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  1. #1
    Senior Member AirborneSapper7's Avatar
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    University of California Campus Erupts In Riots; Student Loa

    Sunday, March 07, 2010

    University of California Campus Erupts In Riots; Student Loan Scam Drives Up Cost Of Education; Expect More Riots

    Inquiring minds are reading about student riots at the University of California. http://rt.com/Top_News/2010-03-03/calif ... fullstory#

    Students at the University of California’s flagship Berkeley campus took to the streets on Friday night, vandalizing university buildings, burning trash cans and clashing with police in the latest expression of frustration over cuts to the educational budget in California.

    In November, the University of California Board of Regents voted to raise tuition by 32 percent. At the same time, professors were asked to take pay cuts or be furloughed, classes were eliminated and class size increased. Protests erupted across the University of California system, particularly at UC Davis and UCLA.

    Student Loan Defaults Soar

    Please consider Defaults on student loans rising http://www.azcentral.com/12news/news/ar ... ts-CP.html

    Every year, tens of thousands of college students and graduates stop making payments on their student loans.

    For more than a decade, that loan-default rate was in decline because the federal government toughened penalties for schools with high shares of defaults. Now, the rate is increasing again and not just because of the economy.

    The problem is particularly acute in Arizona, which has the nation's highest overall default rate on federal student loans: 9.8 percent in fiscal year 2007, the latest figures available.

    But more than default rates, it is the high levels of debt that are provoking alarm among consumer advocates. That has heightened scrutiny of for-profit schools.

    Tuition at for-profit schools can easily top $10,000 a year. The average loans for a student who earned a bachelor's degree totaled $32,650 in the 2007-08 school year, compared with $17,700 at public universities. At community colleges, the average for two-year degrees was $7,125.

    In Arizona, for-profit schools are booming. They have more than doubled the number of students they serve in the past five years, and more students are at for-profit schools than all three of the state's public universities combined.

    Last school year, for-profit schools enrolled nearly 468,000 students, according to the Arizona State Board for Private Postsecondary Education, a state agency that licenses and regulates most for-profit schools. About 55 percent were from Arizona, and the rest lived elsewhere and attended school online.

    In December, the University of Phoenix settled a whistleblower lawsuit in federal court for $78.5 million over recruiter-pay practices. Two former enrollment counselors sued in 2004, alleging the school defrauded the government of billions of dollars in financial aid and violated federal law by paying recruiters based on enrollment. The company said the pay practices were legal because enrollment was not the sole determinant. The university did not admit any wrongdoing.

    Nationally, for-profit schools had the highest share of defaults in the United States in 2007: 11 percent. Community colleges had a nearly 10 percent rate, and private, non-profit universities had the lowest rates, at 3.7 percent, according to the U.S. Department of Education.
    Student Loan Scam

    The article mentions various reforms such as curbing recruiters, requiring more up-front disclosure, and educating borrowers about the loan process.

    The real problem is the entire student loan system is a scam. The government guarantees student loans so colleges have every reason to make the loans no matter how poor the student or how high the cost of education relative to job pay upon graduation.

    Government guaranteeing the loans makes the money readily available to all takers driving up the cost of education.

    My friend "BC" had this to say....

    Millennials had better learn quickly that they face coming of age through middle age and end of life in a world in which they will be forced to consume one-third to half as much in per capita energy terms and associated material production and consumption.

    Thus, they should be rioting to cut taxes and to cut government including cutting funding for places like "Berzerkley" and the many worthless programs and costly administrative and pension payouts.

    What "Berzerkley" or a state or private university confers on the vast majority of students is a "credential" and "legitimacy" within the existing division of labor and state tax farm. Their "education" is mostly in terms of being conditioned to conform to the costly state superstructure, including submitting to tax, wage, and debt servitude for life.

    What they will "learn" in terms of actual occupational skills, self-reliance, and productive wealth creation they could learn at a much lower cost (and higher return to them) than 4+ years of university "education" by actually doing something productive, paid or not, as a youth.

    Rioting for more government largess extracted eventually from their meager paychecks in the future is suicide and merely sustains for a while longer the system they perceive themselves to be opposing or attempting to reform.

    They are wasting their valuable time and youthful vitality rioting against the intractable state when they could be using their time and efforts to form productive private associations in parallel or outside the existing division of labor and social and political superstructure.
    Expect More Riots

    My friend "HB" countered with ....
    There will be more riots, and over more issues. Students are traditionally always the first to riot, since most of them are young and rebellious, and therefore it's easier to get them to engage in street protest and vent their anger.

    The only groups that may even be more riot prone are French farmers and Greek public workers.
    How Good Is That Education?

    Pray tell what is someone going to do with a degree in English literature, social science, journalism, history, French, political science, or math?

    Exactly how many jobs area available in those areas compared to the number of students getting such degrees?

    Sadly, we can even ask the same questions about computer science. In the late 1970s all the way to 2000, a degree in computer science came with a near-guaranteed job. Now, computer science graduates must compete against someone from India or Russia who is willing to work for a lot less than they ever imagined.

    In the early 1970s tuition at a top school like the University of Illinois was $250-$400 a semester. Now tuition is $10,000 with no guarantee of a job.

    But hey, as long as government is guaranteeing student loans, places like the University of Phoenix are glad to off an "education" to everyone coming their way.

    Education System Benefits Recruiters, Administrators, Teachers, Staff

    Funding schemes, loan guarantees, influence pedaling, and especially government meddling have combined to make education a great deal for recruiters, administrators, professors, and staff.

    Unfortunately, there is little benefit to the students for the price they pay. Indeed, the biggest education many students will receive is to learn how compound interest combined with poor salaries will make them a debt slave for life.

    Mike "Mish" Shedlock
    http://globaleconomicanalysis.blogspot.com/
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  2. #2
    Senior Member SicNTiredInSoCal's Avatar
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    Well, I see Mr Celente's prediction about the college "bubble" bursting is coming true....
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  3. #3
    Senior Member AirborneSapper7's Avatar
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    Defaults on student loans rising

    Advocates cite tuition increases, loose lending, low wages

    2 comments
    by Anne Ryman - Mar. 7, 2010 12:00 AM
    The Arizona Republic

    Every year, tens of thousands of college students and graduates stop making payments on their student loans.

    For more than a decade, that loan-default rate was in decline because the federal government toughened penalties for schools with high shares of defaults. Now, the rate is increasing again and not just because of the economy.


    Steep hikes in tuition are forcing student debt levels to all-time highs. Lenders have been generous with money. And many borrowers have discovered too late that their jobs don't pay enough to easily cover loan payments or that one personal crisis can force them to renege on the debt. That debt rarely gets wiped out, even in bankruptcy.

    The problem is particularly acute in Arizona, which has the nation's highest overall default rate on federal student loans: 9.8 percent in fiscal year 2007, the latest figures available.

    Driving that default rate are students who borrow money to attend community colleges and for-profit schools. Arizona has a larger share of students at those types of colleges than the nation as a whole.

    But more than default rates, it is the high levels of debt that are provoking alarm among consumer advocates. That has heightened scrutiny of for-profit schools.

    Tuition at for-profit schools can easily top $10,000 a year. The average loans for a student who earned a bachelor's degree totaled $32,650 in the 2007-08 school year, compared with $17,700 at public universities. At community colleges, the average for two-year degrees was $7,125.

    At least nine out of 10 students who earn degrees or certificates at for-profit schools borrow money to attend, a higher ratio than four years earlier and more than at universities or community colleges.

    Nationally, for-profit schools had the highest share of defaults in the United States in 2007: 11 percent. Community colleges had a nearly 10 percent rate, and private, non-profit universities had the lowest rates, at 3.7 percent, according to the U.S. Department of Education.

    The U.S. Department of Education is considering stricter rules to protect students. Rising debt loads is one reason. Another is allegations that some for-profit schools are manipulating students into costly programs that don't benefit them. Among other things, the department is looking at requiring all colleges to disclose more information to prospective students and prohibit schools from paying recruiters based even partly on the number of people they enroll. Incentive pay can lead to overly aggressive marketing, consumer watchdog groups say.

    Consumer advocates are among those pushing for tougher regulations. They argue that the high tuition and student debt burdens make many for-profit schools a poor value.

    School officials say for-profit colleges serve an important role. Like community colleges, they have more-lenient admission standards and attract larger percentages of students in economic need: lower-income, minorities and older than 25. Officials say this explains why more students struggle with repaying student loans.

    For-profit schools offer other advantages. Many have accelerated programs that allow students to start their careers sooner than public schools, and they have more flexible start dates, which allow students to enroll at several points during the year.

    In Arizona, for-profit schools are booming. They have more than doubled the number of students they serve in the past five years, and more students are at for-profit schools than all three of the state's public universities combined.

    Last school year, for-profit schools enrolled nearly 468,000 students, according to the Arizona State Board for Private Postsecondary Education, a state agency that licenses and regulates most for-profit schools. About 55 percent were from Arizona, and the rest lived elsewhere and attended school online.

    The 232 schools licensed by the state range from cosmetology and truck-driver training to graduate programs in business and education.

    Arizona is headquarters to the largest for-profit university in the United States, the University of Phoenix, a publicly traded company with nearly 500,000 students. Grand Canyon University, another public company, is the second-largest, with 37,700 students. Many for-profit schools are small and privately held.

    Industry officials defend the higher tuition prices. Unlike public schools, for-profits don't get state funding, so their main source of revenue is tuition. With more cash flow, for-profits can more quickly get expensive programs, such as nursing, up and running. They also can fill the gap when popular programs at community colleges fill up.

    "It's more complex than just the (tuition) sticker price," said Harris Miller, who heads the Career College Association, a group that represents 1,400 for-profit schools. Every student has to decide, from a financial standpoint, "Does this make sense to me?" he said.


    Overborrowing

    Consumer advocates say the risk of overborrowing is high at for-profit schools.

    Because of high tuition, they say, it's common for students to borrow more money than their starting salaries can support. Some students take out private loans to supplement lending limits on loans from the federal government. These generally have higher interest rates and less flexible repayment terms.

    Jorge de Leon, 44, of Oro Valley, took out $48,000 in federal and private student loans in 2004 and enrolled in a 15-month program at California School of Culinary Arts in Pasadena. The bulk of the money went toward tuition, and he used $5,000 to support himself while doing an internship before graduation.

    De Leon says the school's financial-aid office advised him that his loan payments would be about $450 a month, so he was shocked when he learned it would be $1,132. His job as a lower-level chef at a Tucson resort paid $10.75 an hour. He was unable to make the payments and cover other bills.

    He is angry at the school yet also regrets not knowing more about the student-loan process. He asked for three deferments on the larger private loan of $33,000. He began using his retirement savings to cover other household bills. Interest continued to grow. He watched as his original loan more than doubled. Six months ago, he ran out of deferments. Feeling helpless and with his retirement savings exhausted, he stopped paying. He now owes $91,000 and has no idea how he will pay off the debt.

    "I'm probably going to die first," he said.

    Le Cordon Bleu Schools North America, which operates the school, declined to comment on specifics, citing federal student privacy laws. Spokeswoman Angela Loiacono said de Leon is not representative of the many happy graduates of the school, which has a student-loan default rate of 3.2 percent in 2007. The rate "demonstrates clearly that our graduates find gainful employment in their fields of choice," she said.

    To prevent such cases, schools should be required to educate borrowers more on the loan process and on typical starting salaries, said Deanne Loonin, director of the student-loan borrower-assistance project at the National Consumer Law Center in Boston. She said vocational-technical, for-profit colleges in particular are much pricier than comparable programs at community colleges.

    But education alone won't solve the problem because students who take on a lot of debt can get into trouble if something goes wrong in their lives, she said.

    "You want to minimize the amount of debt they take out in the first place," Loonin said.

    Miller said all for-profit schools counsel students about loans and debt and encourage them to max out federal loans before turning to private lenders.

    But it's not the school's job to set limits on how much a student can borrow through private loans, especially if it means the difference between whether they go to college or not.

    "You don't want to dampen someone's enthusiasm for changing someone's life," he said.

    From roughly 2003 to 2007, he said the private-loan lending system was "out of control" and giving out lots of private loans to students with lower credit scores. Since the credit markets collapsed in 2008, however, it's much harder to get a private student loan.

    Miller denied claims by critics that for-profit colleges charge too much for training in low-paying careers. Schools would go out of business if they had many unsatisfied customers burdened by debt, he said.


    Recruiting allegations

    For-profit schools have been dogged for years by complaints that they use aggressive recruiting and misleading information to entice students to enroll. Some schools have paid recruiters according to the number of people they sign up. That has led to claims that students are being admitted who are more likely to drop out, never get degrees and default on their loans.

    In February, the U.S. Government Accountability Office said it found violations of incentive compensation rules at 32 schools, mostly for-profits, from 1998 to 2009. That included a 2009 case in South Carolina where the school paid bonuses of $52,500 to 17 employees.

    Arizona has had its share of allegations of recruiting violations.

    In 2004, a federal review of the University of Phoenix depicted a school hungry to enroll new students. The review said the school threatened and intimidated its recruiters in meetings and e-mails, pressuring them to enroll unqualified students. The university strongly disputed the findings. The school's parent company, Apollo Group Inc., later settled the matter for $9.8 million without admitting wrongdoing.

    In December, the University of Phoenix settled a whistleblower lawsuit in federal court for $78.5 million over recruiter-pay practices. Two former enrollment counselors sued in 2004, alleging the school defrauded the government of billions of dollars in financial aid and violated federal law by paying recruiters based on enrollment. The company said the pay practices were legal because enrollment was not the sole determinant. The university did not admit any wrongdoing.

    Officials with for-profit schools say cases of such practices are rare. Private schools know they must provide an education that will cause their students to give good referrals to other prospects, said the Career College Association's Miller.

    "We have to have satisfied customers," he said. "I wish it were 100 percent. It's not."

    In 2008, the Arizona Attorney General's Office sued Tucson College, alleging it was giving false information to recruits.

    The school enrolled in its law-enforcement program students who were ineligible to enter the field soon or at all because they were too young or had criminal backgrounds, the lawsuit said. Students were led to believe wrongly that their credits would transfer to local colleges and universities.

    The school settled the lawsuit for $325,000 in 2008 without admitting wrongdoing; it refunded an average of $10,000 each to 57 students.

    That same year, a discontinued program at Lamson College in Tempe generated complaints from students that the school gave out misleading information before they enrolled.

    To Justin Wallace, 28, of Mesa, the surgical technology program seemed almost too good to be true.

    He was told he could earn his diploma in 14 months. That sounded great because there was a two-year waiting list to get into a similar, less-expensive program at GateWay Community College.

    He started classes in March 2008.

    Three months later, he started hearing rumors that some students who were further along were having trouble completing the 300 required clinical hours. He shrugged it off. As complaints gathered steam, he began to worry.

    In October, school officials announced they would shut down the program. He said students were given the options of staying in the Phoenix area and completing their clinical hours, going to another school out of state, transferring to another program within the college or dropping the program and getting their loans refunded plus a $5,000 payment.

    Wallace was among the few who chose to stay, mainly because he was so far into the program. He said he would have to start over at a community college because his credits wouldn't transfer.

    Two years after he started the program, Wallace is a little more than halfway through his clinical hours. As of late February, he had been at nearly a standstill for three months.

    "Right now, I'm sitting on $32,000 in loans," he said. "I want to finish this and move on. I could have worked months ago if I had this little piece of paper."

    Lamson officials declined to answer specific questions but issued a statement saying that when they decide not to admit new students to a program, they commit to ensuring current students can finish it.


    What's proposed

    The Department of Education is working on reforms intended to reduce the number of borrowers who walk away from student loans.

    One proposal would require schools to disclose more information to prospective students. Among other things, the schools would have to post a link to a Bureau of Labor Statistics Web site that lists median salaries for various occupations. In theory, that would help students determine if their income will justify the debt.

    Another reform would prohibit schools from linking their recruiters' pay to the number of students they enroll. Current rules ban incentive pay, but there are loopholes that consumer watchdogs say are often exploited. One is that schools can increase recruiters' salaries twice a year as long as the hike isn't based "solely" on number of students they enroll. Advocates say the change could reduce hard-sell tactics that draw students into programs they aren't really committed to; the students may drop out or not pursue the field yet be stuck with heavy debt.

    Another change would limit a borrower's payments on 10-year federal loans to no more than 8 percent of his or her projected annual income in the first few years of working.

    Loans from private lenders would be excluded. Current law allows borrowers to cap payments at 15 percent of discretionary income, but that can result in a longer repayment term and more interest.

    Some members of Congress also are pushing to allow borrowers to discharge private student loans in bankruptcy court, a protection removed in 2005. Those with federal loans would not have that option.

    Jorene Reese of Scottsdale was hoping to wipe out her college debt when she filed for bankruptcy in 1994 but then learned she couldn't.

    The 48-year-old owes more than $14,000 on what was originally $6,670 in student loans. The rest is interest and collection fees.

    Reese started out with good intentions.

    She attended a for-profit beauty school, then dropped out and went to a community college in Utah; she never earned any degrees. She filed for bankruptcy two years after moving to Arizona when she was a single mom supporting her young son.

    The black marks on her credit, Reese says, prevented her from buying a home and getting promoted to higher-paying jobs in the mortgage business. She never returned to college because until she pays off her debt, she's ineligible for federal student loans. She lost her job as a mortgage-loan processor a year ago and is still unemployed.

    Reese believes students in her situation should have legal recourse, but she doesn't know what to do. She can't afford to sue the Department of Education or try to reopen her bankruptcy.

    In the meantime, she keeps her loan correspondence stuffed inside two plastic crates in a closet. She said if she ever gets free of the debt, she will burn the paperwork.

    Reporters Matt Wynn and Ryan Konig contributed to this report. Reach reporter Anne Ryman at anne.ryman@arizonarepublic.com or 602-444-8072.


    http://www.azcentral.com/12news/news/ar ... ts-CP.html
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  4. #4
    Senior Member Dixie's Avatar
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    I repaid mine and I didn't treat it like free money and take more than I needed. I've seen people grab the max and blow it. Stupid.

    Dixie
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  5. #5
    Senior Member Tbow009's Avatar
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    Colleges

    Colleges Gouge people and They are purposely driving some kids out with their bloated, overpriced tuitions...

    These are part of the communist agenda as well.

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