College students have particular reason to be concerned about the hostility toward the CFPB, given how effective the agency has been in solving their problems with debt. But taxpayers should be alarmed, too.
One of the vulnerable populations receiving special attention at the agency, college students over the past several decades have experienced increasing financial barriers to their educational paths, despite our intent to remove those barriers. To ensure that all qualified students get the education that we want them to pursue, we, the taxpayers, support the federal financial aid programs by spending $128 billion on them in 2015, not to mention spending billions more to fund public institutions in every state.
Despite that support, student debt remains a huge obstacle for graduates. Sixty-nine percent of college students are graduating with an average of $28,950 in debt. This debt is a drag on individual borrowers, who will see a decrease in their lifetime savings as their money is spent paying down educational debt. It has also become a drag on the economy as a whole, as borrowers put off purchasing a home and starting a family until they achieve the firmer footing we hoped they’d have at graduation.
These problems stem from shrinking state budgets for education and grant programs that don’t keep pace. But they are exacerbated when students lose even more money to tricky financial products and predatory lending schemes that are marketed right on campuses.
During the financial crisis, 67 percent of students reported being stopped on campus to be offered a credit card application. Often, these offers were accompanied by freebies -- pizza, a tee shirt or even a chance to get an iPod -- if the student just applied. Unfortunately, the rates paid by those with the worst credit, such as traditional-aged students with their spotty to non-existent credit histories, were upward of 20 percent, plus an additional 23 percent in fees on their balances. Now, the CFPB is the leading watchdog of the campus credit card marketplace, conducting a bi-annual survey of the trends on campuses.
Students, as the captive audience they are, have become targets for higher-priced private loans than what they can get on the open market. In 2007, then-Attorney General Andrew Cuomo found that students and families were assuming pricey private loans because their college aid offices, enticed by banks hoping to gain more federal loan customers at the institutions, were pushing them over other products, sometimes even including loan offers in aid awards. CFPB generates an annual report on the private loan marketplace to Congress, highlight the troubling developments.
Also, in 2009 the for-profit chain Corinthian Colleges revealed to investors that it would issue $130 million in private loans for the year to its students, even as it admitted its students wouldn’t be able to repay them. Now, CFPB has specific authority to investigate deceptive lending practices on campuses, which has led to lawsuits against prominent for-profit college chains such as ITT Tech, Bridgepoint, and Corinthian. For instance, it won $480 million in relief for borrowers at Corinthian schools, who were tricked into assuming private loans that carried interest at almost 10 percent.
And recently the agency announced a lawsuit against Navient, the student loan servicing giant formerly known as Sallie Mae, which services 12 million borrowers. The lawsuit alleges that the firm cheated borrowers out of their right to lower monthly payments and lower interest accrual by downplaying enrollment and renewal deadlines for those programs.
These problems are especially outrageous on two fronts. First, they undermine the ability of students to get an education. Second, they devalue the investment that taxpayers have made in our college students, as our financial aid dollars end up flowing away from the students we aim to help, and toward predatory lenders that are breaking the law.
As over 50 student and consumer and educational groups declared in a recent letter to Congress, neither students nor taxpayers should have to tolerate these problems. Now is not the time to render ineffective the agency that is stepping in on our behalf.
Christine Lindstrom is the higher education program director for U.S. Public Interest Research Group student chapters.
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I was horrified reading the latest diktat on immigration from an administration blown into power by the winds of intolerance and resentment. President Trump’s executive order barring immigrants and nonimmigrant visitors from seven Muslim-majority countries from entering the United States is an exercise in cynical obfuscation, bigotry and hard-heartedness.
The obfuscation begins early on with the linking of this crackdown to the attacks of Sept. 11, 2001 when, as has been pointed out by many commentators, those responsible for those attacks had no connections to the countries targeted by this order. The bigotry of the decree closing our borders to refugees from these seven countries is most evident in the exception it makes for religious minorities in predominantly Muslim countries.
The hard-heartedness of the executive order is unmistakable. Desperate families who have been thoroughly vetted for months have had their dreams of a safe haven in America shattered. Students, scientists, artists and businesspeople who have played by the immigration rules to ensure that they have secure passage to and from the United States now find themselves in limbo. Colleges and universities that attract and depend on international talent will be weakened. So much for the so-called respect for law of an administration that has made a point of promising to crack down on undocumented children brought over the Mexican border by their parents.
Eighteen months ago I solicited ideas from Wesleyan alumni, faculty members, students and staff members as to what a small liberal arts institution like ours could do in the face of the momentous human tragedy unfolding around the world. We discussed the many ideas we received on our campus and with leaders of other institutions. The steps we took were small ones, appropriate to the scale of our institution. Working with the Scholars at Risk program, we welcomed a refugee scholar from Syria to participate in one of our interdisciplinary centers. We created internships for students who wanted to work at refugee sites in the Middle East or assist local effort at resettlement. We began working with the Institute of International Education to bring a Syrian student to Wesleyan. And, perhaps most important, we redoubled our efforts to educate the campus about the genesis and development of the crisis.
In the last few months, I have traveled to China and India to talk about the benefits of pragmatic liberal education, and in both countries I saw extraordinary enthusiasm for coming to America to pursue a broad, contextual education that will develop the student’s capacity to learn from diverse sets of sources. Since returning, I’ve already received questions from anxious international students and their parents about whether we will continue to welcome people from abroad who seek a first-rate education. Students outside the United States are often fleeing educational systems with constraints on inquiry and communication; they are rejecting censorship and premature specialization, and they are looking to us. Will they continue to do so?
Here at home we must resist orchestrated parochialism of all kinds. A liberal education includes deepening one’s ability to learn from people with whom one doesn’t agree, but the politics of resentment sweeping across our country is substituting demonization for curiosity. Without tolerance and open-mindedness, inquiry is just a path to self-congratulation at best, violent scapegoating at worst.
With this latest executive order, the White House has provided colleges and universities the occasion to teach our students more thoroughly about the vagaries of refugee aid from wealthy, developed countries that are themselves in political turmoil. The new administration has also unwittingly provided lessons in the tactics of scapegoating and distraction traditionally used by strongmen eager to cement their own power. There are plenty of historical examples of how in times of crisis leaders make sweeping edicts without regard to human rights or even their own legal traditions.
Our current security crisis has been manufactured by a leadership team eager to increase a state of fear and discrimination in order to bolster its own legitimacy. The fantasy of the need for “extreme vetting” is a noxious mystification created by a weak administration seeking to distract citizens from attending to important economic, political and social issues. Such issues require close examination with a patient independence of mind and a respect for inquiry that demands rejection of falsification and obfuscation.
As the press is attacked with increasing vehemence for confronting the administration with facts, universities have a vital role to play in helping students understand the importance of actual knowledge about the world -- including the operations of politics. To play that role well, universities must be open to concerns and points of view from across the ideological spectrum -- not just from those who share conventional professorial political perspectives. At Wesleyan, we have raised funds to bring more conservative faculty to campus so that our students benefit from a greater diversity of perspectives on matters such as international relations, economic development, the public sphere and personal freedom. Refusing bigotry should be the opposite of creating a bubble of ideological homogeneity.
As I write this op-ed, demonstrators across the country are standing up for the rights of immigrants and refugees. They recognize that being horrified is not enough, and they are standing up for the rule of law and for traditions of decency and hospitality that can be perfectly compatible with national security.
America’s new administration is clearly eager to set a new direction. As teachers and students, we must reject intimidation and cynicism and learn from these early proclamations and the frightening direction in which they point. Let us take what we learn and use it to resist becoming another historical example of a republic undermined by the corrosive forces of obfuscation, bigotry and hard-heartedness.