Education Funding

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  • WSJ Editorial Blames Progressives For Student Debt, Claims Government Loans Send "Deadbeats" To College

    Blog ››› ››› PAM VOGEL

    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 Journal8/21/15]

    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.

  • WSJ Defends Shuttered For-Profit College Despite Evidence Of Fraud

    Blog ››› ››› HILARY TONE

    Everest CollegeThe 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.

  • WSJ Uses Bad Numbers To Wipe Away Downside Of For-Profit Colleges

    ››› ››› ELLIE SANDMEYER

    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.

  • North Carolina Newspapers Mostly Silent As ALEC And Koch Brothers Rewrite History

    Blog ››› ››› DANIEL ANGSTER

    North Carolina newspapers have largely missed the connection between a Koch-funded education non-profit organization contracted to help shape new statewide history curriculum materials, and the American Legislative Exchange Council (ALEC), the conservative model legislation mill that wrote the bill mandating the new course work.

    In 2011, the North Carolina legislature passed a bill known as the "Founding Principles Act," which would require high school students to pass a course on "Founding Philosophy and the Founding Principles of government for a free people." The bill was generated as a piece of model legislation by ALEC, a conservative group that brings corporations and politicians together to vote on and construct bills to be used in multiple states. According to the Huffington Post, North Carolina's Department of Public Instruction, which has been tasked with drawing up the curriculum required by the Founding Principles Act, proposed on December 3 to "'highly recommend' social studies material from the Bill of Rights Institute," an organization which "receives funding from the billionaire Koch brothers."

    Of the four largest papers in North Carolina (by circulation), The Charlotte Observer, the News & Record, The News and Observer, and the Winston-Salem Journal, only the Raleigh-based News and Observer produced an original report on the connection between the Koch brothers and the new history curriculum. Its story was reprinted by The Charlotte Observer  and the Winston Salem-Journalthe latter of which added quotes from local teachers. The News & Record only ran a short Associated Press story that referenced the original News & Observer article.

    As the News and Observer reported, the Bill of Rights Institute (BRI) was contracted to help create course material. What all of the state papers missed, however, was the BRI's own connection with ALEC. According the Center for Media and Democracy, BRI was an ALEC member and part of ALEC's Education Task Force. Documents obtained by The Guardian show that BRI's ALEC membership lapsed in April 2013, though the institute was listed as providing research materials for the new curriculum in February of the same year.

  • Fox's Sunny Sesame Street Celebration Tries To Sweep The Clouds Of Past Attacks Away

    Blog ››› ››› BRIAN POWELL

    Fox & Friends celebrated Sesame Street's 45th birthday by hosting Muppet characters Grover and Abby Cadabby for a light-hearted appearance congratulating them on their longevity. But if the network had gotten its way in 2012, Grover wouldn't have made it past the age of 44 with his show's funding intact.

    The Sesame Street program is celebrating the kickoff of its 45th season on PBS, and two iconic Sesame Street characters -- Grover and Abby Cadabby -- visited the set of Fox & Friends on September 17 to answer trivia questions and play and sing with the hosts. Co-host Steve Doocy congratulated the Muppets on their show's durability, and Fox's Heather Childers noted how she "loved Sesame Street as a kid." An on-screen graphic promoted upcoming episodes with the words "More Sunny Days Ahead."

    But not long ago, Fox News went all-in attacking Sesame Street and PBS. After then-presidential candidate Mitt Romney called for an end to public funding for Sesame Street and other public broadcasting in 2012, Fox began lobbing personal attacks at the program's most iconic figure -- Big Bird -- in an effort to demonize the show's reception of federal money.

  • New Study Contradicts Conservative Media's Attacks On Healthy School Lunches

    Blog ››› ››› HILARY TONE

    Kids at LunchA new study on school lunches casts doubt on conservative media's politicized rhetoric regarding first lady Michelle Obama's school-lunch initiative.

    In January 2012, Michelle Obama and Agriculture Secretary Tom Vilsack unveiled healthier standards for school lunches, the first effort to do so "in more than fifteen years." However, in May of this year, the new standards suffered a political backlash in Congress. The Washington Post reported that the House Appropriations Committee voted for a "Republican-backed measure" to temporarily roll back the standards in a "party-line vote [that] served as a rebuke of sorts to the first lady."

    Right-wing media, who have a poor track record when it comes to talking about school meals, especially free ones, took to attacking Michelle Obama and the school lunch program itself for "plate waste" amid reports that students supposedly didn't like the new, healthier food.

    However, a new study published Monday in the journal Childhood Obesity shows that students get used to the new lunches with time. According to The Boston Globe, the study found that "over time, children adapt and tolerate school lunches just as much as in the old days":

  • Fox News Scandalizes Hillary Clinton's Speaking Fee At UNLV

    ››› ››› SOPHIA TESFAYE

    Fox News' reporting on Hillary Clinton's upcoming keynote address at a University Of Nevada, Las Vegas Foundation fundraiser falsely suggested that university funds will be taken from students to pay for Clinton's fee, which will be donated to charity. But the university's spokespeople have made clear that private donations -- not university funds -- are paying for Clinton to speak.

  • The Wall Street Journal Refuses To Let Student Loan Relief Distract It From Obama "Scandals"

    Blog ››› ››› CRAIG HARRINGTON

    Wall Street Journal Calls Obama Loan Relief A

    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:

    • Just last week, conservative personalities declared the release of Army Sgt. Bowe Bergdahl in exchange for five Taliban prisoners a distraction from the administrative backlog at the Department of Veterans Affairs (VA).
    • On May 12, Fox contributor Allen West claimed that the White House's involvement in searching for hundreds of children kidnapped in Nigeria by Boko Haram militants was a distraction from the announcement of a Benghazi Select Committee. Days before, Fox hosts Bill Hemmer and Martha MacCallum wondered if the scheduled release of a legally mandated climate report might also be a distraction from "multiple scandals swirling around the administration."
    • In March, Fox contributor Katie Pavlich claimed that the administration's decision to review its deportation practices was a distraction from Obamacare. The next day, Fox host Jon Scott and Washington Times columnist Charles Hurt questioned proposals to stimulate the economy by increasing the minimum wage and reforming overtime rules, claiming that such proposals distracted Americans' attention away from the weak economy. Fox's Scott had previously claimed that President Obama voicing support for a minimum wage increase distracted from issues with Obamacare.
    • In November 2013, Senate Democrats voting to reform the confirmation process of executive nominees and the State Department engaging in diplomatic relations with Iran were denounced as "distractions" of the hour in right-wing media circles.

    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 Ignores Food Industry Ties In Attack Against Healthy School Lunches

    Blog ››› ››› SOPHIA TESFAYE

    Fox News is echoing Republican attacks on healthy school food standards that come from a group receiving funding from companies that sell food to school districts. 

    On the May 27 edition of Fox's Outnumbered, co-host Sandra Smith defended new Republican-sponsored legislation to roll back school nutrition standards, providing waivers from standards to those schools that report a financial loss in their food programs during the previous six months. Smith attacked the healthy food initiative as a program whose "economics" is "failing," asserting that "90 percent of schools...are now reporting increased costs" and that the legislation simply takes into account the difficulties faced by school nutritionists, who she claimed "just want some flexibility because it is being forced down their throat right now":

    While Smith did not disclose the source of her information, the Associated Press notes the claim that "90 percent of schools that are now reporting increased costs" and that school meal programs are losing money come from the School Nutrition Association (SNA), which describes itself as "a national, nonprofit professional organization representing more than 55,000 members who provide high-quality, low-cost meals to students across the country."

    SNA receives a significant amount of funding from companies that sell food to schools. Among its "major" contributors is Schwan's Food Service, which makes pizzas and sandwiches for schools and similar operations. Other SNA donors include more companies that sell food to schools, such as ConAgra, Kellogg's, Pepsico, Coca-Cola, Domino's Pizza, and Tyson Foods.

    The Washington Post reported that the SNA, in a "dramatic change" of position, supports the Republican-backed waivers. The Post noted that White House assistant chef and nutrition policy adviser Sam Kass opposed the change, meaning that "congressional Republicans are choosing to favor corporate preferences over the recommendations of nutritionists and physicians." The food industry has previously sought to weaken food standards, according to the Post, succeeding in 2011 to change rules so that pizza with tomato sauce could be counted as a vegetable.