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DeVos-Trump Budget Reneges on Loan Forgiveness, Balancing the Budget on the Backs of Public Sector Employees
An element of the DeVos-Trump budget that has not gotten nearly enough coverage is the Department of Education is planning to propose ending the Public Service Loan Forgiveness Program. As described in last week’s CNN Money blog post by Kate Lobasco, these cuts would impact 400,000 graduates who paid their debts on time for ten years and work in public sector jobs as “…teachers, public defenders, Peace Corps workers, and law enforcement officers”. As Ms. Lobasco indicates:
This October marks the 10th year of the program and the first time anyone will have made enough payments to get their debt wiped away. It’s unclear how much the program will cost the government when its starts to forgive those debts…
The program could cost the government more than originally expected, according to the Government Accountability Office. The Obama Administration had proposed capping the amount borrowers could have forgiven at $57,500, but that proposal was never approved and forgiveness remains unlimited.
The median borrower in the program has more than $60,000 in student debt and almost 30% of them have more than $100,000 in debt, according to a Brookings report.
The article describes the complications the USDOE ran into when they implemented the law, complications that led to confusion on the part of borrowers and lenders and contributes to the inability of anyone to determine what the cost impact would be. When that is the case, the path of least resistance is to spend nothing at all… to effectively renege on the offer made to many students who chose to attend college or graduate school to work in lower paying public sector jobs… or “government jobs” as they would be disparagingly referred to by at least one political party.
And the latest news out of Washington indicates that the USDOE is not going to be offering clear answers on the issuance of loans anytime soon. As reported in a Washington Post article earlier this week, James Runcie, who was appointed chief operating officer of the Office of Federal Student Aid in 2011 and reappointed in 2015, resigned from that post on Wednesday. According to the article “He had planned to retire by the end of the year, according to people who know him, but clashes with the new Trump administration forced his hand.” Those clashes were described in the article as follows:
Runcie said in the letter that the student aid office is contending with pressing projects. Among them: weighing a student-loan-servicing contract bid, shoring up cybersecurity, building out the expansion of the Pell Grant program, tending to loan forgiveness for defrauded borrowers and getting the tax-data-retreival tool in the financial aid application back online. He said his team has asked DeVos to hire staff for additional help but has yet to receive a response.
Instead, Runcie said, the Trump administration has been preoccupied with transferring all or a portion of the functions of FSA to the Treasury Department. Runcie said there have been discussions about creating cross-agency teams, holding numerous meetings and retreats to determine feasibility.
“This is just another example of a project that may provide some value but will certainly divert critical resources and increase operational risk in an increasingly challenging environment,” Runcie said of the Treasury collaboration.
He went on to thank his team but said he has been “encumbered from exercising my authorities to properly lead” and could no longer “in good conscience continue to be accountable as the chief operating officer given the risk associated with the current environment at the department.”
The foot-dragging on hiring, which has been a hallmark of the Trump administration in those departments that are not favored by the GOP, has real world consequences for students, who have been experiencing serious difficulties completing loan applications for the coming year, including the paperwork needed to determine the amount of funding they are eligible to borrow. But when a political party bases its platform on the fact that “government is the problem” it is not surprising that they fail to hire the staff needed tomato government succeed.
NYTimes College Rankings Measure What’s Important: Opportunities for Upward Mobility
Hats off to NYTimes columnist David Leonardt for his effort to devise an publicize the College Access Index, a college ranking metric released in yesterdays’ Times article titled “The Assault on Colleges— and the American Dream”. Unlike the USNews and World Report‘s index, which relies heavily on test scores and endowments, the College Access Index measures each colleges commitment to economic diversity. It bases this commitment on a metric that factors in the percentage of graduates who received Pell Grants, which are issued to students who can least afford college, and the colleges’ net price. As the title of Leonardt’s article intimates, our country appears to be headed in the wrong direction when it comes to providing opportunities for advancement. He opens his article with these chilling paragraphs:
The country’s most powerful engine of upward mobility is under assault.
Public colleges have an unmatched record of lofting their students into the middle class and beyond. For decades, they have enrolled teenagers and adults from modest backgrounds, people who are often the first member of their family to attend college, and changed their trajectories.
Over the last several years, however, most states have cut their spending on higher education, some drastically. Many public universities have responded by enrolling fewer poor and middle-class students — and replacing them with affluent students who can afford the tuition.
The situation is particularly demoralizing because it’s happening even as politicians from both parties spend more time trumpeting their supposedly deep concern for the American dream. Yet government policy is hurting, not fostering, many people’s chance to earn the most reliable ticket to a good job and a better life.
Leonardt doesn’t say so explicitly, but it is evident that the “government policy” he refers to is the extreme aversion either political party has to raising taxes. Some politicians will disingenuously claim that if they raise taxes on the wealthiest Americans those individuals will lower their donations to post-secondary institutions and that will have a deleterious effect on the endowments of colleges. But as Mr. Leonardt’s accompanying heart illustrates, the endowments to public colleges and universities, the post secondary schools whose presumed commitment is to lifting students out of poverty, are substantially lower than those of private colleges and universities. Moreover, affluent donors tend to come from and donate to their alma maters, which more often than not are already well endowed. Finally, those donations are often earmarked for a particular facility or college that the donor identifies… and it could just as easily be new tennis courts, a new student union building, or a spiffy new football stadium that hosts a half-dozen games a year.
And here the “stunning” consequence of not raising taxes to fund state colleges as described in Mr. Leonardt’s column? “It’s as if our society were deliberately trying to restrict opportunities and worsen income inequality.” He offers a series of charts to show the state-by-state cuts to colleges and universities and then offers these insights:
Since 2008, states’ per-student spending on higher education has fallen 18 percent nationwide, according to inflation-adjusted numbers from the Center on Budget and Policy Priorities. The cuts have occurred in both blue and red states, with somewhat larger ones in Republican-run states. States made deep cuts after the financial crisis and have since failed to restore funding, choosing instead to cut taxes or spend money on health care, prisons or other areas.
“States are making it much more difficult for their residents to get high-quality higher education,” Sandy Baum of the Urban Institute said. “They are causing their institutions to charge more, to take more out of state students, to cut quality. It’s very shortsighted.” That’s exactly the right word, because spending on education often more than pays for itself in the long run.
The budget cuts affect every realm of higher education, with some of the biggest damage happening at community colleges and less selective four-year institutions. These campuses enroll the great majority of lower-income college students. Yet flagship public campuses — like those in Ann Arbor, Mich., Boulder, Colo., and Gainesville, Fla. — are important to upward mobility too, given the success of their graduates.
In the last few years, many flagships have begun to recruit more upper-income students from outside their state, including from overseas. Those students don’t qualify for in-state tuition or for much financial aid — and thus help bolster the colleges’ budgets.
Mr. Leonardt notes that college administrators do not describe their motives as being driven by budgets, though. Instead they talk about the need for more geographic diversity or, as he intimates, the need to “game” their standings in the US News and World Report rankings by going after students with the highest test scores possible.
At the very end of his column Mr. Leonardt suggests that the only ultimate fix is to spend more on public colleges, which, of course, requires more taxes… and it is easier to point the finger at “waste, fraud, and abuse”. He concludes with these paragraphs:
This country should also be investing more of its resources in education.
A century ago, it did precisely that, making high school universal and making possible the so-called American century. Today’s economy demands many more college graduates than the country currently has. Producing them won’t be free. But it will be worth it.
The alternative — which is the path we’re now on — is just about the worst economic-development strategy imaginable.
This Just In: Vouchers Do NOTHING to Help Children Raised in Poverty… Do A LOT to Help Affluent Families who “Choose” Private Schools
Anyone who has thought at all about vouchers will not be surprised to learn that despite their advocates’ high-minded rhetoric regarding their desire to “help parents of poor children get a better education” the reality is that vouchers benefit the parents who are already sending their children to private schools with no government support. As the Arizona Republic article reported in an yesterday by Rob Odell and Yvonne Sanchez the primary beneficiaries of Arizona’s voucher program has been affluent parents. They write:
…more than 75 percent of the money pulled out of public schools for the Empowerment Scholarship Account program came from districts with an “A” or “B” rating, the analysis showed. By contrast, only 4 percent of the money came from school districts rated “D” or lower.
The findings undercut a key contention of the lawmakers and advocacy groups pressing to expand the state’s ESA program: that financially disadvantaged families from struggling schools reap the benefit of expanded school choice.
Critics, meanwhile, argue the program is largely being used by more-affluent families to subsidize their private-school tuition bills. The ESA program allows parents to take 90 percent of the money that would have gone to their school district and put it toward private school, home schooling and other educational programs.
Originally launched as a means of providing options for parents of special needs children, Empowerment Scholarships have grown by 2,543 percent since the ESA program’s start, with a total of $99.7 million paid out over the past seven years. And where does the money for the “Empowerment Fund” come from? Taxpayers!
Unfortunately for the children raised in poverty in AZ, their State constitution enables this hoax to be carried out by legislators. At the conclusion of her post that brought this to my attention, Diane Ravitch poses two questions:
Hello, Arizona taxpayers! How do you feel about your taxes subsidizing the private school tuitions of rich kids?
Hello, retirees! Do you really want your taxes to be used to destroy the public education system that benefited you, your children, and your grandchildren?
I’m afraid that the answer to both questions is: “We don’t care if it will lower our tax burden in the long run.”
President Trump’s Budget Has $2,000,000,000,000 Error… It Should be DOA in Congress
I’ve read scores of articles lamenting the huge cuts to the safety net incorporated in President Trump’s budget along with the huge tax cuts for billionaires and the huge windfall for the military. But Jonathan Chait’s article analyzing the mathematics and revenue assumptions behind the budget in NY Magazine should be front-and-center in any discussions in the budget… because it flags a $2,000,000,000,000 miscalculation! One would think that the Secretary of the Treasury would be concerned about a budget that includes an error of that magnitude… but here’s Steven Mnuchin’s response when the miscalculation was brought to his attention: “This is a preliminary document that will be refined”.
Here’s hoping that it is completely re-worked and level heads prevail when revenues are forecast and safety nets are removed. If not, we’re headed for even darker days.
Study Identifies 52 Genes with Links to Intelligence. What are the Consequences for Schools?
The NYTimes writer Carl Zimmer reported today that scientists have linked 52 genes to “human intelligence”, a “…significant advance in the study of mental ability” that could have repercussions in public education in the future. As Zimmer writes at the outset of his article, and emphasizes throughout, these findings do NOT mean that intelligence is immutable:
These genes do not determine intelligence, however. Their combined influence is minuscule, the researchers said, suggesting that thousands more are likely to be involved and still await discovery. Just as important, intelligence is profoundly shaped by the environment.
Still, the findings could make it possible to begin new experiments into the biological basis of reasoning and problem-solving, experts said. They could even help researchers determine which interventions would be most effective for children struggling to learn.
I was frustrated to read this, because it is possible that researchers could use science to inform instructional practices… but only if the Federal government provided the funding for the kinds of research that would be required. I was even more frustrated to read Mr. Zimmer’s conclusion about actions that could be taken to rectify the proven links between genes and the presence of lead in water and the absence of iodine in certain foods. At the conclusion of his article, Mr. Zimmer wrote that Paige Harden, a psychologist at the University of Texas, who was not involved in the study, looked at the findings and concluded:
…we don’t have to wait for such studies to change people’s environments for the better. “We know that lead harms children’s intellectual abilities,” she said. “There’s low-hanging policy fruit here.”
In a rational world where scientific findings matter, the regulating of lead would be “…low-hanging policy fruit”. But in the world we are living in today “government regulations” are viewed as a cumbersome obstacle to profit-making and, therefore, should be avoided. Here’s hoping that science prevails over politics in this battle.
More on DeVos-Trump Budget from Jeff Bryant
Blogger Jeff Bryant digs deeper into the DeVos-Trump USDOE budget and finds even more disturbing information on how education funding will be redirected away from children raised in poverty and toward school choice programs. In a post picked up by Common Dreams, Bryant writes:
Trump and DeVos would take $1 billion out of the federal government’s Title I funds – money sent to the states to support educating poor children – to a new grant program that incentivizes those states to fund the competitive privately-operated schools such as charters and religious schools. The grant program, the Post explains is called Furthering Options for Children to Unlock Success (FOCUS) that only goes to school districts that “agree to allow students to choose which public school they attend – and take their federal, state and local dollars with them.”
This proposal, often called “Title I portability,” was proposed by Republicans during the Obama administration and met significant opposition from Democrats. The Center for American Progress called the scheme “Robin Hood in reverse” and declared, “Portability actually drives resources away from high-poverty districts and into more affluent ones.”
Nevertheless, Title I portability is based on the general principle that education funding should “follow the child” – a misguided practice many Democrats espouse also – so it continues to live on in the foundation of all school choice initiatives.
What Bryant DIDN’T note in his post is the irony of the GOP using the same carrot-and-stick gambit to promote choice as the Obama administration did in Race To The Top to promote adoption of the Common Core. So much for abandoning the principle of the Federal government dictating to state and local districts!
Bryant closes his post with these paragraphs, which provide some degree of comfort for those of us who believe the DeVos-Trump budget is a disaster… but the final, blog faced sentence tells a chilling truth:
Not many people who’ve already had a chance to comment on this education budget, including Post reporters who brought it to light, think it has much of a chance of getting through Congress.
The circus of scandal that is sidetracking the Trump administration’s plans for tax reform, healthcare, and infrastructure may thwart any progress on his education plan too. But let’s be clear that this budget reflects the education values that have guided, for years, an agenda to privatize public education.
Supply Side Economics: A Bad Idea that Will Not Die
Dominic Rushe, wrote an article in yesterday’s on-line Guardian titled “We Are A Cautionary Tale: Kansas Feels the Pain of Massive Trump-Style Tax Cuts”, describing the horrific consequences of Governor Sam Brownback’s supply-side economics on Kansas’ budget and citizens. The article describes the Laffer Curve that purportedly “proves” that tax cuts will yield increased hiring as businesses are freed from paying taxes. But all of the evidence from Kansas and the national experiment with Loafer’s ideas demonstrate that the tax cuts go into the pockets of the wealthiest people in the state and do nothing to increase hiring.
Mr. Rushe quotes Duane Goossen, the former Kansas secretary of administration, who examined the consequences of the GOP legislature’s tax cuts and concluded “There is no evidence whatsoever that suggests this plan worked.”
Instead, Goossen claims, the money has gone to a small group of wealthy Kansans while the state’s budget has been left with a roughly $1bn shortfall. Its school system, once its crown jewel, has suffered year after year of cuts, and its savings are gone. The non-partisan Tax Policy Center calculates Trump’s tax plan would cost $6.2tn over the first decade.
“We are a cautionary tale. It sounds great, everybody gets a tax cut and it’ll balance – but it just doesn’t work,” said Goossen.
As noted in many previous posts on Kansas, and underscored in the Guardian article, public schools have taken the biggest hit as a result of this plan, which is loathed by virtually everyone:
Part of the dislike stems from what the cuts have done to Kansas schools. In March, the Kansas supreme court ruled that state was underfunding schools by hundreds of millions of dollars per year.
One of the parents affected is Judith Deedy, who moved from Cleveland to Johnson County, by the Missouri state line, in 2004 – in large part because of the great reputation of the local schools. “During the recession I got it that budgets were being cut, but when we came out of recession, it just kept on happening. We are seeing cuts year after year that add up to an entire academic career.”
Class sizes are up, teachers are not being replaced, art and music are being slashed. “I’m lucky. This is still a relatively good area, [but] small towns are losing schools. In Wichita, they shortened the school year and increased the length of the school day. No one likes it,” she says. Small towns that lose a school are being devastated by the cuts, and parents are worried schools may not reopen after the summer break unless an agreement can be reached in Topeka.
“I chose to live in Kansas. We don’t have beaches, we don’t have mountains, but we have great public schools. Well, not any more. There was no shot of adrenaline – you didn’t have to be an economist to see that. The cuts have been so deep we may never get back to where we were,” said Deedy.
Mr. Goossen is appalled to think that this “model” is being advocated in Washington. He notes that the plan’s similarity to the one that has left Kansas in crisis is “unbelievable”. While he and all but the wealthiest Kansans have witnessed the failure of the Gaffer curve, those in Washington want to believe in the agreeable fantasy that tax cuts will yield higher employment and greater affluence for all. It won’t happen… and if the cuts are as deep as Mr. Trump wants them to be, we may never get back to where we are now… and that is not nearly good enough to help those children who are raised in poverty.
Vote even if you think it doesn’t matter…. and be grateful you still can!
