Assholocracy Porn: "I Have Very Little Tolerance For People With Student Loan Debt"

Awhile back, I adopted the phrase "assholocracy" for use as a tag here at TDS, and since then I have already used it on an incredible 52 different posts. Back in the 1970s glory days of Larry Flynt and Hustler Magazine, he used to have a regular feature called "Asshole of the Month" (and yes, I only read that particular publication for the articles....really). Not having picked up an issue in more than 20 years, I don't know if Flynt is still running that always amusing feature, but if he is I would humbly suggest that for April 2012, he consider making it cretinous North Carolina Representative Virginia Foxx. Here is the Raw Story with the details:

If someone is looking for sympathy for their high student loans, Rep. Virginia Foxx (R-NC) would not be among those providing any support.

According to audio obtained by Think Progress, the congresswoman appeared on G. Gordon Libby show Friday afternoon, saying she “never borrowed a dime of money” during her time in college before lashing out at those burdened with heavy loans.

“I have very little tolerance for people who tell me that they graduate with $200,000 of debt or even $80,000 of debt because there’s no reason for that,” Foxx said. “We live in an opportunity society and people are forgetting that.”

Despite her disgust for high student loans, Foxx is somehow content with high mortgage notes. Think Progress reported that Foxx owed two individual notes up to $250,000.

Here are a few fun facts that Representative Foxx might want to consider before ever again opening her big fat fucking yap about student loans. According to her Wikipedia page, old battle axe Foxx was born in 1943, which means she would have graduated college around 1965 or so. According to the National Center for Education Statistics, the average cost for one year of undergraduate tuition, room and board at a public university in 1965 was: $950. By 2007 (the last year for which statistics were available from the NCES), tuition, room and board had risen to a whopping $11,034. At private schools, tuition had risen from $1,907 to $28,384. What's even worse is that since 2007 many public universities have have imposed large tuition hikes on students as cash-strapped state governments have cut back funding.

So it doesn't take a whole lot of fucking imagination to understand how graduates are being burdened with such impossibly huge student loan debts and at a time when there are few good paying jobs with decent benefits waiting for them when they graduate. Unless you are addle-brained asshole North Carolina Representative Virginia Foxx that is.

Addendum: But wait, it gets worse. Right after I wrote this post, I came across another article in Salon about Virginia Foxx, who is not only an asshole, but a fucking hypocrite as well:

Earlier this year, the U.S. House of Representatives voted to pass a bill with the impressive, everybody-can-get-behind-this title “Protecting Academic Freedom in Higher Education Act.” Sponsored by the ultra-conservative North Carolina Republican Virginia Foxx, the bill ostensibly took aim at an issue close to small-government-loving hearts: intrusive federal regulation of for-profit colleges — fast growing, highly profitable outfits like DeVry University or the online-only University of Phoenix.

Like so many of the bills passed by the House since Republicans gained the majority in the 2010 midterm elections, the bill was designed to repeal specific actions taken by the Obama administration. In this case, the issue at hand was the Obama administration’s efforts to ensure greater “program integrity” in the for-profit educational sector. Specifically, a new federal definition of what constitutes a legitimate academic “credit hour” and a new requirement that all online providers of post-secondary education be accredited in each and every state in which they do business.

Foxx’s bill repealed both measures. (The Senate has yet to address the measure.) According to Foxx, the new federal regulations threatened “innovation” in the educational sector. As reported by InsideHigherEducation, Foxx is on record as declaring that for-profit colleges do a “a better job of being mindful about efficiency and effectiveness than their nonprofit peers.” By, for example, flexibly providing online education when and where low-income working Americans want it, the for-profit free market delivers the kind of quality higher education that Americans so desperately need. The government should just stay out of their business.

I stumbled upon this story while researching the student loan crisis and at first I was perplexed. I didn’t understand why Republicans were opposed to higher academic standards for the for-profit sector, and I didn’t get the connection to student loans. But it didn’t take much research to discover what was really going on: an example of blatant hypocrisy sufficient to outrage even the most jaded observer of American politics.

The for-profit educational sector is an industry almost entirely subsidized by the federal government. Around 70-80 percent of for-profit revenues are generated by federal student loans. At the same time, judging by sky-high dropout rates, the for-profit schools do a terrible job of educating students. The Obama administration’s efforts to define a credit hour and require state accreditation were motivated by a very understandable desire: to ensure that taxpayers are getting their money’s worth when federal cash pays for a student’s education. In contrast, Foxx’s legislation is designed to remove that taxpayer protection. So here’s a more accurate title for her bill: “The Protecting the Freedom of For-Profit Schools to Suck off the Government Teat Without Any Accountability Whatsoever Act.”

The for-profit educational sector has been growing extraordinarily rapidly for the past decade: 12 percent of all post-secondary students are now enrolled in for-profit schools, up from 3 percent 10 years ago. But the main beneficiaries of the growth appear to be the shareholders and executives of the largest publicly traded for-profit schools, not the students.

In 2008, for-profit schools registered a a graduation rate of 22 percent. (Public and private non-profits registered 55 percent and 65 percent respectively.)

54 percent of the students who enrolled in 2008-2009 in 14 publicly traded for-profit schools had withdrawn without a degree by 2010.

The biggest player in the for-profit sector, the University of Phoenix, graduated only 9 percent of its B.A. candidates within six years.

The pathetic performance of the for-profit sector in delivering actual degrees becomes all the more alarming when you realize that most of the students who are dropping out paid for their educations with student loans that have to be paid back: According to a report released in the summer of 2010 by Sen. Tom Harkin, D-Iowa, “Emerging Risk?: An Overview of Growth, Spending, Student Debt and Unanswered Questions in For-Profit Higher Education,” in 2009, the five largest for-profit schools reported that government grants and loans accounted for 77.4 percent of their revenue.

Really, North Carolina, on this blog I have facetiously asked, what's the matter with a lot of different states, but you really have some 'splaining to do as to how you managed to elect someone as purely odious as Representative Virginia Foxx.


Bonus: "But you say that we're the assholes...because we bitched about the hassles...while you're sleeping in your castle"

ACT College (Virginia) Abruptly Closes, Leaving Students Hanging

What's worse than graduating college with a beaucoup load of student loans? Having your college close abruptly leaving you with nothing to show for a beaucoup load of student loans. Here is InsideNOVA.com with the details:

Dreams were broken and students were left with crushing debt and nothing to show for it after ACT College abruptly closed its doors Tuesday.

In a letter to students and faculty, Jeff Moore, the president of the school that offered courses in medical assisting, health sciences and medical radiography at campuses in Alexandria, Arlington and Manassas, said the school was forced to close its doors after being denied recertification for federal financial assistance programs by the U.S. Department of Education.

Kaitlyn Zadroga moved from Millville, N.J., to learn to be a medical assistant, or MA, at the school’s Manassas campus and said she was looking to eventually make a life for herself as a nurse.

“I was going to be an MA and get my foot in the door and then be an RN. Apparently that’s not going to happen now,” said the 19-year-old Zadroga who joined 50 to 60 other students to protest at the school’s Manassas campus Wednesday.

Zadroga wasn’t the only student feeling there was nowhere to turn.

Lashanee Gaskins, had been at the school for five months and is on the hook for a $21,000 in student loans.

She said she got a text message Tuesday telling her that the school was closed indefinitely and that it was no longer certified.

“We’re out of our financial aid. People who have graduated have not received diplomas,” the 30-year-old mother of three said. “We’re stranded. We have nowhere to go. People are not accepting our credits from here to transfer, so we have to start all over.”

Gaskins said she gave up her home day-care business to attend ACT College and was looking to better her life.

“I just wanted something that was stable,” the Bristow woman said.

While some students got the letter from Moore saying that the college had worked with the federal Department of Education after a 2010-2011 audit left the school without financial assistance certification, others got phone calls telling them the school was closing. Still others learned of the closing through social networking sites.

Some didn’t find out until they showed up for classes Wednesday.

Sean Doheney, 29, a U.S. Army Reserves pharmacy technician studying radiology at the school, said the administration was heartless in not letting students know that it was having certification and financing problems.

“What they did to us is cruel to say the least,” said the 29-year-old Doheney, who spent $30,000 in grants and loans at the school and was only a few months away from graduating.

Moore’s letter also indicated that the family-owned business had been in negotiations to sell, but that the deal had fallen through when the department refused to release funds that Moore said were due the school.

In the letter, Moore said the department “threw up one last roadblock which caused the deal to fall apart.”

Right here you see yet another problem with private, for profit colleges that prey upon lower income students, loading them up with debt to obtain degrees of often dubious value. The article doesn't state why the Department of Education chose to pull the school's certification, but we can only assume given that shady outfits like the University of Phoenix and Kaplan University are still allowed to operate, there must have been some pretty bad management going on at the very least.

Senior Citizens Have $36 Billion In Outstanding Student Loans

This is a good companion piece to the post I made yesterday about CNN being in denial that there may be a crisis in the student loan industry. It's bad enough that many young adults are carry huge education-related debt burdens, but now it also appears that student loans are going to follow some people right into the grave. Here is Yahoo News with the story:

New research from the New York Fed shows Americans 60 years and older owe a collective $36.5 billion in outstanding student loans. More than 10 percent of these indebted seniors are delinquent on their loans, which means they may field calls from persistent debt collectors and be forced to offer up parts of their Social Security checks to satisfy their decades-old debts, the Washington Post reports.

Most people with student loans are under 40, but because this type of loan cannot be discharged in bankruptcy, the debt can follow a person around for life. The average amount due from all student loan borrowers is $23,300, according to the New York Fed's data, while the median amount is $12,800. On average, college graduates make significantly more over their lifetimes than high school graduates and face a lower unemployment rate. But college costs have skyrocketed over the past 30 years, and the potential payoff of a college education varies widely, depending on which subject a person majors in and the value and reputation of the college.

Notice how that last bit almost perfectly mirrors the propaganda put forth in the CNN story? It almost like the media collaborates in the lies it tells the public. Who would have ever thought?


Bonus: "Old man, look at my life...I'm a lot like you were (or maybe are now)"

Media Denial Porn: CNN Says "There Is No Student Loan Crisis"

Great news, America! Just because the total value of student loans recently topped (cue Dr. Evil) One TREEEEELION Dollars, and the rate of student loan defaults has been skyrocketing, there is no student loan "crisis." So says CNN, the so-called, "Worldwide Leader in News," which back around 2005 or so was, like the rest of the mainstream media, just as confident that there was no so-called "housing bubble." Here is the story in all of its denialist glory:

Total student loan debt has topped $1 trillion ... but there's no need to panic.

Most borrowers have a reasonable amount of debt, and the total balance is not likely to cause major damage to the economy like the mortgage crisis did, experts say.

Wow, I am so relieved that the "experts" have chimed in. Because the "experts" the mainstream media consults about the issues it chooses to report are ALWAYS right. It is perfectly evident by just how fantastic the economy has been preforming in recent years, how cheap energy prices have remained and also how swimmingly that whole Iraq War thing they were cheerleading for turned out. Damn, I might as well just end this article right here.

"I don't think it's a bubble," said Mark Kantrowitz, publisher of Finaid.org, a financial aid website. "Most students who graduate college are able to repay their loans."

So exactly which orifice did you pull THAT factoid from, Mr. Kantrowitz? Yes, it is technically true that the vast majority of student loans are not in default. But it is also true that the majority of student loans were issued to those who completed their educations before the financial crisis hit and got into the job market before the doors slammed shut. In fact, your idiotic statement is directly contradicted by the very next paragraph in the article:

This is not to say that there aren't problems with student loans, which now exceed the amount of credit card debt and auto loans. Students are taking on more debt, on average, and more than a quarter of borrowers are behind on their payments. And a hefty debt load could delay recent graduates' purchase of a home or starting a business.

Given how few high paying jobs are now being created during the "recovery," that sure sounds like a building crisis to me. Kind of like the housing bubble circa 2006 when the first signs of distress started to appear.

But all the talk of a crisis or bubble in the student loan industry is exaggerated, experts say.

Damn, there they are again. Those nebulous "experts." Gotta love those guys.

Nevertheless:

What's raising red flags is that the default rates on federal loans are climbing. They hit 8.8% in 2009, nearly double the rate five years earlier, according to the most recent Department of Education figures.

This jump is being fueled in particular by for-profit colleges, which have default rates of 15%, prompting federal officials to put in new rules. Now, schools with excessive default rates can lose their eligibility for the federal loan program.

Still, heavy debt loads can make it tough for young adults to establish themselves, especially these days. The Great Recession has made it tougher for young adults to find a job.

The unemployment rate for those age 16 to 24 with bachelor's degrees stood at 8.1% in February, up from 4.6% four years earlier. Many others find themselves underemployed.

"Having a lot of student debt can make a person's life very difficult," said Lauren Asher, president of the Project on Student Debt.

It is really hard not to get the feeling that CNN decided what the editorial slant on this article was going to be before they even conducted any interviews. So ultimately, what is the reasoning for claiming that that there is not student loan crisis?

But workers with bachelor's degrees earn about $650,000 more over their lifetime than their peers who only have high school diplomas, a recent Pew Research Center analysis found.

"It's an economic investment," said Sarah Turner, professor of economic and education at the University of Virginia, Charlottesville. "It's not going to work for everyone, but on average, it has a high return."

Kantrowitz expects defaults to climb for another year, before starting to decline. That's because the economy is slowly strengthening and unemployment rates are coming down.

"The defaults are not unexpected, considering the aftermath of the downturn," he said.

Ah-ha! There it is! The tired old "business-as-usual" argument that says things will get better just because they have always gotten better before, spewed forth by a university professor who has every economic incentive in the world to deny that there is a student loan crisis. There is also no consideration given to the fact that the era of cheap oil-fueled economic growth is over and that we have entered a new paradigm of permanent economic contraction.

It's incredible how CNN allows blind faith to override all of the various facts presented right in in their own article. Since this is what passes for "journalism" in America these days, no wonder so few people out there truly understand our real predicament.


Bonus: "Everybody knows these are rock hard times...I gotta make it through...these are rock hard times"

Student Loan Delinquency Hits $85 Billion

As I've said before on this blog, sometimes I hate being right. I've asserted a number of times that predatory student loans are another massive financial bubble just waiting to pop, and now here comes the confirmation from Bloomberg:

About $85 billion in U.S. student loan debt, or 10 percent of the outstanding balance, was delinquent in the third quarter of 2011.

Of the 37 million borrowers who have student-loan balances, 14 percent, or about 5.4 million people, have at least one past due student-loan account, according to a report posted today on the Federal Reserve Bank of New York’s website.

As many as 47 percent of student-loan borrowers “appear to be in deferral or forbearance,” and didn’t have to make payments as of the third quarter, according to the report. The district bank reported last week that debt from educational loans in the fourth quarter was $867 billion, higher than credit-card debt, according to a survey of consumer credit. Special attention should be paid to these student-loan delinquencies compared with other household debt, the authors wrote.

“Some special accounting used for student loans, not applicable to other types of consumer debt, makes it likely that the delinquency rates for student loans are understated,” wrote the economists, Meta Brown, Andrew Haughwout, Donghoon Lee, Maricar Mabutas and Wilbert van der Klaauw.

Note the two portions of this report I highlighted in bold, both of which indicate that the problem is far worse than the headline figure. Nearly half of the loans are held by people who are going to college right now or have just graduated, who have not yet discovered or are just now discovering how bleak their prospects of finding a good job are even with that degree the placed themselves deeply in debt to obtain. Secondly, accounting gimmicks are also likely helping to hide the extent of the problem, just like in the mortgage industry.

The big question is just how long it will take before students and their parents finally begin to realize that there has been a sea change in the economy and that a college degree is no longer a ticket to the American dream of middle class respectability. Blind faith is ll that is holding up this whole creaking edifice, but then again you could also say that about the economy at large.


Bonus: They say you gotta have faith...but you should never have Blind Faith

Student Loan Debt Is Stifling Home Sales

Today must be the day for posting news articles that confirm previous assertions I have made here before on TDS. Dove tailing with this morning's post about how the jobs now being added to the economy are lower paying and have fewer benefits than those destroyed during the financial crash, here comes a story from Bloomberg Businessweek about how student loan debt is helping to stifle a recovery in the housing market:

Last year outstanding education debt passed credit-card debt for the first time, according to Mark Kantrowitz, publisher of FinAid.org, a student loan website. Totaling close to $1 trillion, America’s mounting pile of outstanding student debt is a growing drag on the housing recovery, keeping first-time home buyers on the sidelines and limiting the effectiveness of record-low interest rates.

According to a recent Federal Reserve study, only 9 percent of 29- to 34-year-olds got a first-time mortgage from 2009 to 2011, compared with 17 percent 10 years earlier. “First-time home buyers are typically an important source of incremental housing demand, so their smaller presence in the market affects house prices and construction quite broadly,” Fed Chairman Ben Bernanke said at a homebuilders’ conference in Orlando on Feb. 10.

Recent college graduates carry an average debt load of more than $25,000, limiting their ability to qualify for mortgages even if they’re able to land a job in a market with an unemployment rate of 9 percent for 25- to 34-year-olds. Dubbing it a “student loan debt bomb,” the National Association of Consumer Bankruptcy Attorneys (NACBA) warned on Feb. 7 about the effects of rising student debt on recent graduates, parents who co-signed their loans, and older Americans who’ve gone back to school for job training.

“Just as the housing bubble created a mortgage debt overhang that absorbs the income of consumers and renders them unable to engage in consumer spending that sustains the economy, so too are student loans beginning to have the same effect, which will be a drag on the economy for the foreseeable future,” John Rao, vice president of the NACBA, said on a conference call.

People aged 25 to 34 made up 27 percent of all home buyers in 2011, the lowest share in the past decade and six percentage points below their 33 percent share in 2001, according to the National Association of Realtors. “Students coming out of college are burdened with more debt than traditionally they have been, and they are also coming into an economy that is underperforming previous recoveries,” says Rick Palacios, a senior research analyst at John Burns Real Estate Consulting in Irvine, Calif.

Palacios says first-time buyers are key to a housing recovery because they allow current owners to move into larger, pricier homes. “Move-up buyers need somebody to purchase their homes to move,” he says. “You need that first leg in the recovery to materialize.”

Since the overall number of first-time home buyers has fallen, people aged 25 to 34 still accounted for 52 percent of that group last year, near the average since 2005, according to the Realtors group. Still, almost 6 million Americans in that group lived with their parents in 2011, up from 4.7 million when the recession began in 2007, according to U.S. Census Bureau data.

That quote from Bernanke really makes my head hurt given that every Federal Reserve policy since the financial crash has been designed to prop up the big banks, and yet there he is admitting that the economy cannot recover unless real people have money in their pockets. The housing market remains deeply mired in the doldrums despite the Fed's Zero Interest Rate Policy driving 30-year, fixed rate mortgages below 4%. Bernanke is basically admitting that the Fed policy has been a complete failure, and yet still no one in authority has called him on it.


Bonus: If you've got the time, here is "Loan Me a Dime"

CAUGHT ON TAPE: Former SEIU Official Reveals Secret Plan To Destroy JP Morgan, Crash The Stock Market, And Redistribute Wealth In America

Stephen Lerner, formerly of SEIU.

Editor's Note:  The "Corporate Media" will not waste anytime before they label Mr. Lerner a domestic terrorist.

BUSINESS INSIDER-A former official of one of the country's most-powerful unions, SEIU, has a secret plan to "destabilize" the country.

The plan is designed to destroy JP Morgan, nuke the stock market, and weaken Wall Street's grip on power, thus creating the conditions necessary for a redistribution of wealth and a change in government.

The former SEIU official, Stephen Lerner, spoke in a closed session at a Pace University forum last weekend.

The Blaze procured what appears to be a tape of Lerner's remarks. Many Americans will undoubtely sympathize with and support them. Still, the "destabilization" plan is startling in its specificity, especially coming so close on the heels of the financial crisis.

Lerner said that unions and community organizations are, for all intents and purposes, dead. The only way to achieve their goals, therefore--the redistribution of wealth and the return of "$17 trillion" stolen from the middle class by Wall Street--is to "destabilize the country."

Lerner's plan is to organize a mass, coordinated "strike" on mortgage, student loan, and local government debt payments--thus bringing the banks to the edge of insolvency and forcing them to renegotiate the terms of the loans.  This destabilization and turmoil, Lerner hopes, will also crash the stock market, isolating the banking class and allowing for a transfer of power.

Lerner's plan starts by attacking JP Morgan Chase in early May, with demonstrations on Wall Street, protests at the annual shareholder meeting, and then calls for a coordinated mortgage strike.

Lerner also says explicitly that, although the attack will benefit labor unions, it cannot be seen as being organized by them. It must therefore be run by community organizations.

Lerner was ousted from SEIU last November, reportedly for spending millions of the union's dollars trying to pursue a plan like the one he details here.  It is not clear what, if any, power and influence he currently wields. His main message--that Wall Street won the financial crisis, that inequality in this country is hitting record levels, and that there appears to be no other way to stop the trend--will almost certainly resonate.

A transcript of Lerner's full reported remarks is below, courtesy of The Blaze. We have heard the tape, but we have not independently verified that the voice is Lerner's.  You can listen to the tape here.

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