Education under Trump

Democrats worried about how the new Education Secretary Betsy DeVos would be with student debt given that she had invested in a company that collect defaulted loans. They were right to be worried:

The U.S. Education Department late Thursday rescinded an Obama-era rule that prohibited student loan guaranty agencies from collecting jumbo fees from defaulted borrowers who quickly resume paying.

Currently, guaranty agencies — the bodies that administer federal loans made before 2010 — aren’t allowed to collect fees from borrowers who respond within 60 days to a default notice and then enter into (and honor) a repayment agreement. Those rules were put in place in July 2015.

The Obama-era rule on collection fees was linked to a court case that started in 2013, in which a borrower sued United Student Aid Funds (USA Funds) for hitting her with a $4,500 charge from a 16% collection fee. She owed $18,000 at the time her loans went into default, but she responded to USA Funds and agreed to a repayment plans.

This isn’t the final decision (they also link to the actual letter):

The two-page “Dear colleague” letter from the Trump administration walks back the department’s previous stance on the grounds that there should have been public input on the issue.

“The department will not require compliance with the interpretations set forth” in the previous memo “without providing prior notice and an opportunity for public comment on the issues,” the letter said.

I have a feeling they’re not going to be asking for any public input in the near future. This doesn’t affect loans that have been taken out recently:

The rule only applies to debt from the Federal Family Education Loan (often called FFEL loans) Program, which was phased out during Obama’s first term. The department started lending directly to student borrowers in 2010, so the rule won’t affect anyone who’s taken out loans in the past several years.

but I have a feeling that these loans directly from the Education department aren’t going to be around for much longer.

It also appears that the President might be thinking about reopening Trump University:

Less than a month after Betsy DeVos was sworn in as its top official, the U.S. Department of Education announced Monday evening that it would delay until July 1 an effort to crack down on career training programs that load students up with unpayable debt.

The biggest winners: the more than 800 higher educational programs that claim to lead to “gainful employment” but flunked the department’s January excessive debt test—mostly for-profit art and cosmetology schools. These programs can now continue to recruit applicants (at least until July 1) without having to warn them about alumni’s oppressively high debt loads. The schools can also take this extra time to seek data showing that their graduates’ student loan bills are actually below the official “excessive debt” cutoff. That means bills must be no more than 12% of the average student’s gross earnings, as reported to the Social Security Administration, and no more than 30% of their discretionary income.


As chief compliance officer for a corporate owner of for-profit colleges, Robert S. Eitel spent the past 18 months as a top lawyer for a company facing multiple government investigations, including one that ended with a settlement of more than $30 million over deceptive student lending.

Today, Mr. Eitel — on an unpaid leave of absence — is working as a special assistant to the new secretary of education, Betsy DeVos, whose department is setting out to roll back regulations governing the for-profit college sector.

It appears that the only thing the Trump administration wants to teach you is: if you’re not rich we’re going to screw you.

The University President as CEO

The University of Iowa selected a new President. Let’s see how this has gone:

Harreld, a former IBM executive with no experience in higher education administration, had “a clear lack of faculty support,” Faculty Senate President Christina Bohannan told the Iowa Board of Regents in the Sept. 2 email. Choosing him over three other candidates who were warmly received would “destroy the goodwill” with faculty leaders and prompt calls for a no-confidence vote in the regents, she warned.

A day later, the regents voted unanimously to make Harreld the school’s 21st president and gave him a five-year contract, sparking protests from faculty and staff.

Board President Bruce Rastetter has said the regents considered Harreld the best leader for the university and received feedback from the “greater Iowa community” as well as from campus.

The clear lack of support is shown in this poll which shows that 89.3, 93.1 and 98.3% of faculty members thought the other 3 candidates were qualified while 2.5% thought Harreld was qualified (4.9% of non-faculty thought he was qualified).

Well, the faculty and students will get over it, right? Not so far:

Faculty members at the University of Iowa on Tuesday voted no confidence in the statewide Board of Regents, less than a week after the regents fanned a controversy at the state’s flagship university by unanimously appointing J. Bruce Harreld as its next president.

But that’s just the faculty, what about students? Oops:

Both the UI Student Government student senate and the UI Graduate and Professional Student Government passed votes of no confidence in the board Tuesday night.

“The voice of the undergraduate student body was not seriously considered in the final selection process,” according to the UISG resolution, which stressed that undergraduate students comprise 73 percent of the UI enrollment. “The undergraduate student body has overwhelmingly expressed their discontent and frustration over the regents’ dismissal of their concerns in the selection of the new president.”

The graduate student resolution revisits the board’s vow throughout the presidential search process to value feedback from the UI community.

“However, it is clear that this ‘open’ search was truly not transparent, and the collective voices of all the constituencies at UI were not taken into account and further, actively ignored,” according to the resolution. “It is unfortunate that the board took this action in the face of such fierce and vocal opposition from the UI community.”

Well, the board will certainly be feeling meek now. Umm:

Board of Regents president Bruce Rastetter described the faculty’s vote as a sign that professors were resisting changes needed to make the school’s business practices sustainable.

“We are disappointed that some of those stakeholders have decided to embrace the status quo of the past over opportunities for the future,” he said in a statement Tuesday.

That would be this Rastetter:

Bruce Rastetter, an agribusiness mogul who’s made a fortune in pork, ethanol and farm real estate, has long worked behind the scenes to help bankroll conservatives across the country, but Saturday is a public coming out party of sorts for Rastetter as he hosts the first-ever Iowa Agriculture Summit. It’s an event designed to promote farm policy in a state where pigs outnumber voters 10 to one, but it’s also a bold display of the political power Rastetter has amassed — and a reminder to candidates that his endorsement would be a big get ahead of the Iowa caucuses.

I worry very much about what such a person means by “opportunities for the future” and it seems most of the students and faculty at the University of Iowa agree.

We don’t like the details, so there are none

This is an interesting statement:

Senator Bernie Sanders of Vermont is calling for zero tuition at public colleges. Former Maryland governor Martin O’Malley says he will fight to erase debt for college graduates. Hillary Rodham Clinton, at a recent campaign event in Iowa, endorsed the goal of slashing such debt.

Promises to reduce, or even eliminate, the financial burdens of higher education represent the newest frontier in Democrats’ call for taxpayer-sponsored social programs. The anxiety-inducing $1.3 trillion in student debt has quickly become a focus of the 2016 Democratic presidential primary contest.

But while the concept is attracting attention from financially challenged middle-class families, details are scarce on how government should pay for potentially the costliest initiatives since President Obama’s health care overhaul.

it’s interesting because here’s the very next paragraph:

The one concrete source of funding comes from Sanders, who proposes a new tax on Wall Street transactions. While that idea draws cheers from his populist fan base, it would be a political long shot for passage in today’s Washington.

Sanders also has produced the only guess at the huge costs: three quarters of a trillion dollars over the first decade.

So, details for paying for it and its cost are scarce … except for the main person advocating for it. We also get this:

“This is a politically popular idea, but the solutions are hard and expensive,” said Terry Hartle, senior vice president of the American Council on Education, a nonpartisan policy and lobbying group in Washington for colleges and universities. “How you pay for it very quickly becomes a seriously complicating issue.”

This is national healthcare all over again: we can’t figure out how to do what other countries do:

That’s right, Germany will allow US citizens to go to college tuition free, but there’s no way the US can afford to do it.

Let’s give lots of money to the rich

This is a waste of money in a few different ways:

Harvard University raised a record $1.16 billion in donations in a single year, beating rival Stanford for the first time in a decade. Harvard’s haul, the largest ever in higher education, represents more than the entire endowments of all but about 70 U.S. colleges. Stanford came in No. 2, with $928 million, its third-biggest total, according to a survey by the New York-based Council for Aid to Education, which tracks university giving. The gifts to Harvard show that the nation’s wealthiest colleges are attracting a disproportionate share of higher education philanthropy, cementing their competitive positions, even as less fortunate universities find their finances weakening as they look for customers to afford soaring tuition. Such inequality is growing, said Ronald Ehrenberg, an economist at Cornell University. “The richer institutions are pulling away from everyone one else in terms of their endowment resources and the vast annual giving sums they generate, much of which goes towards building their endowments,” Ehrenberg said. “At poorer places, you need the money for current operating and also for construction projects.”

This is bad for education in general since the money goes to a few institutions that represent relatively few students.

This is bad for equality, as the article notes, since a few students get a much better education while most of the rest of the students get a worse education.

We’re paying for this. Since these are all non-profits they don’t pay taxes and the donors get a big tax write off. There really does need to be a change here– we should not be subsidizing places like Harvard.

I also don’t understand the mentality of the donors–if you want to make a difference and be recognized, it would be much better if you gave to several less wealthy universities. A large gift to Harvard would only make an incremental change–if you break that into 50 smaller donations you could make much larger changes for many more students. The only way I can understand this is if the point is to show off to the other wealthy people.

Commencement speakers and free speech

There seems to be some confusion about free speech. A commencement address. for example, has little to do with free speech and yet somehow it is:

Smith thought it had scored a coup when Christine Lagarde, the first woman to head the International Monetary Fund, agreed to be the 2014 commencement speaker. But some Smith students and faculty were fervently opposed.

A petition demanding that the invitation to Lagarde be rescinded called the IMF the “primary culprit” of developmental policies that have “led directly to the strengthening of imperialist and patriarchal systems that oppress and abuse women worldwide.” Some students wrote to Lagarde, asking her not to come.

Lagarde withdrew, and McCartney worried that Smith would now be identified with a disturbing trend in which “subsets of students and faculty, typically on the political left, [object] to commencement speakers whose words, views, actions or organizations they opposed.”

Here’s a few reasons a commencement address is not about free speech:

  • the speakers are often paid (Condoleezza Rice would have made $35,000), which is in effect paid for by the students
  • the speaker usually gets an honorary degree
  • there is no debate or discussion, no opposing views will be heard
  • this is a graduation not a classroom

This comment is also interesting:

It’s far better for students to counter speech with more speech. Instead, on the very day students are launched into the “real world,” a vocal minority would prefer to fend off speakers who’ve struggled with the complexity and contradictions that come with any high-level career.

The students who protested did counter with their own speech and this editorial is complaining about that. Why is it so hard to understand that some students want more say at who will speak at their graduation paid for with their money?

Pay at nonprofits

The pay of the CEOs at nonprofits is worrisome:

A survey of 25 large health insurers, universities, and other Massachusetts charitable organizations, released Thursday by Coakley’s office, found that all of them paid their leaders between $487,000 and $8.8 million a year in total compensation each year between 2009 and 2011.

In addition to salaries, many of the organizations offered executives an assortment of other benefits, including bonuses, deferred compensation, auto allowances, financial planning, life insurance, and other considerations that are more commonly associated with corporate leaders and boosted their total pay.

In 2011, that brought total compensation of Northeastern University president Joseph E. Aoun to $3.1 million. In the same year, Partners HealthCare chief executive Gary L. Gottlieb received $2.2 million, Tufts Health Plan head James Roosevelt Jr. took in $2.1 million, and ISO New England chief Gordon van Welie received $1.6 million.

On the one hand they are still making less than their counterparts in the for profit world, on the other hand they’re supposed to be doing this not for the money. Does the president of my university really deserve $3.1 million?

Capitalism at work

The primary purpose of a for-profit company is to make money. Like  here:

 But for-profit colleges have failed to support those students, the report states, by prizing recruitment over retention. The colleges studied spent 23 percent of their revenue on marketing and recruiting, and 17 percent on instruction.

The publicly traded companies that operate for-profit colleges yielded an average profit margin of 20 percent in 2009 and paid an average of $7.3 million to their chief executives.

The companies are successful largely because they charge high tuition. Associate degree programs at for-profit colleges cost at least four times as much as comparable programs at public community colleges, $34,988 versus $8,313, the report said. Internal company documents showed tuition hikes were enacted ‘‘to satisfy company profit goals,’’ rather than to cover increased costs of educating students.

There are two basic ways that a company can do well: have a really good product; have really good marketing. As far as the company is concerned either is ok, but only one is better for the rest of us. That means if the product is important, then there needs to be regulation. That’s why there is an FDA, OSHA, and many other federal agencies–the collective we has decided that we want there to be basic requirements for food, medicine, workplace safety and other things (we do not want a company to be able to sell diseased meat for example). We have to decide whether a college needs to have basic requirements in the same way. I think the collective we will decide it’s in our best interests to have these requirements. And it’s also in the best interests of the colleges: if the abuses get too bad at a few colleges, then all of them will suffer. Done well, government regulations help private industry by giving consumers some basic trust that the products they buy have minimum standards.

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