Did anyone really see this coming? Proprietary schools pushing hard against gainful employment approach

Indentured educated servants: prepare yourself for some intense battles. With little resources to promote our voice inside the beltway, the recent developments attacking the gainful employment rule are worrisome. In addition, we have a new and despicable sheriff in town, Rep. Virginia Foxx (R-NC). But when it comes to the attacks, I doubt anyone saw these things coming, especially with regard to the proprietary schools. They're winning, and it is a crying shame.

Foxx is now the chairwoman of the higher-education subcommittee in the House of Representatives, and she has allies in the banking and student lending industry. She is against any form of regulation, and is targeting the gainful employment rule. Pell Grants are also vulnerable.

She also hopes to slash the budget of the Department of Education, and in ways that are not good for borrowers.

It sounds like those within the Department aren't too concerned. For instance, Eduardo Ochoa, assistant secretary for postsecondary education at the U.S. Education Department, stated that the new rules will probably not be disconcerting for the proprietary schools. He added, "The regulations as they come out are going to be significantly different—I think they're going to be better, nuanced, and I think that there's a lot there that people will appreciate having other views reflected."

When someone like Ochoa uses words like 'nuanced,' that is code for the following: "we've been lobbied and pressured so hard, that we're going to cave to the demands of the for-profit industry." Well, we can all rest easy, knowing that the very schools that ought to be regulated are drafting the new rules. After all, that is the way things work these days in Washington.

If these are Foxx's plans, you can imagine what that means for current borrowers who need relief and immediate solutions. Rest assured, I'm working on angles and have some propositions out there.  

That's why we need to organize and demand answers from Congressman Virginia Foxx.   

Original source: Eric Kelderman,"Rep Foxx calls for Streamlining Regulations and Cutting Spending," The Chronicle of Higher Education, January 25, 2011 

Related Links

Kelly Field, "Obama Calls for Spending Freeze but Says He'll Spare Education," The Chronicle of Higher Education, January 25, 2011

Shame more people didn't vote that way in her district.

Obama's Metamorphosis: From Center-Center-Right to Right-Right

Last year I listened to the SOTU while driving through the South. We had to tune in by AM radio, and at times the crackling speech was as we went deeper into the south. We were headed to South Korea, and I still had hopes for what Obama intended to do for the country. While that sense of hope was somewhat of a flicker, it was still there. Today, that then dwindling flicker has been fully extinguished. Not even a faint string of smoke or the leftover hint of hot wax remains.

When President Obama delivered his last SOTU, I had even received a letter from him a few weeks weeks earlier about the student lending crisis. Of course, the President didn't call it that, but that's why he was responding to me. As of this date, the White House continues to shift the conversation back to the same sorry message. They can't get away from the safe and easy lines that relate to prospective and current students. To hell with the current debtors. Even though the outstanding student loan debt is nearing a whopping $900 billion, we're still going to talk about how we'll take care of those who don't currently carry the burden of debt. Oh, and we'll be sure to pat ourselves on the back for a job well done.  Because helping prospective students is really going to make a difference when it comes to a generation, actually generations, of people who are part of the indentured educated class. Keep up the good work! You're really making a friggin' difference.

In President Obama's last SOTU, he mentioned student loan debt at least four times. His most inspiring line was this: "In the United States of America, no one should go broke because they chose to go to college."

He should have added, "well, what I mean to say is, no prospective students should go broke when they go to college in the future. To hell with those of you who are current student loan debtors. We've been convinced that you're not a problem in D.C. That's what the the associations for the universities and students are telling us. Oh, so is the College Board. I'm pretty sure I've had some dinners with Nelnet and Sallie Mae. Besides, I read the Post, and they never seem to make a stink about student loan debt. They've all assured me that you're really not a concern. So, to hell with you. But . . . please rally around me for my next election, so that I can break more promises and then bitterly complain that you are ungrateful and whiny!"

Welcome to the new age of Right-Right Obama.

Related Links

"Bitter Taste, Bad Letter," July 19, 2010

"You don't say? The President tells the Arizona Daily that higher education needs to be affordable," September 28, 2010


"Last call with the White House," February 5, 2010

"Quick Notes: The President's State of the Union Address," January 21, 2010

"The Obama Administration: Why they have failed (Part II)," January 11, 2010

"The Obama Administration: Why they have failed," January 7, 2010 

Other related links

"Barack Obama - Out of the closet," Michael Brenner, Huffington Post, January 24, 2011

"Obama's transformation culminates in Tuesday's State of the Union Address," Sam Youngman, The Hill, January 24, 2011

Olbermann calls Obama a sellout, MSNBC, December 7, 2010

Good luck, indentured educated citizens! You're on your own!

Quick links: Our favorite gal, Sallie Mae

For those of you interested in market updates and news-related stories about Sallie Mae, I've decided to post bi-monthly updates of relevant links with annotations. Since we're all big fans of Ms. Mae, she's the first on the list for this new feature at AEM. In the future, I will also post quick links about Mr. Nelnet. If you would like me to feature other lenders, please don't hesitate to submit the names of your favorite companies! After all, we know how much they care about the indentured educated class.

So, without further adieu, let's see all the great and dismal and infuriating things that is in the news about Ms. Mae.

- "Sallie Mae Hints at Dividends," WSJ, January 20, 2011 

SLM may return cash to shareholders. She hasn't done so since 2007. They've made these promises to investors in the past, but then have failed to follow through. The best news in this article? SLM's fourth-quarter earnings are up by 45%! Great news for us, right?

- "Calls from student loan firm aggravate non-borrowers," Chicago Tribune, January 20, 2011

So this story is about a couple with the last name of Collins. It turns out they started receiving calls from Sallie Mae . . .  get this . . . non-stop, even though they were non-borrowers. I know, I know, it's shocking to those of you who are aware of the amazing quality of customer service that Ms. Company Mae possesses. She's a real lady when it comes to phone call etiquette and fair treatment. In any event, the Collins shared the same last name with one of Ms. Mae's debtors (lucky them!). Even though the couple told Sallie to stop calling day in and day out, the very next day - you guessed it - the phone would ring again and again and again and again. You get my point. And of course it would be damned Sallie on the other end of the line wanting to chit-chat. Luckily, there's a happy ending for the couple. As for the debtor, I doubt that's the case for him.

- "Sallie Mae Tops Zacks Estimate," Daily Markets.com, January 20, 2011

"SLM Corp. (SLM: 14.13 +0.31 +2.24%), better known as Sallie Mae, reported fourth quarter 2010 core earnings of $401 million or 75 cents per share, ahead of the Zacks Consensus Estimate of 72 cents. The results compare favorably with prior-year quarter’s core earnings of $268 million or 44 cents per share. Favorable results were primarily driven by decrease in loan loss provisions and gains from repurchasing debt. During the quarter, the company repurchased $1.3 billion of debt with realized gains of $118 million."

 You can count on us! We are experts in terrorizing and demoralizing the indentured educated class.

Member Notes: Meetings, Legislation, the hope of institutionalizing AEM, Inc.

It's a cold, frosty, icy day in D.C., but that isn't going to stop me from making it to yet another meeting on behalf of the indentured educated class and AEM, Inc. This time I am visiting with a non-profit organization to discuss a potential partnership.

As many of you are aware, I have been in D.C. since the 9th of January. In a matter of 3 weeks I have traveled nearly 8,000 miles, and have been on two continents (Seoul > L.A. > Dallas > D.C). Despite all the traveling, I am still energetic and setting up as many face-to-face meetings in D.C. as humanly possible. So far, I've had a lot of luck. I've met with staffers in various offices on the Hill, and will be meeting with more - as well as a Representative - this coming week. We have had lengthy discussions about the student lending crisis, and I have even been asked to provide them with feedback and suggestions on some forthcoming legislation. If we consider how much we had been ignored even a year ago, these conversations suggest that we're making headway. People here are listening. It would be nice if we could receive that sort of response from the White House. Sadly, they keep referring back to prospective students (for instance, see my post about Ms. HigginBottom here), even though that has absolutely nothing to do with current student loan debtors and the resulting crisis. If Pres. Obama does not listen to the voices of the indentured educated class, I have a feeling we might not be so keen on the idea of heading to the ballot boxes to vote for him. Why would any of us be motivated to support a president and an administration who continually ignore such a large portion of the population?

But I digress. 

I've also had lunch with several important authors, and they have provided me with enormous support. One of my friends, a renowned writer and lifelong activist, has offered to organize some events to help me spread the word about AEM and the indentured educated class. I'm not just having face-to-face conversations with authors and previous policy makers. For example, Robert Reich recently responded to several of my emails and has offered to keep an eye out for grants. He closed by saying, "Thanks for your important work."

We will eventually, I am confident, open an office in the D.C. area. When that happens, I will hire staff, pay them well, and provide them with great health insurance. So many of you know that that is my biggest goal - that's because it is important to institutionalize AEM. We've incorporated and I have a team of 8 outstanding Board Members. I did have 9 until quite recently. One of my Board Members passed away unexpectedly from pancreatic cancer on January 13th. She will be sorely missed. While we certainly cannot replace her, I am turning my attention again to recruiting more Board Members and volunteers.

There's so much going on, even more than what I've mentioned above. I am also collaborating with an outstanding scamblogger, Nando, who works on revealing the often harsh realities of going to law school, taking on piles of debt, and entering a legal industry that is crumbling. You can check out his work over at Third Tier Reality. Incidentally, Nando's blog was just referenced in a NYT article entitled, "Is Law School A Losing Game?" It is one of the few pieces that adequately portrays the problems of obtaining professional degrees and taking on astronomical amounts of student loan debt. Of course, I don't think Mr. Wallerstein, a law school debtor, is depicted in a particularly positive manner, but overall I was pleased by the content of this piece.

Moreover, I am continuing to work on my research about suicide/suicidal thoughts among student loan debtors.

Finally, we are launching a new campaign that will challenge Rep. Virginia Foxx's support of lenders and so forth. If you have yet to sign up, please do so now. Email me (ccrynjohannsen AT gmail DOT com) and simply copy this into the subject line: "Virginia Foxx: Count me in for the next campaign."

 Working around the clock for the indentured educated class! If you are able to do so, please donate to All Education Matters, Inc. AEM depends upon generous donations.

Quick Post: Indentured Educated Texans Needed

Indentured Educated Texans -

I am assisting a reporter for the Star-Telegram in Ft. Worth on a story about student loan debt. She wants testimonials from student debtors living in Texas. If you are willing to speak to her - you can just provide a first name, if you wish to remain anonymous - please send me an email ASAP (ccrynjohannsen AT gmail DOT com). Also, if you don't live in the state of Texas, but know any indentured educated Texans, please let them know about this request.

Thanks!