Archives for category: Higher Education

The Ford Foundation decided to eliminate one of its best programs. This program has encouraged some of our most outstanding scholars of color. Who made this decision and why?

A millionaire foundation president constantly surrounded by controversy and verbal missteps (Google Darren Walker), a former University president who resigned, and the “cold” wealthy Apple tech heir just killed the most successful philanthropic diversity effort ever. Darren Walker, Francisco G. Cigarroa, and Laurene Powell Jobs are sunsetting the Ford Fellowship. For decades, this program has been addressing educator diversity in higher education and enhancing the contributions of faculty of color. Despite its unrivaled accomplishments— in an instant— one of the most successful diversity programs of all time— 6,102 fellows since the inception of the program in 1967— is now in the dustbin of history.

 

Educator diversity is one of the biggest challenges facing education today. It is an acute issue as students of color rarely encounter teachers of color in K-12 and then have the same experience in higher education. The last decade of research has shown that higher education hasn’t moved the needle and improved diversity in an appreciable way— but the Ford Fellowships clearly have. Mary Beth Gasman, a Professor at Rutgers University, said in the Washington Post that higher education has not solved this problem because colleges and universities “don’t want” faculty of color and now neither does the Ford Foundation.

 

In an email message to Ford Fellows, Darren Walker, Francisco G. Cigarroa, and Laurene Powell Jobs and the Ford Foundation board offered a couple of flawed reasons for killing the prestigious and impactful program. They argued that “winding down” the Ford Fellowships is acceptable because the Gates and Lumina foundations participate in higher education philanthropy. Leaving to the side the failures that the Gates Foundation has wrought on K-12 and Higher Education, it’s a straw man argument because unfortunately neither of these— nor any other foundation— are funding educator diversity in higher education in “meaningful and inspiring ways” as the Ford Foundation fellowships have done.

 

Walker, Cigarroa, and Jobs and the Ford Foundation board also engage a sleight of hand by mentioning that they will refocus on “social and racial justice.” What they neglect to mention is that the Ford Fellowship have supported the intellectual foundation of grassroots social and racial justice activism and movements. For example, while the program has encompassed many intellectual disciplines, this award has identified and supported some of the leading educational scholars and movement influencers such as Travis Bristol (Educator Diversity), Keffrelyn Brown (Culturally Relevant Pedagogy), Julian Vasquez Heilig (Community-Based Education Reform), Delores Delgado Bernal (Latinx students and schools), Daniel Solorzano (Critical Race Theory), Angela Valenzuela (Ethnic Studies), Chezare Walker (Black Youth and schools), Bryan Brayboy (Indigenous students and schools) and many more. I can only imagine how slighted the scholars of color supported by this fellowship may feel by this gross oversight of their widespread impact on social and racial justice. What Walker, Cigarroa, and Jobs and the Ford Foundation board don’t realize is that the fellowships are funding social and racial justice intellectual capital across the nation and globe. If they would have asked the Ford Fellows, they may have realized this. Furthermore, to set up a competitive and false dichotomy between funding Ford Fellowships and racial justice and movement building is insulting and demeaning for Ford Fellows and communities of color.

 

Killing the Ford Fellowships is not actually a “judgement call” as they say in their closing statement, but rather severe ignorance of the incredibly rich history of the Ford Fellowship. The closing of the Ford Fellowships just compounds Darren Walker’s ongoing errors, controversies, and missteps as a leader. Maybe for Darren Walker this “judgement call” is payback as the Ford Fellows created a movement and publicly protested his extensive support of prisons.

 

So, what is to be done? How do we hold the board members of the Ford Foundation representing Xerox, Ford, Davidson Kempner, Aluko & Oyebode, Cisco Systems, Sigma Impact, Mastercard and others accountable? Do you know how to reach out to them? Should Ford Fellows boycott the proposed 2023 conference? If Walker, Cigarroa, and Jobs and the Ford Foundation board were truly interested in movement building, the fellowship could have been reworked to encourage scholars to apply who are leaders and were identified as future leaders in social and racial justice. This new approach would add to the heritage of the Ford Fellowships and honor the legacy of leadership whose shoulders Walker, Cigarroa and Jobs and the Ford Foundation board stood on— but have now fallen off. By simply killing the Ford Fellowships, Darren Walker, Francisco G. Cigarroa, and Laurene Powell Jobs and the Ford Foundation board are destroying the intellectual foundation of social and racial justice movements and killing philanthropy’s most successful diversity program of all time. Shame on them.

Lindsay Owens and David Dayen note that some of the most outspoken critics of Biden’s decision to forgive up to $20,000 in student debt are Obama-era economists. Republicans have called it “socialism” and worse, but some Democratic economists are also upset. Owens and Dayen attribute their anger to the failure of Obama’s policy to solve the home foreclosure crisis.

They write:

President Biden’s long-awaited decision to wipe out up to $20,000 in student debt was met with joy and relief by millions of borrowers, and a temper tantrum from centrist economists.null

Moments after the announcement, former Council of Economic Advisers Chair Jason Furman took to Twitter with a dozen tweets skewering the proposal as “reckless,” “pouring … gasoline on the inflationary fire,” and an example of executive branch overreach (“Even if technically legal I don’t like this amount of unilateral Presidential power.”). Brookings economist Melissa Kearny called the proposal “astonishingly bad policy” and puzzled over whether economists inside the administration were “all hanging their heads in defeat.” Ben Ritz, the head of a centrist think tank, went so far as to call for the staff who worked on the proposal to be fired after the midterms.

Histrionics are nothing new on Twitter, but it’s worth examining why this proposal has evoked such strong reactions. Elizabeth Popp Berman has argued in the Prospect that student loan forgiveness is a threat to the economic style of reasoning that dominates Washington policy circles. That’s correct. But President Biden’s elegant and forceful approach to tackling the student loan crisis also may feel like a personal rebuke to those who once worked alongside President Obama as he utterly failed to solve the debt crisis he inherited.

Let’s be very clear: The Obama administration’s bungled policy to help underwater borrowers and to stem the tide of devastating foreclosures, carried out by many of the same people carping about Biden’s student loan cancellation, led directly to nearly ten million families losing their homes. This failure of debt relief was immoral and catastrophic, both for the lives of those involved and for the principle of taking bold government action to protect the public. It set the Democratic Party back years. And those throwing a fit about Biden’s debt relief plan now are doing so because it exposes the disaster they precipitated on the American people.

One reason the Obama administration failed to swiftly help homeowners was their obsession with ensuring their policies didn’t help the “wrong” type of debtor.

President Obama campaigned on an aggressive platform to prevent foreclosures. Larry Summers, one of the critics of Biden’s student debt relief, promised during the Obama transition in a letter to Congress that the administration “will commit substantial resources of $50-100B to a sweeping effort to address the foreclosure crisis.” The plan had two parts: “helping to reduce mortgage payments for economically stressed but responsible homeowners,” and “reforming our bankruptcy laws” by allowing judges in bankruptcy proceedings to write down mortgage principal and interest, a policy known as “cramdown.”

The administration accomplished neither. On cramdown, the administration didn’t fight to get the House-passed proposal over the finish line in the Senate. Credible accounts point to the Treasury Department and even Summers himself (who just last week said his preferred method of dealing with student debt was to allow it to be discharged in bankruptcy) lobbying to undermine its passage. Summers “was really dismissive as to the utility of it,” Rep. Zoe Lofgren (D-CA) said at the time. “He was not supportive of this.”

Summers and Treasury economists expressed more concern for financially fragile banks than homeowners facing foreclosure, while also openly worrying that some borrowers would “take advantage” of cramdown to get undeserved relief. This is also a preoccupation of economist anger at student debt relief: that it’s inefficient and untargeted and will go to the “wrong” people who don’t need it. (It won’t.)

For mortgage modification, President Obama’s Federal Housing Finance Agency repeatedly refused to use its administrative authority to write down the principal of loans in its portfolio at mortgage giants Fannie Mae and Freddie Mac—the simplest and fastest tool at its disposal. Despite a 2013 Congressional Budget Office study that showed how modest principal reduction could help 1.2 million homeowners, prevent tens of thousands of defaults, and save Fannie and Freddie billions, FHFA repeatedly refused to move forward with principal reduction, citing their own efforts to study whether the policy would incentivize strategic default (the idea that financially solvent homeowners would default on their loans to try and access cheaper ones).

Virtually everyone involved with the housing system was stunned that the options of cramdown and principal reduction weren’t taken. Banks literally held meetings in expectation of Obama’s team requiring writedowns, until they didn’t.

Instead, the Obama administration rolled out the industry-backed Home Affordable Modification Program (HAMP), relying on the voluntary cooperation of servicers to modify mortgages. The program was, even by the administration’s own modest objectives, a failure, ultimately reaching less than a quarter of the three to four million homeowners it hoped to target. In the critical first two years, the administration did not even spend 3 percent of what they were allotted to save homeowners.

Just as with cramdown, one reason the Obama administration failed to swiftly help homeowners was their obsession with ensuring their policies didn’t help the “wrong” type of debtor. When Obama first announced HAMP in 2009, he said the program would “not reward folks who bought homes they knew from the beginning they would never afford.” The resulting “Goldilocks” proposal, with its focus on weeding out undeserving borrowers, would not be available to homeowners with incomes too high or too low and would be backstopped with voluminous income and financial verifications (in many cases, more than what was required to take out the loan in the first place). Treasury also tweaked the program numerous times as they went along, confusing servicers and borrowers. The barrage of paperwork ground the program to a halt at many servicers, and ultimately nearly a quarter of modifications were rejected on the grounds that incomplete paperwork was provided.

But it was much worse than that. The mortgage servicers used HAMP like a predatory lending program, squeezing homeowners for as many payments as possible before canceling their modifications and kicking them out of their homes. These companies had financial incentives to foreclose rather than modify loans. In one particularly excruciating example, the servicer arm of Bank of America offered its employees Target gift cards as a bonus for placing borrowers into foreclosure.

This was also by design, or at least benign neglect. Then–Treasury Secretary Timothy Geithner candidly told officials that the program was intended to help banks, not borrowers. The purpose was to “foam the runway” for the banks, Geithner said, with homeowners and their families being the foam crushed by a jumbo jet in that scenario. If the goal was just to let the banks use HAMP for their own benefit, it’s not surprising that would come at homeowners’ expense.

And those banks executed their plan fraudulently, using millions of forged and fabricated documents to illegally foreclose on people. Even with this new leverage against the banks, the administration failed to provide equitable relief. A new program, the National Mortgage Settlement, promised one million principal reductions but delivered only 83,000. Meanwhile, millions more unlawful foreclosures ensued, and no high-level executive was convicted in association with any of these crimes.

In short, the policy apparatus ultimately failed to assist the majority of people who sought help, a suboptimal policy outcome by any metric. Student debt relief skeptics like Furman spent the Obama years advocating for privatizing Fannie and Freddie, rather than apologizing for falling so short on dealing with the massive debt overhang, which stunted the economic recovery.

President Biden’s approach has been markedly different and, if well implemented, is poised to be extremely effective. The simplicity of the program design, with its straightforward cancellation thresholds ($10,000/$20,000) and eligibility criteria (Pell status and household income), means the policy should deliver nearly 90 percent of its relief dollars to those making less than $75,000 a year. Will some small amount of relief dollars land in the bank accounts of borrowers who will make higher incomes in the future? Absolutely. Is preventing that outcome more important than delivering relief to 43 million borrowers? Of course not.

It’s not just the policy design that is a rebuke to the old guard’s theory of debt relief; it’s also the rhetoric. Notably, in his 20-minute speech announcing the rollout of the student loan relief program, President Biden didn’t mention “bad debtors” once. He didn’t spend a single breath on the individual failings of borrowers, make any reference to their poor decision-making, or nod to a handful of unscrupulous debtors trying to game the system.

Instead, he talked about the failings of our higher-education system, in which “an entire generation is now saddled with unsustainable debt.” Instead of blaming borrowers, he showed them empathy. Instead of talking about borrowers taking advantage of the system, he vowed to hold “colleges accountable for jacking up costs without delivering value to students” and crack down on “schools luring students with the promise of big paychecks when they graduate only to watch these students be ripped off and left with mountains of debt.” And he headed concerns about moral hazard off at the pass, vowing to “never apologize for helping the working and middle class.”

Moreover, Biden wasn’t afraid to use all of the tools available to him to get results for indebted borrowers. The Obama administration was given funding from Congress, an explicit mandate for foreclosure prevention, and at the end, a settlement with the banks that authorized even more money. They still failed, because they were more interested in deluded notions of “personal responsibility” than acting to avert disaster.

Biden has flipped the Beltway consensus on policy design around debt forgiveness and modeled a path for viewing student debt as a national crisis, rather than an individual failing. It’s a stunning reversal of the Obama-era consensus and one that casts that failed legacy of mortgage debt relief in an even darker light. Biden has shown us there was an easier, softer way all along.

Republicans are outraged that Biden is forgiving the student loan debt of millions of borrowers by $10,000-20,000. They have denounced loan forgiveness as “socialism,” a “big government giveaway,” and worse.

They are on the wrong side of history and politics.

I can tell you from the two years I worked in the U.S. Department of Education that there is a student loan industry that has a powerful lobby. They want student debt to be as high as possible and they want the rates to be as high as possible. Biden’s decision is very disappointing to their lobbyists.

Zachary D. Carter writes in Slate that there is a long history of forgiving debt. This is a terrific article. I urge you to read it.

He begins:

In 1920, the world’s most famous economist, John Maynard Keynes, was digging through old books on the economy of the ancient world, when he discovered something startling. All his life he had been taught that civilization depended on ironclad financial certainty. Without a stable currency and dependable debt contracts, commerce could not exist. Governments that meddled in such matters were thought to be asking for social chaos.

But the documents he perused on Ancient Greece, Rome, Babylon, Assyria, and Persia showed him something else entirely. Throughout history, political leaders had abolished debts and managed the value of their currencies—another way to revise debts—as routine matters of government policy. Keynes was electrified. A year earlier, he had staked his reputation on a call to cancel the largest debts the world had ever seen—those accrued by the governments of Europe during World War I. If these debts were not cleared, Keynes had argued, the international trading system would break down, leading to misery and another war. Predictably, the financial establishments on two continents responded to this apparent heresy with alarm. Now Keynes had discovered precedent for his ideas — thousands of years’ worth, from Hammurabi in ancient Babylon to Solon of Athens.

[As a side note, the Treaty of Versailles imposed massive debt on Germany. Had that debt been forgiven, there might have been no World War II.]

Indeed, debt relief has always been the handmaiden of debt itself. In the United States we have a formal legal process for eliminating nearly all forms of debt: bankruptcy. When debts become unbearable, people file for bankruptcy to have them discharged in court. In the 15 years preceding the pandemic, more than 14.3 million people filed for bankruptcy, and in the decade prior to the pandemic, more than 20,000 businesses filed for bankruptcy every year, with a high water mark of 60,837 in 2009. Debts are discharged every day in the United States, and have been for decades.

Indeed, debt relief has always been the handmaiden of debt itself. In the United States we have a formal legal process for eliminating nearly all forms of debt: bankruptcy. When debts become unbearable, people file for bankruptcy to have them discharged in court. In the 15 years preceding the pandemic, more than 14.3 million people filed for bankruptcy, and in the decade prior to the pandemic, more than 20,000 businesses filed for bankruptcy every year, with a high water mark of 60,837 in 2009. Debts are discharged every day in the United States, and have been for decades.

Not that you would know from the apocalyptic conservative outrage emanating from social media and cable television this week. When President Joe Biden announced his new student loan relief program on Wednesday, Senate Majority Leader Mitch McConnell decried it as “socialism” and Utah Sen. Mitt Romney called it a naked attempt to “bribe the voters.” Reason magazine’s Robby Soave declared it a “fuck you to every financially responsible person in the country.” These reactions belie centuries if not millennia of economic history.

Capitalism would collapse without debt relief systems. Businesses get in trouble all the time—both good businesses that would work fine without a few onerous debt deals, and bad businesses that need to be liquidated or restructured. Sometimes bad things just happen. People get divorced. They get injured and are overwhelmed by medical bills. They get laid off. They have to pay for a parent’s funeral or care for children with special needs. And yeah, some people just don’t know how to manage their money and buy things they can’t afford. But we do not consign such people to never-ending financial servitude as a result of unforeseen circumstances, or even totally reckless spending habits. We have a formal process to eliminate debts and start over, with a reasonable chance of living a healthy financial life.

But not for students who borrow money to attend college. In 2005, Congress passed a law that made it next to impossible to discharge almost any form of student debt. Even the most creative consumer lawyers estimate that only about $50 billion—less than 3 percent of the $1.75 trillion in outstanding student debt—had the potential to be wiped away, but only if students could persuade a court that they had been egregiously wronged, by say, non-accredited programs or institutions that didn’t actually offer degrees.

Biden’s new student debt relief program exists because student debt is currently ineligible for the ordinary process that Americans use for extinguishing excessive debts….

Nor are the recipients of Biden’s aid particularly wealthy. The plan flatly excludes anyone who makes more than $125,000 a year from participation. According to an analysis by the University of Pennsylvania’s Penn Wharton Budget Model, about half of the money will go to borrowers in the bottom half of the income spectrum, with only 2.5 percent of folks breaking into the top 10 percent receiving relief. The median personal income in the United States—the 50 percent line—is $35,800. This makes sense once we consider the actual demographics of the typical American college student, who is not an Ivy Leaguer bound for the 1 percent. About 40 percent of all undergraduate students attend community colleges, about one-third of whom take out student loans to help pay for their education. The average community college borrowergraduating with more than $13,000 in debt. There are also racial disparities in student debt: According to a Brookings Institute analysis, Black borrowers shoulder roughly double the amount of debt to attend college that white borrowers do.



Connecticut Member of Congress Rosa De Lauro is chair of the House Appropriations Committee, one of the most powerful members of Congress. She is a staunch friend of working people and public schools.

WASHINGTON, DC – Chair of the House Appropriations Committee Rosa DeLauro (CT-03) today released a statement following President Biden’s announcement of his student debt plan.

“Americans are living paycheck to paycheck. The biggest corporations are using their money to rig the game, and costs are on the rise.

“I applaud President Biden for taking a necessary step today to level the playing field for working Americans by cancelling $10,000 in student debt for borrowers who earn under $125,000 a year and up to $20,000 for Pell Grant recipients. This will completely wipe out debt for millions of borrowers and give many the economic security they need to invest in a small business, buy a home, or simply just take care of their families.

“Today’s announcement builds on historic actions by the Biden administration to provide student debt relief to borrowers in need. By discharging loans for borrowers ripped off by for-profit colleges, making administrative improvements to the Public Service Loan Forgiveness Program, and canceling loans for permanently disabled borrowers, the President has already approved $36 billion in student loan relief. In addition, the Biden administration is drafting improvements to income-driven repayment programs, including proposals I have pushed for in my Affordable Loans for Any Student Act, so that no borrower has to struggle to make monthly payments.

“Democrats in Congress and President Biden are delivering on commitments to make college more affordable, make student loan repayment manageable, provide relief for those in need, and hold predatory colleges accountable for ripping off students. Americans need a government that works for working families and the vulnerable – not one that answers to the wealthiest and biggest corporations. Today’s announcement is a huge step toward dealing working Americans back in.”

 

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delauro.house.gov

President Biden issued sweeping student debt relief for people earning less than $125,000 a year.

The Washington Post reports:

White House officials are planning to cancel up to $20,000 in student debt for recipients of Pell Grants as part of their broader announcement on Wednesday of student debt forgiveness, four people familiar with the matter said.


The extra debt forgiveness for Pell recipients would be in addition to the expected cancellation of up to $10,000 in student debt for most other borrowers. The White House’s plans are only expected to apply to Americans earning under $125,000 per year, or $250,000 per year for married couples who file taxes jointly, the people familiar said.


Roughly 43 million federal student loan borrowers would be eligible for some level of forgiveness, including 20 million who could have their debt completely canceled, according to internal documents shared with The Washington Post. The White House estimates that 90 percent of relief will go to people earning less than $75,000.

Michael Hiltzik is my favorite columnist in the Los Angeles Times. He recently wrote a wonderful column explaining patiently why canceling some or all college student debt would not be inflationary, as Republicans claim, but instead would be good for the economy.

He writes:

With a deadline looming in less than two weeks for President Biden to decide what to do about student debt, it shouldn’t be surprising that conservatives have been agitating with increasing intensity against relief for the borrowers.

Among their principal arguments recently is that debt relief would be inflationary.

The deficit hawks at the Committee for a Responsible Federal Budget, for example, fretted last week that forgiving even $10,000 in student debt per borrower would be so inflationary that it would destroy a decade’s worth of inflation reduction from Biden’s newly enacted Inflation Reduction Act.

Student debt cancellation will increase the wealth of millions of Americans who need it the most and promote racial equity — all without increasing inflation.

— Mike Konczal and Alí Bustamante, Roosevelt Institute

A bill filed by Republican members of Congress Elise Stefanik of New York, Patrick McHenry of North Carolina and Jason Smith of Missouri cites canceling student debt as among “harmful economic policies” by the Biden administration that have “exacerbated inflation and led to skyrocketing prices.”

I’ve written about the fatuous arguments against student debt relief before. The inflation angle is relatively new, however, presumably because inflation is top of mind for voters as we approach the midterm elections. It’s natural, in a way, for opponents of debt relief to bootstrap this kitchen table issue to their long record of opposition.

As it happens, however, they’re wrong. Canceling student debt, even at higher levels, won’t drive inflation. The critics are using faulty math to make their point.

“Student debt cancellation will increase the wealth of millions of Americans who need it the most and promote racial equity — all without increasing inflation,” according to Mike Konczal and Alí Bustamante of the Roosevelt Institute, who expertly refuted the CRFB’s analysis the day after it appeared.

Before getting into the economics of the issue, a few words of context.

Biden’s deadline actually applies to only a portion of student debt policy: the forbearance that has been granted borrowers since March 2020 in recognition of the burdens of the pandemic.

Since then, borrowers with federally backed loans (which is more than 90% of the indebtedness ) haven’t had to make payments, and interest hasn’t accrued on unpaid balances in that time.

Under current policy, the payment freeze will end on Aug. 31. Biden could extend it by executive order; the Washington consensus is that he will do so, perhaps to the end of this year so payments won’t have to resume prior to the election

The other aspect concerns cancelling student loans. For many of the 45 million borrowers currently owing a total of about $1.8 trillion today, this issue is far more consequential.

Biden pledged during his presidential campaign to forgive $10,000 per borrower. Progressives such as Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) have advocated cancelling $50,000. Others support cancelling full balances for some middle- and low-income borrowers. That decision doesn’t have to be made immediately, though some Democratic advocates think the policy would be favored by Democratic voters in November.

Some traditional arguments against student debt relief can be easily dismissed. One is that forgiving debt today would be unfair to borrowers who shouldered the sacrifice of paying off their loans. As I wrote in the past, this is the argument from pure selfishness and a formula for permanent governmental paralysis.

The truth, of course, is that in a healthy society government policy moves ahead by taking note of existing inequities and striving to address them. Following the implications of the “I paid, why shouldn’t you” camp to their natural conclusion means that we wouldn’t have Social Security, Medicare or the Affordable Care Act today.

The unfairness argument also overlooks the generations of college students whose education was financed by taxpayers to a far greater extent than today. Tuition at the University of California, for example, was free to state residents from its founding in the 1860s until 1970.

UC tuition today is $13,104 per year for residents and $44,130 for nonresidents, and constitutes what the UC says is its “largest single source of core operating funds.” Should today’s tuition-burdened students demand back pay from those pre-1970 enrollees?

Another common argument is that debt cancellation would be regressive — that is, it would disproportionately benefit the rich. The heart of this argument is that wealthier households carry more debt than low-income households, so they would gain more from reducing their balances.

But that’s math-driven misconception. The truth is that the student debt burden falls much heavier on lower-income borrowers than the affluent.

Contrasting borrowers in the poorest 10% of income earners with those in the richest 10%, Laura Beamer and Eduard Nilaj of the Jain Family Institute showed that although “higher-income groups experience higher median debt burdens ($23,160 for the richest decile and $16,094 for the lowest-income decile), this difference is small compared to the difference in median incomes ($60,193 for the richest decile and $16,770 for the lowest-income decile).”

Even cancelling $10,000 in debt would be a greater boon for lower-income borrowers than the rich. Among borrowers with $20,000-$40,000 in income, 234,000 carry balances below $15,000, Beamer and Nilaj calculated. About 57% of borrowers in that income range have balances of less than $20,000, compared to 43% of those with income of $75,000 or more.

Nor is there any doubt that debt cancellation would have a strong impact on racial and ethnic economic inequality. About 75% of Black borrowers have current loan balances greater than the original loans, due mostly to difficulty in making repayments, compared to 50% of white borrowers.

Once repayments resume, the New York Federal Reserve Bank reported in April, “lower-income, less educated, non-white, female and middle-aged borrowers will struggle more in making minimum payments and in remaining current.”

That brings us back to the newest wrinkle in the anti-relief argument: That debt relief will be inflationary and add to the deficit.

The CRFB is perhaps the most ferocious deficit scold among conservative think tanks in Washington. It’s a full-spectrum fiscal critic. To its credit, it was critical of the GOP’s massive tax cut for the rich in 2017, but it has also pursued benefit cuts in Social Security and Medicare, a reflection of the long patronage of the late hedge fund billionaire Pete Peterson, who conducted a long campaign to shrink those programs.

The CRFB analysis of student debt relief asserts, “Simply extending the current repayment pause through the end of the year would cost $20 billion — equivalent to the total deficit reduction from the first six years of the IRA …. Cancelling $10,000 per person of student debt for households making below $300,000 a year would cost roughly $230 billion.”

Put these two options together, the group states, and “these policies would consume nearly 10 years of deficit reduction from the Inflation Reduction Act.” Its analysis further states that “debt cancellation would boost near-term inflation far more than the IRA will lower it. A $10,000 cancellation, according to the CRFB, could add .15 percentage points to the inflation rate “up front and create additional inflationary pressure over time.”

Konczal and Bustamante found some suspect math in this reasoning — specifically the comparison of apples to oranges by applying formal federal budget rules instead of real-world accounting.

Under the formal rules for credit programs, cancellation of debts must be treated as though the foregone interest and principal payments all occur immediately, in year one, when in fact they’re spread over the life of the loan. The Inflation Reduction Act, similarly, is treated as though all its inflation effect occurs in the first 10 years, when it’s also spread over two decades or more.

The CRFB’s analysis therefore overstates the impact of debt cancellation on the IRA’s inflation reduction. This flaw should be obvious. Spread over the decades-long terms of student loans, the foregone debt payments come to about $13 billion a year.

“It’s about allowing borrowers to keep $13 billion a year in income,” Bustamante told me. “That comes to about 0.08% of total personal consumption.” For an economy with about $16.5 trillion in annual personal spending, $13 billion is “insignificant when it comes to inflationary pressure.”

Nor is there any evidence that people would go out and spend that money, creating inflationary demand. The evidence from more than two years of debt forbearance thus far is that borrowers have used it to improve their household balance sheets, paying off high-rate credit card debt and saving the rest.

That’s not even to mention what has been driving inflation over the last year. It’s not demand-side personal consumption, but constraints such as supply-chain disruptions and restricted supplies of oil. Both factors have decreased in recent months, which is why the month-over-month inflation rate in July fell to 0.0%. (The Federal Reserve may be making the same mistake in its inflation-fighting campaign.)

The power of inflation as a scare word just now must explain the rhetoric employed by Stefanik, McHenry and Smith when they introduced their attack on debt relief in July.

Stefanik represents the sixth-poorest congressional district of New York’s 31, with a median income of $57,320. McHenry’s is the fifth-poorest in North Carolina, with a median income of $53,189. Smith’s is the poorest in Missouri and the 22nd-poorest of all the 435 districts represented by fully voting members.

That suggests that their own constituents would be in line for the most help from student loan forbearance and cancellation, including help dealing with prices at the pump and the supermarket. In this case as in many others, we must ask who these politicians are working for — certainly not the people who elected them.

Clearly, student debt relief will be a wealth-producing, economy-growing initiative. It won’t create unfairness, but redress economic injustice that has been building for decades. Biden’s proper course should be obvious.

Writing in The Nation, David Kirp reviewed a book about the college rating system devised by US News and finds it to be as ridiculous as we have long believed. The book is BREAKING RANKS: HOW THE RANKINGS INDUSTRY RULES HIGHER EDUCATION AND WHAT TO DO ABOUT IT by Colin Diver, former president of Reed College.

Which are the “best” colleges and universities, according to the rankers? The most selective. The richest. The ones that have their pick of the most gifted students. The ones with the money to have fabulous student centers, libraries, gyms, etc.

This is nuts.

Kirp writes:


A few years back, the “Varsity Blues” scandal made front-page news. Rich parents, desperate to ensure that their offspring were accepted by an elite university, paid huge sums of money to an entrepreneur who promised “side door” admissions. Over the course of nearly a decade, athletic records were faked, bribes were paid to university staffers, and hired experts took the SAT instead of the students. To the public, the perp-walk treatment received by these parents and those who abetted them was a justified comeuppance for those who cheated the system.

But did the prosecution of these cheaters really solve the problem? Hardly. The titillating story about entitled parents, far from being an isolated scandal, was just the proverbial tip of the iceberg: It illustrated how the college admissions system in the United States is systemically broken. With places in top-rung schools almost as rare as the Hope Diamond, affluent parents scramble for every advantage. But universities made this system what it is today: They are these parents’ eager enablers, competing fiercely for the prestige and money that comes with success in the rankings game.

In Breaking Ranks, Colin Diver, a former president of Reed College, details how the rankings industry—most notoriously, U.S. News & World Report—powers this unvirtuous cycle. If you are buying a car or a refrigerator, a Consumer Reports–style rankings system works just fine. But, as Diver points out, there is no right answer when it comes to choosing a college—for all the fancy formulas the rankings companies trot out, they offer faux science. When the powerhouses, like U.S. News and its ilk, weigh competing values—selectivity versus affordability, reputation versus higher-than-predicted graduation rates—they are making an ideological judgment about what really matters in a college education. (The Washington Monthly’s formula emphasizes a college’s contribution to the public good, focusing on social mobility, research, and promoting public service. It’s a fine, if imperfectly executed, idea, but there is scant evidence that the magazine has much of an impact on students’ choices.) Thus, it’s apparent from the results that what counts most in these calculations is the wealth of the institution and, indirectly, the wealth of its students. Were it otherwise, would all of the top 20 universities be wealthy private schools?

The rankings game is a high-stakes affair. Where an institution stands in the U.S. News pecking order affects the number and credentials of its applicants, whose decisions are heavily influenced by a school’s prestige; the generosity of its donors, who like to give to the winners; the bragging rights of its trustees; and its appeal to the professoriate. It’s a perpetual cycle: A college that admits more well-credentialed students, has a growing endowment, and boasts a more highly regarded faculty receives a higher ranking, which in turn generates greater selectivity, bigger donations, happier trustees, and more-pedigreed professors. Because rankings are a zero-sum game, an institution that doesn’t do as well slips in the charts, and all hell breaks loose on the campus.

Kirp can imagine a fairer ratings system: one that credits colleges and universities for improving the life chances of their students:

A fairer rankings system would highlight universities like Georgia State and CUNY, whose mission is to help students from poor families enter the middle class, rather than fixating on institutions like Yale and Princeton, which burnish the prone-to-success credentials of their students. It would give a shout-out to colleges where the teaching is first-rate, the students are engaged in learning, and the alumni describe themselves as living a fulfilling life. But such an approach is unlikely to gain traction in this hyper-competitive society, where the meritocratic myth prevails and prestige is all that matters.

Lt. Governor Dan Patrick of Texas explains in this video why he wants to eliminate tenure in the colleges and universities of Texas. He believes in “academic freedom,” he says, but he thinks the legislature should govern what is taught in universities. He lashed out at professors who want to teach “critical race theory.” He believes that there is no academic freedom for those who want to teach the Constitution (!), but only for those who teach controversial topics.

Apparently he thinks that academic freedom and tenure should protect only those who share his views.

Just how dangerous is Dan Patrick’s proposal?

Seth Masket, director of the Center on American Politics at the University of Denver, understands that Patrick threatens one of our nation’s greatest treasures: its public institutions of higher education.

He writes, at NBC’s website:

Texas Lt. Gov. Dan Patrick announced last month a plan to phase out all tenure in Texas’ public colleges and universities, and to revoke tenure for those who teach critical race theory. These changes would have dramatic effects on public education in Texas and, ultimately, across the United States, undermining academic freedom and compromising a higher education system that is the envy of the world.

If you were to make a list of the United States’ most significant contributions to the world, our public university systems would have to be somewhere near the top. According to U.S. News’ rankings, of the top 20 universities around the world, 15 are American, and five of those are public. Thanks to these and other universities, the U.S. dominates Nobel Prizes and other scholarly achievements, while it educates tens of millions of students annually. Typically, about a million students per year come from other countries to attend American colleges and universities. Those on student visas largely return to their home countries, spreading the knowledge and values they learn here.

Rather remarkably, this is not widely celebrated. Worse, America’s public universities are currently being attacked from multiple sources, threatening both our educational integrity and global reputation, to say nothing of the way such attacks could impact student opportunities.

The first of these attacks stems from a rather long-term historical force — declining state budgets. States are simply subsidizing public education far less than they used to do. Outside just a handful of states, per-student funding from state governments dropped substantially over the past few decades. Students and their families increasingly have to make up that difference.

But there’s a more immediate threat going on, of which Patrick is only the latest instigator. Patrick is hardly the first state leader to go after tenure for university professors. Former Wisconsin Gov. Scott Walker worked to weaken tenure protections at his state’s university system. A current bill in South Carolina would end tenure in that state. Georgia made it easier last year for administrators in public universities to fire tenured professors. Tenure has long been a target of Republican state officials seeking to reduce the status of the professors they see as elitist liberals.

Tenure, of course, is complicated, involving complicated and school-specific standards. Some schools have suspiciously biased tenure patterns. But at its best, tenure serves two important purposes. First, it protects researchers from reprisals. Academics may produce findings that make state leaders uncomfortable or defensive — tenure helps assure that findings are not suppressed and altered. Think, for example, of recent academic debates over whether voter ID and other voting restrictions disproportionately affect people of color and actually reduce turnout. This is an important discussion that quite legitimately makes people on all sides of it uncomfortable. But researchers must be able to pursue the truth without fear of losing their jobs…

Second, tenure is a valuable perk for professors who could typically make more money in another line of work. In both these senses, tenure helps keep top scholarly talent at universities producing important and occasionally critical and politically unpopular research.

But Patrick’s second announcement, that he is seeking to revoke tenure protections for professors who teach critical race theory, is even more sinister. It’s important to note first that very few professors outside of law school actually teach critical race theory. Rather, the term “critical race theory” for public officials like Patrick has come to mean any lessons involving race, identity and/or history that conservatives do not like. For some, critical race theory now just means any history lesson that might make white students feel bad. It’s not hard to guess who will be blamed for teaching these sorts of lessons, and who will more readily be fired or silenced as a result

Great public university systems with top scholars educating millions of students at (relatively) low cost are legitimately one of the U.S.’ greatest accomplishments. We are watching that accomplishment being dismantled before our eyes

The Koch Foundation has made gifts to over 300 institutions of higher education. These gifts are restricted, given to create an “institute” or “center” where libertarian ideas can be promoted on campus. In one such center, a speaker was invited to lecture on “The Moral Case for Fossil Fuels.”

Universities should be open fora where different ideas can be debated, but it’s absurd to have a center devoted to only one point of view.

Fortunately a group called UnKoch My Campus has made a mission of exposing Koch money and its purposes.

I received this message recently:

At the beginning of February, Brown University faculty members voted to postpone the creation of a new Koch-funded center, the Center for Philosophy, Politics, and Economics (PPE). This push could not have happened without grassroots organizing efforts spearheaded by Students Against Koch Influence (SAKI). The faculty now intends to adopt a more robust gift and grant acceptance policy ahead of the next vote on the PPE center.

With growing awareness of the ways in which Charles Koch buys influence over hiring, research, and curriculum in higher education to achieve these goals, a call to protect against such donor interference in academia is growing. We built power with SAKI students to ensure we enacted a cohesive strategy to employ a rigorous pressure campaign at Brown University. We’ve also provided the resources to take campaigns like this to the next level, like our Model Funding Policies for higher ed institutions.

The move to kick Koch-funded research programs off of campuses across the nation is already underway and we’re hot on the Koch network’s trail. Join us for our national network call on Tuesday, March 15th at 5 pm EST. Representatives from SAKI will join us to discuss organizing tactics they used and how they plan to adopt a more robust gift and grant acceptance policy at their university. You are not going to want to miss this call.

Now that Republican state legislatures have had their way imposing their personal views on what may or may not be taught in the public schools, they are taking aim at what may be taught in state universities. In Wyoming, the legislature wants to defund gender studies.

Legislation to defund gender and women’s studies at the University of Wyoming has stoked faculty fears about how far lawmakers will go to stop public colleges from teaching courses they don’t like.

The Wyoming Senate voted on Friday to pass a budget amendment that would prevent the university from using state money for its gender and women’s studies program and courses, a move that would effectively eliminate them. While a version of the amendment died in the state’s House and its future is unclear, the mere possibility of its passage has left some Wyoming professors shaken by what they see as an infringement on their academic freedom.

This is censorship, plain and simple. Will they next come after science professors who teach about evolution? Or legal scholars who study critical race theory?