Monday, October 31, 2016

Student Debt Past Death!

By Professor Doom

     Medieval laws can be funny to read. Both the laws and the penalties for violation are bizarre by modern “civilized” standards. Many laws, of course, were enacted differently for the serfs than for the nobility, with the former typically being punished more severely, for a wider array of violations. 

     The reason for this was simple: the nobility wrote the laws. Things have changed a bit nowadays, we don’t really have nobility, and there’s this theory that laws now apply to everyone (except for Hillary, of course). It’s a good theory, but something happened to warp that theory.

     Our laws are no longer necessarily written by human beings. Our courts ruled that “corporations are people,” especially when it comes time to make campaign donations, and so corporations have a major hand in our law writing.

      This is most evident when it comes to banks (which have a great deal of money to influence lawmakers), where the laws just don’t seem to apply, no matter how egregious the criminality. It’s clear the banks are now starting to write laws, and, much like the laws of centuries ago, these laws seem to be ridiculous to a civilized mind.
      A recent example highlights what our system is degenerating into:

     To be clear here, this only is a problem in New Jersey. For now. The article focuses on a poor mother whose son was murdered.

When DeOliveira-Longinetti called about his federal loans, an administrator offered condolences and assured her the remaining balance would be written off.

     Federal student loans are already atrocious: you can’t escape such loans via bankruptcy, you can’t even escape them if the loans were made to a fake school offering bogus education. Even if the loans are made on your behalf without your knowledge…you’re still in debt until the day you die (for new readers wondering how this can happen, the loan money goes to the school first, which can easily take all of it, while the student has no clue what’s going on. I’ll leave the gentle reader to consider how the loan disbursement system was set up this way…).

     So, death can clear a student loan. Alas, New Jersey was influenced, somehow, into thinking that this was too generous a gesture, and decided to write the law so that a student loan debt can transcend death. New Jersey will pursue a debt beyond sanity:

“Please accept our condolences on your loss,” said a letter from the Higher Education Student Assistance Authority to DeOliveira-Longinetti, who had co-signed the loans. “After careful consideration of the information you provided, the Authority has determined that your request does not meet the threshold for loan forgiveness. Monthly bill statements will continue to be sent to you.”

     True, the poor mother made a mistake by co-signing the loans, but New Jersey is remarkably vicious here:

New Jersey’s loans, which currently total $1.9 billion, are unlike those of any other government lending program for students in the country. They come with extraordinarily stringent rules that can easily lead to financial ruin. Re-payments cannot be adjusted based on income, and borrowers who are unemployed or facing other financial hardships are given few breaks.

New Jersey’s loans also carry higher interest rates than similar federal programs. Most significantly, the loans come with a cudgel that even the most predatory for-profit players cannot wield: the power of the state.

New Jersey can garnish wages, rescind state income tax refunds, revoke professional licenses, even take away lottery winnings — all without having to get court approval.
“It’s state-sanctioned loan sharking,” said Daniel Frischberg, a bankruptcy lawyer. “The New Jersey program is set up so that you fail.”

      It’s natural to ask why New Jersey is like this, but the answer is an easy one to guess:

One reason for the aggressive tactics is that the state depends on Wall Street investors to finance student loans through tax-exempt bonds and needs to satisfy those investors by keeping losses to a minimum.

     I keep railing against the Federal student loans as a great destructor of both higher education and our kids, but even state-based loans are clearly a horrible idea. Please understand, higher education doesn’t need government support, and certainly not “support” in form of a retributive student loan system. There have been “private” universities for centuries that are still doing just fine, despite this system.

     On the other hand, the huge sums of money involved here simply invite corruption, in addition to being a system that provides no benefit to the taxpayer:

New Jersey’s agency was caught in what amounted to a kickback scheme. The state attorney general found that the agency had improperly pushed one company’s loans in exchange for annual payments of $2.2 million. A subsequent investigation by the state’s inspector general found that the agency was in “disarray.”

      When faced with scandal, and the crushing of its citizens under an obviously detrimental system, a legitimate government would dismantle the system. New Jersey, of course, will take a different route:

New Jersey, meanwhile, encourages students to buy life insurance in case they die to help co-signers re-pay. As an agency pamphlet cautions, “Are you prepared for the unthinkable?”

      Honest, if human beings were the only ones writing the laws, the abominations going on in New Jersey simply wouldn’t happen. The only question the remains is how long until the Federal government uses New Jersey as an example, and makes all student loans actually last past death?

Friday, October 28, 2016

Good Teaching = More Debt

By Professor Doom

     Most folks think that the reason “for profit” schools are more expensive than “public” schools is because the former are trying to make a buck. It seems a good working hypothesis, but “non profit” schools are also (often) wildly more expensive than state schools, and all too often are clearly as motivated by profits as any school that openly claims to be for profit.

     The main reason public schools are cheaper has nothing to do with profits. While non-public schools get to set their tuition (and thus continue to raise tuition to whatever is the most they can take via the student loan scam), public school tuition is typically set by the state. Tuition still goes up rapidly, of course, as our public school administrators spend every dollar as fast as they can, lest future state budgets see the surplus and say “hey, the school doesn’t need it, we can spend it on a different boondoggle.”

     Governments have rather caught on to the game, and nowadays schools can only raise tuition if they can justify a reason for it, and the justification can’t simply be “we spent the money on administrative bonuses” like in prior years.

     Increasingly, state schools can only raise tuition if they can show they’re doing a good job.

     Now, I’m all for accountability, but, alas, administrators get to determine the rules by which it is determined the school is doing a good job. What are the goals of the institutions?

“…based on three crude metrics: student retention and progression; the number of students in paid employment after graduation; and scores on selected items of the National Student Survey. Universities will be classified as outstanding, excellent or meeting expectations, with a pre-determined proportion in each category.”

     Ah, retention, the “butts in seats” model of education that has done so much harm, has led to community colleges with 0.6% graduation rates being classified as “successful” because of all the butts in seats, and huge remedial programs that start students in 3rd grade material, and then administrators act shocked, shocked, when nobody is doing college work after two years.

     Ah, but now there will be “progression”…I do see a little hope here, but seeing as social promotion has now come to college with nary a peep of protest, I suspect this will be a meaningless measure in short order—I’ve been at state schools that mandated an 85% passing rate, so I know passing rates mean nothing. Progression as a measure will just move the mandated passing rate up closer to 100%. 

     Please, understand that I don’t want people to fail. I’m not a jerk, I’d like to see everyone succeed and do well, but if a “college education” just means “4 years of social promotion where everyone gets a diploma” I just don’t see how a college degree is supposed to be meaningful to a thinking adult, any more than I can see graduating the 4th grade is meaningful to an adult. And, of course, I see no reason why everyone needs to be forced into a lifetime of debt for a socially-awarded diploma.

      “Job placement” is another problem with our inflated tuition. Because higher education means big debts, students are forced to turn their education into job training. Again, jobs training is a perfectly legitimate thing to do…but universities really aren’t set up that way. The whole system is designed to create scholars and academics. Even if job placement were a legitimate way to measure education, this measure gives far more power to schools in booming economies than in less powerful economies. Why does the current economy affect the “education” at the school?

     The National Student Survey, on the other hand, strikes me as an excellent idea. Yes, I know, standardized tests are horribly over-used in the mandatory public school system, but the sad fact is GPA means nothing in college, the average grade in college is A-, so that there’s just no way to distinguish college graduates based on GPA. Accreditation has nothing to do with education, so we can’t distinguish graduates based on school, either (beyond the very top tier schools).

      But a standardized test for all college graduates could change all that overnight. Everyone takes the test, everyone gets a percentile score, and the test has nothing to do with the socially-awarded college degree. As soon as we do this, we can look at those percentiles and tell right away which schools are offering legitimate education, and which are ripping off students. It’s what they do in the UK, and it’s a great idea.

     In United States, we could do the same thing. We already have an appropriate test (the Graduate Record Exam, intended for college graduates), we could do the same there here without effort. 

     I’ll leave it to the gentle reader to consider why we don’t do this simple thing to restore legitimacy to our higher education system.

     In any event, what happens if a school does well on these performance measures, questionable as some of them are?

The reward for good teaching? If your university is found to be outstanding, you have won the opportunity to raise your students’ fees above the current £9,000 cap. And so the prize for excellence is the ability to extract more money from learners, creating yet more barriers to accessing and creating knowledge.

      Isn’t it pathetic? Taxpayers pour money into the school, and if the school does a good job, taxpayers get to see their kids placed deeper into debt. It’s beyond bizarre, but I want to talk more about how idiotic the measures of success are.

     Students’ own opinions of the teachers also factor into this:

“…students’ assessments of individual teachers show persistent gender bias…”

     It’s so funny how female superiority is crammed down my throat, every study showing females are better at, well, anything, is taken as absolute truth, and institutional policies are warped around this. On the other hand, studies show that students prefer male professors, and hey, those studies are biased and so we can’t use them. Why are there no voices of reason in higher education today?

     Ok, there are few voices of reason, but those voices are restricted to the educators, and we’ve been silenced when it comes to making decisions about education. Still the educator pointing out the problems does see the end game of the standard by which tuition will be determined:

     Instead, we will send our graduates out so laden with debt that they need to cling to the first job they can find – and call ourselves successful educators. We will compete like starved dogs over the reward of being able to raise fees, and proudly put our Tef status on promotional materials, ensuring a steady supply of students willing to pay inflated fees.

So what can be done? I don’t believe that universities have to resign themselves to the Tef structure as it is, or even to the notion of a Tef at all. But I can’t speak out: as a young academic, I’m far too financially insecure to risk rocking the boat.

     It isn’t just that the academic here is financially insecure…he’s silenced. Like so many academics, he’s forced to make his observations anonymously, and won’t dare speak truth to the powerful administrators who control the system now, a system determined to destroy future generations, in exchange for enriching the current generation of administrators.

Tuesday, October 25, 2016

College Debt List of Shame

By Professor Doom

     The student loan scam is crushing our future, or at least the future of many of our kids. The average student loan debt for a new graduate in 2014 was around $33,000.  The average student loan debt in 2015 was around $35,000, and in 2016, we’re looking at an average of $37,712, and that’s what the trend has been like for the last decade, laughable government claims of “1.5% inflation” notwithstanding. 

      Trust a statistician when he tells you the “average” can be very misleading. We could have 9 students with a debt of $10,000, and one student with a debt of $260,000, and the “average” would be $35,000. Price of tuition varies wildly from school to school, even for the same courses, so we can do much to help the average just by getting rid of the schools that are causing the most debt.

      The recent closures of Corinthian and ITT Tech, combined with the massive loss of students at University of Phoenix, should do something about this debt problem. The huge for-profit schools were very expensive, and, like community colleges, specialized in targeting the most vulnerable: students who came from families with no knowledge of how a college should work.

      These students didn’t know better, and just assumed sitting in classes, any classes, would get them a great job, provided they kept paying tuition. The schools naturally helped secure the loans for the tuition.

      While many people know about the scammy schools, it’s surprising to learn what schools indebt their graduates the most:

1.     National University: $52,986
2. Grambling State University: $51,887
3. Charlotte Christian College and Theological Seminary: $50,033
4. Wesleyan College (Georgia): $48,460
5. Stevens Institute of Technology: $48,244 

     I imagine most of my readers have never heard of most of these schools, so I want to talk a little about them.

      The top school, National University, is a private non-profit school. It has about 24,000 students; a school this large really should be able to use economy of scale to reduce prices. The school has been around 45 years. Why is it even expensive? I mean, surely they’ve paid off much of the loans they took out to buy the land and construct buildings, and their endowment is around half a billion dollars. If an accredited, non profit university can get by with tuition of around $1,000 a year, it seems like National could squeak by with a bit less money flowing in, right? The $52,986 is just the debt, tuition is quite a bit more than that, I’m sure. As a non-profit school, I can’t help but wonder if this place is basically going the route of NYU, plundering students while using “non profit” as a shield from scrutiny. In any event, this seems a place to avoid: there’s nothing here that can’t be found elsewhere, at a much lower price.

      Grambling State University is a surprise on several levels. It’s a state school, why doesn’t taxpayer support do something here? It’s a historically black institution, in a state (Louisiana) that is hardly known for wealth. Wouldn’t they be interested in protecting their students from crushing debt, and wouldn’t they be well situated to make it so? It also has a renowned sportsball program; we’re often told that a school with a successful sportsball team makes enough money to help students…this is, of course, well known as crap to anyone in higher education, and the fact that Grambling buries its students in this kind of debt is all one needs to know about going here. Again, I have to suspect the school is taking advantage of its students…Louisiana just isn’t the kind of state that provides the kind of jobs that would help pay off gigantic student loans, except in engineering…and Grambling doesn’t offer those kinds of degrees.

     Charlotte Christian College is the classic example of why accreditation is a joke. I have nothing against religious schools, they can easily be legit, but the flags here are high and colorful. The school was founded in 1996—the “new” schools really have a marked tendency to be scammers. They have, seriously, 110 students. According to wiki, they only have 3 administrative staff, and about a dozen faculty. Do the math here, assuming that the debt is all tuition: this tiny school rakes in over $5.5 million for each graduating class. Assuming all faculty/staff are paid $50k a year each on average, we’re talking around $2.5 million in profit for each cohort of students, basically two classrooms full. Is it ok to ask some questions about what’s going on at this school? The degree programs are all religious based…again, nothing wrong with that, but why is it so expensive? Avoid, avoid, avoid.

     Wesleyan is a reasonably famous private liberal arts college and an old school (est 1831), with a few thousand students.

According to National Science Foundation (NSF) research and data, the University ranks first nationally among liberal arts colleges in federal funding for research in the sciences and mathematics…

      Wow, the school ranks highly in pulling that federal research money (that’s big money, I promise you)…it’s a shame none of it does the students any good. Yes, it’s an old school, and fairly prestigious, and very selective (unlike the other schools in this list).

      So, despite being on this list of shame, I’m going to give Wesleyan something of a pass: people are clearly dying to get in here, and why I don’t see why it’s crushing the students so, but being a very selective school means this place is probably on the up-and-up. That said, if you’re a good enough scholar that you could get into this school, you almost certainly can get a better deal elsewhere. If you want to see what kind of indoctrination Wesleyan students get, here's a nice YouTube video of a Wesleyan grad.

     Stevens Institute of Technology is another private, old school that seems to put the screws to its students. The endowment is only a few hundred million, admittedly not so much considering the 6,000 students the place has…but it’s curious such an esteemed school with a long history can’t do more for its students than be on this list. Stevens is an engineering school, and is probably the only school on this list where taking on such debt isn’t financial suicide. Recall, the only reason to take on debt is to get something that will help you pay off the debt. A degree from Stevens is probably going to be a money-maker, and they have real job placement programs and the connections that only a 100 year old school can have. They are, of course, selective, which again is a hint that we’re looking at a real school, and not just a tuition scammer. It’s possible to be both, unfortunately.

     One school was on the list, then removed:

Three campuses at Everglades University were also in the top ten, and also said they submitted incorrect data. Everglades University did not submit new data and asked to be removed from the list entirely.

     Now this is a flag: when a school puts effort into being below the radar on a list of shame like this, it only draws more attention from people like me.

      Everglades University? I was born and raised in south Florida and have spent a lifetime in academia, never heard of the place. Wiki is helpful, as always. Let me count the flags marking this school as suspicious:

·        85% acceptance rate. They take most everyone, that’s a real hint that they’re in it for the money, not for education.

·        Established 1998. This is when the student loan scam really hit its stride, and I have to be worried here.

·        There are as many “academic staff” as “administrative staff.” They don’t even call them faculty, because they obfuscate the numbers. One of the cute tricks many schools use is they double-classify their administrators and staff as “faculty.” For example, all the librarians are faculty, as are quite a few deans, even if they never actually teach any courses. The fact that this school doesn’t even have faculty, just “academic staff,” and still has more administrators than staff, is a flag that there’s something wrong here.

      Following the trail of ownership here is amazing. 

Arthur and Belinda Keiser - the owners of Keiser University - purchased American Flyers College (American Flyers, Inc.), then changed the name to Everglades College
In 2011, Everglades University purchased Keiser University, a Florida-based for-profit chain[11] which then became a nonprofit college.[9]

     So, the Keisers, owners of Keiser University, buy Everglades, and then a few years later Everglades buys Keiser University. Accreditation rules prevent conflicts of interest, but such rules (heck, all rules) are waived as long as accreditation dues are paid…it sure looks like there’s something fishy here.

     Bottom line, “for profit” schools have such a scummy reputation that it just makes more sense to call the school “non profit” and then use accounting legerdemain to still reap huge profits even if the school, theoretically, isn’t trying to make a profit. This is, obviously, what’s happening here, and I would run, run, away from this place.

      We really need to start following our schools more carefully. The student loan scam, along with minimal accreditation procedures, has made it far too profitable to open a school, charge whatever it wants for tuition, and create huge profits. Years later, the students graduate with mountains of debt, and don’t even have a clue what happened.

     I doubt even a single one of these large-debt schools could survive one year without the student loan scam. Without the loans, these places would be forced to charge far more reasonable tuition, and cut back many non-education related staff/admin.

     Only the owners and administrators of these schools are benefiting from the student loan scam, and, once again, it’s clear we need to stop the easy student loan system.