Monday, July 19, 2010

Bitter Taste, Bad Letter

The State Support Leader from Kentucky, Gail Tolson, let me know that she had received an enormously disappointing letter from the White House recently. Ms. Tolson wrote to the White House about the student lending crisis, and has urged them to think about helping out current borrowers. Apparently, this type of response is as good as it gets. The letter is dated July 17, 2010, and here's what it said [truncated version]:

Dear Friend:

Thank you for writing. Expanding access to higher education is critical to preserving the American Dream and securing our future, and I appreciate your  perspective. 

To make college more affordable for millions of middle-class Americans for whom the cost of higher education has become an unbearable burden, my Administration is expanding Federal Pell Grants for students, increasing them to keep pace with inflation in the coming years, and putting the program on strong financial footing. In total, we are doubling funding for the Federal Pell Grant program to help students who depend on it. 

To make sure our students do not go broke just because they chose to college, we are making it easier for graduates to afford their student loan payments. Today, about two in three graduates take out loans for college. The average student ends up with more than $23,000 in debt. When this change takes effect in 2014, we will cap a graduate's annual student loan repayments at 10 percent of his or her income. 

I'll pause here for a moment. While I have my critiques of the expansion of the Federal Pell Grant, I'll won't go into analysis for the reasons why. I'm more frustrated at this point by two things. First off, why won't these people get off this hogwash, this so-called "average student loan debt" of $23,000? This number has no bearing on the real problem, and it's aggravating to see it regurgitated over and over again. President Obama's staff should be savvy enough to realize how problematic that number is. What bearing does that number have to a person  who is drowning in student loan debt? Second, why aren't they talking about solutions for current borrowers? Sadly, they continue to dance around that problem. The letter continues to discuss prospective borrowers and the wonderful future they can look forward to:

To help an additional five million Americans earn degrees and certificates over the next decade, we are revitalizing programming at our community colleges - the career pathway for for dislocated workers and working families across this country. These schools are centers of learning, where students young and old can get the skills and technical training they need for for the jobs of today and tomorrow.

I'll interrupt President Obama's letter writer (who cut out some of the worst paragraphs for this response letter), and say this: uh, what jobs are you talking about? Are you aware of what's happening in the U.S.? Are you aware of what Krugman is writing? If you aren't, check out his recent article about the Great Depression number three - THERE ARE NO JOBS. We're facing cataclysmic problems with employment, and this is the best you can do? 

I'll leave the letter at that. I am just as disappointed by this letter as Ms. Tolson. It says absolutely nothing about people who are currently drowning in debt. Indeed, Pres. Obama's primary higher education staffer - Roberto Rodriguez  - has failed to respond to our countless letters. I've also sent him email after email after email, imploring him, begging him, to write me back. There is nothing but silence. Here's the last email I wrote to him on July 8, 2010:

Dear Mr. Rodriguez:

I have made countless attempts to write to you at this email address. When I spoke to you directly on several phone calls with the White House in early February, we were all told that this email was the best way to reach you.

I am really at a loss to understand why you have failed to respond to my letters. Moreover, many of my readers - those who are part of the indentured educated class - have sent you several letters too. This is one of the many ways the Administration is ignoring the base of people who put them into office. In fact, I am fast losing hope in the policies you're implementing - they're tepid at best. So you are aware, right-wing think tanks like CCAP have picked up my works on Education Matters. Many of my readers are infuriated by your lack of response to their struggles to pay off their student loans, and these - again - are the people who voted Pres. Obama into office. 

If you continue to our ignore our entreaties, I can only assume that the White House only care about the same moneyed elites that were privileged under the previous Administration, and my work will reflect that. Perhaps you and others have become too embedded within the comforts of the beltway - times are desperate, sir, and American citizens, especially those who have sought higher education and are now drowning in student loan debt, deserve a response.

Just so you are aware, my readership on Education Matters jumps dramatically each day.

The latest post is worth reading. It's a testimonial from a mother who has a daughter who nearly died from heart problems and recently received a kidney from her sister. This family is being punished for pursuing higher education, and the mother feels guilty for owning a cell phone. It's highly illuminating. The piece is entitled, "Destroying The Educated American Family, One Member At A Time." Here's the link:

Thank you in advance for your response.

Ms. C. Cryn Johannsen

Mr. Rodriguez is making an F at the moment. There is absolutely no reason why he cannot respond to my email requests. He owes it to all of us.


Anonymous said...

I commend your letter writing campaign! I'd do it, but I don't want to reveal my identity.

Cryn Johannsen said...

JD - why not send it anonymously?

Anonymous said...

If you show up and vote the Democrats out of the House and Senate you might get the president's attention. Of course, the president may be self-centered enought to not notice.

Anonymous said...

JD Underdog, Cryn:

Could we not post a letter on-line and allow people to subscribe to it using their pseudonyms?

Cryn Johannsen said...

That's a great idea, JD. How could we go about doing that?

Anonymous said...

They are shooting themselves in the foot with that $23,000 number because it is way high. All it represents is the average cumulative debt of students who graduated with a bachelor's degree in 2008 -- a tiny, tiny sliver of the total, postsecondary student population in 2008, or in any year, for that matter. Most students don't graduate. In addition, you would have to look at the (lower) average cumulative debt incurred by students who complete short-term postsecondary certificates and associates degrees, as well as students who drop out or stop out before completing those programs as well.

Finally, there is the group that is not included in those averages at all, the group that everyone forgets about: those who do not borrow at all for their education. This group ranges from 30% to 90% depending on what group you are talking about and what length of education experience. The longer someone stays in a bachelors program, for example, the more likely she will be to take out a loan.

Glen S. McGhee said...

I had similar experiences.

I once hand-delivered a letter to the US Secretary of Education, but never heard back. Yes, that is correct! Here is the story:

After almost two years of pestering my congressman, I finally received back a letter from his office.
Can you find the 3 typos in the letter? Sheesh! That's Florida educated interns for you.

I even went to Washington, D.C., US DOE Office of Postsecondary Education on K Street at the "FoggyBottom," but they wouldn't meet with me. This, after conversing with staff over the phone for months. Here is a photo-essay on the experience.

I am convinced that those trapped within the bureaucracy are just as unhappy as those of us trying to reach them (except for the fact that they are getting a pay-check and I am not) -- Max Weber, afterall, called it an "iron cage" (better translation, steel carapace). And here is another link for you:

The choice, it seems, is between the "iron cage" and the infamous Ivory Tower. No hope there. But to rid ourselves of both monstrosities forever would only result in more pain and suffering than we now have. I don't know what the answer is. I really don't.

Cryn Johannsen said...

Thanks for all the links, Glen. I am all too familiar with Weber's conception of the iron cage, and am a huge fan of his work (I've read the Spirt of Capitalism countless times). However, I still wish to believe that through everyday life resistance we will be able to solve this enormous crisis and change the entire system. I will fight for that until the day I die.Why? Because the people of the United States, those who have sought education and those will seek it in the future, matter to me. Thanks so much for posting.

Anonymous said...

Allen Boyd? He is on the ropes, unfortunately attacked from all sides. The tea party people are angry that he voted for health care reform. The pro-pork/pro-earmarks/pro-jobs people are also angry that he voted for health care reform because of course it included the shift to 100% direct loans for new loans after 6/30/10, and Sallie Mae has a large facility in his district which is threatening layoffs.

Either Boyd didn't read the legislation before voting "yes," or he deserves the 2011 Profiles in Courage Award.

Some of this stuff about job cuts is scare tactics. Sallie Mae still has $160 billion in loans to service down over the next 30 years, as well as its growing private (non-federally-guaranteed) loan business and its lucrative new direct loan servicing contracts with DoEd.

Boyd is now trying to hook up the Sallie Mae folks with jobs servicing the BP oil spill.

The outrage against Boyd seems typical of the tea partiers. If you meet them and scratch the surface, you will find someone whose life depends totally on governmental appropriations, grants, benefits, subsidies, or what-have-you.

The bottom line is that it takes Sallie Mae eight times as many jobs to perform the same role as direct loan and handle the same sized portfolio. Layoffs will be necessarily because those jobs NEVER should have existed in the first place. They were only in place because of pork from the federal taxpayers. All those marketing jobs were unnecessary. Why does the federal taxpayer need to pay extra subsidies so that lenders in the federal programs can compete with each other (using other people's money to sweeten the deal with schools!). It is a government welfare program, and there should be no reason to confuse students and schools with hundreds of different computer systems and web sites.

warwick555 said...

We need more than letters to Obama. We need to contact our Congressional Representatives about this issue. is a great website set up by student loan crusader Alan Collinge. I'm going to tell him about this blog, and I'm excited that we have so many people participating in the poll. Also, be aware that it there is Breach of Contract or Fraud involved with the school you borrowed money to attend, you don't have to pay the loans back. Search out other unhappy grads or drop outs and document the broken promises and sloppy adminstrative procedures. It's a way to get your loans forgiven. That's we are doing about Union Insitute and University.

Cryn Johannsen said...

Warwick555, thanks for your remarks. Collinge is aware of this blog - we've been in contact. I have been in touch with the White House continually. If you're interested in writing to the White House, join our next writing campaign! Just send me an email that says: "Count Me In" (in the subject header). My address is I agree with you - we need to send more.

Anonymous said...

Even the National Consumer Law Center's borrower assistance project concedes that there is no such thing for a defense based on Breach or Contract or Fraud for the federal student loan programs. It is risky for borrowers to be following advice from people like Warwick that can result in a lifetime of ruined credit.

These web based urban legends are similar to the story that continues to circulate that paying your federal income tax is purely optional. Not one person has won on that argument either.

A powerful judge in the federal appeals courts write in an opinion 10 years ago that DoEd has significant authority to discharge loans in cases where the student was clearly lied to by the school about the school's accreditation status, available certified majors, and so on. 10 years later, DoEd still hasn't taken him up on the challenge. DoEd still will only approve "fraud" discharges only if the borrower can prove that someone else (like a relative or a college recruiter) signed the promissory note.

Cryn Johannsen said...

@Anonymous August 8, 2010 - you make good points. I am not interested in spreading urban legends on the web, but rather seeking to raise awareness about the student lending crisis and assist in writing letters for debtors.

warwick555 said...
This is more commentary on why Summers is leaving. Also, he's the jerk that made the comment about women not being as valuable in the work place because of lower scores in math and science, so Clinton made him leave when he served in the White House back in the 90's. Why Obama picked him in the first place is anybody's guess. Thank God for Harvards strick 2 year leave policy! I graduated Harvard with a doctorate in 1994, by the way (Yes, Obama and I were there at the same time and I think we danced together when I went to a dance at the law school. An angry young lady came up to reclaim him -- I think it was Michelle, LOL!)

warwick555 said...

I think its interesting that someone accused me of posting an urban legend. The Union loans were not federal loans. They were private loans. I apologize for any confusion. We were qualified for federal loans. but Union came under probation by the DOE and lost its ability to qualify for federal loans. We were steered toward a private arm of Sallie Mae. Private loans based on fraud do not have to be repaid, however, you will take a ding on your credit to challenge your debt. Therefore, the comment about ruined credit is an important point, but only if you are still in the half of Americans who still have a credit rating. If you have been divorced, unemployed, or even temporarily disabled, you don't have a credit rating anyway. Also, 90 percent of credit scores have errors (See the film documentary Maxxed Out). It is harder to function without a credit rating, but it is not impossible, and something to consider if you are already living in a hovel and going without healthy food because of paying off your debts, student loan or otherwise. Building up your cash reserves so you don't have to borrow many mean not paying, at least for awhile. It's terrifying at first, but now I am able to keep 1000 in reserve and haven't had to borrow for three years. I'm not in default with federal loans because I have received deferments and am going to apply for income based repayment. Since I have no new debt, and am not paying on the private fraudulent Union loan, I will be able to afford those payments. Eventually I will come out from under. People who are running up credit cards to make student loan payments will eventually get in terrible trouble anyway. Could you please post a reference to that 10 year old opinion? I've been corresponding with my congressional representative about Union, and I want to send it to her. Thanks!

warwick555 said...
Finance guru Jane Bennet Clark of Kiplinger presents herself as giving objective commentary on student loans, but it turns out that the firm she works with, Kiplinger, teamed up with Sallie Mae to produce a student lending video back in 2008. All these "advice" columns turn out to have the same, misleading message -- student borrowers have rights, that they can work with their lenders, and that the Fair Credit Collection Act will protect them from abusive collection tactics. We all know that this rosy picture has nothing to do with reality, and that Sallie Mae is vicious with its collection techiniques. They have ignored several certified letters and calls from attorneys on my behalf. I changed my number, which is the only way I stopped them from calling, and now they call my main client, a psychology services agency, and bother them. Lenders do not work with you, they don't want to make reasonable deals, and there is no reasonable way out of your situation if you fall behind the huge payments. That's the truth!