A non-profit organization dedicated to the eradication of all student loan debt through activism, education, and legislation; because student loan debt is dangerous to the US economy and to the health and well-being of individual Americans and their families. CRYN JOHANNSEN, Founder & Executive Director
Saturday, August 15, 2009
BREAKING NEWS PART II: The College Board USED to be a LENDER
Clark described the College Board as "an organization made up of colleges." That could mean a host of things. For most readers, they could easily assume that the College Board was a type of think tank who carries out research on behalf of colleges. Or perhaps the College Board is a not-for-profit whose staff of social scientists and economists spend their days crunching out numbers and reports that, in my view, miss the bigger points. To be sure, we need number-crunchers. They're important. But they can also do a great job of providing highly problematic conclusions. (At one point in my exchange with Baum, I asked her if she'd ever read How To Lie With Statistics . It's of no surprise that she did not reply to that question).
But at the end of the day, number crunchers don't help most people figure out the big stuff in life - who to fall in love with, when to have children, etc. Moreover, number crunchers don't do a good job of acknowledging the complexity of things. If you begin to contextualize numbers and data, well, things begin to look a whole lot messier.
Baum has been an economist for 30 years. Fine. She's probably a fine economist. But as a result, Baum is incapable of answering some BIG questions. She hides behind numbers to make her case. Like I said, I'm not saying that data isn't important. Data helps us put together stories, but it isn't the only picture of a story. Thankfully, historians realized the errors of going number crazy. But there was a time when they too believed that it would erase all forms of interpretative historical work. That was back in the 70s and cliometrics was the wave of the future. Alas, historians came to understand the drawbacks to this shift toward number-crunching only. It's too neat. History and those who craft histories with precision, analysis, and honesty know this to be true.
This reminds me of a great post on Clark's page. The reader wrote:
-How does the 33% of students with debt today compare to that of 30-40 years ago? -Why is $20k in student loan debt for an associate's or bachelors degree acceptable? -What percentage of income is an average borrower's debt compared to that of 30-40 years ago? -Why wasn't credit card debt included? A lot of people I know paid for utilities, books, and groceries with credit cards because their loans didn't cover everything. -If the percentage of student borrowers is higher today because more people are getting access to loans to fund their education, does that mean we've accepted a permanent underclass in America? If someone who can't afford school spends $20-$30k to get a degree from a state school, and their competition in the job market is someone whose parents' financial situation afforded them a debt-free degree from a well-known, private liberal arts school (or an Ivy), the less advantaged student will be less advantaged on the job market, meaning they'll remain saddled with their debt (overeducated and underemployed) for a long time. I believe in the meritocratic ideals that were an important part of America's foundation - this is not a future for America I like to envision. Having the College Board produce a report on student loan debt is like having the Beef Council reporting on the health risks of their product.
I doubt very much that Baum could satisfy those who are steeped in a historical and literary tradition in answering these questions. BUT she has her numbers. Good for her. Those numbers don't help the thousands and thousands of students who are presently being crushed my student loans. These are students who have worked very hard to obtain their degrees. Now they're humiliated because they can't find a decent job and they've moved back into a basement, the place they thought they'd FINALLY escaped (for either good or bad reasons) when they left for college, or grad school, or med school . . .But now they're back. These students are realizing that they are living in a basement, can't find a job, and have Sallie Mae breathing down their throats. These students are questioning the value of their education. Some still cling to the belief that it was all worth it, while others are thinking that they were just royally shafted by an insidious lending industry. There are some who are realizing that they probably won't be able to have children (To Sandy and Patricia - if you even bother to read this "misinformation," that realization is NOT a sensationalistic claim. If you took the time to read the posts on these articles, you'd find STATISTICS in the remarks. Many, many times over - hundreds and hundreds of times - I've seen people write: "I'd really like to have children, but I don't think that's possible because of my debt.")
But let's return to that last remark of the reader above. S/he concluded: "Having the College Board produce a report on student loan debt is like having the Beef Council reporting on the health risks of their product."
That's powerful, and it makes me wonder if this particular poster knows what I know about the College Board now (i.e. after my heated exchange with Sandy and Patricia). Did all of you know that the College Board was itself a LENDER? That's right, folks! They were lenders until 2007! See it here. Yeah. Funny thing is - neither Patricia nor Sandy bothered to tell me that. Hmmm . . . I'm really, really confused as to why they didn't disclose that information. Oh, right! I mean, after all, it is ON their page, so I'm just silly to have missed it. Right?
Now the pieces have fallen into place, and I understand how one of the people at the College Board couldn't understand the connection between two things that so clearly intersect. I believe in universal health care and I believe in universal post-secondary education. Those things to people not defending an industry to which they once belonged make sense. But for someone who works for an "organization made up of colleges" (that's doublespeak for "WE WERE PREVIOUS LENDERS"), they can't see the connection. Hmph.
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"the College Board contracted with Sallie Mae and Citibank to originate, service and purchase students loans. Citibank and Sallie Mae then service loans from the point of origination through repayment."
Talk about bedfellows.
if things change, a google cache
You'll find the explanation on pages 35 & 36 of "Merchants of Opportunity" as to why the College Board got out of federal loans (and into private loans).
Thanks, Delver. I appreciate the information.
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