Thursday, June 11, 2015

US Dept of Education to Forgive Millions in Student Loans

So it begins. After several years of ignoring the difficulties faced by students with over $1 trillion in outstanding loans and no way to repay them, the Feds finally face the music. Corinthian College, which included the well-known Heald College, recently failed after committing numerous ethics violations that amounted to defrauding its students. The US gov't has agreed to forgive student loans which it has frequently claimed cannot be forgiven. So much for that meme.

Heald college students are now eligible to receive student debt forgiveness, despite the often repeated mantra that these loans can't be forgiven, they must be paid off. What about the other colleges, the ones which may be legitimate but which are training candidates for jobs that just don't exist? What about the Arts Colleges that give degrees to artists who cannot be placed, as the Colleges well know. What about the Law Schools, which churn out candidates with law degrees year after year, thus contributing to the glut of lawyers already out there? Who should suffer for their duplicity, the students who legitimately want to work in the legal field? Or the colleges, who know how few jobs there are for their graduates? I believe the banks should suffer, since they are well aware of the low likelihood of adequate employment when they approve the loans, but they know the government will bail them out by paying the interest while graduates are unemployed.

The only way out of this dilemma is a two-step plan, one already approved by Clinton and Sanders:

1. Make colleges free.
2. Forgive all existing loans.

This plan would get the colleges out of the profit-making business. It would also free billions of dollars of debt which young people could use to start businesses or buy homes.

Right now, that $1.2 trillion in debt is being held by wealthy lenders, who refuse to forgive it. Let's put the money in the system back in the hands of those who will use it, consumers and entrepreneurs.

Monday, June 8, 2015

Brownback Obeys Court Order: Kansas Legislature Raises Taxes $471 Million

We saw this one coming. The Republicans in Kansas have no choice but to raise revenues because state law prohibits them from running a deficit in the state budget.

The main problem that Republican legislators face is not a federal court ruling. The problem is embedded in the Kansas state constitution, which says that "the Legislature shall make suitable provision for finance” of public education.

In earlier rulings, Kansas state courts consistently found that

"it is a violation of the Equal Protection Clause of the Kansas and U.S. Constitutions to make the education of a child a function of or dependent upon the wealth of the district in which the child resides."

Yet that is precisely what Brownback and his Republican pals decided to do, claiming that money did not make any difference to the quality of education received. But once again, the courts disagreed, citing studies that showed almost a one-to-one correlation between spending on education and student achievement. The courts not only told the state of Kansas how much to spend on each student, but also insisted that the amount of money spent in poor districts be equal to the amount spent in wealthy districts.

[Note to Paul Krugman: The Kansas state courts do in fact declare that inequality is a major cause of problems.]

Which brings us to the present day, when Kansas Republican legislatures have decided to raise taxes to bring educational spending up to the level ordered by the courts. That means they will need to raise $471 million, the largest tax raise in Kansas history. These are Tea Party Republicans, mind you, so they're not very happy about doing it. They are raising taxes directly on the poor, of course, by taxing alcohol and cigarettes heavily. Rich people will have to pay as well, but rich people are well able to afford extra spending on alcohol and cigarettes. Poor people are not.

True, poor people probably drink too much, and no one should smoke. But taking a fix from an addict is still reprehensible. These people did nothing to deserve such treatment, aside from being poor.