreaking it is for families who invest the time and money to make sure their children are the first in the family to attend college, only to see their children come home with no job and thousands in debt. The higher education system has become a Ponzi Scheme and the people who are responsible for perpetuating the higher education scam and charging hundreds of thousands for useless degrees should be forced to testify before Congress for their crimes.

College and graduate school have only become more accessible because of worthless for-profit scams and lower tier schools. This is far from the world class education for the poor President Obama talks about in his speeches, and he knows that too. It sure sounds nice to say in theory that the United States gives everyone the opportunity to pull themselves up by their bootstraps with a college education. It kind of takes off any blame on the elites for draining the public coffers of billions and instead places it squarely on us powerless unemployed and underemployed citizens for whining too much about our plight. No one talks about the business of selling worthless degrees and a really poor education system at its core. Our public schools are falling apart and some of the teaching at colleges and graduate schools are really bad because the professors are paid not to teach but to publish academic papers. Not only do you waste money on the worthless degree, but you really don't get a good education either. Has anyone graduated from law school prepared to practice law? There's also that little problem of not having enough jobs being created to put 24 million Americans to work.

We at BIDER and other scam bloggers have said this again and again. College and graduate school have ALWAYS benefited the rich who had the money and connections to get the best private school education and admittance into the Ivy League. If they were dumb rich kids, they still had a job guaranteed with the family business or through a business associate. At every level of education since high school, most of the people I know who turn out to be "successful" or at least employed at a well-paying or prestigious job have done so because of their family wealth and connections. The truth is that the degree alone has never helped the majority of people who didn't graduate from top schools at the top of their class. Even a degree from a high ranked school gets you nowhere without connections, unless you are extremely resourceful and lucky.

LawCrossing Uses Reverse Psychology in Stupid Email

I apologize to the law graduate who forwarded an email from legal recruiting site Law Crossing to me last week for not posting this sooner. My initial reaction when reading the beginning of the Law Crossing email was WTF? before setting it aside until today to make some sense of it. If I had received this email directly from Law Crossing, I would’ve trashed it immediately without reading it because it’s that stupid and nonsensical. Note to boring and humorless attorneys: Do not use reverse psychology in an entire email. You’re not funny and you won’t get your point across, especially when it concerns a moneymaking scheme to swindle unemployed law graduates.

The person who sent me the email is a paid subscriber of this new LawCrossing service through BCG Attorney Search, which places “new lawyers” with firms, I suppose? Our source must have been equally confused with a WTF cloud hovering above his head because these were his thoughts on the email:

What the hell is this? The vultures now descend with riddles?

I would happily give these guys a good percentage of my first year salary and bonus if they could find me a paying job. I see no reason why they should be paid a subscription up-front. The fact that they operate like my gym ($15 every month whether it does you any good or not.) makes it all the clearer that there are no jobs. And another thing: I have no doubt that I'm the target demographic here. I mean, BCG kicked me over to their "new lawyer" department, LawCrossing, because I am, in fact, a recent graduate. But, thing is, I'm not exactly in a playful mood, and the reverse psychology here falls pretty flat. How's this, Harrison Barnes, Esq.: DO NOT go fuck yourself.

So they are charging lawyers money every month even if they don't find them a job? Nice. I'm sure they will find enough new graduates to con out of hundreds if not thousands of dollars over the next several years without ever finding them law firm employment.

I won’t link directly to the email on the BCG site because it would reveal our source’s email address, so here it is below.

For-Profit Film School & Movie Studio Scams an Entire City

People in economically depressed areas desperate for jobs will place their faith in almost anyone who promises a miracle to end their suffering. Unfortunately, scam artists are taking advantage of the recession to deplete the little that is left in hard hit cities such as Allen Park, Michigan outside of Detroit. As if things couldn’t get any worse for Detroit, right?

Last summer, Allen Park residents celebrated what seemed to be the answer to their prayers. A wannabe studio executive by the name of Jimmy Lifton (gawd, doesn’t his name just scream scam artist?) wanted to open a movie studio and film school in their town that promised to create hundreds of jobs and bring Hollywood projects to the area.

According to The News-Herald, the city sold $25.3 million in long-term general obligation bonds and $3 million in Wayne County-issued recovery zone bonds last fall to pay for the property.

Eight months later, the city has revealed that Lifton failed to pay the base rent of $25,000, along with an additional rent of $17,000 on April 3. More:

It also said Unity failed to separate utility meters and to provide information on Lifton Institute for Media Skills’ curriculum and a list of students and instructors to the city. It said that Unity failed to provide on a quarterly basis a balance sheet, a profit and loss statement and a payroll report for all people for any Unity entity that generates a W-2 and/or 1099 tax statement.

I did an online search for any information on Lifton Institute for Media Skills and came up with little other than the school's website which didn't provide any tuition rate information and a comment that was left under the Oakland Press article:

Jimmy Lifton as well as all the other clown shoes "film schools" that have mysteriously popped up in the last 2 years are just a bunch of scam artists. They use Michigan WORKS! tax payer dollars to line their pockets.

Jimmy Lifton charges up to $12,000 a class for "film training"- you will never see a true film camera in his classes- you will never be taught by an industry professional. He holds his "classes" in beat up abandoned automotive office space with free rental equipment that he has borrowed from local rental houses- the gaff house and william f white.

He is stealing power from the plant next door, clearly a fire hazard as well as thievery. (please investigate if you have the means)

I don't know how this jerk sleeps at night. no rent, no audit, poor excuse for a business, stealing tax payer dollars..

only saving grace...
You will make a short video on a prosumer digi camera starring JIM LIFTONS DAUGHTER!!!- hope its worth 12 grand!

Good luck finding a job "graduates" !.... Lifton Institute! WHAT A JOKE!!!!!!!!! you will be viewed at as a moron, untrained, or "one who has been scammed"
Keep up the DENILE Jimmy.. its a great tactic for liars, thieves and cowards!

Who knows if the school even has more than a few of Lifton’s children gullible students who attend? Despite the lack of public information on this “film institute”, Lifton was able to obtain a $2 million unsecured loan to improve his school. If you are from the Detroit area or know more about what is happening on the ground in Allen Park, please comment or email me with the details. BIDER would love to expose this scam and warn potential students to avoid attending this film school at all costs.

What was supposed to be a joint project with Unity Studios and Allen Park has instead become a $150 million bad investment paid in full by the city with Lifton pocketing every loan and grant he could get from taxpayers. I wonder how long Lifton will be able to continue this scam with the assistance of Allen Park city officials who need pretend everything is on the right track to save their jobs in the next election.

This story should be a reminder that if someone pops up out of nowhere in your Podunk town with an offer that sounds too good to be true, it usually is. Honestly, why would a legitimate, big name Hollywood studio exec want to invest over a $100 million in a studio outside of Detroit instead of a bigger city like Chicago or even Minneapolis? Any competent city official ought to have questioned this guy’s motives. Now, their constituents will suffer for their million dollar mistake.

I Need A Freakin' Job

This is amusing.

"I need a freakin' job." That's the message President Obama saw as he arrived in Buffalo, N.Y., this afternoon for an event talking up the administration's success in creating new jobs. He also pitched Congress on approving a $30 billion credit for small-business growth.

Yet critics say Obama has been focusing his recovery efforts too narrowly and hasn't done enough to help people find work. After all, the latest job figures show 9.9 percent of the country still out of work. That inspired a group of unemployed Buffalo residents — who also have a website called INAFJ.org — to appeal to the president in the form of a billboard along the route his motorcade took into town.

Unfortunately for those who need a freakin' job immediately, neither of the major political parties think job creation is the number one issue for midterm elections. Why do we vote for these people again?

Yet jobs aren't a huge priority for either party heading into the midterm campaigns, as Politics Daily's Jill Lawrence notes. That might be because other issues have taken precedence. A new Gallup poll finds that for the first time in two months, the issue of "jobs" has fallen to No. 2 on the list of issues Americans are most concerned about. The new No. 1 issue: The economy in general. White House officials defend their efforts on jobs, saying the president has been focused as much on creating new jobs as on "saving" current positions.

Meanwhile, in the real world outside of lalaland DC where everyone gets paid by the health insurance industry and Sallie Mae, millions of people are suffering and the higher education scam continues. The New York Times interviewed a woman who took out a $17,000 student loan for an eight-month course to become a medical assistant after losing her adminsitrative assistant job two years ago. The program sounds like another for-profit college scam to me.

Ms. Norton, for her part, may be reluctant to acknowledge that many of her traditional administrative assistant skills are obsolete, but she has tried to retrain — or as she puts it, adapt her existing skills — to a new career in the expanding health care industry.

Even that has proved difficult.

She attended an eight-month course last year, on a $17,000 student loan, to obtain certification as a medical assistant. She was trained to do front-office work, like billing, as well as back-office work, like giving injections and drawing blood.


The school that trained her, though, neglected to inform her that local employers require at least a year’s worth of experience — generally done through volunteering at a clinic — before hiring someone for a paid job in the field.

She says she cannot afford to spend a year volunteering, especially with her student loan coming due soon. She has one prospect for part-time administrative work in Los Angeles — where she once had her own administrative support and secretarial services business, SilverKeys — but she does not have the money to relocate.

“If I had $3,000 in my pocket right now, I would pack up my S.U.V., grab my dog and go straight back,” she says. “That’s my only answer.”

With so few local job prospects and most of her possessions of value already liquidated she has considered selling her blood to help pay for the move. But she says she cannot find a market for that, either; blood collection agencies, she said, told her they do not buy her blood type.

“Sometimes I think I’d be better off in jail,” she says, only half joking. “I’d have three meals a day and structure in my life. I’d be able to go to school. I’d have more opportunities if I were an inmate than I do here trying to be a contributing member of society.”

My suggestion to flee the country might sound drastic to some of you, but when educated professionals who have done everything right are selling their blood to pay the bills or would rather commit suicide or be thrown in jail, that is when you have to consider other options. Oh, and as I mentioned last week, this won't be ending any time soon.

Millions of workers who have already been unemployed for months, if not years, will most likely remain that way even as the overall job market continues to improve, economists say. The occupations they worked in, and the skills they currently possess, are never coming back in style. And the demand for new types of skills moves a lot more quickly than workers — especially older and less mobile workers — are able to retrain and gain those skills.


There is no easy policy solution for helping the people left behind. The usual unemployment measures — like jobless benefits and food stamps — can serve as temporary palliatives, but they cannot make workers’ skills relevant again.


Ms. Norton has sent out hundreds of résumés without luck. Twice, the openings she interviewed for were eliminated by employers who decided, upon further reflection, that redistributing administrative tasks among existing employees made more sense than replacing the outgoing secretary.


One employer decided this shortly after Ms. Norton had already started showing up for work.

Frontline Exposes For-Profit College Scam

Be sure to watch this on your local PBS station.

Frontline Press Release:
Higher education is a $400 billion industry fueled by taxpayer money. One of the fastest-growing--and most controversial--sectors of the industry is the for-profit colleges and universities. Unlike traditional colleges that raise money from wealthy alumni and other donors, many for-profit schools sell shares to investors on Wall Street. But what are students getting out of the deal? Critics say a worthless degree and a mountain of debt. Proponents insist they're innovators, widening access to education. FRONTLINE follows the money to uncover how for-profit universities are transforming the way we think about college in America.

Paying Thousands to Work for Free

Hat tip to Esq. Never and Exposing the Law School Scam for reporting first on the Chicago Tribune article about the latest company to take advantage of desperate, unemployed students and graduates.

A company called University of Dreams (oh, the irony) guarantees anyone an unpaid internship placement at the basement bargain price of $7,999. Since I was duped into taking out $40k in loans to attend the three year nightmare also known as law school right before the brink of our country's economic collapse, very little surprises me anymore. I am surprised, however, that colleges and law schools didn't think of this scam first. But I sense that they'll likely get into the act as well when they start noticing desperate students willing to pay a semester's worth of tuition during the summer to work at the school museum or cafeteria.

Back in the good ol' days these unpaid internships were filled by actual full-time workers who received a livable wage and benefits. But honestly, who needs those people anymore when young, college educated students are lining up at the door willing to pay thousands of dollars to work for free with no health insurance or guarantee of a full-time job at the end of the internship? Yes, this really is a dream come true - for universities, corporations, and scam artists like the people who created University of Dreams and the so-called non-profit group The Washington Center. Here is an example of the type of internship you can get at the low price of $8,000:

Take Carmelle Hayes, a junior theater and voice major from Stephens College in Columbia, Mo. The 20-year-old works in her school's costume department and loves being on stage. But her goal is to work in casting.

So Hayes agreed to pay $7,999 to University of Dreams for a casting internship in New York for the summer (she's deciding among three choices) as well as handling her living arrangements.

Yep, you read that right. This poor college student just paid University of Dreams $8,000 to spend the summer in a casting internship. College "guidance counselors" tell these kids that it doesn't matter what you major in as long as you're haapppy with what you study. They encourage students to take out a $100k loan to study voice, acting, art, and other majors that will almost certainly land you in the unemployment line in this economy. Voice and art are great things to do as a hobby or as a minor to accompany your pre-med or computer science major, you know, subjects that might lead to one of the few jobs left in America that can pay off those loans. It is sad to see innocent students like Carmelle Hayes duped into paying $8,000 on top of her likely $30k/year college tuition for a casting internship. This is a prime example of why so many students today are unemployed and owe six-figure debt.

Interview With the $500K Doctor, Michelle Bisutti!

Today was my lucky day. No, I didn't get a job, don't get overly excited. I had a chance to speak to the famous, or infamous, Dr. Michelle Bisutti--from the Wall Street Journal article entitled The $500K Student Loan Burden. She was sweet as apple pie, and was very excited to reach out and talk to my readers, who have also suffered from the student loan scam. I spoke to her on the phone and I tried my best to quote her verbatim. Excuse me, Michelle, if I didn't get it quite right. But the message certainly there. Michelle is not a sob story. She's allowing herself to be the poster child for a revolution. I hope she didn't tell her story in vain. Enjoy...

1. Are you surprised at how popular the story from the WSJ has become?

Yes. I knew it would grab people’s attention because of the number, but I’m surprised at how many people picked it up. Rush Limbaugh, Ron Paul and Michael Moore picked it up. Radio commentary and on-line as well. Rush Limbaugh blamed the govt. for the high fees that I was charged. At the time, I thought that he didn’t know what he was talking about, but I’ve learned some things [which I will get into later]. On Michael Moore’s website, one of the most popular articles is one featuring my story. They are on opposite ends of the spectrum, but they both used the article to make their points. It was very strange. Those are the just the ones that I got to. It was nauseating at first to see how popular the article was; I’m a private person and to see my name all over was very embarrassing. But people need to know what’s going on. What’s happening to students is criminal. In regards to the government’s involvement, I thought that Sallie Mae owns Financial Management Systems (FMS), my lender, but FMS is basically a government agency. 80% of its revenues come from the government. It contracts with the Dept. of Education and Dept. of Treasury. It’s basically a government agency. So, it’s the U.S. govt. that charged me that $53K penalty for default. FMS collects on student loans, Medicaid, and Medicare for the government.

2. Why did you decide to give your story to the WSJ? Two reasons. First, I wanted people to know about these crazy fees that you are charged if you default on your student loans. It’s outrageous and criminal and legalized loan sharking. Second, I want parents and their kids to know what they’re getting into when they get a loan. What does it mean for interest to accrue, what does it mean to defer, what happens if I default? These are the tough questions that kids need to ask if they decide to sign on for a student loan.

3. If you could do it again, would you? What would you do instead? I don’t know. There are not too many things that I love to do and medicine is one of them. I used to be a personal trainer. Both professions go hand in hand, really.

4. Why did you decide to leave being a Personal Trainer? That was a side job. I did it while I was going to school. I didn’t think it would be satisfying. I wanted to go to law school, but I found out that Columbus has the most attorneys anywhere per capita. So I decided that isn’t a good idea. At the time, I foresaw taking out 70K in loans, and not finding a job as an attorney. So I went back and did pre-med requirements in two years after college and went to medical school.

5. What is your current monthly payment? My loan is partially in collection. $550-600 and the other one, $990, with only $100 going to the principal. They are trying to charge me another $32K penalty fee, so that the loan can be sold to another student loan company. They are asking that I sign on and agree to that penalty. I am meeting with attorneys and trying to figure out what I can do to avoid this. I’m trying to enter the Income Based Repayment program but I’m not sure what portions of the loan will qualify and what won’t. It’s been 2 months since I applied. I know I’ll be paying this back the rest of my life.

6. What caused you to fall behind? I did my residency and Wells Fargo loans came due 2 years into my residency, so I started paying on those loans. I deferred the others while I did my residency and then I did a fellowship in sports medicine. While I was in my fellowship, I defaulted. I was not making enough to survive, so I couldn’t pay it.

7. Did you live extravagantly while in Medical School? Do you live extravagantly now?? Far from it. I drove a used Honda and lived in an apartment. I haven’t been on a vacation in five years. I still own a used Honda accord. I live in a house my boyfriend owns. Like I said, I haven’t been on vacation in 5 years.

8. What is your plan for tackling your student debt? I have applied for IBR and that’s all I can do. You can’t get out of student loans. I can’t not pay them. They garnish wages. I’m getting 100s of emails about stories much worse than mine. At least I don’t have children and I have a job. I’ll be okay and I’ll be able to pay these, but the fees are absolutely criminal. A lot of these people are not going to be okay. It’s horrible what they are doing to people that tried to get an education, better themselves and live the American dream and now they are indentured servants for the rest of their lives.

9. If called to testify before congress about your student loan experience, would you? Yes, I have become the poster child for the student loan crisis. Without a doubt.

10. Do you have any feelings on the student loan scam? Do you think that the system should change? I think there is a scam, evident by some of the actions of the Bush Administration when they created the 2008 budget. I won’t get into that, but there was something seedy in the way that Sallie Mae was dealt with. But this take over by the U.S. Government of student loans is a good thing, to take out the middleman. But it’s the government is the one that charged me these unreasonable fees. So, I don’t know what to say about that. But I know that the middleman is making billions of dollars off of us, which is criminal.

11. Any advice to students? I advocate higher education, but doing it smart. Take out as little as you can, if you can live at home and stand your parents, take out low interest loans, and be aware of what would happen if you get out and can't find jobs in your chosen field. Especially now, when so many people can’t find a job in their field. Know what kind of money you will be looking at repaying. You cannot get out of student loans. You have to pay them. People say the two things you can be sure of are death and taxes, but add to that—paying off student loans. They need to know what can happen. Get a major that you can get a job with, like being an engineer. But don’t go to school, just to go. Like getting an art history degree. That won’t work and you’ll probably be waiting tables. I don’t want to keep people from going to college, just know what you’re getting into. I have given some thought to whether we’re better as the uneducated masses or the educated masses. I think it’s better that we’re educated. Because if we’re educated, we can fight this.

The Holidays are Around the Corner!

Nothing gets me more in the mood than The Christmas Carol... the ghosts... Scrooge and Tiny Tim. EsqNever (a fellow blogger) has made the story relevant to lawyers in his creation of Law School Carol. Hilarious, kids. Make sure to watch parts #2 to #5 as well and the epilogue.

Law School: Don't do it!

So, I was stupid and uninformed and I went to law school.  But thank God, I wasn't the only idiot to make that mistake.  Some people think that God gives us all a mission in life. I definitely have one. I have a duty to tell all naive students not to go to Law School.

Let me break it down for you.  People think Lawyers make money. People hate lawyers, they respect Lawyers.  Whatever your feelings may be.. whether you think they are intellectuals, bloodsuckers, scam artists, ambulance chasers, or crooks....  you probably assume they make money.  WRONG!  My school, let's call it, Princeton School of Law, promised that the average salary of a lawyer graduating from law school was $70K.  That sounded like a lot of money to me at the time. I thought I could count on earning at least $70K.  That's not what happened.  What happens is that a shitload of people earn $40 or $50K, a few people earn (at the time I graduated), $125K and this somehow averages to $70K.  This was before "The Crash."  So things have only gotten worse.  Ha.  Lawyers graduating in May 2009 would be dancing for joy if they found a job earning $50K.  Let's downward modify that to $30K.  

And you can't even tell someone that your earning potential will grow.  If you're a first year associate today, earning $165K--your salary may have been cut down to $145K or $125K.  And you may never become partner.  Actually, you will never become Partner.  That's a myth. It's almost attainable in firms big and small.  So, you have no future in your big firm.  Eventually you're counseled to that effect and you're encouraged to move on.  What will you do?  Ideally, you will move to an in-house counsel job.  But you aren't that lucky.  

So, in all likelihood, you'll do something to give back to society.  I guess you've taken so much that you must be punished.  That's not true of course.  Earning a good living for less than a decade does not warrant punishment.   But you will be punished by earning $40K doing nonprofit work, or devoting yourself to civil service.  Either way, you're not earning a lot of money.  Oh yah, and you have $200K of debt that you PROBABLY didn't pay off because you thought you'd always be living on cloud 9 in big law.  So now you're fucked.  

The other scenario is that you weren't on moot court or law review and you're always trying to pursue to the allusive 6 figure salary.  And you can never save enough because you pitch over $1000 a month to those shitty loans that you pulled out to go to law school.

What should you have done?

You should have taken an entry level job at a company and worked your way up the corporate ladder.  By the time you're 25, when your dumb friends are graduating from law school, you are already earning over $60K without debt.  

It's all about net, not gross.  $60K-$200K law school loans equals not enough money.  $60K free and clear is ideal.  

This is the legal field's dirty little secret.  No one seems to know or consider this when they decide to take the $200K plunge for a law school education.  They just ASSume that this is the responsible thing to do when you graduated from college.  Law Schools aren't going to tell you this.  Because they can't be honest with you and still get you to fork over the money.  We are drowning in lawyers.  There are too many of us and there is certainly not enough money to make sure that we won't all go hungry.  But every day law schools open up and get accreditation from the ABA.  Every year, more and more people sit for the bar... thinking that the hard part is behind them.  It's in front of you folks!  Now that you're strapped with a law school loan that you can't get rid of in bankruptcy, how the hell will you live?

You can live in the hood like me.  I can very honestly say that I don't have more now than I did when I was in law school. I travelled more when I was in law school. I had a car when I was in law school. I had more clothes when I was in law school. I ate at nice restaurants.  Now, I live like a student.  I better get used to it because it's not getting better for people like me.

Maybe someday, Capitalism will do what it's supposed to do and law schools will close for failure to produce happy graduates.  I can only pray.