Quick Update: Default, The Debt Ceiling Fiasco, and Interest on Your Student Loans

Default is still a possibility as the August 2nd deadline nears. Regardless of the outcome, the average American will be hurt by whatever happens. So-called compromise is a euphemism for selling out the poor and the middle-class. At least there are a few folks on the Hill, like Senator Bernie Sanders, who won't accept such measures. But we have seen something unprecedented occur, and when a "Democratic" president willingly puts Social Security on the table, the feeling of betrayal spirals into fury.

The triple-A rating will most likely be downgraded, and that means, as AEM has been reporting, that interest rates on student loans will spike. 

CNN reiterated the point today:

If the debt ceiling isn't raised, many, including President Barack Obama and the Treasury Department, warn that the country will risk unprecedented default. That default could cause Americans to face rising interest rates. It could also mean that the value of the U.S. dollar would drop compared to other currencies. As interest rates increase, the cost of borrowing rises, so individual mortgages, car loans and student loans could become significantly more expensive. As individual Americans' personal finances take a possible hit, some financial experts have warned that America's AAA credit rating could also be downgraded, threatening an already drooping stock market.

Brace yourself.

"Someone was telling me about these people . . . these . . . citizens. I don't get the term. Do you?"

[UPDATE] 

Krugman reminds of us a very interesting question and answer session between the President and Marc Ambinder last December:

Obama, at his press conference last December, announcing his surrender to the GOP on tax cuts; the questioner was Marc Ambinder:

    Q Mr. President, thank you. How do these negotiations affect negotiations or talks with Republicans about raising the debt limit? Because it would seem that they have a significant amount of leverage over the White House now, going in. Was there ever any attempt by the White House to include raising the debt limit as a part of this package?

    THE PRESIDENT: When you say it would seem they’ll have a significant amount of leverage over the White House, what do you mean?

    Q Just in the sense that they’ll say essentially we’re not going to raise the — we’re not going to agree to it unless the White House is able to or willing to agree to significant spending cuts across the board that probably go deeper and further than what you’re willing to do. I mean, what leverage would you have –

    THE PRESIDENT: Look, here’s my expectation — and I’ll take John Boehner at his word — that nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse, that that would not be a good thing to happen. And so I think that there will be significant discussions about the debt limit vote. That’s something that nobody ever likes to vote on. But once John Boehner is sworn in as Speaker, then he’s going to have responsibilities to govern. You can’t just stand on the sidelines and be a bomb thrower.

 And so my expectation is, is that we will have tough negotiations around the budget, but that ultimately we can arrive at a position that is keeping the government open, keeping Social Security checks going out, keeping veterans services being provided, but at the same time is prudent when it comes to taxpayer dollars.

Related Links


Pedro Nicolaci da Costa, "Default cloud hangs over U.S. job market," Reuters (July 31, 2011)


Progressive Co-Chair Rep. Raúl M. Grijalva Statement on Emerging Debt Deal, Official Statement (July 31, 2011)


Gregory Floyd, "It's Time to Question Labor's Ties to Democrats," HuffPost (July 30, 2011)


"Debt Ceiling Fiasco and Student Loans," AEM (July 30, 2011)

"Who's Terrified? Debt Ceiling Fiasco and Student Loans," AEM (July 29, 2011)

"Call to Action: Tell Leaders in D.C. to Raise the Debt Ceiling," AEM (July 28, 2011)

"Sell Those Indenture Instruments Immediately! The Debt Ceiling Disaster and Student Loans," AEM (July 25, 2011)

"The Debt Ceiling Fiasco and Student Loans," AEM (July 25, 2011)

Debt Ceiling Fiasco and Student Loans

As AEM has been reporting, the debt ceiling disaster will have a direct effect upon interest rates on student loans. On the floor today, Senator Harkin called the situation a "manufactured crisis." That is true, and pathetic, because millions of Americans will, undoubtedly, pay a price. Most politicians on the floor are now confirming that a downgrade is probably inevitable.

Reuters has put out a great piece on how a fallout from a downgrade will effect average Americans, and one of the questions they had was this:

Will interest rates on mortgages, car loans, student loans [my emphasis] and credit cards rise?

The answer:

Yes. Like any average Joe or Jane who misses a credit card payment, the United States will be socked with higher borrowing costs if it defaults on its debt. If the country loses its coveted triple-A rating, which is expected to happen, the cost to service its debt will probably rise. And that will have a significant ripple effect.

So, what does this mean for borrowers in the next coming months? What will happen to those of us who have interest rates that are variable? It sounds safe to now say that they will definitely go up, and that's probably going to bring people closer to financial ruin, and that is if they aren't already there. We are being terrorized by our own politicians. What is the indentured educated class to do about these economic terrorists in D.C.?

As Senator Bernie Sanders said today, "this will devastate education . . . and the American people." It will devastate Americans, as he emphasized, on so many levels.

Senator Barbara Boxer said this evening, "if we fail this, I hope the President will invoke the 14th Amendment . .  If we can't get together, the President will have to take this responsibility."

Some are also theorizing that Standard & Poor's is threatening to downgrade the ratings status of the U.S. in order to push away the possibility of being investigated.


Related Links
"22 trillion Social Security Surplus revealed on C-Span," Daily Kos, July 30, 2011
Senator Bernie Sanders, "Why Americans Are Angry," WSJ, July 28, 2011
"House Panel Plans to Question Ratings Agency Over Downgrade Threat to U.S.," NYT, July 26, 2011

Who's Terrified? Debt Ceiling Fiasco and Student Loans

It's politics as usual, and like many of you, I am underemployed, living with my in-laws, and absolutely furious with this bullshit in D.C. I want to play an active role in this country. I want to be engaged politically, and know it makes a f---ing difference. I am fighting tooth and nail, and can no longer afford to buy my own f---ing groceries, and these nitwits are playing with fire! Hey, a---holes, people OUT HERE ARE SUFFERING, and yet you march along like a bunch of nitwits.

I know the political and social reasons why this is happening. Neoliberalism is bringing the whole f--ing thing down. I'm just one of millions of other victims. At least I have a roof over my house, and a supportive family.

This is terrifying and infuriating, but it doesn't matter. No one who will make a difference cares. They'd rather play cat and mouse with something very, very dangerous.

So, folks, let's see what next week will bring.

I can't wait to see how the lenders are going to respond if we default. Shit is going to get ugly.

Now I think I can confirm that I will never own a home, I will never have children, and I will never live a life that I thought was within my reach. But apparently wanting those sorts of things is just crazy and selfish and entitled. How dare I want to have a home? God. I am so selfish and absurd! Same goes for wanting to have a family. God! That's even worse!

So glad I spent time reading and learning at the most elite schools in this soon-to-be ravaged, destroyed country.

"So, uh . . . I've heard about these things called people . . . what does that term mean exactly?"

Related Links


"Call to Action: Tell Leaders to Raise the Debt Ceiling," AEM (July 28, 2011)

"John Boehner: Yet Another Lobbying Slut?" Village Voice (January 2006)

URGENT ACTION: Tell The GOP that Pell Grants Are NOT Welfare

AEM has been reporting about the threat to Pell Grants since mid-May. It is on the chopping block, and some members of the GOP have described the program as being akin to welfare. Pell has helped many low-income and minority students pay for college. In the worst economic downturn since the Great Depression, politicians have no business trying to slash such an important program. With the wealth gap between whites and minorities at its worst in decades, this is not a smart move. It's un-American. Tell your representatives, the ones who wish to cut Pell, that they are being anti-American. And while you're at it, tell them that if they don't raise the damned debt ceiling, that they are acting like economic terrorists and inflicting  pain upon their own consitutents. It's time to boot these folks out of office and get DC back in working order. The level of dysfunction is straight from an Onion article!

Take action immediately! Sign the petition here to help save Pell. You can also send out tweets to your representatives, and tell them to stay away from Pell (use the hashtag #SavePell) or support saving it!

Related Links

"More Threats To Pell," AEM (July 20, 2011)

"Save Pell!" AEM (July 16, 2011)

"Point/Counterpoint: Pell Grants," AEM (May 25, 2011)

Rep Hansen Clarke's Call for Loan Forgiveness

Copyright Notice: If you are not reading this at All Education Matters, and unless I've explicitly given an individual or entity permission to publish my work, this post has been illegally appropriated. Please read original content here. 

If you have heard problematic claims made about my character, please feel free to email me about it (ccrynjohannnsen AT gmail DOT com) and avoid feeding the trolls. (Please also see - To The Mule Who Keeps Suggesting I Work For The Banks).

AEM was the first to break the news about Congressman Clarke's call to forgive student loan debt on the floor of the House.

Thanks again, Congressman Clarke for making another announcement about the need to help the indentured educated class. I am looking forward to meeting your staff (and hopefully you!) in late August. I am interested in learning more about the specific plans his office has to implement bold loan forgiveness for all of us.



Related Links


"Rep. Hansen Clarke's Call for Loan Forgiveness," AEM (July 23, 2011)

"Rep. Hansen Clarke: Congress should cut and cap mortgages and forgive student loans to create jobs," AEM (July 20, 2011)

Call to Action: Tell Leaders in D.C. to Raise the Debt Ceiling

Investors are jittery about D.C.'s inability to raise the debt ceiling, so they are seeking alternatives to U.S. bonds. AEM has been discussing the ramifications of not raising the debt ceiling and interest rates on student loans over the past week, and interviewed several experts who painted a grim picture of what will happen to indentured educated citizens if the U.S. loses its AAA rating.

As already stated, there is a likelihood that the U.S.'s credit rating will be downgraded to AA status. That means that variable rates on student loans could increase, and borrowers seeking loans will have a harder time obtaining them. Just to be clear, I do not believe people should have to take out loans to finance their education - as I have stated countless times. In fact, I am so "radical" that I believe higher education ought to be free. But neoliberalism has triumphed, and turned higher education into a market, and one that has been highly lucrative for people like Albert Lord and [insert for-profit President's name here]. But I digress.

The Nation has written a great piece about the situation. It's called, "Shut Up. Raise The Ceiling." 

Call your representatives in D.C. and politely tell the ones who are refusing to act on this simple, procedural mater immediately. Send them tweets asking them to raise the debt ceiling. Tell them you don't care if they signed a promise to not raise taxes. Tell them you are tired of them working against the interests of the American people. Tell them that, if they have been opposed to raising the debt ceiling, they are economic terrorists and victimizing millions of people in the U.S.

Some quick facts on the debt ceiling. Right-wing "wonks" are conflating it with raising taxes. Anyone who understands the difference knows that's crap. The debt ceiling was raised under Bush seven times. It was raised under Reagan eighteen times. 

As a struggling, underemployed freelance writer and activist, the needless focus on the debt ceiling infuriates me. I blame both parties, too. Moreover, most of these clowns make no mention joblessness anymore. This shows the level of dysfunction and corruption in D.C. While I am looking forward to reconnecting with my contacts on the Hill, and meeting new folks there, I am discouraged by our leaders' inability to actively solve problems.

Related Links


"Sell Those Indenture Instruments Immediately! The Debt Ceiling Disaster and Student Loans," AEM (July 25, 2011)

"The Debt Ceiling Fiasco and Student Loans," AEM (July 25 ,2011)

Your thoughts - The Debt Ceiling Fiasco and Student Loan Debt

AEM has interviewed several experts about the debt ceiling fiasco and student loan debts.

There are indicators that the triple A rating that that U.S. has enjoyed will be downgraded to AA. What do you think will happen to interest rates on student loans, i.e., the ones that do not have fixed rates?

Jerry, thanks for the helpful link about the issue on the Facebook pages. (Jerry interviewed me months ago, and it was a delightful interview).

Related Links


Janet Novack, "Debt Ceiling Plan Take Aim At Graduate Student Loans," Forbes, July 27, 2011


"Sell Those Indenture Instruments Immediately! The Debt Ceiling Disaster and Student Loans," AEM (July 25, 2011)

"The Debt Ceiling Fiasco and Student Loans," AEM (July 25, 2011)

Sell Those Indenture Instruments Immediately! The Debt Ceiling Disaster and Student Loans

As I mentioned earlier, Bloomberg reported that if the US defaults and loses its AAA rating, investors might begin to sell off government-backed student loans. The value is a drop in the bucket. It's merely $250 billion in government-backed securities. So . . . yeah, no biggie. But perhaps being so nonchalant about  the issue is wrong? Hmmm . . . I wonder. Since I have been wondering and reading some piss-poor 'analysis' on the subject, I asked people who actually know what they are talking about.

I've spoken with a few economists as well as with a savvy financial reporter, and asked them what they think would happen to student loan debtors if the US defaults. Here's what they had to say:

I'm leaning toward believing that a complete collapse of the financial system, as well as the dollar, would be a *good* thing for the indentured educated class (in a narrow respect), as systemic failure might be the only thing that would cause actual *big* corrective actions to be taken, e.g. a blanket debt forgiveness/Jubilee or other such things. In addition, if the banks collapse, our bought-and-sold-passed-her​e-passed-there debt instruments might simply disappear within the system, as the chain of ownership collapses!

Quite intriguing and optimistic even though the collapse will be, obviously, cataclysmic.

Someone else asked me what could happen to loans that have been consolidated and have fixed rates. Certainly nothing will change with those loans, and the rates in place won't change. But it would be insane if that turned out to be false. Can you imagine the number of people who would be ruined financially if they changed those terms and conditions?

I am, by the way, not trying to be alarmist. In addition, I am not suggesting that this will happen. We - all of us - are merely theorizing, because no one really knows what will happen if the US defaults.

Finally, another reliable source suggested that variable rates could skyrocket. The cost of new loans would most likely balloon.

Thinking about the ramifications of investors selling off government-backed loans is just wild!

Related Links


Julie Haviv, "Dollar hits record low versus Swiss Franc in debt standoff," Reuters (July 25, 2011)


"The Debt Ceiling: Why It's A Real Issue For The Indentured Educated Class," AEM (July 25, 2011)

"Steve Eisman Blasts For-Profits, Arguing 'Subprime Goes To College," AEM (May 28, 2010)

 "We don't want those mutha-f$#%!-ing indenture instruments! Sell! Sell! Sell the indentured educated class off! 

The Debt Ceiling Fiasco And Student Loans

If the US loses its triple A status, investors might end up selling off their student-loan backed securities. The $250-billion government-backed securities would be hit hard. This concern is only being framed into terms of how it would affect the markets. If those securities are shaken, what does that mean for the debtors who owe the loans? What sort of disastrous results could occur in their world?

Related Link


"The Debt Ceiling: Why It's a Real Issue for the Indentured Educated Class," AEM (July 25, 2011)

UPDATE: Exclusive Interview - Whistleblower David Goodstein Discusses Victory over Kaplan University

Last Friday, AEM broke the news that David Goodstein, a former high-ranking employee at Kaplan University, settled his suit against the school for $1.6 million. There was something remarkable about the case. In many instances, if the students even win, they never see a dime of the settlement money. That is not the case here. The NYT picked up the story hours later, and provided details on the disbursement of the money, stating, "the settlement includes nearly $500,000 to be paid on behalf of 43 students who had taken out student loans for the program, but were not able to graduate because the school, one of Kaplan’s for-profit campuses, had no placement for them."


David Goodstein agreed to answer some questions about his settlement. We spoke briefly by phone on Friday (I called to congratulate him), and he then answered a few questions later that day by email.


CCJ: This settlement is great, especially because students are seeing a direct benefit from it and being refunded. But do you really think settlements are the best way to solve the problem with proprietary schools and their practices? 

If you could change the current higher educational system, what do you think should happen to proprietary schools? Is it unrealistic to shut them all down? 

DG: Although there are probably some schools that are ok the vast majority are a waste of the students' time and money both. They make lots of money for the shareholders. Given a choice of all or nothing, I would shut them down.

CCJ: Have you spoken to any of the former students about the settlement? Were they surprised by the outcome?

DG: To date I have not spoken to any of the former students. I would hope that this gets them talking to each other and perhaps a class action will come out of it by all the students who are not being reimbursed.

David had the courage to stand up against an exploitative system. It was brave of him to fight against this pernicious "university." We need more people in the world like David. It was an honor to speak with him again, and I am glad he initially came to me in November of 2010 to discuss the suit.


While the suit doesn't address the systemic problems that have led to the student lending crisis, it is a victory for these students who were defrauded. Like David, I hope they file a class action suit against the school. I am working on several large writing projects at the moment, but I am definitely going to try and get in touch with a few of these individuals and ask them for interviews. Stay tuned for updates.

Related Links


"Sordid Relationships and Broken Promises: Kaplan University's Troubling Financial Relationship To The Washington Post," AEM (November 23, 2010)

The Debt Ceiling: Why It's A Real Issue For The Indentured Educated Class

So . . . stock markets have opened in Asia, and, despite what you have been told - by those who have no sense of how markets operate and affect us - this debt ceiling issue could have huge ramifications for those of us who are part of the indentured educated class. Right now, as Reuters reports, stocks are falling in Asia and gold is at a record high. Hopes of avoiding default in the U.S. have all but faded across the globe, and that means bad things for debtors.

While I am not trained as an economist, I certainly have researched the relationship between student loan debt and how it is a part of the global stock market.

Things are grim, folks.

Stay tuned for updates on this breaking story, and other big things.

Rep Hansen Clarke's Call for Loan Forgiveness

Copyright Notice: If you are not reading this at All Education Matters, and unless I've explicitly given an individual or entity permission to publish my work, this post has been illegally appropriated. Please read original content here. 

If you have heard problematic claims made about my character, please feel free to email me about it (ccrynjohannnsen AT gmail DOT com) and avoid feeding the trolls. (Please also see - To The Mule Who Keeps Suggesting I Work For The Banks).

AEM a few days ago announced Rep Hansen Clarke's call to forgive student loan debt. Obviously, it's an admirable thing to do on the floor, and I am in the midst of setting up talks with his office. However, I think it is important to keep in mind that, unfortunately, Clarke is not on any committees that could sway his colleagues to push legislation to forgive student loans (for instance, he is not on the Education & Workforce Committee - one that could have considerable influence on such matters, but has, sadly, been bought and sold by the industry). As much as we would all love that, it is not realistic. Perhaps at one point there was a possibility, but it has passed. With austerity measures being pushed by both parties, the notion of loan forgiveness is simply out of the question, and anyone who has any sense of how the market works and how the student lending industry and debt are bound to it, will tell you that it's a pipe dream.

When I met with a sympathetic congressman in mid-January, he let me know that his "new colleagues" were wanting to make it impossible to include medical bills in bankruptcy. So when it comes to relief for student loan debtors, things don't look great. If I were to be proven wrong, I would - of course - be delighted. But I also think it is important to be honest about these things and not mislead people who are struggling with student loan debt.

Rest assured, I wish that my analysis and knowledge of these things were not true.

But keep in mind, there were calls over three years ago by countless people for total loan forgiveness, and it didn't happen. That was at a moment in which major corporations and the banks were bailed out. It made sense then, but it makes no sense now.

The concept of loan forgiveness is not a new thing in this country. It's not a new thing when you go back through history. There used to be 'debt jubilees.' It would be great if that would happen here, but the situation is far more complex than that.

While I still applaud Rep. Clarke for what he recently said, it is a mistake to assume that those words could actually lead to change for the indentured educated class. At the same time, I look forward to meeting him in August.

UPDATE: BREAKING! Whistleblower David Goodstein Slams Kaplan and Wins!

In November of 2010, I wrote about David Goodstein's suit against Kaplan. He came to me with his story about one of Kaplan's campuses in Pennsylvania. He alleged that they lured students into signing up for a surgical-technology program that literally had no end, i.e., the program could not be completed. The students were defrauded and left with mountains of debt. Goodstein, a high-ranking employee at Kaplan, was outraged by the situation, and took action. (Kaplan is owned by the Washington Post, which is one of the reasons they never write about the student lending crisis, and especially not the for-profit issue. In fact, they have come out in defense of the for-profits. But why wouldn't they? The paper depends upon those profits. So their writers, like Michelle Singletary, spews out positive-thinking mumbo jumbo about paying down debt. She always likes to highlight exceptional cases in which people have paid off their debt, and fails to discuss the fact that we're dealing with a systemic crisis. Here's the problem with that - folks on the Hill turn to the WAPO for big news items. They take a glance at stories that discuss debtors who take hiking trips or who have paid down their debt. Then they think there isn't an issue, and they move on. That's why WAPO has lost its journalistic integrity, especially when it comes to adequately addressing the student lending crisis.

The U.S. Department of Justice announced today that the suit has been settled for $1.6 million. Goodstein prevailed! The official press release can be read here.

*UPDATE*

I just spoke to David again and he has agreed to answer a few questions about the case, so stay tuned for his remarks!

Here's some other bizarre news about Kaplan. Bloomberg reports that a former dean of Washington Post Co. (WPO)'s Kaplan University unit was sentenced for threatening the school and Kaplan Inc. CFO Andrew Rosen via email and on the Internet. Bennie Wilcox was sentenced to 1 year and 1 day by a federal jury in Chicago.

Source: Screwed by Kaplan University.com

A short conversation with a teacher in Florida

I was playing softball in the old guys league again. The last few days there has been a very good player in his 40s playing as well. He is a teacher, so I guess he has the summer off.

Sitting wait for my turn at bat, I heard the following conversation:

Teacher: my students never heard of the great ones, like Dick Groat or Roberto Clement. (These are old famous baseball players.)

Teacher: Things are different nowadays. When I was a kid I knew the names of the old guys like Phil Rizzuto and Mickey Mantle. (These are even older baseball players.)

Other Player: Are you kidding? These days kids don’t know who George Washington was.

Teacher: I gave a test last year to my social studies class. I asked them “Who discovered the Dominican Republic?” There were four choices, one was Christopher Columbus, and another was Sammy Sosa. Would you believe that many of them thought it was Sammy Sosa! (A famous baseball player who is from the Dominican Republic, at least I think he is.)

I walked over to the teacher and quietly mentioned that no one discovered the Dominican Republic since it is a country and countries are founded, not discovered, and I doubted that any of his choices has founded that country.

What I didn’t say was that Sammy Sosa was a better answer since at least he had been in the Dominican Republic.

This is not a column blaming teachers. I am simply concerned that our multiple choice test-driven society has reduced our conception of knowledge to random facts about nothing. It is so bad that even teachers have no clue what they are asking any more because they too were taught in this way.

Rep. Hansen Clarke: Congress should cut and cap mortgages and forgive student loans to create jobs

Please let Rep. Clarke know how much we appreciate his suggestion!

Call his office (202-225-2261) and send him a tweet (@RepHansenClarke) - let him know how much it means to the indentured educated class!

RELATED LINKS


"Are Millennials the Solution to the Nation's Housing Crisis," Morley Winograd and Michael D. Hais, Future Majority

More Threats To Pell

Higher education advocate at U.S. PIRG, Rich Williams, has written an frightening piece for USA Today about Pell. It is at even greater risk of being eviscerated than previously thought. Neoliberals want us to believe that 'austerity measures' are necessary to 'save' the country from falling apart, but they are feeding the public with lies. At a time when Pell and other 'entitlement' programs should be supported and increased, woefully out of touch and I can only assume economically ignorant lawmakers are pushing for the exact opposite. 

Here's a snippet:

The U.S. House of Representatives has approved austerity measures that expose this same generation to potentially unsustainable debt right now through increased student loans.

The tradeoff promises to not only undermine individual and national prosperity, but also make it less likely that the country will have the resources to meet its obligations in the years to come. Controlling our national debt is not, as they say, an academic exercise. Deficit reduction, like education policy, should focus on ensuring a stable and sustainable economy. If that is the goal, cutting funding to higher education and job training programs is the wrong approach.

I encourage you to read the piece in its entirety here. 

Related Links

"Save Pell," AEM (July 16, 2011)

"Point/Counter Point - Pell Grants," AEM (May 25, 2011)

Image Credit: Angelo Lopez

Thomas M Cooley Law School Sues NYC Law Firm and 4 'John Does' for Defamation: Seeking Answers and Help from the Hill

As AEM reported last week, Thomas M Cooley Law School has filed a lawsuit against a NYC law firm and '4 John Does' for defamation.

This information caused an immediate stir in the blogosphere and was quickly picked up by a number of major media outlets. The most recent piece, by TTR, condemns the school for its hypocrisy.

In an effort to bring this situation to the attention of Michigan lawmakers, I am seeking some help from those on the Hill. I'll be heading to DC in August to represent the indentured educated class, and will certainly bring up the situation if I am granted some meetings with those offices.

One person cynically told me that these lawmakers are to blame for schools like Cooley to operate in the way that it does. Perhaps that is true. Perhaps it is false. (Since Cooley has threatened me with a SLAPP suit in the past, I will continue to remain neutral, as I have each time I've written about them). Nevertheless, I think that Michigan lawmakers, in particular, ought to know about the situation, and then they can weigh in. The former Cooley student, who is fearful that his career will be ruined if they reveal his identity, deserves that much.

Save Pell!

Are you aware that the Pell Program, which helps low-income Americans go to school, is on the chopping block because of this debt ceiling fiasco? That's right. It is. I also wrote a piece recently in defense of Pell, and called for bold increases to the program.


If you tweet, I encourage you to send the President (@BarackObama) and the Whitehouse (@whitehouse), as well as House and Senate leaders tweets that let them know you're worried about Pell. You could send the following, and also call the White House. Here are some suggestions:

• Last night @BarackObama gave hill leaders 36 hours to create a debt ceiling deal. Pell cuts possible.  http://wapo.st/oFgWgZ #SavePell
   
• Congress has identified Pell Grants as target for debt  reduction cuts. #SavePell
   
• Pell faces huge cuts in debt ceiling talks. Neither students or our economy can afford this. #SavePell http://bit.ly/qX1kUU
   
• Tell @BarackObama to stand up for students. Protect Pell in debt negotiations. Tweet @whitehouse or call 1-888-245-0215 #SavePell
   
• Tell @BarackObama to take Pell Grants off the table. Call 1-888-245-0215. Sign the petition http://bit.ly/rruNrD. Tweet @whitehouse #SavePell
   
• President @BarackObama: “I'm prepared to bring down the deficit by trillions...but not by sacrificing our kids' #education." #SavePell
   
• Low-income students  are facing tuition hikes and reduced financial aid packages. Tell @BarackObama to #SavePell. 1-888-245-0215
   
• America needs more college grads. Tell @BarackObama to #SavePell. Tweet @whitehouse or call 1-888-245-0215
   
• Tell your friends to help #SavePell. Sign the petition: http://bit.ly/rruNrD Call the White House: 888-245-0215 Tweet: @whitehouse

A number of organizations have sent the President a letter, urging him to protect Pell. All Education Matters signed that letter too.

Here it is:

July 15, 2011

The Honorable Barack Obama

President of the United States

1600 Pennsylvania Avenue

Washington, DC 20500

Dear Mr. President:

Throughout your presidency you have shown a strong commitment to increasing our nation’s college completion rates and have made great strides toward advancing this goal. As you negotiate with Congress on a debt ceiling package, we urge you to honor this commitment by protecting the maximum Pell Grant and avoiding any eligibility cuts that would be harmful to students. Cutting Pell Grant awards or eligibility will reduce access to college, undermine the economy, and lower college completion rates when we need to be raising them.

As you know, Pell Grants make college possible for over nine million Americans. They enable the neediest among us to get the postsecondary education required to increase their earning potential and keep America competitive in the global economy. Even after the significant increases in the maximum grant that your Administration secured, the maximum Pell Grant will cover less than a third of the cost of attending a four-year public college next year—the smallest share in the history of the program. Furthermore, Pell Grant recipients are already more than twice as likely as other students to have student loans. Make no mistake: cutting Pell Grants at this time—either through a reduction in the maximum award or through harmful eligibility changes—will reduce the number of people who can attend college and earn a degree.

The recent increase in the cost of the Pell Grant program is no reason to make damaging permanent changes to this successful and vital program. Fully 40% of the recent rise in Pell costs is because of the economic downturn, not policy changes. When millions of Americans lost their jobs and saw their incomes decline during the recession, the Pell Grant program responded as it was designed to—ensuring access to education and training when jobs were scarce. Another 22% of the increase was due to the year round Pell Grant program, which was ended under the FY2011 budget agreement, reducing program costs by $40 billion over 10 years. Because of this change and with the economy continuing to recover, program costs have stabilized. In fact, the Congressional Budget Office projects that Pell Grant costs will grow less than 1% a year in the next two years and only 2% a year over the next ten years. After adjusting for inflation, spending on Pell Grants is projected to decline in each of the next two years.

At a time of record income inequality and unemployment, Pell Grants are one of the keystones of economic mobility and opportunity in this country. Cutting Pell Grant awards or eligibility would be pennywise and pound-foolish. We urge you to honor the values you have articulated for the nation and protect educational opportunity in the current deficit reduction package.

Sincerely,

AFL-CIO

All Education Matters

American Association of Collegiate Registrars and Admissions Officers

American Association of University Women

American Federation of Teachers

American Medical Student Association

American School Counselor Association

American Student Association of Community

Colleges

ASPIRA

Business-Higher Education Forum

Campaign for College Affordability

Campaign for College Opportunity

Campus Progress Action

Center for Law and Social Policy

Children’s Defense Fund

College Summit

Community College League of California

Corporate Voices for Working Families

Crittenton Women’s Union

Democrats for Education Reform

Dēmos: A Network for Ideas & Action

The Education Trust

Forum for Youth Investment

Generational Alliance

Green Dot Public Schools

The Greenlining Institute

Hispanic Association of Colleges and Universities

Illinois Education Foundation

The Institute for College Access & Success

Institute for Higher Education Policy

Jobs for the Future

KIPP Foundation

League of United Latin American Citizens

MomsRising

NAACP

National Association for College Admission

Counseling

National Association for Equal Opportunity in

Higher Education

National Association of Student Financial Aid Administrators

National Association of State Student Grant and

Aid Programs (NASSGAP)

National Black Law Students Association

National College Access Network

National Consumer Law Center (on behalf of its low-income clients)

National Council for Community and Education

Partnerships (NCCEP)

NCLR (National Council of La Raza)

National Education Association

National Organization for Portuguese Americans

National Skills Coalition

Neighborhood Economic Development

Advocacy Project

Public Advocates

Rebuild the Dream

Rock the Vote

Roosevelt Institute Campus Network

Single Stop USA

Students for Education Reform

Thurgood Marshall College Fund

UNCF

U.S. Public Interest Research Group

United States Student Association

Women Employed

Workforce Strategies Initiative at The Aspen Institute

Year Up

Young Invincibles

UPDATE: BREAKING! Thomas Cooley Law School Fights Back And Sues a Law Firm and Four 'John Does'

One of the John Does is saying some interesting things about Thomas Cooley Law School, and I'm not referring to the opinions he (?) stated earlier about the school. His name is RockStar05. He was a student at Cooley for one year, and then transferred to another law school.

Rockstar05 also launched a blog called "Thomas M. Cooley Law School Scam," and that's what has gotten him into trouble. He criticizes the school for a number of reasons. One point he brings up is the school's claim that they are ranked the "2nd best law school in the country."  Rockstar05 found the basis for the claim to be highly problematic. (The reader can be the judge of the school's claim).

Cooley filed a suit against him and 3 other "John Does,"  and that includes Ch. Burns, too. He's how I wound up writing some short pieces about the school in the first place. He got in touch with me about Cooley (you can find all those links below). In any event, Rockstar05 has been responding to the suit that was filed against him by Cooley on JD Underground. (As already noted, Cooley is also suing a small NYC law firm called Kurzon Strauss).

After a reporter got in touch with him, Rockstar05 has had this to say about the suit (truncated version):

RETRACTED

He also stated (again the quote is truncated):

RETRACTED

In addition, he does not think he defamed the school:

 I didn't really 'defame' in my opinion. I was actually thinking of calling the law firm named in the lawsuit tomorrow and asking what their thoughts are and if they would like to represent me. 

I'm just a broke 3L law student and will leave it up to the law firm to do all that discovery crap and actually blowing the lid on Cooley- I just want out of this stupid fucking suit [my emphasis].

That's where I am concerned for RockStar05. He's a broke law student, and just trying to finish up his schooling. What if they unveil his identity before he even graduates from the law school he's presently attending? What will that do for his job prospects? Won't that hurt his reputation and his ability to earn a living?

Rockstar05 has this lengthy address, too (scroll down to the bottom of the comments on his page to these the original):

THIS IS WHAT I AM POSTING IN RESPONSE TO THE LAWSUIT ON MY BLOG POSTING. HOPEFULLY THE JOURNALIST WILL PUBLISH SOME OF MY STATEMENTS TOGETHER WITH HIS ARTICLE TOMORROW. PLEASE PROVIDE ANY THOUGHTS. I CAN MODIFY IT ASAP.

Dear all,

I believe I was very clear throughout my dated blog post that I was expressing my personal opinion. I would analogize my entire post reflecting my personal experience and personal views of the Thomas M. Cooley Law School to watching a movie on a Friday night then publishing online statements asserting that it was a poor investment of time, money, and certainly not worthwhile- to boycott the movie and go ahead and watch that other movie that released the same Friday or any other movie. Do motion picture producers go out and publicly file lawsuits against each and every one who trashes their film? Let’s make the analysis more relevant and assume I flatter myself and liken my blog post to a giant public platform to express my views and opinions. Will Michael Bay go out and sue Roger Ebert, who is arguably one of the biggest critics in America, for trashing his movie?

As for distorted employment data, I have previously acknowledged that this is not a problem that is confined to Cooley alone. The ABA regulation of school reported employment data has been widely criticized by commentators, scambloggers, law professors, in addition to industry experts and analysts as being misleading. Common grounds for criticism include the idea of self-reported employment data by the law schools and notable deficiencies in the reporting in terms of not disclosing overall response rates and either having a breakdown or reflecting employment that actually requires a law degree. Since I concur with the opinions of these critics and publicize it, will this opinion and view subject me to another 200 law suits filed by each and every ABA approved law school?

I would like to make it clear that I never once addressed the quality of the education provided at Cooley but grounded my opinion based on its poor reputation as a fourth tier school, high attrition rates, unfriendly administrative policies, and most reprehensible of all, the school naming itself as the second best law school in the United States of America ahead of such notables such as: Yale, Stanford, Columbia, NYU, UofM, Chicago etc. In fact I would consider their subjective self-proclaimed and advertised ranking as the second best law school equally if not more 'misleading' to the general public than my own personal opinion on Cooley not being a good option for law school. I’ll go out on a limb and speculate that my 'misleading' claim would bear slightly more weight given that the most authoritative ranking of law schools published by the US News ranks Cooley closer to the bottom of the 200 schools as opposed to the top two law schools in the country.

The assertion by Thomas M. Cooley of its status as the second best law school in America is as ludicrous as asserting that I am the second smartest man in America. It would invite the type of backlash that Cooley experiences everywhere throughout the nation. Yet I would not go out and sue someone who has a different opinion, or in the extreme scenario, publicly lambasts me for my declaration and calls me the dumbest man in America.

I will also point out that I never made any allegations with regard to loan fraud or other specific factual claims regarding the Thomas M. Cooley Law School. I simply expressed my experience, views, opinions, and said that I would not recommend the school to anyone. Since I love use analogies (as I used several times in my disputed blog post to insult Cooley), this is similar to using a product then posting a negative review online telling everyone to beware and choose one of the competitors. Do you think McDonalds would come sue me if I said their Big Mac was a load of crap and that everyone should spend their money on a whopper or virtually any other hamburger on the market (or none if that was their only other option)?

Finally, I would like to add that Cooley has not attempted to contact me even once, either through e-mail or through a blog comment on this post. If they had done so, or perhaps even are willing to retract their lawsuit at this early stage, I would consider removing the post altogether. In terms of damages I’m not sure of the basis for Cooley’s request for relief in the amount of $25,000, let alone the special damages and/or actual malice that must be proven in order to successfully sue someone for defamation. I am not technologically savvy and any Joe Shmoe who is disgruntled about their experience and wants to inform others of essentially a 'buyer beware' message can set up a site in less than 5 minutes to publicize his views. Truthfully, I almost forgot about my Weebly blog site until I received an e-mail from a journalist that hit my blackberry informing me that a lawsuit has been directed towards my website. Up until now this blog has had an average of under 30 hits a day for the past few months. Most of the users seem to actually ATTEND COOLEY THEMSELVES, so the damage and defamation would be similar to telling the Detroit Lions they suck. Is a $25,000 lawsuit necessary to vindicate my 'damage' to Cooley by expressing my opinions regarding it. My two-sense on a two-bit site should be hardly anything that would publicly defame and damage a world-class institution like the Thomas M. Cooley Law school which can boast of being the second best law school in the country that is the world’s leader in top educational institutions.

Sincerely,

Rockstar05

As many of you recall, I also received notification from the school (you can find it in the related links). I was told to remove all the things I had written about Cooley. However, I was merely relaying information about claims made about them. In addition, I sent those pieces to reporters in  my higher education circles, encouraging them to investigate the allegations. After I wrote about this piece, at least 5 major media outlets picked it up.

So . . . this raises the question: is it freedom of speech or is it defamation?

Related Links

"BREAKING! Thomas Cooley Law School Fights Back And Sues a Law Firm and Four 'John Does.'" AEM (July 14, 2011)

"Cooley Law School Files Suit to Protect Students, Alumni, and Reputation," Thomas M Cooley Law School  (July 14, 2011)

"Thomas M Cooley Law School - What Are They Hiding?" AEM (June 15, 2011)

"Thomas M Cooley Law School Scam"

"Repost - Investigating Law Schools (Class Action Suit)," AEM (May 22, 2011)

"[UPDATE] Dean Jame Thelen from Thomas M Cooley Law School Responds with a Threatening Letter," AEM (April 28, 2011)

"Part II: Thomas M Cooley Law School," AEM (April 28, 2011)

"[UPDATED] MUST READ: Thomas M Cooley Law School Under Investigation For Serious Title IV Violations," AEM (April 27, 2011)

James Thelen, associate dean of legal affairs and general counsel for Thomas M Cooley Law School

BREAKING! Thomas Cooley Law School Fights Back And Sues a Law Firm and Four 'John Does'

A few months ago I relayed information about Thomas M. Cooley Law School. It was from a little bird named Ch. Burns. The school has now filed two lawsuits, claiming that their reputation has been damaged by Ch. Burns and three other "John Does." The other lawsuit is against a New York City Law Firm. The suits  (see here and here) were filed in Ingham County (Michigan) Circuit Court. Jesse Strauss and David Anziska are the two attorneys at Kurzon Strauss who have been accused of defaming the school.

When asked about the lawsuit, Anziska stated, "This is one of the most ridiculous, absurd lawsuits filed in recent memory."

When I first wrote about the allegations that Burns sent to me, the associate dean of legal affairs and general counsel, James Thelen, at Cooley insisted that I remove my posts. After I spoke with my own legal counsel, I refused to remove any of my earlier posts. But - and as requested by Thelen - I did post his letter to me.

In that note, Thelen wrote:

Your report regarding Thomas M. Cooley Law School is, at best, false and misleading; at worst, it is defamatory and actionable.  A simple Google search would have demonstrated that the defamatory material passed off as truth – admittedly by your own “hunch” – is nothing but a regurgitated Internet rumor circulated and discredited months ago.  (I’ve reviewed too your Twitter feed regarding these allegations, which is stated as fact and is thus defamatory as well.)

He continued:

You should immediately remove these defamatory postings from your “All Education Matters” blog page, as well as from your Twitter feed and any other site that you control.  I also expect that you will post an appropriate statement of the reason for your retractions.

You can read the entire letter below in the related links.

I will be following these suits carefully, and will provide updates.

Related Links


"Cooley Law School Files Suit to Protect Students, Alumni, and Reputation," Thomas M Cooley Law School  (July 14, 2011)


"Thomas M Cooley Law School - What Are They Hiding?" AEM (June 15, 2011)

"Thomas M Cooley Law School Scam"

"Repost - Investigating Law Schools (Class Action Suit)," AEM (May 22, 2011)

"[UPDATE] Dean Jame Thelen from Thomas M Cooley Law School Responds with a Threatening Letter," AEM (April 28, 2011)

"Part II: Thomas M Cooley Law School," AEM (April 28, 2011)

"[UPDATED] MUST READ: Thomas M Cooley Law School Under Investigation For Serious Title IV Violations," AEM (April 27, 2011)

James Thelen, associate dean of legal affairs and general counsel for Thomas M Cooley Law School

The 9.5% Loan Scandal: The Hero and The A%&$!-es

Very few are aware of how much taxpayers were ripped off by student lenders like Nelnet, Sallie Mae, PHEAA, etc., etc. They stole millions and millions of dollars from taxpayers. Nelnet settled a case out of court for $55 million after a former Department of Education researcher, Dr. Jon Oberg, filed a False Claims Suit against them. These loan shark cumbags like to settle out of court, so that the public doesn't learn the true story.

PHEAA is still in litigation, and claim that they will get out of it.

It is time to revisit the 9.5% loan scandal.

Stay tuned for a sordid and despicable story . . .

Nelnet News

Nelnet has purchased $1.9 billion in FFELP loans from an affiliate of Greystone Co Inc. This means their portfolio will increase to $25 billion.

So, even though the administration got rid of the 'middle men' who operated FFELP, that money is still out there. Moreover, these companies attract investors with the amount of student debt they have on their books. That is why they do not want the indentured educated class to pay off their loans. There is money to be made off of indentured bonds.

Nelnet has now moved into the resume writing biz, too. How perfect is that? They've created indentured educated citizens who face a brutal, broken job market. So there they are, to help out people and 'improve' their resumes!

Related Links

"Nelnet Reaffirmed At Neutral," Daily Markets (July 12, 2011)

"Money Making Schemes: FFELP Loans, the Market, Sallie Mae, and Nelnet," AEM (July 4, 2011)

"Online Corporate Whore News Report: Nelnet's In The Resume Writin' Biz," AEM (June 1, 2011)