August 31, 2017
By Charlene Crowell
NNPA Newswire Columnist
A scheme designed to evade an important Department of Education rule could soon lead to an estimated 41,000 former Corinthian College students and loan borrowers receiving more than $183 million in student loan relief.
Aequitas Capital Management, a former financial services firm, is charged with acting in concert with Corinthian College to preserve the now-closed for-profit college’s heavy reliance upon federal financial aid. Operated across much of the country, the alleged fraudulent partnership also enabled Corinthian to trap students in unaffordable private student loans.
“Tens of thousands of Corinthian students were harmed by the predatory lending scheme funded by Aequitas, turning dreams of higher education into a nightmare,” said Consumer Financial Protection Bureau (CFPB) Director Richard Cordray. “We will continue to address the illegal lending practices of for-profit colleges and those who enable them.”
An investigation and subsequent charges were coordinated by a state-federal effort that included 13 state attorneys general, working with CFPB, and representing California, Colorado, Connecticut, Florida, Illinois, Iowa, Kentucky, Maryland, New York, Oregon, Pennsylvania, Texas and Washington.
Together the governmental officials charged that Aequitas aided Corinthian in a $230 million predatory lending scheme to mask its lack of compliance with a Department of Education rule requiring for-profit colleges to have a minimum 10 percent of its revenues from non-governmental sources. The CFPB alleges that both firms knew the students could not repay the loans and would default. At the time, the default rate ranged from 50 to 70 percent.
The default would not affect Aequitas, because Corinthian was committed to buying back all delinquent loans. Aequitas retained only those loans that did not default, but charged high interest rates and therefore reduced the chance of any financial risk.
In 2016, the Securities and Exchange Commission also sued Aequitas and three of its top executives. That complaint alleged the firm ran an illegal Ponzi scheme that defrauded 1,500 investors.
“These were sham loans used by for-profit schools and lenders to access federal taxpayer dollars to fund programs that did nothing to help students get ahead,” noted Illinois Attorney General Lisa Madigan. In Illinois, Corinthian owned and operated seven Everest College campuses and approximately 2,800 Illinois students are expected to be eligible for relief.
These private-label loans known as “Genesis” loans had terms that required students to begin repayment as soon as they were enrolled in Corinthian classes. The government investigation also charges that both Aequitas and Corinthian continued to make the loans, despite knowing students could not afford them. Aequitas reportedly knew that the loans provided no benefit to Corinthian other than the appearance of eligibility for federal funds.
If the proposed settlement is approved, eligible borrowers will be notified within 90 days following its announcement. Officials estimate that borrowers will average $6,000 to $7,000 in loan relief.
Genesis loan borrowers, who were 270 days or more past due as of March 31, will receive forgiveness on all balances, according to CFPB. All other Genesis loan borrowers would be forgiven any accrued and unpaid interest, fees and charges that were 30 days or more past due as of March 31; additionally, these borrowers’ remaining principal owed would be cut 55 percent.
Earlier this year, the Center for Responsible Lending (CRL) released a series of research reports on for-profit colleges. Findings revealed that for-profit students have lower graduation rates and carry heavier debt loads than their counterparts at private, non-profit and public schools. The research also uncovered that students of color are disproportionately enrolled in for-profit colleges in Connecticut, Colorado and Maine. Though these states have comparatively few residents of color, students of color were heavily recruited.
“Many for-profit college students are working hard to break into the middle class and build financial security for themselves and often their families,” said Lisa Stifler, CRL’s deputy state policy director. “Our research shows the anguishing outcomes of high debt, no degree and few promising job prospects that fall more heavily on people of color.”
These findings and others underscore the fact that as higher education costs continue to climb, the choice of institution is ever more important. Just as a combination of state and federal resources were needed to bring former Corinthian College students closer to financial justice, it will take continued efforts at both levels of government that are watchful of the quality of education offered.
Recent rollbacks in consumer protections from the U.S. Department of Education (DOE) do not bode well for student borrowers. For example, the Gainful Employment rule developed under the Obama Administration holds hundreds of career colleges accountable for the education students received. Earlier in August, DOE announced its intention to “reduce the burden on institutions” by extending appeal deadlines involving schools that failed the rule.
Further, instead of objective measures to determine regulatory compliance, appeals will be reviewed on a case-by-case basis. These institutions may also continue to enroll students dependent upon federal financial aid—even during appeal.
“Unfortunately, Corinthian is not alone in abuses that harm students,” added Stifler. “State and federal regulators must continue to crack down on the widespread problems that exist among for-profit schools.”
July 13, 2017
By Charlene Crowell
NNPA Newswire Columnist
Decades of vigilant struggles, sacrifices and civil rights legislation enacted in the 1960s won federal promises to ensure that discrimination is illegal and would not be tolerated. Unfettered access to housing, voting rights, fair credit, public accommodations and more were marked and celebrated as hard-fought victories for Black Americans and other people of color. In later years, additional protections were added as amendments to safeguard the rights of the elderly, disabled, and the LGBT community.
Now in 2017, a growing number of interests are openly questioning whether the Trump Administration intends to uphold these laws. More specifically, a series of federal agencies with offices dedicated to civil rights are at risk. Through budget cuts and staff reductions, these agencies will either outright deny or severely limit the ability to challenge discrimination that continues today.
Case in point: the Department of Education’s scaling back of civil rights enforcement. Proposed Trump Administration departmental budget cuts will result in the loss of the equivalent of 46, full-time positions. For remaining staff, caseload levels will rise.
Commenting on the severity of cuts, Laura Dunn, the executive director of SurvJustice, a DC-based nonprofit that supports legal justice recently told Inside Higher Ed, “They know that they can’t complete these investigations with such a lean budget and inadequate staffing.”
On June 8, Candice Jackson, the Acting Assistant Secretary for the Office of Civil Rights (OCR) issued an internal Education memo directing all 12 regional Office of Civil Rights (OCR) staff of immediately begin new practices. Per Jackson, the Education Department goal is to swiftly address compliance issues, reach reasonable resolution agreements and encourage voluntary settlements wherever possible. Staff members, who handle investigations, were advised to clear case backlogs and resolve complaints in a “reasonable time frame.”
Education’s OCR is charged to prevent, identify, end and remedy discrimination against students. OCR investigates education complaints involving admissions, recruitment, financial aid, academic programs, student treatment and services, vocational education, housing, employment and more. Complaints may be filed by an affected consumer or on behalf of another person or group.
Under the Obama Administration, additional OCR staffing in the Education Department was added to better meet the goal of closing cases within 180 days. In some instances, clearing case backlogs took years, instead of days, to thoroughly investigate and resolve complaints.
On June 16, the nonpartisan U.S. Commission on Civil Rights weighed in on proposed cuts and issued a lengthy statement detailing a new two-year, comprehensive assessment of federal civil rights enforcement. In part the statement read, “The review will examine the degree to which current budgets and staffing levels allow civil rights offices to perform their statutory and regulatory functions.”
“The Commission has grave concerns about continuing signals from the current Administration, including the President’s proposed budget and statements of Cabinet and senior Administration officials, that the protection and fulfillment of civil rights of all persons will not be appropriately prioritized,” continued the Commission statement. “These proposed cuts are particularly troubling in light of Education Secretary Betsy DeVos’ repeated refusal in Congressional testimony and other public statements to commit that the Department would enforce federal civil rights laws.”
Other agencies that will also be reviewed by the Commission include: Environmental Protection Agency (EPA), Health and Human Services (HHS), Housing and Urban Development (HUD), Justice, Labor, and the Legal Services Corporation.
More criticism of the Education Department under Secretary DeVos arrived on June 27 when 34 U.S. Senators representing 22 states sent their own detailed letter of concern. Two of the three Black U.S. Senators now serving in the Senate were signatories: California’s Kamala Harris and New Jersey’s Cory Booker.
“You claim to support civil rights and oppose discrimination, but your actions belie your assurances,” wrote the Senators.
The senators’ letter continued: “Closing cases quickly at the expense of the quality of the investigation is not in the long-term interests of the complainants and impedes students, teachers, and families in receiving just resolutions. Rather than abandon a systematic approach, we strongly urge you to support increased funding for OCR’s budget to allow the office to hire additional personnel to swiftly resolve complaints.”
Research by the Center for Responsible Lending (CRL) has found that students of color are often targeted by high-cost private career and training institutes that advertise high incomes for 21st Century jobs. However, the outcomes promised and the experiences of these students do not match. Only 27 percent of all for-profit students in four-year programs graduate within six years.
Students who do not graduate almost always wind up with deep student debt and low-paying jobs. When their loan repayments become too costly to maintain, loan defaults result that mar their credit profiles.
“If the Education Department was serious about addressing civil rights enforcement,” noted Robin Howarth, a CRL senior researcher, “they would be continuing the Obama Administration’s emphasis on adequate staffing of this complex and time-consuming function. Instead, they opt for gutting the standards of investigation in favor of quick resolution of cases.”
Howarth is right. Closing complaint cases quickly is not the same thing as justice.
June 22, 2017
By Bona Malwal
NNPA Newswire Guest Columnist
I am a native of Sudan and now of South Sudan, and I’ve held several positions inside and outside of the government of Sudan.
America has always had a special place in my heart.
Let me state clearly, that without the help and support of the United States and especially former president, George W. Bush, there would be no independent South Sudan today.
South Sudan split from Sudan and became a sovereign nation on July 9, 2011. We are a proud people and have much to contribute to the global community.
My president, SalvaKiirMayardit, fought for many decades in the bush to help bring about our independence.
Whatever you think about SalvaKiirMayardit, he is our president and our people put him in office. The South Sudanese never quite understood why President Barack Obama openly talked about circumventing the will of people, by coming up with a “different plan” for the future of the fledgling nation.
In 2015, Voice of America reported that Obama contemplated moving forward “with a different plan,” because he thought that our leaders were “incapable of creating” a lasting peace. Obama and the United Nations tried to enforce a strict August 17 deadline for signing the peace deal that year.
The New York Times also reported that Obama said that the world might have to come up with a "different plan" for South Sudan our young country's feuding leaders failed to meet the August 17 deadline for a peace deal. President Kiir later signed the peace deal, even though he had reservations.
“President Obama and regional leaders threatened recently to expand international sanctions and impose an arms embargo if the rival factions did not sign a peace deal,” The New York Times reported.
I was thrilled to see the political change in the U.S. with the election of Donald Trump. Republicans have always been good to the continent of Africa and especially to South Sudan.
We are hoping to have much better relations with the Trump Administration than we had with the Obama Administration. We have a lot to offer the Trump administration and the American people.
We want America to know that we are open for business, investment, and a mutually beneficial relationship.
Yes, we have oil, but we also have great agricultural opportunities, as well. We have some of the most fertile land anywhere in the world.
Earlier this year, our finance minister pledged to double oil production to nearly 300,000 barrels per day. We also have some of the most fertile, pristine, virgin land in the world.
We can also be a staunch ally to the U.S. in the global fight against terrorism. We are neighbors of Kenya and Ethiopia. We are also a majority Christian nation.
So, what are our priorities relative to re-engaging with the American people and the Trump Administration?
The first priority would be for the U.S. to restore economic assistance to South Sudan, so that we can address the immediate issue of lack of food for our people. With the rainy season having started, food access has become even more difficult. Our people count on the generosity of the American people in this regard.
It is my sincere hope that American foreign policy under President Donald Trump will return to the old United States policy of support in friendship, coupled with respect for the sovereignty of states.
The government of South Sudan, under President SalvaKiirMayardit and First Vice President Taban Deng Gai are doing their best to implement the peace agreement that was imposed on them by the outside world under the extreme pressure of President Obama. The president of South Sudan and the first vice president have not yet restored peace to their country, but they are trying very hard. They are enlisting the involvement of their entire population. Our leaders have initiated a national dialogue, involving a diverse group of community activists. Our president and first vice president need sympathy, encouragement and support, to achieve peace for their people.
It is my sincere hope, that the Trump Administration will give support for these new peace efforts in South Sudan, rather than holding the threat of regime change over our heads.
Bona Malwal is an academic visitor at St. Antony’s College, University of Oxford, United Kingdom.
June 15, 2017
BY JESSE JACKSON
In his perverse fixation on overturning all things Barack Obama, President Donald Trump now turns his attention to Cuba, the island located 90 miles off our shore. Reports are that the president plans to travel to Florida to announce that he will reverse Obama’s opening to Cuba, reinstate restrictions on the right of U.S. citizens to travel to Cuba and curtail business opportunities that Obama had opened up by executive order.
This is, in a word, ridiculous. The United States maintained an economic embargo on Cuba for more than 50 years. It plotted repeatedly to assassinate Fidel Castro and to overthrow his regime. It painted Cuba as a terrorist nation for its support of Nelson Mandela in the fight against apartheid. For more than five decades, a succession of U.S. presidents — cowed by the right-wing Cuban community in Florida — enforced an economic embargo even though the policy increasingly isolated the U.S. from its neighbors in the hemisphere and its allies across the world. When Obama finally went forward with a limited opening, he was doing more to end the isolation of the U.S. than of Cuba.
Now Castro, the leader of Cuba’s revolution, is dead. His brother Raul has announced he will leave office next year. The Soviet Union is no more; the Cold War is over. A new generation is coming to power in Cuba and a new generation of Cuban-Americans is rising in Florida. The vast majority of Americans and the vast majority of Cuban-Americans support free travel to Cubans.
So why would Trump want to revive the failed policies of the past? The reasons range from the petty to the perverse. Trump’s hatred of Obama is apparent. From Obamacare to climate policy to Cuba, he seems intent on overturning whatever Obama did — no matter how great the cost to the American people.
In the campaign, Trump pledged in Florida to overturn Obama’s opening. Right-wing Cuban-American legislators — Republican Sen. Marco Rubio of Florida, Democratic Sen. Bob Menendez of New Jersey and Republican Rep. Mario Diaz-Balart of Florida — have lobbied Trump hard to revive the travel ban and embargo. According to the New York Times, Diaz-Balart exacted a promise from Trump as a price for his vote in favor of Trumpcare. He signed off on depriving 23 million Americans of health care coverage in order to tighten the screws on Cuba.
Obama’s policy of engagement, however halting, has already shown results. Engage Cuba, a U.S. business lobby group, published an economic impact analysis on the costs of reversing Obama’s policy. It put the cost at as much as $3.5 billion in lost revenues and 10,000 jobs lost in the travel industry over the next four years. Commercial contracts that will create $1.1 billion worth of U.S. exports to Cuba in the next five years would be broken, costing more than 1,000 jobs a year.
Once more the right of Americans to travel would be sacrificed, in the name of what? Petulance? Perversity? Undying hatred? The Trump administration has made it clear that in its America First foreign policy, America’s economic and security concerns will not be sacrificed in the name of human rights. But it rationalizes its reversion in Cuba on the grounds of defending human rights and spreading democracy. This is at best what former Obama adviser Ben Rhodes called a “tragic irony,” given the Trump administration’s “complete lack of concern for human rights around the world.”
Surely, after more than five decades we have learned that Cubans, proud of their revolution and their independence, will resist economic or military coercion. One would think that Trump, who trumpets his business background, would understand that open relations with Cuba — trade, travel, human and cultural exchange — will have far more impact in generating pressure for change than a reversion to the failed embargo.
Under Castro, Cuban education and health care became the envy of Latin America. An educated generation now rises to power yearning for more. The U.S. should engage them, not seek to isolate them.