Let’s Fix This Fraud With More Fraud. WTF?

Alan J. Yeck

Tossing out any dollar amount in student debt relief with no other action is just another form of fraud committed by our government against its people – again! It’s a fraud sandwich and we’re the protein.

$10,000 – 50,000 paid by the government, to the dirty government collection contractors (Navient, et al), will then be directed back to the political PACs, Super PACs, and student loan industry lobbying firms. Everybody in on the con, wins! But that’s not us, my friend. “It ain’t me, it ain’t me, I ain’t no senator’s son.”

There is a reason the politicians, including the attorneys general, are not listening about implementing the foundational reforms that must happen in the student loan industry to remove the corruption, provide relief to existing victims, and prevent this crisis from happening again.

The elected elite are either: 1) listening only to the lobbyists who work for the student loan industry to keep their money train scam rolling along; 2) are part of the corruption/kickbacks themselves; 3) have their heads up their asses.

While I can understand the skill of misinformation of number 1, and can personally relate to number 3, I have a feeling their lack of addressing the real issues that caused this crisis comes down to number 2. It’s gone on too long, over both blue and red administrations, for them to claim ignorance. 

We the people, are the least of their concerns. 

To end this problem today – 

  1. Recalculate loan balances at zero interest (the government should not profit off of educating its people). With this formula we’ll save millions who have already paid back their original principal and are being held hostage by interest (10 times the original loan amount. I know you don’t understand how that can happen but it does).
  2. Restoration of unconditional, full bankruptcy rights for student loans. Bankruptcy isn’t a free pass at all, is it? Millions of borrowers, through the racketeering of collections agencies are in true, lifelong, debtors’ prison today. When Congress began to tamper with this right in the early 1970s the loan default rate was less than 1%. Today it’s over 20% and growing. Removing bankruptcy protection is the foundation of today’s crisis which all the student loan industry corruption was built upon. 
  3. Hold higher education accountable for the costs of their programs. Until this is done, they will just continue to raise their costs. Higher education is a financial black hole that will suck in every penny and then start going through your couch cushions to find more. Degree costs have risen 400%, above inflation, in the last generation. Policies have to be put in place that restrict loans going to any institution that cannot demonstrate fiscal responsibility and the return on investment for completing their programs.
  4. Immediately end the practice of the loan servicers from garnishing wages, tax returns, and social security. 
  5. Restructure the loan payback formulas to reflect the cost of life. Currently calculations from the loan servicers do not consider that you have to pay rent/mortgage. Car payments, insurance, healthcare, food, electricity, maintenance, emergency funds…they let the government get their taxes then they swoop in to steal the rest. The current formulas almost guarantee to force defaults, which in turn interest builds, added to the principal and interest applied on that new amount. 
  6. Increase Pell and Perkins Grants including for the trades and apprentice programs, again holding the educational institutions accountable. 

The current system and the currently discussed solutions are all just part of the con, the scam. It’s Three Card Monty with Uncle Sam not only dealing but telling you how much you have to bet, knowing you’ll lose every hand. Fixing fraud with more fraud. WTF?

Open Letter to those in Opposition to Student Loan Forgiveness

By Patrick Donohue

These will be the first days of the last days of Student Loans.

Sure, you should pay back what you have legitimately been loaned. Legally. Legitimately. Prudently. Fairly.

Are student loans legal?

Sure, lawyers have seen to that.


There is no credit check for student loan borrowers. The “collateral” is a pending and hoped for education and its earning power.

For Parent Plus Loan credit checks, they do not ask debt to earnings ratio. Incomplete credit check equals illegitimate loan.


We can trust a government program, right? They’re just trying to help, right?  The nine most terrifying words in the English language are: I’m from the government and I’m here to help.” – Ronald Reagan

“Trustworthy lenders make it their goal to lend to qualified borrowers who will be able to repay their loan. With predatory lending, however, the lender is looking to take advantage of the borrower’s situation.“ (Desire to earn an education) (studentlloanhero.com)

“In many cases, these (Predatory) loans carry high fees and interest rates… all to the benefit of the lender… “Predatory lenders … induce and assist a borrower to take a loan that they will not reasonably be able to pay back.” (Investopedia.com)

Student loans are NOT a fair trade transaction to gain an education.

What started out as an innovative idea to allow downtrodden members of the world’s greatest society to become educated and improve their lives and those of their countrymen has been turned into a financial fiasco; to the point where lower income students and their families and even the masses of the American middle class can ill afford to attend college and take on its attending debt.


Those involved in the Student Loan Program have allowed our government, universities, and their bankers to chase profit and disregard our national well-being. We now cringe at the looming sight of the $1.5 TRILLION debt. Too bad? Just pay?

In the recent sub-prime home loan crisis, if you could not pay on your home loan, the house was repossessed. If you become unable to repay a student loan, you are liable to be harassed and hounded with no statutes of limitation and no viable collateral, since you were improperly and incompletely vetted.

Along the way, with the help and persuasion from the banks, those in charge removed some and then all legitimate bankruptcy protections and limitations, flinging disproportionate responsibility onto the borrower and relieving the banker or lender of any risk or responsibility, because the government guaranteed the loans.

Then the universities saw the “free money” and felt free, themselves, to raise tuition at four times the rate of inflation, while incomes remained static.

This loan program was supposed to build us up, but it is tearing us down. FDR said, “We cannot always build the future for our youth, but we can build our youth for the future.”

If we no longer build our American youth, we are in danger to watching the rest of the world surpass us and take the lead in science, technology, and innovation. We may outsource science and technology and in-source healthcare providers to “save money” and “increase profit share” but in doing so, we merely increase global corporate profits, as we sell our projects and jobs and our souls and livelihoods to the lowest international bidder. All the while, we are compromising American prosperity, integrity and even security. 

There is some return on the investment and many are better off than before, but millions of borrowers and their families have become trapped with unpayable loans by sophisticated and cynical business tactics.


What about, ”I paid back my loans. You should, too.”? Congratulations. You have been used.

Some might be able to repay, but the payments didn’t merely go for education. Millions of dollars in salaries and bonuses and stock options were pocketed by CEOs of the loan servicers (Sallie Mae, Navient, Nelnet to name a few). Millions more were “contributed” to colleges to recommend loans and to candidates and members of Congress (Opensecrets.org) to pass policies that favor the lenders.

Even current President Biden and several former presidents have received “contributions” from the student loan industry. Former President Trump allowed his name to be used to form a “university” which encouraged and aided students to take out loans to attend the now defunct institution which has been ordered to repay millions.


Millions of dollars of student loan “profits” (upwards of $50 Billion per year, including fees on defaulted loans) are used to fund, in part, the Affordable Care Act; and billions of dollars of loans were repackaged and sold as assets to fund retirement accounts on Wall Street.

Our own government and its contractors and colleges double dipped and made huge profits on the backs of students and their families and didn’t provide job and advancement opportunities as corporations and businesses moved their operations overseas.

This will be the end of the road since we are now rightly skeptical of the instigators and the enablers.

Wanna Make America Great Again? Cancel all student loans, restore bankruptcy protection and responsible lending practices, and most of all, revamp higher education finance and Make College Accessible Again.

The country is already paying in dollars and lost opportunities.   

Theodore Roosevelt once said, “A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad.”

May we take this opportunity to remake the funding of college education into something better.

Patrick Donohue


JPMorgan CEO Jamie Dimon: Student Loans Are “Irrational”

Patrick Donohue grew up in Salinas, California and is a former secondary teacher and coach and is semi-retired after a twenty-year career at AT&T. He graduated from the University of the Pacific in Stockton, California in the 1970’s with minimal student debt. He and his family have seen their four daughters all graduate from public universities in California and are in the process of attempting to pay off a much more substantial educational bill. They now reside in San Diego, California.

The Killing of American Higher Education (Part 4)

Alan J. Yeck

The Dirty, Rotten, Crooked, Broken, Student Loan System and the Immoral Bankers, Brokers, Collectors, and Corrupt Politicians Who Make Billions Off of It While the Courts Garnish Wages and Destroys Lives

The Modern Philistines

David faced one giant Philistine and defeated him. The modern Philistines never forgot this lesson and therefore they attack today with overwhelmingly larger giants, both in numbers and in strength. Individual student loan debtors cannot afford the legal fees to challenge the system, and that’s even if the courts had any balls to stand up and make their own definitions of “undue hardship”.

Bill Clinton was paid nearly $18 million over a five-year period to be the honorary chancellor of a for-profit edcuation network, Laureate International Universities (multiple lawsuits have been filed against this organization). His contract with them concluded in 2015 as Hillary started her run for president. During her time as Secretary of State, after Bill was honorary chancellor, the U.S. State Department gave $55 million in grants to a non-profit organization chaired by Laureate’s chairman, Douglas Becker.

The following was taken from a report by David Halperin, published on June 21st, 2016, “Friends In High Places: Who Endorses America’s Troubled For-Profit Colleges?” posted on the web page Republic Report: Investigating How Money Corrupts Democracy. I have kept the hyperlinks in case you want to dive deeper and would urge you to read the full report found here.

This by no means identifies all the players involved in this nightmare. It would probably also include your congressman, your senators (all three branches of the federal government), your state reps, governors and attorneys general who have not moved forward in investigations and prosecution for political reasons. All are involved in the creation and maintenance of a system so corrupt that it is unparalleled to anything in the history of the United States. Some of the below are still active in one capacity or the other and others have moved on or are deceased.

“I went to college hoping to make a difference in the lives of my future students. I came out with a debt around [$50,000], could not get full-time work, so I went back to get my master’s in special ed. I had four credits to finish, but my mom got sick so I had to quit school. I am 53 years old and now owe over [$130,000] with interest. I can’t buy a house, have no retirement [fund] and will never pay this off. The American dream is out of reach. Unless I win the lottery, I will be paying until I die and even then it won’t be paid off!” said Jeanne Mallett. 

The Damage and Destruction Well Beyond a Bad Credit Rating

The destruction caused by garnished wages, garnished tax returns, garnished social security payments and unfair monthly payments go much deeper than a bad credit rating. Being financially crippled, being in a government-sanctioned debtors’ prison literally destroys the American soul. It’s not about the money but our American understanding of what is societally right or wrong and how the student loan system openly and completely, violates those beliefs. You cannot continue to fuck people over and over again and again and maintain a functioning society – at least not the one we grew up believing in. Truth. Honor. Justice.

In a study at Northwestern, those with higher debt levels relative to their incomes reported much higher levels of stress, anxiety, depression, a larger presence of mental disorders, drug dependency, and poorer health overall. In a survey by Student Loan Planner, one in 15 student loan borrowers has considered suicide because of their loans. I believe that number is much higher on a national scale. People consider suicide when hope disappears, and the student loan system does just that – kills the hope that anything will ever get better. Other studies show that student loan debtors constantly lose sleep over their loans, which has prevented them from taking care of themselves or purchasing health insurance. Those who do have health insurance are more likely to see a mental health professional to help deal with the stress of debt.


The average graduate will leave college owing almost $40,000 in student loans. While industry folks (politicians, judges, collection agencies, higher education administrators, etc.) are concerned with shaking down the individual, there is a much broader, negative effect on the U.S. economy. You will never turn on the the news and see that the markets are on the verge of crashing globally because Lydia and Marcus went into default on their loans. Student loan debt is a slow, painful death for the individual and affects sustained long-term economic growth. Besides the obvious hit on the home buying market, millions of these borrowers have no savings or retirement fund. With collectors garnishing social security, what little folks do have is not enough to live on. You will see an increase in homelessness and all related social issues, including hunger, disease, crime and drug use — all amplified tenfold if this corruption isn’t addressed.


There are many individuals and organizations out there fighting the good fight. Below are a few of them to check out, and please, help them in any way you can. Considering the amount of money at stake for corrupt politicians and the loan industry, it’s truly incredible that we are making any headway to bring attention to these criminals and the damage they continue to do to our country.

This is the fourth installment of a five-part series by Alan Yeck reflecting on the student loan system, its challenges, and the far-reaching effects it can have. For a full list of works cited, please view the last installment in the series.

We have the power to change the business of education back to a right for all. Contact your representatives and ask them to listen to these facts and national narratives.

Read Part 1 here

Read Part 2 here

Read Part 3 here

Lies, Damn Lies, and Damn Student Loan Debt Lies

Alan J. Yeck

Too many of us are just reading the headlines and not the content, the meat of the articles. On social media we are quick to respond, to post, to tweet based only on that headline and by doing so we perpetuate lies.

There was a recent article headline (I’ll paraphrase) ‘Biden Close to Cancelling Student Loan Debt.’ As I read the article, the headline was completely misleading. I do not know if it was the author’s choice to manipulate us or the editors, but it was nonetheless manipulation – a lie by omission of the facts. The article was about Senators Warren and Schumer introducing a bill to cancel up to $50,000 of student loan debt for each borrower – very different from the headline. The reality is that there is so much misinformation out there about student loan debt that even reading the article would have done little, if any to clarify the crisis. Please allow me a few more minutes, and sentences, to explain a bit more.

Damn Student Loan Debt Lie #1

The amount of student loan debt that is currently in mainstream media is around $1.7 trillion, both federal and private student loans. This number comes from the loan servicers/Department of Education telling us what is owed. This is a number that gets folks very worked up about ‘forgiving’ from their tax dollars. 

The Truth 

Millions of Americans have paid off their student loans, and then some, but cannot get out from under the ongoing interest scam. For example, Corella had a $35,000 student loan for a graduate degree in education (she’s a 7th grade teacher). To date she’s paid $38,000 back but the loan servicer is telling her she still owes $87,000. This is not an uncommon story at all. Pull those numbers from the Department of Education and we’ll see that millions have paid back their loans but not counted as such because of the predatory interest.

Damn Student Loan Debt Lie #2

“It’s those kids, privileged kids, that think they don’t have to pay back their debts. I pay my debt and so should these punks. Get the hell off my lawn!”

The Truth

Of the 45 million Americans with student loan debt, only 37.5% are below the age of 30. The other 62.5% are older than 30. Minorities and women are disproportionately affected by student debt. Predatory lending, longer times to complete, and longer times to pay back increase the interest, which is then often capitalized on the original balance, which interest is then reapplied to. 

Damn Student Loan Debt Lie #3

It’s their own fault for going to these expensive, private schools. 

The Truth

Four-year public institutions enroll a higher percentage of students (44.8%), followed by two-year public institutions (33.2%), and four-year private non-profit institutions (19.5%). The cost of a four-year degree has increased 400% above inflation in just one generation. While the schools are quick to point the finger at decreased state and federal funding, they themselves are very much to blame. Fiscal mismanagement, increased competition from for-profits, bloated mid-level administrative lines, and the lack of leadership at the executive and board levels are just as much, if not more so to blame for the unjustified increases in tuition and fees. 

Higher education is a black hole that will absorb every penny it’s given and still want more. They must be held accountable for their costs, their degrees offered, their completion rates, and time of completions. Six years is the acceptable number today to complete a four-year degree, but even with that insane statement (“six years is the acceptable number today to complete for a four-year degree” – WTF?), the completion rates within that time frame are less than 50%.  Why? Because of arrogance, tradition, traditional arrogance, inability to change, and lack of any real (teeth) federal oversight. The feds must address this or the costs will continue to go up. 

Damn Student Loan Debt Lie #4

There are several options for repayment that are based on a borrower’s income. There’s no reason they should ever go in default. 

The Truth

The repayment plans are between 10-20% of discretionary income or income that they believe is ‘leftover’ after you pay your bills. Unfortunately, they don’t consider these bills in your life to determine a true discretionary number; rent or mortgage; utilities; auto loan payments; auto insurance; phone; internet; veterinarian bills; health insurance; dental; food; and emergency funds, or any kind of savings/retirement. What this means is that when your transmission goes and you must fix it to keep your job, you are forced into default on your student loan because you have not been allowed financially to plan for this. Then they start piling on the interest. The system is created to increase defaults. Take it all. Default. Take more, longer. Repeat until you die (at least that’s something to look forward to in this corrupt system).

We have lost what the purpose of education is supposed to be. Education is the single greatest factor that will determine our future as a nation (or the single greatest factor in destroying our nation). Education isn’t just degree programs but also the trades and apprenticeships – all equally critical, and all should be equally supported. Instead, the politicians have turned education into a commodity, like pork bellies, to be traded and make a great deal of money off of, for a very small group of people. 

Sustainable Solutions

  • Remove interest and recalculate from the original balance borrowed, less what has been paid back by the borrower. That’s the real number. The government should not make money off of helping its people/building the future of the country. 
  • Restore, unconditional bankruptcy rights to student loan borrowers. This was the foundation that this crisis was built on. Criminalizing student loans has made a great deal of money for a small group of people. 
  • Hold higher education financially accountable for the costs of their degrees, job placements, graduation rates, graduation time frames, and do not lend to students going to institutions that do not comply. 
  • Recalculate and reform payment plans including stopping all wage, social security, and tax return garnishments.
  • Disassemble the loan servicing companies that have lied, cheated, and stolen the lives of so many Americans through their fraudulent operations.   

Canceling $10k or $50k without any other changes to the student loan industry, predatory lending, bankruptcy, and the overly inflated cost of education only ensures the crisis continues and the money continues flowing back to D.C. It’s still fraud, it’s still corruption. We have lived with this dirty game so long that now we fool ourselves into thinking $50k is good?

Just because the government is giving us a box of chocolates (Russell Stover to boot) when they screw us doesn’t make it all okay now. It’s nothing more than rearranging the deck chairs on the Titanic. I’m happy for you if it addresses your problem but ultimately, the country is still fucked. 

We have the power to change American politics back to a system that serves the people, not the politicians. Contact your representatives and ask them to listen to these facts and national narratives.

The Killing of American Higher Education (Part 1)

The Dirty, Rotten, Crooked, Broken Student Loan System and the Immoral Bankers, Brokers, Collectors and Corrupt Politicians Who Make Billions Off of it While the Courts Garnish Wages and Destroy Lives

Alan J. Yeck


The U.S. spends almost double that of anywhere else in the world on higher education and that’s before the interest charges are shackled upon the students. Nine million Americans are either in default, deferment or forbearance on their student loans with a million more each year. These students are Democrats, Republicans, African American, Caucasians, Latinx, Asian, Native American, young, old, married, divorced, LGBTQ, fathers, mothers—every single demographic that exists. It’s not a political party issue; it’s blatant criminal activity by our elected officials, their collection agencies and the Department of Education. For their own profit, they have created a life-long debt sentence for these students at the cost of our country’s future.

The student loan debt crisis didn’t just appear. The warning sirens have been blaring for over a decade with the causes going further back than that. The subprime mortgage crisis was also seen years before but again, the people who could have changed it, the politicians, chose to do nothing until it was too late and then they bailed out the firms to the tune of $30 trillion. That same year Goldman Sachs paid out record bonuses to the very people who caused it. Why was this allowed and why is the student loan debt allowed? Because nasty, rotten bankers, brokers, collection agencies, politicians and billionaires are making a great deal of money off of the dreams and misfortunes of students and the mismanagement of higher education (again allowed). Shame on them all. A pox on them all. There are solutions beyond the news bites and campaign rhetoric but solutions don’t pay as well.

The student debt crisis is not new. It wasn’t like a tornado that pops up with the warning sirens giving only minutes of notice before it destroys everything in its path. It has been in the making since the 1970s and touched down on land over a decade ago. It was seen then—sirens blaring, projected to get worse. The narrative never changed: Do not ignore this or very bad things will happen—and it has. Our elected officials didn’t just ignore it but instead they have actively, albeit quietly, ensured the system remained broken and has supported the loan “servicing” agencies in pushing their boots harder on the necks of borrowers for their own profits.

These numbers, including our $1.7 trillion student loan debt figures are always increasing so this is a snapshot of the first quarter of 2019:

  • Federal loan borrowers in repayment: 18.6 million.
  • Federal loan borrowers with loans in deferment: 3.4 million.
  • Federal loan borrowers with loans in forbearance: 2.7 million.
  • Federal loan borrowers with loans in default: 5.2 million.

11.3 million American citizens cannot make their payments. Twenty-five percent of all borrowers will go into default and that’s where the true ugly begins. At this point interest begins to quickly pile on and can double, triple, quadruple the original loan amount.

Once in default, the loan is sent to collections. This is also the point where the power finance players make their money. With the blessing of congress and the courts, wages are garnished, social security payments are garnished, tax refunds are taken in full, you are no longer eligible for deferments or forbearance, and your credit is ruined. This can also cost you your job, or prevent you from future employment. This will last until the loan is paid back or until death (except for private student loans where creditors can come after the estate).

How we reached this point can be very confusing (intentionally designed) so I’m going to attempt to deconstruct the main areas that facilitated the fraud and the areas that keep it going and growing. All of these issues have been previously reported by numerous journalists but have not always tied the relationships together of higher education, politicians (all branches of the federal government), collection/servicing agencies, financial institutions, billionaires and how they worked and continue to work together to commit such a monumental deception on the American public.

Beware phony advocates for reform that appear to speak on your behalf with partial fixes but do so just to ensure there are no real changes to the system that would result in any financial losses for themselves and the masters they serve. The predatory student loan industry exists because our elected officials are either corrupt themselves, don’t take the time to truly understand all the complex aspects of the abuse and fraud in the system (they choose to listen to the industry’s own lobbyists instead of their own constituents), or are just plain morons. Regardless, all kill American higher education.

The American student loan system—government loansharking enforced with judicial muscle. The mafia never had it so good.

No Good Deed Goes Unexploited

It is important to understand the history of how we arrived at our current crisis, because as I said it’s not new, it didn’t just happen last year. It was not only allowed but designed, fed and encouraged to be the devious monster that exists today. This is not the complete history but what is needed to bring us to today.

1944. The GI Bill was established to reward veterans who served their country during World War II to catch up with those Americans who remained in college during this time. Prior to this, many of these people would never have been able to afford to go to college before or after their service. This is really the first involvement we see of the federal government assisting citizens who didn’t have the wealth to attend college on their own. There were advocates who wanted this extended beyond veterans to allow more Americans to benefit from higher education, but the majority members of congress felt that since they never received that, no one else should either. No free rides was the mantra.

1958. The “Red Menace” swept the country and with Russia’s launch of Sputnik. Congress sponsored low-interest loans under national security. It’s of interest to also note that the National Defense Education Act also included debt cancellation for those students who became teachers. There was still no support for need- or academic-based undergraduate funding.

1965. President Johnson and the 89th Congress enacted the Higher Education Act (HEA). Title IV was the first true federal government commitment to providing college opportunity to students in need. This included the Guaranteed Student Loan (GSL) and College Work-Study Programs which also applied to middle-income families. Because the cost of education was somewhat affordable then, any loans to the middle class would have been a small percentage of the program. Enrollments increased and student aid appropriations took the lion’s share compared to other domestic social programs.

1972. This was a big year in higher education. The reauthorization of the HEA laid the foundation for today’s student loan system including establishing the term “postsecondary” to recognize that not everyone needed a four-year bachelor’s degree but did need further education of some sort. This would allow financial aid for those students attending community colleges, trade schools, vocational schools and students attending part-time. The reauthorization also included:

  • Pell Grants began as a way students could directly receive federal aid beyond the campus-based programs.
  • Private schools were now allowed to participate fully in receiving these monies.
  • State Incentive Grants, which provided matching dollars to help states expand their need-based grants.
  • Hidden quietly in the darkest corners of Title IV where mold feeds and vermin defecate, they established the Student Loan Marketing Association, AKA Sallie Mae, as a publicly chartered corporation to increase funding to guaranteed student loans (GSL).

The Old Sons of Bitches

In the early 1970s, while the protests of the Vietnam War were still in full swing on college campuses throughout the country, legislators became paranoid that these long-haired, lazy, hippie pinkos would use the bankruptcy system to get out of paying the federal government back for their student loans. (This was the early 70s and our government was completely controlled by wealthy, white men who did think like this.) This fear had nothing to do with reality and there was no evidence to support this position. At that time their main target was those pursuing medical and law degrees that were higher priced. Keep in mind that the degree costs were a small fraction compared to today’s tuition.

In 1973 the Congressional Commission on the Bankruptcy Laws of the United States issued a report which included that student loan debt cannot be discharged for five years after graduation. Three years later the Education Amendments of 1976, Section 439A, was adopted even though the Government Accounting Office reported less than one percent of student loans had gone to bankruptcy. Now, no student loans could be discharged in bankruptcy until five years after graduation, or unless the borrower could prove repayment imposed “undue hardship” (which was never defined by the law makers). While this passed it did have more than a few critics. Michigan Congressman James O’Hara stated that establishing this “treats educational loans precisely as the law now treats loans incurred by fraud, felony, and alimony-dodging. No other legitimately contracted consumer loan … is subjected to the assumption of criminality which this provision applies to every educational loan.”

In 1978, with the passage of the Bankruptcy Reform Act, the exception to bankruptcy discharge of student loans was moved from the Higher Education Act to the U.S. Bankruptcy Code at 11 USC 523(a)(8). While Congress sought to reverse the earlier exception, the Senate’s version prevailed maintaining the inability to discharge student loans for five years and adding that it applied to loans backed by the government and nonprofit institutions of higher education.

In 1979, Congress wanted to address the problem of lack of participation by lenders (although this wasn’t known to be a problem by anyone) so they quietly passed an amendment giving banks a higher rate of return on student loan by linking them with changes in Treasury bill rates. Prior to this the government set a cap on what lenders would make. With banks making more money, the student loan industry was born.

Just because the corrupt say it’s legal, doesn’t mean it’s still not corrupt.

The Noose Tightens

1986-92. Loan volume shot up again after the 1986 and 1992 Higher Education Act (HEA) reauthorizations. In 1990, the Crime Control Act extended the period before student loans could be discharged in bankruptcy from five years to seven years and then a year later the statute of limitations on defaulted loans, six years, was totally eliminated by the Higher Education Technical Amendments. There was a failed push to increase Pell Grants to reduce the reliance on loans and instead Congress raised the borrowing limits of students and created a new unsubsidized loan for the middle-class that was no longer based on financial need. This meant anyone could now take on a student loan regardless of their income or parents’ income. Smelling more money could be made off of the well-meaning, caring, loving parents, they also uncapped the Parent Loan (PLUS) program. Now parents could borrow, on behalf of their children, the full amount of their children’s’ educational costs. Because of these changes, enrollment took off and in a two-year period the amount borrowed increased over $10 billion.

The Student Loan Reform Act of 1993 revised how loans are serviced and financed, allowing for more students to take out more loans. This also established an income-based repayment plan stretching out to a home mortgage length of 25 years. The Department of Education responded by creating more than 70 complex rule-making packages, further complicating the regulatory process for students, schools and the government itself.

By 1998 the Higher Education Amendments, Section 971 eliminated the seven year period required before a student loan could be discharged in bankruptcy. There had been no debates or hearings on this prior to President Clinton signing the bill into law. This meant there was no longer a statute of limitations nor could student loans even be considered for bankruptcy – ever, unless the ambiguous, indeterminate, undefined “undue hardship” provision could be proven.

In 2005 the final nail was hammered into the hands of student borrowers by Congress with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act. This meant all federal and private educational loans were excepted from bankruptcy discharge unless the undefined “undue hardship” could be proven (note: you have a better chance of being hit by lighting, which would probably be a welcome relief to my student loan borrowers, than having a judge dismiss a student loan in bankruptcy).

The politicians, with help from their financial keepers, knew by now that money, lots and lots of money, could be made off of student borrowers. By increasing funding to everyone, by ensuring every kind of nonprofit and private educational institution was eligible to receive federal and private loans, by supporting the skyrocketing costs of higher education, by removing the only tool that could provide some kind of market correction (bankruptcy), and by placing student loan debt in the financial markets (SLABS) which allowed those on the inside to make billions of dollars, they had successfully created the most devious, destructive system ever in the history of the United States.

This is the first article in a five-part series by Alan J. Yeck reflecting on the student loan system, its challenges and the far-reaching effects it can have. Check back each Thursday for the latest installment. For a full works cited list, please view the last installment in the series.

We have the power to change the business of education back to a right for all. Contact your representatives and ask them to listen to these facts and national narratives.

Episode 10: Corporate Politics & The Student Debt Crises wih Alan Yeck

Thank you to RightsandWrongsPodcast.com for featuring us!

“Join Alan Yeck and I in a conversation about corporate funds in U.S. politics such as lobbyists. Along with a deep dive into the unspoken issues that make up the student debt crises such as the loans, exploitation of employers, and the disconnect between the universities and the workforce. Alan Yeck is a former Intelligence specialist, with 20 years of experience in higher education, and the founder of the political organization AltRaged Editor & Producer: George O.”

Source: Episode 10: Corporate Politics & The Student Debt Crises wih Alan Yeck

Defiance. We Must Fight!

An excerpt from The Killing of American Education, Part 1

By Alan J. Yeck, Founder

I went back to school in 40’s to get a better job. I got an Associate,Bachelors and a Masters. Almost 9 yrs later I don’t have a better job but I have almost $80,000 of debt. No matter how much I pay the balance doesn’t go down. I am at my wits end. I don’t know what to do. I barely have gas money to get to work to pay this bill.   LaDean Mitchell   March 14, 2019  Phillipsburg  (https://studentdebtcrisis.org/read-student-debt-stories/)

I cannot keep up with all the lawsuits filed in the last several years against the student loan industry including the (self) servicing agencies, Department of Education, Secretary of Education, Betsy Devos, the Consumer Financial Protection Bureau and their new leader Kathy Kraninger. What I want you to understand is that the status quo of the system is completely and utterly broken and in complete chaos driven by unprecedented greed and corruption. Below is by no means a complete list –

The Consumer Financial Protection Bureau filed against Navient in 2017 (when Seth Frothman was still there fighting for American consumers) for “systematically and illegally failed borrowers at every stage of the repayment by”

  • steering borrowers toward more expensive forbearance instead of affordable repayment plans;
  • misleading borrowers about the options available;
  • payments processed incorrectly.

Attorneys General of California, Illinois, Mississippi, Pennsylvania, New Mexico, Arkansas, Arizona, Connecticut, Idaho, Iowa, Kentucky, Missouri, Nebraska, North Carolina, Oregon, Pennsylvania and Washington as well as the Securities Exchange Commission and the Consumer Financial Protection Bureau have launched investigations and/or filed lawsuits against this industry for fraud and unfair practices.  

I was denied Public Student Loan Forgiveness and Temporary Public Student Loan Forgiveness after working at an eligible nonprofit for the 10 required years (2007-2017). I still work there, but hate that I was denied forgiveness twice. I feel like I was lied to by the federal government and it angers me. I am even angrier that so many people like me were denied as well.   Kelly Ascheman   February 14, 2019  Blaine (https://studentdebtcrisis.org/read-student-debt-stories/)

New York state sued the Pennsylvania Higher Education Assistance Agency (PHEAA), aka American Education Services. New York Attorney General Letitia James said they “failed miserably” in their servicing of the Public Service Loan Forgiveness Program. 

I previously mentioned Seth Frothman who resigned from the Consumer Financial Protection Bureau as its chief ombudsman over student loans. In his resignation letter to the than acting director Mick Mulvaney, Frothman stated the administration “has turned its back on young people and their financial futures…unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting…instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”

“What Da Wybe Is” In Higher Education Leadership?

Let them eat conch

By Alan J. Yeck

Leadership, great leadership, goes beyond art and science to something that is often undefined by those who study it and even the practitioners themselves. In the context of varying, and often challenging situations, great leadership is clearly and consistently visible. Where does that je ne sais quoi ultimately originate? What is it about those we choose to follow (not forced to follow), which honors the trust and respect we give to them, which they give to us? There are people we report to and people who supervise and manage, but being a great leader is an entirely different dimension and one that many do not seem to grasp. The position or role may be one for leadership but that does not mean a leader sits in the chair. It is not a rank for we see generals that cannot lead. It is not wealth or power for we see CEOs that are more business dictators than leaders. Nor it is their level of education for we see college and university presidents running their campuses like first time teachers with badly managed classrooms. There is an organic element, applicable to every decision regardless of the industry, or issue at hand, and is too often missing in higher education today. 

 No matter how much post-secondary education wants to believe it is above the routine fray of other corporate entities, it is still a business. It is the business of education. Regardless of the tax classifications (nonprofit, for-profit, private) there are processes and procedures just as pertinent, prudent, and necessary to a university as they are to Microsoft, Walmart or US Steel. Higher education teaches business but rarely uses those same tools and best practices within its own hallowed halls. How many senior leaders on campus are Six Sigma certified? Project management certified? Certified human resources, certified public accounts, certified financial planners…etc? Too often, administrators are brought in or moved up without the experience, knowledge or skills required by their positions. Their mentors, if any, climbed the same status quo ladders so are incapable of seeing the gaps, let alone help in those areas. What we end up with, for leadership, is a group of nice, well-meaning people that probably excelled in something, at some time in their careers but are ill equipped to lead an institution. We see poor decisions made throughout the country resulting in inflated costs of education, poor on-time completion rates, and increased attrition rates with apathy being the campus modus operandi. These do not happen because our students Jenna and Jerome could not do the work but because their campuses were so intentionally unaware that the resources to help were never put in the right place at the right time with the right people. In education, all rubrics, including financial measurements, should flow back and forth from the goal of our students’ development, not internally for the occasional accreditation visits. It is a living process, constantly nurtured, free from fear, with the common understanding that we can be better – we must do better. Good leadership removes silos and barriers that inhibit teamwork, open communications and it openly values every member of the organization.  

I recently heard about a small, liberal arts college in the northeast struggling to keep the doors open as so many similar institutions have closed over the last several years. A previous president and his board borrowed $40 million dollars to build a new dormitory, a monumental structure complete with gargoyles and the president’s face (and his wife’s face too) chiseled above the entrance. While built in 2006 it looks like a palatial estate from the 1880s – truly a beautiful piece of architecture where a prince would have stayed if not Harry Potter himself. Normally there would have been a capital campaign to fundraise for this kind of project but instead they went to Wells Fargo and borrowed it. As enrollment continued to declined, all the college’s endowments were eaten-up over the next 10 years – reduced to nothing. After realizing they would never be able to pay back Wells Fargo, the college renegotiated and the bank forgave $30 million of the $40 million loan. The other $10 million was ponied-up as a loan from some of the school’s trustees. Day-to-day operational funding came from tuition revenue only. Bills went unpaid and projects on hold until the tuition checks rolled in. Major maintenance (roof repairs, elevator repairs…) were delayed, if done at all. The president, ever board-focused, would terminate various senior officers around him, which also allowed the blame game after they were gone, then he brought in unqualified friends, who brought in their friends. What money there was, now spent on new systems that did not integrate with old systems that never integrated with any of the other systems before anyways – a ‘if you always do what you’ve always done…’ approach to operations. Consultants were paid to bring new program ideas, which they obtained by asking faculty what they thought was needed, reviewing local Department of Labor data, and a few interviews including board members – all of which did nothing to slow declining enrollments. Not being able to afford an experienced or even inexperienced provost, faculty rotated this position every few years with the main requirement to obtain the job being, they said they would do it. No other management, leadership or position experience required. Nice people though.

The last pay increase that occurred for faculty and staff was several years ago although they’ve been promised, again, a one percent raise sometime in the near future, after HR developed the new employee appraisal system. There have been layoffs, attrition, and faculty positions left unfilled to save money; major support offices (IT, registrar, campus safety, student services, continuing education, marketing, recruitment, and graduate studies) operated with a skeletal crew. All continued to do the best they could with what they had, understanding the situation and hoping for better news to come. Senior administration (leadership) kept promising pay increases and new strategic directions to put them back on a solid plan of growth and opportunity. Meetings were held, new committees formed – a cornucopia of the correct buzzwords for educational management were dropped broadly and often.

The department chair’s meeting was at noon on a Wednesday, early February. One of the agenda items was “college culture” or specifically college morale. As the discussions took place on previous agenda items, discussions about more things the chairs would need to do, more reports, more things for them to ask their faculty to do, more committees for them to be on, it bled nicely to campus morale. There was no question in anyone’s minds how low morale was. You can ask your people to do extraordinary amounts of work because of a situation, and most will roll up their sleeves and do it, but you can’t continue to ask them to that on and on and on with no end in sight. It degrades themselves, their work and destroys morale. The current acting provost suggested a solution, “maybe the college could do a year-end mixer.” How do you fixed overworked, underpaid, unappreciated employees? Cocktail sausages and toast points! What never came up was that he was leaving on a 6:00 a.m. flight the next morning with four other senior administrators to join the president and another vice president who were already there, for a board meeting in the Bahamas. The pictures of the beach and water posted by the vice president on Facebook looked wonderful. At a previous all-faculty meeting a week before, faculty asked administration if they could speak to the board at their next meeting. Nothing was ever mentioned that it would be taking place in the Bahamas. I guess senior leadership just forgot about the upcoming trip. I mean after all, ‘what da wybe is,’ which is Bahamian for ‘what’s the problem?’ Success belongs to the team but the road to and from failure always has direct paths to leadership. Always.

For those out there thinking at least this was a good ‘team building outing’ allow me expand a bit more on this story. As I said the president and one of the vice presidents had left a day or two before with their spouses. The other five were scheduled to leave the Thursday before the Friday meeting with a planned arrival at the beach later that day. One of the five missed the 6:00 a.m. departure flight so now there were four flying into Detroit to make their connecting flight. Once there, they had less than an hour to get to their next gate, (if you’re transiting Detroit, inevitably, your next gate is always on the other side of wherever you landed). One of the four, a wonderful African American woman (the single person of color in any administration role) has a physical condition that limited the speed and distance she could walk. So, what did the others do? After admonishing that person for not making arrangements with the airline in advance to have someone at the gate to take them in a wheelchair or golf cart to the next gate, the other three abandoned her and dashed off to the next gate. The provost, the VP of advancement and the president’s administrative executive assistant (invited to entertain the spouses during the board meeting). Sometimes unseen adverse circumstances make the very best team building opportunities. This was not one of those times.

A few days later, Friday, the area was hit with a major snowstorm falling on another layer of ice that accumulated over the night. All local schools and many businesses closed, and the snow kept coming. This campus was a residential campus, meaning students lived on campus and could walk to their classes. Terrible weather would not prevent that. What it does prevent is the safe travel to and from campus for employees and staff. The roads were terrible and those coming in drove past accidents and spinouts. As all senior administrators were enjoying their conch omelets in the Bahamas, the person left in charge, (which nobody knew he was in charge because the president did not inform the campus that he was leaving) had no experience with this kind of situation. One of the trustees, on the island for the meeting, had heard from a relative back in the U.S. that the storm was ‘not that bad.’ and relayed that to the person running/not running the campus. No cancellations. No delays. Employees were expected to report on time as usual, or they could take a vacation day (as it was pointed out when anxiety about the dangers was expressed). Faculty canceled most classes because they were not going to risk their lives. Some staff dug themselves out and made it in. Others took a vacation day. I believe there must be other places just as demoralized and mismanaged. Somewhere. Ukraine? 

I started this piece noting that trying to define what makes great leaders goes beyond the arts and sciences, that it goes beyond position, wealth, or power. I have to also point out that the opposite of piss poor leadership, as reflected by the beach boys and girls above, is not great leadership either (although they are in no danger of being an example of that). We know great leaders share common qualities such as commitment, confidence, inspiration, honesty, empathy, vision…but what I’m speaking about is where these traits ultimately grow from. Great leadership begins and ends with the soul of the leader. It is a complete, conscious, tightly encompassed philosophy to value above all else those whom they have been given the great responsibility of leading. The roots are deep, and must be, because powerful storms will come. Great leaders recognize both the frailty and the unbelievable strengths within us all. This is not something to overcome but to hold dearly and model from when creating the culture of an organization. Great leaders recognize we are all the same beings on a short journey best taken together with support and love. Build your leadership, culture, company, house from here and see your life, and the lives of those you are responsible for, change for the better regardless of external conditions, despite the storms out of your control. This does not guarantee success from a Wall Street point of view, but neither does the Wall Street point of view. It aligns lives correctly with the time we have, in the place we are, to the unmistakable joy of our existence together. Anything else is just another trip to the Bahamas.  

Drug Use at the Department of Education: The Discretionary Income Formula

By Alan J. Yeck

The formula used to determine how much of your monthly income the student loan “servicers” will steal is based on a model where Department of Education, in cooperation with Congress, fed rats LSD over a 15 week period and then observed their movements in a standard 20-point maze. What occurred was nothing short of remarkable on a global scale. After the results were reviewed by no less than seven times by outside scientists it was determined that the Department of Education, in cooperation with Congress, were the ones actually ingesting the LSD and not the rats. This explains why the payback formula used by student loan “servicers”, aka Sallie Mae, Navient, Fedloan, Nelnet, et al is so fucking insane.  

This is directly from the Navient website –

Income-Based Repayment Plan (IBR)

“Your payments will be 15% (10% if you are a new borrower*) of your monthly discretionary income, the difference between your adjusted gross income and 150% of the poverty guideline for your family size and state of residence (other conditions apply) divided by 12.”

Clear? Maybe if you’re on acid.

Here is what the federal government considers as ‘discretionary’ income, meaning they will take 10-15% from your monthly income before these bills are paid:

  • Rent/Mortgage
  • Food
  • Utilities
  • Clothes
  • Trash pick-up
  • Phone
  • Internet
  • Car payment
  • Car insurance
  • Car fuel and maintenance
  • Dental/vision (deductibles if you’re lucky enough to have insurance)
  • Health insurance (deductibles if you’re lucky enough to have insurance)
  • Emergency savings (emergency trip for family emergency…transmission breaks…etc.)
  • Any kind of retirement savings
  • Pets (food, litter, veterinary – or do we just put the down?)
  • Children (costs associated with children and or child support)
    • Trying to help them with their college costs so they don’t get sucked in this black hole of despair.
  • Misc (expenses I just can’t think of now or that might be unique to your life

The student loan “servicers” will take all they want, after their big brother has taken their taxes, and whatever is left you have to figure out how to pay these normal bills of life. When the transmission goes, and you need your car to get to work, so you can get your pay, so you can pay the loan “servicers,” you have to fix it, right? Right. Since you have no savings you have to default on your student loans to get your car fixed…or to travel to a family funeral on the other side of the country…and another 1,000 unseen events that you need emergency savings for. Then begins the interest game, and capitalization of that interest on to the principal…months later when you’ve been “rehabilitated” (what a great word – so fitting of the debtors prison they have created) you will owe more than ever before with the same formula used to steal your life. Repeat. Repeat. Repeat. This is the LSD influenced system they built and what our politicians protect. In turn for their feigned ignorance and silence to the plight of student loan borrowers, they are given campaign kickbacks through Super PACs to ensure the status quo remains the status quo and we go on paying. Forever. This story is told by millions of Americans and is the biggest scam ever inflicted by the U.S. Government on it’s own people.

At 59, with my 29 year plan ($35k loan will then be $310k), there’s a good chance I’ll be dead before it’s paid off. At least that’s one thing to look forward to.

#corruption #studentloandebt #dirtypolitics #bidenharris #joebidden #trump #kami #highered #students #business #innovation #blm #womensrights #elizabethwarren

Walking Dead Higher Ed: Leadership In A Pandemic

By Alan J. Yeck

Since the beginning of the pandemic there have been over 300,000 cases and 80 deaths at U.S. colleges and universities, according to a survey done by The New York Times of 2000 campuses. Of note is that the majority of cases occurred since the start of the fall semester (almost 70,000 cases since the start of this month). Also, given there is no national tracking system The Times relied upon the institutions’ self-reporting but at least 70 ignored requests while another 80 said they had zero cases. What we know about data is its ease in manipulation, and what we know about higher education is its ease in lack of transparency. The reality is that those numbers are likely higher than being reported/discovered.

The other numbers that are directly related to COVID are the job losses in education. According to an analysis by The Pew Charitable Trusts, since the start of the pandemic state colleges and universities are down 14% with some exceeding 20%. Declining enrollment, already a huge problem prior to the pandemic, continues to increase the financial strain. As state funding is reduced, declining enrollment revenue, and increased costs of COVID testing, their budgets are in complete chaos. 2021 doesn’t look to be any better. There is no surprise that most states are projecting greater revenue declines, which directly affects the already minimal aid given to education. Declining revenue and increased costs will surely mean more layoffs.

Now we have transparency of the problem. Now we can see the challenge – keeping revenue up enough to keep colleges open while not killing any more students or staff. Keep people safe but keep the money flowing. That’s a tough problem but I do have the answer – you can’t. Anyone who says the teaching and learning is just as good as it was a year ago is in denial or a liar (or maybe in denial that they’re a liar). The learning taking place on many of the colleges today is poorly done regardless of the quality of the instructor or the student. Fatigue coupled with curriculum never meant to be taught online to students who were never meant to take these classes online by faculty who were never meant to teach these classes online means learning outcomes blur down to, survival. Nothing more. Senior leadership and trustees must realize they are not only robbing the students tuition but wasting the students’ time and cheating them with a subpar product. It’s a pandemic and the issues need to be addressed as if it were a pandemic – because it is. We will recover but if your plan is to keep the lights on at the students’ expense, it’s a poor plan from poor leadership.

Colleges and universities must work together and present a unified front to the state capitals and Washington. Remember these are the same folks that bailed out Wall Street after the mortgage crisis (which Wall Street causes in the first place). Your voices must be loud and in unison. Do not let them ignore you or surely you will fall, one by one.

There will be more layoffs until this is under control but stop passing that burden down to the students. It’s a pandemic.

Institutions that bring students back on campus to fill dorm rooms to ensure their money flow should be held liable for any deaths they cause. It’s a pandemic.

While there is no argument that success in teaching and learning, historically (but not exclusively) has been through a classroom experience, historically we haven’t done this in a pandemic. Yes, again, it’s a pandemic.

Higher education leaders who would risk students, faculty and staff (and their families) to make up for years of financial mismanagement are playing a dangerous game. Take care of your people, first and foremost and brighter days will return for all. It’s a pandemic.

#highered #higheredleadership #highereducationleadership #highereducation #studentloans #studentloandebt #altraged #election2020 #corruption #elections2020 #education #students #dirtypolitics #teachers #school #teaching #teacher #backtoschool #blmmovement #kamalaharris #joebiden #trump #elizabethwarren #womenempowerment #business #innovation #covid19learning