Archive
Who Will be Obama’s Secretary of Education?
The Chronicle of Higher Education has an excellent article about Barack Obama’s potential choices for the next Secretary of Education. His choice will be important for student loan activists because the Sec. of Education advises the President on education policy and is in charge of overseeing federal education funding. Read more…
Rahm Emanuel and Student Loans
Since Obama has named Rahm Emanuel his new Chief of Staff, I decided to see if could find out anything about Emanuel’s positions on policies affecting student loans. Information is sparse, but so far:
Voted No on the Bankruptcy Abuse Prevention and Consumer Protection Act, which, as most of you are familiar with, was the law that made it virtually impossible for debtors to discharge their student loans in bankruptcy. (Obama also voted against this bill, and not that it matters any more, McCain voted in favor of it).
Voted Yes on the College Student Relief Act, which would have lowered the interest rate on federally-subsidized student loans from 6.8% to 3.4% by 2011. Unfortunately, the bill has yet to be passed by the full Congress.
Looks good so far. Still digging…
Stealing Money to Pay Off Student Loans
According to an article in today’s Pittsburgh Post-Gazette, a local government official has been charged with stealing money from the borough for which she was secretary. Cora King has been charged with misappropriating $15,710 of government money, including $3303 she used to pay off her student loans. I won’t go so far as to say that student loan debt leads to a life of crime, but I’m guessing that it doesn’t exactly help when one is faced with temptation.
Lawyers for Plaintiff in Sallie Mae Case Withdraw
I’ve just learned that the lawyers for Michael Zahara, the ex-Sally Mae employee who has filed a Federal False Claims Act against the company alleging “a pattern and practice of fraudulent conduct” in connection with the Federal Family Education Loan Program (FFELP) have withdrawn from the case.
The lawyers, Larry Zoglin of Phillips & Cohen, LLP and Kathleen Sweeney of Schembs Sweeney Law, argued that there was “an irremediable breakdown in the trust necessary to sustain the attorney client relationship” with Zahara in their motion to United States Magistrate Judge Jane Magnus-Stinson. The motion was granted on October 29, 2008, and it’s not yet clear what the implications will be for Zahara’s case.
Here’s the official Entry on the Motion to Withdraw
Higher Ed Watch Releases Wish List for Obama
Higher Ed Watch has a great blog post today clearly outlining their hopes for college funding and student loan reform in an Obama administration.
Here’s the short version of their list:
1. Better oversite at the Dept. of Education and better (or heck, any) enforcement when lenders break laws protecting students.
2. Reassess the need for two competing federal student loan programs and clean up the way they are run.
3. Reform the bankruptcy law to provide protection for private student loan borrowers.
4. Crack down on unscrupulous, for-profit trade schools.
5. Simplify and stream-line the federal aid system.
Student Loan Organization Writes Letter to Obama, Pledges Support
The President & CEO of the National Association of Student Financial Aid Administrators (NASFAA), Dr. Philip R. Day, Jr., has written a terrific letter to Obama, congratulating him on his election, discussing the federal student aid system, and outlining plans for NASFAA to work with the new administration. From the letter:
At specific points during the campaign it seemed you were talking directly to us in the higher education trenches. When you said, “America is the sum of our dreams, and what binds us together, what makes us one American family, is that we stand up and fight for each other’s dreams, that we reaffirm that fundamental belief – I am my brother’s keeper, I am my sister’s keeper – through our politics, our policies, and in our daily lives,” it was clear that you understand the critical importance of supporting college access for all students, and not simply those of greater means. Read more…
Obama Wins – What Can We Expect for Student Loans?
As I’m sure you all know by now, Obama has been elected the new president of the United States. So what will an Obama presidency mean for student loan reform? It’s too soon to tell, but a review of some of his past statements might be instructive.
In a May 2007 interview with the Yale Daily News, Obama “vowed to overhaul the aid system in order to curb corruption by eliminating the middleman between the federal government and students seeking loans.” In that interview, Obama argued that the current student loan system benefits private lenders at the expense of students.
Also in May 2007, the Boston Globe reported that Obama said that he would like to see student loans centralized under the federal government and end the practice of federally guarenteed bank loans. “It is long past time to put an end to the rampant abuse by lenders of our student loan programs,” he said.
By June 2008, Obama was making more specific policy proposals. As reported in NextStudent’s Student Law Blog, he supported a $4000 college tuition tax credit in exchange for 100 hours of community service, expected to cost about $10 billion annually.
While in Congress, Obama also sponsored a bill that would have increased the amount of funds available in Pell Grants by 26 percent, from $4050 per year to $5100 per year with additional increases built in for inflation.
Most recently, in an interview that aired on MTV this past Monday, Obama reasserted his $4000 tax credit plan and talked about loan forgiveness for certain professions like teaching and nursing. He did, however, seem to hedge his words a little on people who already owe substantial loans that they are having trouble paying.
It will be interesting to see how many of Obama’s plans he is able to implement and whether, as he eases into the role of President, he will take a more or less aggressive stance on student loans and the cost of education. We have a new President, but only time will tell if we get real change. Here’s to hope.