An October 5 editorial by the Wall Street Journal used anti-union rhetoric and pro-privatization arguments to celebrate Secretary of Education Arne Duncan's resignation and replacement by Acting Deputy Education Secretary John King. The editorial perpetuated several well-worn education policy myths, and mischaracterized the economic outcomes of for-profit colleges and the effects of voucher programs for low-income students of color.
From the October 6 edition of Fox News' The O'Reilly Factor:
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From the October 6 edition of Fox News' The O'Reilly Factor:
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As the nation's student loan debt burden continues to grow and voters look to 2016 presidential candidates for solutions, right-wing media continue to perpetuate debunked myths about college costs, financial aid, and student loans. Here are the facts that conservative media outlets ignore.
A Wall Street Journal editorial on student debt takes aim at Democratic presidential candidate Hillary Clinton's New College Compact college affordability plan, arguing that Democrats have "encouraged student debt" in order to win over young voters with debt relief proposals. In addition to favoring fewer opportunities for low-income students, the board's argument ignores the flawed and sometimes corrupt private lending system that led the government to reform the student loan process, and the recession-driven policies supported by both parties that have sent higher-ed costs skyrocketing.
The August 21 WSJ editorial characterized Clinton's recently-announced student debt relief proposal as part of a larger "arc of progressive politics" that first causes problems, and then presents voters with solutions. The short editorial - which is also short on facts - is worth quoting in its entirety (emphasis added):
The arc of progressive politics these days seems to be hoping to benefit from proposing policies to solve the problems their previous policies have created--and hoping nobody notices the cause and effect.
Hillary Clinton and the other Democratic presidential candidates have been proposing new ways for college students to reduce or write-off their student loans. The goal is to win over millennial voters with more taxpayer largesse, while slowly turning higher education into one more universal federal entitlement. Mrs. Clinton's proposal would cost a hefty $350 billion over 10 years, by her own no doubt conservative estimate.
What Democrats don't say is that such taxpayer generosity wouldn't be necessary if they hadn't done so much to encourage students to load up on taxpayer-guaranteed debt. The Education Department reported this week that some 6.9 million Americans with student loans hadn't made a single payment in at least 360 days. That's up 6%, or 400,000 borrowers, in a year.
The Obama Administration took over the student loan market in 2010, easing terms and expanding benefits. Now that the bills are coming due in (sic) more deadbeats, Democrats hope to benefit again by handing the tab to taxpayers. They nail you coming and going. [Wall Street Journal, 8/21/15]
The editorial lays the blame for the national student debt crisis at the feet of the Obama Administration, which it says "took over the student loan market" in 2010. That's a reference to The Health Care and Education Reconciliation Act of 2010, which eliminated the Federal Family Education Loan (FFEL) program, a lending system that dates back to 1965 and offered government-guaranteed student loans through private and nonprofit lenders. In its place, the government created the present-day Direct Loan program, which cuts out private lenders and issues loans directly to students (private lending continued without the government's backing).
Among other things, the 2010 education loan overhaul lowered interest rates for certain borrowers, upped maximum award amounts for Pell grants, expanded access to both income-based repayment and the Public Service Loan Forgiveness plan by allowing borrowers to consolidate into loans eligible for these programs, and made income-based repayment significantly more affordable. The Congressional Budget Office projected that the new, simplified loan program would save the government $68 billion over 11 years.
The WSJ editorial made no mention of the 2010 law's cost savings for the government or students, or the circumstances that laid the groundwork for the reform. Before 2010, the government was paying millions to private lenders to subsidize interest rates on federally-backed loans. In 2004, it was discovered that private lenders were exploiting a legal loophole and overcharging the government for those subsidies. In 2007, several lenders also admitted to engaging in illegal deals with colleges to encourage students to borrow from them.
Those revelations shook public and policymakers' confidence in the whole system of privately-issued, taxpayer-backed student loans and helped set the stage for the 2010 reforms.
In August, 2012 -- two years after the Direct Loan program began -- the Consumer Financial Protection Bureau issued a report that showed how private student loans, which often come with variable interest rates and limited repayment options, expose borrowers to greater credit risk and higher costs. Despite that damning finding, the Republican Party's 2012 party platform called for an end to direct lending and a return to the FFEL-style lending system that had allowed private lenders to overcharge taxpayers and exposed student borrowers to higher debt costs.
Another of The Journal's claims -- that progressive policies have created a cycle of "entitlement" -- is undermined by the fact that bipartisan measures have increased pressure on students to borrow ever-higher amounts of money to pay for college. State-level budget cuts to higher education in the wake of the 2007 recession, for example, have been a proven cause of higher college costs across the board, especially at community colleges. An in-depth analysis of state higher education disinvestment from 2007-2012 by the Center for American Progress found that 29 of 50 states had lowered their direct funding of public institutions. By Media Matters' count, legislative leadership in those 29 states was almost evenly divided between Democrats and Republicans, proving the fallacy of the Journal's claim that progressive policies are responsible for driving up higher-ed costs.
Finally, the Journal's claim that expanding access to student loans leads to more "deadbeats" looking to taxpayers to foot their loan bills echoes a common conservative talking point that says expanding access to higher education through accessible student loan programs results in unqualified (read: undeserving) students going off to college.
That argument ignores the reality that taking on some measure of student debt is inevitable for most Americans, regardless of what kind of school they attend. In 2013, the most recent year for which data is available, nearly 70 percent of graduates of public or private nonprofit schools had loan debt. Tuition costs are rising quickly at every type of higher education institution, according to figures from the National Center for Education Statistics: private colleges, state universities, vocational schools, community colleges, even professional certification programs. And the growing debt burden is shouldered disproportionately by low-income, black and Hispanic borrowers, many of whom lack the adequate financial resources to avoid borrowing.
The bottom line is that any argument against the loan simplification measures and expanded student aid established in 2010 is an argument to limit college opportunities, which will inevitably hit low-income, minority students hardest. The Wall Street Journal's elitist dismissal of the serious problem of student debt, and its partisan argument against worthwhile policy solutions, reinforces a stratified system of higher education that limits opportunities for deserving Americans.
Right-wing media have falsely claimed Hillary Clinton's debt-free college plan eliminates student financial responsibility and doesn't address rising tuition costs. In fact, students on the plan would be required to work, and the proposal ties federal funding to states lowering school costs.
From the August 18 edition of Fox News' Your World with Neil Cavuto:
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The Wall Street Journal editorial board falsely blamed the Obama administration for the closing of for-profit college company Corinthian Colleges, ignoring mountains of evidence that the company engaged in exploitative practices against its students.
Corinthian Colleges Inc. announced on April 26 that it would immediately shut down its 28 remaining campuses, following reports that it has been "teetering on the brink of collapse for months." About 16,000 students in five states are affected by the move, which Mic.com called "the final act of a slow-motion disintegration."
On April 27, The Wall Street Journal editorial board defended Corinthian, claiming that the "feds and [California Attorney General] Kamala Harris put 16,000 students on the street." The editorial alleged that the Department of Education (ED) "began to drive Corinthian out of business by choking off federal student aid," that Corinthian was held at "government gunpoint," and that an ED "penalty scared away prospective buyers." The editorial concluded:
Though Corinthian has established an escrow account for refunds, the reserve likely won't be sufficiently capitalized to cover 16,000 students. Maybe there would be more money for students if Corinthian didn't have to spend so much defending itself from the government. But for the Obama Administration, protecting students has always been second to its mission of doing whatever it takes to put for-profit schools out of business.
The WSJ's attempt to blame the ED for Corinthian's collapse is misguided given that the for-profit company has been under investigation for years for "exploitative practices," including "predatory lending, deception in performance data and job placement rates, and bogus career services." Last summer, the ED cut Corinthian off from receiving federal aid, and penalized them with a $30 million fine earlier this month for 947 confirmed cases of "misrepresentation of job placement rates." California Attorney General Kamala Harris filed a lawsuit against Corinthian in 2013, alleging that the company "targeted some of our state's most particularly vulnerable people -- including low income, single mothers and veterans returning from combat."
A group of former Corinthian students also announced earlier this year that they would "not repay any federal student loans they took out to attend Corinthian's schools," calling it a "debt strike." Officials from the ED, Consumer Financial Protection Bureau, and Department of the Treasury met with those former students last month and listened to claims that "they were either lured into taking out loans with bogus promises of future job prospects or were simply signed up for loans by their school's staff without their consent." Think Progress further noted in its "inside story" on Corinthian:
The company's bait-and-switch approach to recruiting students -- or making sales to customers -- lured many ambitious people who thought they were investing in future economic security, workplace dignity, or job satisfaction. But ultimately, many of them were just buying a meaningless degree at a very high price.
This isn't the first time the WSJ has used faulty arguments to defend for-profit colleges, or even its first foray into deceptive reporting on higher education and student debt. This editorial echoes a larger trend within conservative media to ignore the realities of America's student debt crisis.
Image at top via Flickr user Jeramey Jannene using a Creative Commons license.
Media outlets are falsely alleging that President Obama's plan for free community college will hurt the middle class because it makes changes to 529 college savings plans. In fact, those who use 529 plans tend to be wealthy, and the changes will help build a broader tax credit for college savings.
The Wall Street Journal editorial board used a misleading comparison of graduation rates to attack community colleges as "inferior" to for-profit schools. In reality, for-profit schools have significantly higher costs and employ questionable business practices that translate to lower employment and earnings for their graduates.
A Wall Street Journal editorial dismissed the student loan relief plan outlined by President Obama as a distraction from the so-called Bowe Bergdahl "scandal," even though conservative media had previously declared Bergdahl's release a distraction from other alleged "scandals."
In a June 9 editorial, the Journal's editorial board attacked Obama's plan to extend income-contingent loan repayment options to all recipients of federal student loans. The Journal chided Obama's decision to extend through executive action reduced payment options to 5 million previously unqualified borrowers who had taken out loans before October 2007. The Journal also invoked myths that college loans are driving up attendance costs and represent taxpayer handouts to college graduates.
The Journal concluded its anti-loan relief tirade by claiming that the president's announcement, along with Sen. Elizabeth Warren's (D-Mass.) proposal to lower student loan interest rates, amount to little more than "attempts to change the subject" from alleged "scandals" and "government failures." From the editorial:
The Warren bill has no chance to pass the House, as Democrats know. The Warren bill and the Obama debt-forgiveness-by-fiat are attempts to change the subject from the cascading examples of government failure -- the VA scandal (see nearby), the Taliban prisoner swap, the rising cost of health insurance under ObamaCare. In the Obama era, government failure is never a failure. It's another political opportunity to call for more of the same.
The Journal's claim that proposals to relieve millions of student loan borrowers buried under more than $1 trillion in outstanding debt are a distraction from "the Taliban prisoner swap" is just the latest in a series of right-wing media outlets obsessing over the notion that each policy proposal or news development from the White House is a "distraction" from something else:
The Journal's decision to force the "distraction" talking point into the student loan debate proves that no news item is safe from being uncritically dismissed by right-wing media outlets bent on turning every issue into a political scandal.
Fox News is ignoring economists' warnings that record student debt is a drag on the economy and attacking President Obama's plan to provide an avenue for student debt relief as a "distraction" that Fox claims will leave taxpayers "footing the bill."
Fox News often promotes myths about student loan debt in the United States, misinforming about everything from the lack of protections borrowers receive, to the unsubtantiated claim that student loans drive up college costs, to the myth that struggling borrowers are taking a government handout. As the two-year anniversary of student debt surpassing $1 trillion takes place this week, here is a sample of the network's past student loan misinformation.
Conservative radio host Rush Limbaugh severely misrepresented several years of student loan-related legislation in an attempt to smear Democrats while pushing yet another unfounded conspiracy.
On July 1, interest rates on government-sponsored Stafford Loans automatically doubled from 3.4 to 6.8 percent. Myriad provisions to avoid the rate hike have been advocated by various caucuses in the House and Senate, as well as by the White House.
On the July 1 edition of The Rush Limbaugh Show, Limbaugh stated that "it was Democrat legislation that doubled the student loan interest rate, 3.4 to 6.8 percent." He went on to claim that, originally, "Democrats intentionally wrote law to make student loan interest rates double in an election year" so they could "blame it on the Republicans."
While Limbaugh attempted to pin the automatic rate hike solely on Democrats, the legislation in question -- the College Cost Reduction and Access Act of 2007 -- passed both houses of Congress with broad bipartisan support. On September 7, 2007, the bill passed 292-97 in the House of Representatives with 77 Republican votes before passing 79-12 in the Senate with 33 Republican votes. The legislation did not face so much as a cloture motion from the Republican minority.
Limbaugh's claim that House and Senate Democrats intentionally designed the bill to raise interest rates to previous levels during an election year to help Democrats' election prospects in 2012 is also false. The final rate expiration date specified in the College Cost Reduction and Access Act of 2007 was negotiated with Republicans to go into effect on July 1, 2012 - the original Democratic drafts had the rate cut expiring in 2013.
Last summer, near the height of the election, President Obama and Republican presidential candidate Mitt Romney both lobbied Congress to delay the rate hike for twelve months specifically to avoid making student loan rates an election issue, according to The Washington Post.
Finally, after falsely claiming that Democrats would use the returning issue of student loan rates as a "bludgeon" against Republicans, Limbaugh reiterated a long-debunked claim that the increased revenue from a student loan rate increase would go to fund Obamacare, claiming, "The bottom line is that the student loan rate is going to double. It's gonna go from 3.4% to 6.8%, and here's the reason why: Congress has figured out they need that additional money to spend on Obamacare. "
In the weeks leading up to an automatic doubling of federal student loan interest rates, broadcast and cable nightly and weekend news devoted little time explaining the effects of the rate hike and the expiration of other programs designed to help American students, graduates and families with increasingly high education costs.
In 2007, Congress passed a law to reduce interest rates on federal subsidized student loans, the Stafford Loan program, to 3.4 percent. The law was intended to reduce college costs and increase access to higher education. The Budget Control Act of 2011 ended several provisions of previous law; foremost setting an expiration date of July 1, 2013, for Stafford Loan interest rates. Today, those rates automatically double to their previous 6.8 percent.
Media Matters research found the looming student loan deadline has been largely ignored by major news networks in the past several weeks. Since May 23, the date the House of Representatives passed a party line student loan plan of its own, primetime and weekend television news has offered just 13 brief segments on student loan issues.
Absent from media analysis has been any real discussion of economists' recommendations for dealing with student debt. Many economists, including Nobel Prize winners Joseph Stiglitz and Paul Krugman, have supported various efforts to defray college costs, expand federal funding, and provide restructuring and refinancing options for student and family borrowers.
In May, the Consumer Financial Protection Bureau released a report on student loan affordability. It found that expanded refinancing options for student debt could have a simulative effect on economic growth, household formation and homeownership among borrowers. The Federal Reserve Bank of New York had previously found that student debt was a driving force in decreasing home and automotive purchases among recent graduates.
The rate increase set to take effect on July 1 will directly affect millions of Americans while making college less affordable for prospective students. The Congressional Research Service estimated that the higher rate could cost average borrowers more than $1,000 to take out a subsidized federal loan. College graduates are saddled with an enormous debt burden - more than $1 trillion through 2013, according to The New York Times.
Media Matters conducted a Nexis search of transcripts of Sunday and evening (defined as 5 p.m. through 11 p.m.) programs on CNN, Fox News, MSNBC, and network broadcast news from May 23 through June 30. We identified and reviewed all segments that included any of the following keywords: student loan, college loan, student debt, college debt, student, debt, loan, and college.
The following programs were included in the data: World News with Diane Sawyer, This Week with George Stephanopoulos, Evening News (CBS), Face the Nation, Nightly News with Brian Williams, Meet the Press with David Gregory, Fox News Sunday, The Situation Room, Erin Burnett OutFront, Anderson Cooper 360, Piers Morgan Live, The Five, Special Report with Bret Baier, The O'Reilly Factor, Hannity, On the Record with Greta Van Susteren, Hardball with Chris Matthews, Politics Nation with Al Sharpton, All In with Chris Hayes, The Rachel Maddow Show, and The Last Word with Lawrence O'Donnell. For shows that air re-runs (such as Anderson Cooper 360 and Hardball with Chris Matthews), only the first airing was included in data retrieval.
Media Matters only included segments that had substantial discussion of increasing student debt or the July 1 interest rate deadline. We did not include teasers or clips of news events, and re-broadcasts of news packages that were already counted on their initial broadcast in the 5p.m. to 11p.m. window.