Showing posts with label student loan debt. Show all posts
Showing posts with label student loan debt. Show all posts

Friday, February 10, 2023

People's Rally for Student Debt Cancellation to be held outside Supreme Court, February 28, 2023

[Update: This event will be livestreamed at https://www.cancelmystudentdebt.org/peoples-rally-livestream

Sign up for the People's Rally for Student Debt Cancellation to be held outside the US Supreme Court, Tuesday morning, February 28, 2023.  And please share this event with people in your network. 

The Supreme Court case involves the constitutionality of President Biden's order to cancel more than $400 billion in student loan debt, that according to the NY Fed would provide a disproportionate amount of relief to low and middle-income families

Supporters of the People's Rally include the Debt Collective, NAACP, National Urban League, American Federation of Teachers, National Education Association, SEIU, the National Consumer Law Center, Young Invincibles, and Move On. Senator Elizabeth Warren will be one of the speakers. 

While there is no substitute for People on the ground, folks can also attend online.  

Before the hearing, the People are invited to use the #CancelItSCOTUS! hashtag and flood Twitter with personal and shared stories of why the cancellation is so vital. Access the toolkit to join the Twitterstorm on 2/28 at 9-11am.

Currently, there are about 45 million Americans carrying student loan debt. Based on our interpretation of the 2022 Financial Student Aid Annual Report, about 40 percent of the federal student loan debt portfolio ($674 Billion of $1.7 Trillion) is unrecoverable.* 

Meanwhile, student loan debt collectors like Maximus receive hundreds of millions of dollars from the US government while sometimes using unethical and predatory business practices. 

Students who attended subprime schools or who had low financial value majors have been hardest hit. And the debt takes its toll on millions of citizens, their families, and their communities--and reduces their opportunities to live the American Dream. 

About 200,000 student debtors who were defrauded by subprime schools are also facing a legal battle in the 9th Circuit Court to have their debt forgiven. Hundreds of thousands more have filed Borrower Defense to Repayment claims and are awaiting for decisions that can take several years, due to  understaffing and an enormous backlog at the US Department of Education.

 

So far, ED has only approved Borrower Defense to Repayment claims from a handful of closed schools, and it appears that victims of fraud from other subprime schools, like the University of Phoenix, have received blanket denials.  


Pushing back against the debtors, Republican lawmakers are calling for mandatory loan repayments to restart.  

Stay tuned to this post for more information.  #strikedebt 

 *We have asked the US Department of Education press team for a comment, but they have not responded, which is often the case.

Related link: I Went on Strike to Cancel My Student Debt and Won. Every Debtor Deserves the Same. (Ann Bowers*) 

Related link: Assessing the Relative Progressivity of the Biden Administration’s Federal Student Loan Forgiveness Proposal (NY Fed)

Related link:  Federal Student Aid FY 2022 Annual Report 

Related link: Sweet v Cardona (Borrower Defense to Repayment) 

Related link: Maximus, Student Loan Debt, and the Poverty Industrial Complex 

Related link: Borrower Defense to Repayment Loan Forgiveness Data





Tuesday, October 18, 2022

I Went on Strike to Cancel My Student Debt and Won. Every Debtor Deserves the Same. (Ann Bowers*)


Image of Ann Bowers, courtesy of the Debt Collective

[Note:  This article originally appeared in In These Times on June 2, 2022.  The Higher Education Inquirer is now working with Ann Bowers and the Debt Collective to restore GI Bill benefits to veterans preyed upon by for-profit colleges.]

This week, former students of Corinthian Colleges — a predatory for-profit school that once boasted more than 100 campuses across the country — received news that their student loans will be canceled. In an announcement, a Department of Education (DOE) press release called the move ​“the largest single loan discharge the Department has made in history.” As a former student of Everest College, which is a branch of Corinthian, I am overjoyed that everyone who attended the scam school will finally be made whole.

The action, announced on June 2, will impact 560,000 former Corinthian students and $5.8 Billion in total student debt will be cancelled. This amounts to a stunning victory for debtors who took collective action to win relief.

But I want to set the record straight. This victory is not the result of the Biden administration’s good will. It is the outcome of a fierce organizing campaign by debtors that has been going on for almost eight years. I should know. I was part of a group of former students that launched a 7-year long student debt strike to win loan cancellation from the federal government.

Now, as President Biden considers cancelling student loan debt more broadly, the outcome for former Corinthian students should send a clear message that the only way to resolve the issue of pernicious student loan debt is to cancel it for everybody and to do so automatically, without making borrowers individually apply.

My involvement started back in 2014 when I read an article that revealed my school was suspected of lying to and defrauding borrowers, many of whom were from low-income families. I was outraged to discover that Corinthian had been under investigation by the U.S. Senate since at least 2010 for breaking the law — all while continuing to receive billions of dollars per year in government funding. Investigators found that Corinthian lied to students about job placement rates, enrolled people who were not prepared for college-level work and offered a sub-par education. The college also provided falsified placement information to accrediting agencies in order to keep federal money flowing. Some of the evidence against Corinthian was compiled by then-California Attorney General Kamala Harris, who sued the school in 2013 for false advertising.

Furious and determined to fight back, I turned to social media and found that hundreds of former students of my school were gathering online to address the dilemma that we had found ourselves in: huge debts and worthless degrees.

Organizers from the Debt Collective, a union for debtors, had also heard about the plight of Corinthian borrowers and found our group on Facebook. They proposed that everyone who had attended the school join together to pressure the government to cancel our debts. There were few other choices: student debts cannot be erased in bankruptcy except in a few extreme circumstances. Turning our individual burdens into a collective demand was our only option.

In the winter of 2015, a group of former students met in person to plan the campaign. We were all in a similar situation. None of us had been able to find the high-paying jobs that Corinthian had promised, and none of us could afford to pay back the astronomical sums that we owed. We turned our inability to repay into a rallying cry and launched a student debt strike — the first in U.S. history — to demand the cancellation of our loans. We called ourselves the Corinthian Fifteen.

The law was on our side. We relied on an obscure legal mechanism called Borrower Defense to Repayment that required the government to cancel the debts of defrauded students. Since the DOE did not even have an application available to those who wanted to apply for relief, we worked with lawyers to design a form and then made it available on the Debt Collective’s website. By the spring of 2015, applications from former for-profit college students rolled in by the thousands.

Public opinion was also on our side. Our campaign went viral. Dozens of news outlets covered the story of the scammed borrowers who were taking on the Obama administration in March 2015. Strikers met in Washington, D.C. with officials from the Consumer Financial Protection Bureau, the Department of Education and the Treasury Department. We shared our experiences of being lied to and defrauded by Corinthian and delivered hundreds of applications for loan relief into the hands of Ted Mitchell, the Undersecretary of Education under President Obama.

Our campaign won the support of major media organizations like the New York Times editorial board and politicians like Sen. Elizabeth Warren (D-Mass.) and Hillary Clinton. As more former for-profit college students realized they had been scammed, our numbers grew. We were joined by students who had attended other predatory schools such as ITT Technical Institutes. Our group of 15 strikers soon grew to 100. Thanks to the Debt Collective, we met with lawyers who helped us understand the consequences of not paying our debts. We knew that defaulted debtors could face wage garnishment and tax offsets. Older borrowers might have their social security benefits garnished. But we were ready for those consequences. Most of us could not afford to pay anyway and were already in default, so the strike was a way to politicize our inability to pay. We stood together for everyone in our situation across the country.

Unfortunately, the Department of Education dragged its feet. Officials claimed they cared about us and wanted to help, but rather than just canceling debts that were shattering lives and ruining futures, they set up a series of administrative processes and claimed they needed to study the issue. Little by little, a few former students who filled out the correct forms and checked the right boxes got their loans relieved. But hundreds of thousands of others waited in anguish.

I was one of the lucky ones. Finally, in 2017, I received an email from the DOE that said my loans were being canceled. My joy was tempered by the fact that thousands of others were still in debt. The news got even worse when President Donald Trump came into office. His Education Secretary, Betsy DeVos, halted the relief process that had begun slowly under Obama.

But the fight is far from over, and the stakes are higher than ever.

Back in 2010, when I enrolled at Corinthian, I didn’t know there was such a thing as for-profit education. I assumed that if the government was funding a college, it must be offering a quality education. My experience organizing a debt strike and talking to borrowers who attended colleges of all kinds has taught me that the problem is larger than scam schools. The for-profit college industry is part of a larger system of higher education that often promises the world while failing to deliver for students like me who don’t come from wealthy backgrounds.

Just like former Corinthian students won by turning our individual struggles into a collective demand, I believe we can win even more if student debtors from colleges of all kinds fight back together. We can demand a more fair and just higher education system and an end to the for-profit schools that prey on low-income students.

Tuesday, August 30, 2022

US Department of Education Projects Increasing Higher Ed Enrollment From 2024-2030. Really? (Dahn Shaulis and Glen McGhee)

The US Department of Education (ED) continues to paint rosy projections about higher education enrollment despite harsh economic and demographic realities--and increasing skepticism about the value of college degrees.  

Image from Digest of Education Statistics (2022) 

Since 2011, higher education enrollment has declined every year--a more than decade long trend. The Covid pandemic of 2020 to 2022 made matters worse with domestic and foreign enrollment-- (temporarily) ameliorated by government bailouts and untested online education.  Foreign enrollment continues to languish. And the enrollment cliff of 2026, a ripple effect of the 2008 Great Recession, is now just around the corner. 

ED is projecting enrollment losses in 2022 and 2023, but why is it projecting enrollment gains from 2024 to 2030?  Apparently, one of the problems is with old and faulty Census projections made during the Trump era that were not corrected.

Based on these Census numbers and other factors, the Department of Education's National Center for Education Statistics (NCES) projects increases in high school graduation numbers.  The Western Interstate Commission for Higher (WICHE), in contrast, projects declines in high school graduates starting about 2025. (see graph below). 



For ED, relying on overly optimistic projections for high school graduates creates a statistical train wreck that's made even worse by what's not in their formula.  

Popular opinion about college has been declining for years, and there is no indication that attitudes will improve.  A growing number of younger folks have joined the "educated underclass," becoming disaffected by underemployment and oppressive student loan debt.  While progressive policies could change attitudes, deep skepticism about the value of education is an important statistical wildcard.

This is not the first time that the Higher Education Inquirer has questioned overly optimistic US Department of Education projections. While NCES has updated projections from time to time, it seems to have relied too much on the past and been too slow to change.  

Related link:  Millennials are the first generation to prove a college degree may not be worth it, and Gen Z may be next (Chloe Berger, Forbes/Yahoo Finance)

Related link: America’s Colleges & Universities Awarded $12.5 Billion In Coronavirus Bailout – Who Can Get It And How Much (Adam Andrzejewski, Forbes)

Related link: Online Postsecondary Education and Labor Productivity (Caroline Hoxby)

Related link: U.S. Universities Face Headwinds In Recruiting International Students (Michael T. Nietzel, Forbes)

Related link: Demographics and the Demand for Higher Education (Nathan Grawe)

Related link Why U.S. Population Growth Is Collapsing (Derek Thompson, The Atlantic)

Related link: Economic Well-Being of U.S. Households in 2021 (Federal Reserve)

Related link: Many US States Have Seen Enrollment Drops of More Than 20 Percent (Glen McGhee and Dahn Shaulis) 

Related link: Community Colleges at the Heart of the College Meltdown

Related link: Projections of Education Statistics to 2028 (NCES)

Related link: US Department of Education Fails to Recognize College Meltdown (2017)

Sunday, January 23, 2022

Maximus, Student Loan Debt, and the Poverty Industrial Complex

The Higher Education Inquirer is taking a close look at who's invested in Maximus, the enormous social welfare profiteer. Maximus has been servicing student loan defaulters for years and has now taken over Navient's federal student loan business, branding it Aidvantage

Since 1995, Maximus (MMS) has grown from $50 million in annual revenues to more than $4 billion in 2021. 

Maximus (MMS) Share Price 1995-2022
(Source: Seeking Alpha) 

With an army of more than 35,000 workers, Maximus' clients include 28 US agencies: the Internal Revenue Service, Department of Commerce, National Oceanic and Atmospheric Administration, Bureau of the Census, Patent and Trademark Office, Federal Student Aid, Department of Defense and US Army, Department of Veterans Affairs, Homeland Security, Health and Human Services, Medicare and Medicaid, Department of Labor, Office of Personnel Management, Securities and Exchange Commission and many more. 

As a contractor to Federal Student Aid (FSA), Maximus has more than 13 million student loans to service.  Its four contracts with the US Department of Education total almost $1 Billion.  

While CEO Bruce Caswell made more than $6 million in total compensation last year, Maximus' customer service representatives, the people who have to make the calls to the growing number of student loan defaulters, make less money than workers at Walmart. 

Maximus has recently posted federally contracted jobs on Indeed for $13.15 an hour in Texas and South Carolina, even though the federal minimum wage has been raised to $15 an hour. Wages for Maximus workers in other states are reportedly even lower, as little as $10 an hour in Kentucky and other states with regressive economies.   

Maximus' largest institutional investors include BlackRockVanguard Group, and State Street Corp--three financial behemoths.  BlackRock has $10 trillion in Assets Under Management (AUM), Vanguard Group has about $7 Trillion in Assets Under Management, and State Street has almost $4 Trillion in AUM. 

Bank of New York Mellon, Wells Fargo, and Bank of America each own 900,000 shares or more. 

Public retirement funds, including public school teachers retirement funds (see table below), are directly and indirectly invested in the Poverty Industrial Complex and the student loan mess through Maximus and other large corporations. 


Maximus' strategic partners include AWS, Microsoft, Oracle, and Cisco.  

Social justice advocates have to wonder, how can the student loan system be fixed if the US establishment has a vested interested in the mess?  
 
Maximus (MMS) Top Institutional Investors 



List of Public Funds Directly Invested in Maximus

Alaska Department of Revenue 
California PERS
California State Teachers Retirement System
Colorado PERS
Florida Retirement System
Pennsylvania Public School Retirement System
Teachers Retirement System of Kentucky
Louisiana State Employees Retirement System
Ohio PERS 
New Mexico Educational Retirement Board
New York State Retirement System
New York State Teachers Retirement System
Ontario Teachers Retirement System
Oregon PERS
State of Tennessee Treasury
Teachers Retirement System of Texas
State of Wisconsin Investment Board










Monday, August 31, 2020

Student Loan Volumes Show College Meltdown Has Accelerated

According to Ken Miller at The Century Foundation, volumes decreased 10 percent at public colleges, 18 percent at for-profit colleges, and 20 percent at private non-profit colleges.  

And according to Mark Kantrowitz, new student loan volumes were down 42 percent

Student loan volumes were especially low at subprime schools University of Phoenix (-48%), Walden University (-48%)Ashford University (-56%), and Colorado Tech (-43%) and state flagship universities, University of Washington (-95%), Ohio State (-68%), Penn State (-51%), Temple University (-47%), and University of Texas-Austin (-41%).  

Elite private universities Columbia University (-87%), Boston University (-55%) and Georgetown (-39%) also saw big losses in student loan volume. 

While schools with large endowments will be able to cover these dramatic losses, those with less in alternative revenue streams and endowments will have to make tough decisions, in many cases cutting costs through layoffs in 2021.   

Numbers for the 4th quarter, posted in November after the election, could be even worse, at least in absolute terms.  The loss of these funds may not only hurt colleges and their employees, but also college towns.  Federal student loan fiscal year numbers will also be reported in November.  

In late December 2020, the National Student Clearinghouse will post national enrollment numbers which may parallel declining student loan volumes.  The greatest income losses, however, may come from losses from room and board revenues.  

Related Links:






Thursday, July 11, 2019

Music Videos of the College Meltdown


While I was updating my College Meltdown bibliography and writing a review of College is Bullshi*t, I found an enormous number of Youtube music videos dedicated to student loan debt. Scholarly sources are fine, but they don't get people to move. These videos vary in quality and genre, from blues to rap, to pop, heavy metal, and country. But you gotta listen. My favorites are Eatin' Me Alive by Ramy B. and Dee-1's Sallie Mae Back. An extremely popular tune, Stressed Out by Twenty-one Pilots, has just one line about student loan debt, but definitely hits on the consequences of youth and making choices.

Works Cited
B., Ramy. “EATIN' ME ALIVE (STUDENT LOAN RAP).” YouTube, YouTube, 10 Feb. 2019, www.youtube.com/watch?v=C44O_GUtcQs.

chescaleigh. “BeyoncĂ© ‘Countdown’ Parody: Student Loan Countdown.” YouTube, YouTube, 8 Oct. 2011, www.youtube.com/watch?v=96KiSEMHy7Y.



Cornell, Charles. “Student Loans, You've Got Me By The Balls - Charles Cornell.” YouTube, YouTube, 12 June 2019, www.youtube.com/watch?v=7aJWUA3-E0E%2Bhttps%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv.



Dee1music. “Dee-1 - Sallie Mae Back (Official Video).” YouTube, YouTube, 11 Feb. 2016, www.youtube.com/watch?v=JqbXQa05Z6c.

Dorsey, C. Richaude. “Studen Loan Song.” YouTube, YouTube, 3 Nov. 2016, www.youtube.com/watch?v=JZG8H-1pwu4%2Bhttps%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv.

ebonysongstress. “Student Loan Song by C. Richaude.” YouTube, YouTube, 5 Jan. 2008, www.youtube.com/watch?v=ILcTrUHqHa0&list=PLBiTf7f_nVjgtZ7HCrrPEHY9xvIIHSkXd.

Grosscup, Ben. “‘Four Years of College’ (Parody of ‘Sixteen Tons’ by Ben Grosscup).” YouTube, YouTube, 28 Feb. 2016, https://www.youtube.com/watch?v=_sWosZ2qshc

Hammer, Dave. “Student Loan Blues.” YouTube, YouTube, 2 Apr. 2013, www.youtube.com/watch?v=QQtb8EtD458%2Bhttps%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv.

Harris, Lisa E. “Sally Mizzle (The Student Loan Song).” YouTube, YouTube, 6 Oct. 2016, www.youtube.com/watch?v=_WHXc7FTkPQ.



Lazer, Glenn. “Student Debt Metal Song.” YouTube, YouTube, 13 June 2019, www.youtube.com/watch?v=w5JBNcTDtVo%2Bhttps%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv.



pincgator. “PINC GATOR STUDENT LOAN SONG.” YouTube, YouTube, 29 Oct. 2008, www.youtube.com/watch?v=qD8KVaMbF7E.

“Twenty One Pilots: Stressed Out [OFFICIAL VIDEO].” YouTube, YouTube, 27 Apr. 2015, www.youtube.com/watch?v=pXRviuL6vMY.



Wilson, David. “Simple Mind (The Student Loan Song) by David Wilson.” YouTube, YouTube, 6 June 2016, www.youtube.com/watch?v=hDVtuoPmTPQ%2Bhttps%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv.
?v=_sWosZ2qshc.