‘I’m A Student-Debt Slave.’ How’d We Get Here?

From WBUR NPR Radio in Boston. July 11, 2016, By

 (Chris Nickels for NPR)(Graphic by Chris Nickels for NPR)

Most everyone knows someone adversely affected by student debt: More than 40 million Americans are shouldering a crippling $1.3 trillion in loans.

That burden is obstructing careers, families, dreams, employment and even retirement.

Uncle Sam and Wall Street have made lots of money off the crisis.

We’ve covered this issue in many ways, including the debates, the players, tips for easing debt, how debt is affecting young people’s decision making and a lot more.

But how did we get here? Who has profited most and how?

The Center for Investigative Reporting and its weekly radio show Revealrecently dug deep into these questions and profiled people who’ve been affected. I reached out to CIR reporter Lance Williams, who co-investigated the story with journalist James B. Steel. Here’s an excerpt of our conversation.

Let’s talk about the student lending giant Sallie Mae. You report how the decision to privatize Sallie Mae in 1997 played a huge role in helping to create this debt crisis. Explain.

Sallie Mae was a government-affiliated corporation whose board was made up in part of public officials. When it first came into existence, it was supposed to help create a market for the student debt that the feds were issuing. But after privatization, it became a full-service, for-profit corporation that really “verticalized” its involvement in the student debt industry, everything from issuing loans to running collection bureaus. The concern now is we replaced a program whose real purpose was to help people go to college with something where that’s kind of a secondary goal. The primary goal, of course, for for-profit institutions is the bottom line.

Privatization of Sallie Mae was a key victory for banking and financial industry lobbyists when the Republicans controlled Congress in the mid-’90s, yes? President Clinton tried to maintain his new direct-lending program, which made Uncle Sam the lender — not just insurer — of the loans.

Yes. President Clinton wanted to take back the issuing of federal student loans. In the dust-up over that, he was forced to accept the privatization of Sallie Mae to get what he wanted. This was the [Newt] Gingrich Contract with America-era Congress. There was widespread suspicion that government can’t do things efficiently and we need to get the private sector to roll up their sleeves and make this stuff work, and that’s what we got.

Suddenly, hedge funds, investors, lots of banks had a more direct role, not just in lending, but in the fees, services, in the collection. And Sallie Mae and other financial organizations began marketing private loans with higher interest rates and fees and with fewer relief options?

Right. All of the functions of the student loan program originally were run by government agencies, bureaucrats, I guess you could say in a dismissive way, but they were not motivated by profit. They were there to make the program run. When you privatize collections, you get really aggressive companies that come in there and work really hard to get the money back. That’s totally understandable in the corporate context. But we started this trying to help people get educated and get on with their lives. And now you’ve got thousands upon thousands of students who fall behind on their debt harassed from dawn to dusk, hassled, pushed hard, and in some cases even when they aren’t in arrears on their debt, having to deal with all kinds of crazy stuff that’s really in the name of a government program.

[Note: Sallie Mae declined to comment on CIR/Reveal‘s report. At times, company officials have spoken publicly about their views of the industry and how it has evolved — here, for example. In 2014, Sallie Mae spun off many of its operations into a separate company called Navient Corp., which today is the largest servicer of federal student loans and serves as a loan collector on behalf of the U.S. Department of Education.]

You write that in the three-year period 2010 to 2013, when students began to shoulder more and more debt, Sallie Mae’s profits were $3.5 billion. And the former CEO of Sallie Mae, Albert Lord, was instrumental in that. In your story, Lord says, “Look, it wasn’t the private lenders that made this mess.” He blames universities and the government. And universities, and state governments in particular, are not blameless here. Budget cuts led schools to raise tuition, and the debt burden widened. Doesn’t Lord have a point?

He does. There’s been tremendous disinvestment in public higher education in our country. It peaked in the 1970s. Our reporting showed that if state legislatures had continued to support higher ed at the rate they were in 1980, they would have pumped an additional $500 billion, billion with a B, into state university systems. Interestingly, that’s just about how much outstanding debt is now held by people who attended public colleges and universities. You see the symmetry. As the states disinvest, the burden is picked up by the students, and the way they pay for it is they borrow the money.

We talk about the numbers and the policies and the politics a lot, but of course there’s also the stress, angst and pain of having this massive debt burden hanging over your life. It can start to control your life. You talked with a 28-year-old named Jessie Suren who says “I’m a student debt slave.” Tell us about her.

Jessie went to elementary and middle school at the Hershey Academy, which is an institution in Pennsylvania to educate poor children. She had a mom but no dad. No one in the family had been to college. She wound up doing well in high school and going to La Salle University, a private school in Philadelphia. She borrowed pretty heavily. She had career aspirations, wanted to be in the U.S. Marshals Service. That did did not work out. Suddenly, she found herself spit out into a bad economy with some $76,000 in debt. Her life since then has been just scrambling to make the payments. Her mom co-signed some of the loans. An aunt co-signed some of the loans. She didn’t want to get mom and aunt jammed up, and so she’s worked as many as three bad jobs at a time just trying to keep on top of the loans. One of the most interesting jobs she had was as a student-loan debt collector.

Painful irony there.

Yeah, she said she was working for the enemy. She went to work for a state agency in Pennsylvania. Her job was to sit in the cubicle, and they’d robo-dial the debtors and then she was trying to get some money out of them. She said, “This is going to be me in a couple of years.”

There are many Jessies across the country, as we now have 40 million Americans shouldering more than $1 trillion in debt.

I think what’s troubling to reflect on is we made reforms, the Obama administration has made some strides, Congress has made some reforms, and if you’re borrowing money now, you’re much better informed and you have much easier payment options that are at least possible for you. For people who’ve already got the loans, and that’s all those 40-plus million you said, the relief is not really on the horizon.

Your story really highlights that this isn’t just some problem of people in their 20s and 30s as some might assume. You talked to retirees, professionals nearing retirement. It’s affecting their life a long time after college, their retirement plans. Tell us a little about Professor Mary Franklin.

Professor Franklin got a Ph.D. in special education and taught for many years at the University of Cincinnati. Borrowed a modest amount of money, I think under $25,000, to accomplish the Ph.D. She admits that she was not at all financially savvy and just has been paying the minimum on that loan ever since. She’s now in her 60s, she got those loans when she was in her late 20s, early 30s, so she’s actually paid the debt for her entire adult life.

Just to show you how intense it can get, late in her career, she [became ill] and the wheels came off her life. During that period, before she found relief and got better, she wasn’t even opening the mail at home. Of course, the student loan that she had been paying on for 25 years was not getting paid, and so she had these guys calling her up and saying they were going to go after her disability retirement check, which was all she was living on at the time. That’s on a loan that had been paid on for many, many years.

Let’s talk relief. The Obama administration has taken some steps to try to ease the burden, including the rise of income-based repayment plans, capping loans at 10 percent of income, cutting the fees paid to private banks who act as intermediaries, among other moves. Any evidence that those changes are helping?

I think they do. If you’re borrowing now, you’re going to have an easier time of it. The trick is trying to figure out how to provide some relief for two generations of Americans who have borrowed and haven’t been able to pay those loans off. We met people whose Social Security was being garnisheed for student loans. We wrote about a murder victim whose estate was pursued for his student debt. You can’t discharge this debt any other way than by paying it, really. It’s almost impossible to use bankruptcy to discharge student loans. Once they’ve got you, there you are.

As you write, the debt crisis is something of a microcosm of America’s inequality. Today, the least well off often end up the worst affected. Couldn’t this worsen income inequality for years, even decades, to come?

I think so, because you’re taking away people’s ability to participate in the economy, buy a house, buy a car, have a family, and the debtor class is restricted from these things and the debt-free class is not. You can just see it happening. The other element of this, of course, is that low-income people, especially low-income people with no history of college education in their families, tend to be targeted by the for-profit universities. They’re really their market target. You have poor people, perhaps unsophisticated about higher ed, loading up on private loans for an education that’s supposed to bring them up a rung or two on the economic ladder, but end up dropping out and are stuck with $12,000 or more in debts and no way to pay it.

What are a few potential ideas to help ease the worse-off? Reduce the power of these private collection agencies? Debt forgiveness? Further reorganization of Sallie Mae? Revolution?

De-privatizing is a suggestion that we’ve heard that would at least take away some of the more intense and tough aspects of being a student debtor. If you could return collections and so forth to a government agency where the motivation is not to grab every last buck, that would take some of the sting out.

The real issue is how can we help people by forgiving some of the huge debt they have, people, say, in their 40s who have already paid far more than they ever borrowed. What can we do to forgive that debt? That runs up against the tremendous expense it would be. Also, of course, the government makes money off student loans, makes a lot of money. By some accounts, there’s a GAO report that says for federal student loans issued between 2007 and 2012, the government got $66 billion — billion with a B — profit income, revenue, off that over the life of those loans by the time they’re paid off. That’s a big chunk of money straight out of the general fund if you wanted to forgive it.

Uncle Sam would feel that; they’re making big money off this.

They’d have to make it up somehow, yes.

Copyright NPR 2016.

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The Bell Curve and Pearson

Pearson Cares. Really.
by Dr. Diane Ravitch

This interview with John Fallon, the CEO of Pearson, was conducted at the Aspen Ideas Festival, an event that is held annually and completely dominated by reformers and entrepreneurs.

Pearson has a responsibility to end educational inequities, he says.

Perhaps someone might explain to him that standardized tests are normed on a bell curve and the bell curve never closes. The bottom half is always populated by disproportionate numbers of children who are disadvantaged by poverty, by language, by disability.

Inequity is baked in to standardized tests. By design.

And, the states and districts that spend hundreds of millions to test children are diverting that money from teaching them.

Even worse, the tests are so secret that teachers and parents never learn about the strengths and weaknesses of individual children.

And that doesn’t even touch on the problems with the EdTPA and the GED.

Perhaps Mr. Fallon can tackle these problems.


dianeravitch | July 11, 2016 at 11:00 am

How to use research & common sense, community, time, and democracy to rebuild schools

Research-Based Expectations for Implementation of the Community Schools Initiative in New York City

Research offers strong cautions against claims of miraculous school change. Instead, changing a school’s culture and practices in sustainable ways that improve student learning takes years of commitment by all stakeholders in the school.

Attempts to dramatically turn around schools to show quick improvements in student outcomes are often counterproductive, resulting instead in school conditions associated with persistently low performance.

Many quick school turnarounds, like those initiated via the federal School Improvement Grant program, were associated with unintended, negative outcomes such as high teacher turnover, large numbers of inexperienced teachers, administrative instability, poor school and classroom climate, and socioeconomic segregation.

In contrast, reform efforts grounded in the idea of sustained improvement over time are more likely to improve student achievement along with other critical aspects of the school.

The evidence is clear: in the first three to four years, schools generally achieve only partial implementation of complex change efforts, with full implementation taking upwards of five to 10 years.

Part of the challenge in turning around schools is that outside-of-school factors likely account for twice as much of the variance in student outcomes as do inside-of-school factors.

Accordingly, the community schools approach—one of the most prominent and research-based approaches to sustained reform—addresses the academic, social-emotional, and health needs of children as well as the capacity to systemically meet these needs in communities of concentrated poverty.


To read and download the full report go here: National Education Policy Center (NEPC): Also posted by the WordPress blog Seattle Education

WBUR Commentary: Why One First Grade Teacher Is Saying Goodbye

David Weinstein has taught first grade at the Pierce School in Brookline for 29 years. He’s gifted, dedicated and beloved — so I was stunned to find out that he is retiring, early.

In his early 50s, he’s leaving as the Brookline schools are immersed in contentious contract negotiations, largely about the data and documentation workload for teachers. This isn’t just a Brookline issue — it’s part of the national story of education reform.

Weinstein says it’s the main reason he’s stepping down. Even in a progressive town with an acclaimed public school system, he says, the paperwork is overwhelming.

I guess the big-picture problem is that all this stuff we’re talking about here is coming from on top, from above, be it the federal government, the commonwealth of Massachusetts, the school administration. But the voices of teachers are lost. I mean, nobody talks to teachers. Or, if they do talk to teachers, they’re not listening to teachers.       — David Weinstein

Postmodern Test Theory (2014) by Robert J. Mislevy

Postmodern Test Theory (2014) by Robert J. Mislevy (University of Maryland, College Park)

If we were to look at a functional definition of professional teacher practice in the future, the practice would include the goals in the following quote and in gaining the trust of the public.

The full article may be accessed at: Teachers College Record Volume 116 Number 11, 2014, p. 1-24 

The following quote is under the section titled: RAPPROCHEMENT

Good teachers have always relied on a wider array of means to learn about how the students in their classes are doing and to help plan further learning. Alongside the tests and quizzes they design and score under the mental measurement paradigm, they also use evidence from projects, work in class, conversations with and among students, and the like—all combined with additional information about the students, the schooling context, and what the students are working on. Teachers call these “informal” assessments, in contrast with the “formal” assessments typified by large-scale standardized tests.

The stark contrast between formal and informal assessment arises because to understand students’ learning and further guide it, teachers need information intimately connected with what their students are working on, and they interpret this evidence in light of everything else they know about their students and their instruction. The power of informal assessment resides in these connections. Good teachers implicitly exploit the principles of cognitive psychology, broadening the universe of discourse to encompass local information and address the local problem at hand. Yet precisely because informal assessments are thus individuated, neither their rationale nor their results are easily communicated beyond the classroom. Standardized tests do communicate efficiently across time and place—but by so constraining the universe of discourse that the messages often have little direct utility in the classroom.

The challenge now facing neopragmatic postmodern test theory is to devise assessments that, in various ways, incorporate and balance the strengths of formal and informal assessments by capitalizing on an array of methodological, technological, and conceptual developments.

Deborah Meier: The Value of Tenure and Seniority

Readers note: This post was  originally in Diane Ravitch’s Blog on 18 June 2016

Background: Deborah Meier, founder of Central Park East in New York City and the Mission Hill school in Boston, explains the rationale for tenure and seniority from her perspective as a principal.


Tenure and seniority are often attacked by people of good will. As a former principal of several schools, I embrace it. The culture of Central Park East and Mission Hill depended on both, even if there were occasions when I wished otherwise. I’m not alone, as a principal, in this view.

The kind of noncompetitive shared “ownership” over the school that the staff and faculty displayed over and over and over again rested in large measure on their not having to balance their personal self-interest and their devotion to the school. There is nothing evil in our desire to have a steady paycheck, to feel secure even if you irritate those in charge, and to want to be able to plan one’s life ahead. These are healthy qualities that human beings should not be ashamed of. As FDR once noted, “freedom from fear” is one of the basics that democracy rests on—–fear makes for bad practice of teaching and democracy.

My capacity to provide leadership where needed, and build a strong staff rested on the fact that there were some rules of the game we couldn’t change, and were not available to our temporary biases. I could be strong and as persuasive as I could be without fear of intimidating others to follow my lead, or silence even young and inexperienced staff from venturing forth with their opinions—as long as I did not have the power to wreak havoc on their lives—and cut off the lively ideas that might otherwise inconvenience me. Experience close to home reminds me that even tenured teachers can lose their jobs if they annoy the principal too much in settings where staff cohesion is weak. Only such “irritation” is sufficient to get many principals to take the trouble to “get rid” of a staff member—-and cause can always be dug up when the desire is strong enough.

Finally, it’s hard to believe that some wouldn’t be influenced by having to pay senior teachers so much more than first year teachers, thus creating a tendency to punish experienced teachers who have to constantly outperform newer and younger colleagues. If we want people to stay we need to offer them a good shot at making decent pay as they get older. Given that most newbies leave within the first 5 years—perhaps inevitable—it makes sense to pay them less as they learn the craft, and while they have fewer adult responsibilities. But once again, as with tenure, if decisions about pay are made by one’s principal there is a never-ending tendency to “please the boss”. When someone should not be teaching there should be peer reviews, with the principal being a part of the process, for weeding out those who, at the present time, do not seem ready to be teachers.

Denis Ian on the True Cost of the Teacher Exodus: The End of Wisdom

Readers note: This post was  originally in Diane Ravitch’s Blog on 17 June 2016


Free market capitalism creates jobs; therefore, it is imperative that the legislature and government agencies decrease unnecessary regulations that cause intrusions and administrative delays that drive up business costs. Recruiting and retaining businesses and industries in the State of Washington requires a business climate that will enable them to successfully compete locally, nationally, and globally. State agencies should operate openly and consider the comments and concerns of citizens.

There are simple reasons why teachers are fleeing the profession, college prep programs are drying up, and master teachers are rushing to retirement. This reform has gutted any attraction the profession ever held. But, as a master teacher, I see the destruction in different terms than just stark numbers.

Teachers know how schools change over time. Serve a few decades and you’re not much bothered by the continuous, subtle adjustments from year to year. Schools are ever in a state of reform. They have to be.

Way back when, the drug stuff had us all alarmed … and the beer stuff, too. That was everyday teen stuff leaking into our narrow world. We had run-ins with hygiene and sex and cigarettes. And, of course, drunk driving. Daring schools talked about daring stuff beyond classrooms … like alcohol and divorce … and physical abuse.

Then there was AIDS. That was extra-delicate and owned a frantic immediacy. The right words were so hard to find. Lots of times, I felt like I was killing innocence. 

Other moments were colored by usual stuff. Usual for adults, trauma for kids. Big difference.

Not many of us got much help from teacher-prep programs or post-grad classes. Not about those issues. There weren’t many best-sellers on the issues that seeped into our classrooms. No sexy titles like you might find today … like “ Beer and the Back Seat” … which would kill two sins at once. Or “I’ll Love You for All of Next Week” … which might seem cute, but is likely to be an overly graphic how-to manual for very young teens in this age of sexual over-kill. That’s the sad trend.

Sexting is now a middle school sport. And cell phones are sex toys. Hazing never really goes away … it just morphs into some new ugliness. 

Today, schools are nimble emergency responders … making mighty efforts to cushion kids for any and all eventualities. Lots of schools have figured out how to deal with very different students with very different issues who weren’t part of the landscape even a few years ago. Not an easy feat when the student body itself is lost in the weeds of immaturity. Lots of adults become stumble-bumblers in such situations … and it’s often these kids who sort of tutor us big dopes.

My point? Where does generation after generation of teachers get their wisdom for things like this? … and for other topics that seem invisible to outsiders?

Who whispers to them?

Who makes the greenhorns less green and the naive less naive? Who gives the next generations their reality booster shot? … and gets them to understand the nuances of their craft? Who oracles them?

Know who? The folks walking out that back door. And they’re leaving in droves. 

They’re walking away from the New Nonsense and the New Idiocy. They’re leaving because they have something the New Intruders have never possessed … integrity. And they won’t ever compromise that. And they won’t betray kids. Not ever.

This sudden exodus isn’t just the usual changing of the guard. Nope. When this brigade of Old Souls … these Gray Heads … gather up their experiences and box their lives and leave for good … they’ll be packing up decades of wisdom that will no longer be at the ready for the newbies who are never, ever as ready as they think.

The most important things learned about teaching happen in whispers, asides, or in simple observations. 

It happens in fable form and in funny-sincere recollections of long disappeared characters. And it could happen anywhere … at any time. In hallways. At a copy machine. Or the parking lot. In a stairwell or in an empty classroom … very late in the day … when the school goes silent save for the sounds of sloshy mops and things on squeaky wheels. 

And now those splendid souls …the Wisdomers … they’re leaving. Vanishing.

And in their moving vans are the moving stories young teachers need to know … because those stories are informal survival guides. They’re reference material for soothing young souls and spackling torn hearts. What’s in those boxes are manuals for curing failure and repairing kids who’ve had a bottom-bounce. Those are medicine boxes with un-named elixirs for hurts of all sorts. And all of this magic is flying out the back door of schools.

Those master teachers are the antidote for this sick reform. But they’ll be gone when their wisdom is most needed.

Someday … not sure when, but someday … we’ll come to our senses. We’ll have a national mea culpa. And we’ll get our educational priorities back in common sense rhythms. But it’s not going to be easy at all. It’s gonna be hard stuff.

All of the wisdom whispers will have disappeared. And “starting from scratch” won’t be a cliche any more. It’ll be a reality. A bad reality.

Wish us luck. We’re gonna need it.

Denis Ian