No One Looks Good in Prison Deal

September, 2023

Lincoln —  Seldom is a public policy deal struck that does not have winners somewhere along the way, but the recent state prison siting agreement on 300 acres north of Lincoln seems to be one.  No one is looking good; fingers are pointing; conspiracies abound.  

The cause of transparency in government was dealt a blow from both the state and the city.  Citizens had no warnings about what was going on.  Suddenly the state announced a new prison was to be built at North 112th and Adams Streets in northeast Lincoln, and that it had already paid landowners $17 million for 305 acres, or about $56,000 per acre.  When nearby residents revolted, the site was switched to another location north of I-80 that was already owned by the city, but which the city had previously said was not available.  The city gave it up and got the Adams street property in exchange, but with strings that it would pay for improvements at the new alternative  site.  The fait accompli was announced at a press conference.  

The rule of law may also have been dealt a blow.  There are statutory procedures that are supposed to govern such transactions.  If the state was acting under its eminent domain authority, there should have been public notice and an independent appraisal of the property.  

The cause of affordable housing lost out, too.  Imagine what landowners will think their agriculture-zoned property is worth if the state itself is paying $56,000 per acre.  Will taxpayers now have to subsidize developers even more to increase Lincoln's affordable housing stock? 

Neighborhood comity evaporated quickly, when north Lincoln residents complained that this would never have happened to south Lincoln.  And those near the final site asked why they had no voice at all in the matter. 

Ethnic and racial divides widened as Native Americans watched how quickly the city acted to move the prison away from a location next to a largely white, middle-class neighborhood, compared to their own constantly thwarted attempt — even through the city's board of zoning appeals — to protect an indigenous peoples' spiritual site in an environmentally fragile area near Wilderness Park.

Conservationists watched to see if anyone was aware how the prison site at 112th would degrade Prairie Pines, an important prairie and woodland natural habitat next door.   It was seldom mentioned.  

Penal reform advocates, who wanted to reduce prison populations as a part of prison construction considerations, lost a chance to make their arguments.  

Political analysts of all stripes, especially those with an eye for real or imagined conspiracies, widened already yawning gaps with declarations of who got the better of whom in the deal.  Some said the state cleverly planned it all beforehand to force the city's hand on the property the state wanted in the first place.  Others said the city got the better deal because it would up with a property to sell off, probably at a profit of millions at the needless expense of state taxpayers.

Was there a way to avoid all of this?  Questions remain as to why the city, or at least the city's state legislative delegation, did not press the state to explain the authority under which it was acting, and if the authority was eminent domain, to follow public transparency and appraisal requirements. 

Is there a way to move forward to remediate some of the damage done?  Yes.  The situation calls for a review by an outside, independent third party, perhaps a reputable good government organization outside Nebraska, to determine how public transparency was avoided, at what cost.  

The city could recover considerable credibility if it were quickly to commit to an open and transparent process to evaluate options on its newly acquired Adams Street property.  The city's own comprehensive plan calls for a buffer around natural resources like Prairie Pines; so does its climate action plan.  Its new local food plan might be a good fit with some of the property.  Sales of portions of the property could be used to fund conservation easements to protect other natural resources, including remaining parcels near the controversial development near Wilderness Park.  Prompt and proper appraisal of the Adams Street property would put a damper on wild land speculation around Lincoln that hurts the cause of affordable housing.  

Most of all, state and local governments must let citizens have a say.  





Time for the Big Fix in U.S. Higher Education

August, 2023

Washington — Now is a propitious time to fix much of what's wrong in U.S. higher education pricing, admissions, and financial aid.  Three recent developments make such action more plausible than previously, and a looming student loan repayment crisis makes it a necessity.  

Affirmation action based on race is out, per the U.S. Supreme Court.  Legacy admissions are perhaps the next preferences to fall, partly in response to the affirmative action decision.  And then there is Henry et al. v. Brown, a lawsuit striking at the way institutions surreptitiously manipulate enrollment management to favor the wealthy over the financially needy, which has contributed to the debilitating student loan crisis.  This case is not going away until there are many large settlements in favor of borrowers.  All eyes are on the Secretary of Education to see what he will do in response to these three developments. 

Now, as to the necessity of a sweeping fix, consider the following.  

All this is happening at a time when millions of student and parent borrowers are going back into loan repayment in October, after the Covid pandemic pause gave them three years of temporary relief.  The Biden administration is trying to effect a smooth transition to repayment but is hampered by a lack of resources from Congress to do the job.  The administration's earlier attempt to cancel up to $20,000 of debt for borrowers with annual incomes under $125,000, which would have cut the number of accounts to service by nearly half, was blocked in June by the Supreme Court.  

The Biden cancellation plan was not only blocked by the Supreme Court, it was also unpopular with many because it did not address the underlying causes of the huge debt build-up, which would be all too likely to repeat themselves quickly.  This viewpoint was widely distributed across the political spectrum, but the lack of attention to the future has been pounced upon by congressional Republicans especially, who continue to hold up funding to provide servicers what they need to get people back into repayment accurately and efficiently.  (This is ironic in that most servicers are located in red states, and are being impaired by their own congressional delegations.)

So what should the Secretary do?  There is a ready solution to address all of the above:  begin to enforce laws already on the books. 

The Secretary should send department program review teams to selected institutions with instructions to review whether their pricing, admissions, and financial aid processes are complementing or conflicting with the statutory purposes of federal student financial aid programs under the Higher Education Act. If they are complementing federal programs, they are not in trouble.  But if institutions are undermining federal programs by favoring the wealthy, in such a way that it results in higher debt for the financially needy, whether by legacy admissions or secretive algorithms, their future participation in HEA Title IV should be reviewed.*  Transparency in financial aid, and therefore in setting net price, is required by federal law.**  Serious misrepresentations by institutions in matters of admissions and financial aid are punishable under law by limitation, suspension, or termination from federal programs.***  

This reform action by the Secretary is urgently needed to convince skeptics that immediate help for servicers and borrowers (many of whom are the victims of unfair institutional practices) will not lead to even greater borrowing in the future.  Putting institutions on notice that they can and will lose their eligibility for federal student aid if they try to game the system, against the purposes of the HEA, will change institutional behavior.**** Reducing bias toward the wealthy (as well-documented by Raj Chetty and others) will also redound to the benefit of the lower income and its disproportionately large minority component.  This will counterbalance the loss of race-based affirmative action, which over the past three decades unfortunately acquired its own bias toward wealth. 

Such action by the Secretary is also necessary to restore the faith of Americans in the promise of higher education, which badly needs it.


* Legacy admissions are often dwarfed by wealth biased algorithms. Chetty et al. estimate them at 46% of bias toward wealth in their sample. Doing away with the former may only be cosmetic if it leads to increased reliance on the latter.

** 34 CFR § 668.42 Financial assistance information   

*** 34 CFR § 668.71 Scope and special definitions

**** Many institutions would welcome relief from the destructive merit-based aid arms race.  


DOJ and the Student Loan Crisis

August, 2023

Washington — How much of the nation's student loan crisis can be attributed to the Department of Justice?   It's a question that deserves more exploration than it has received.

There are at least four instances in the past few decades when DOJ made highly questionable calls that exacerbated the crisis.  

1.  In the early 1990s, a group of colleges known as the Overlap Group agreed to limit the amount of grants they were giving to non-needy students, to be able to target the financially needy instead.  DOJ stepped in to say it would be a violation of the Sherman Antitrust Act for the colleges not to compete against each other with grants for the non-needy.  A federal appeals court ruled for the colleges, but DOJ did not change its position.  Congress then carved out a narrow exemption for such colleges, but again DOJ held fast in its interpretation.  This helped set the stage for a merit-based arms race among many colleges that not only remains to this day but has spread widely, short-changing need-based aid that could have been deployed to the financially needy to reduce student loan borrowing.  It has also led to tuition hikes and the practice of discounting to give the illusion of aid.  

2.  In the early 2000s, several student loan lenders began making false claims against the Department of Education.  After Inspector General's audits, Secretary of Education Margaret Spellings ended paying the false claims but did not require the lenders to pay back any ill-gotten gains.  In subsequent litigation over the false claims, DOJ did not intervene against the lenders, despite remarkably detailed discovery evidence documenting the illegal schemes. (If this didn't result in DOJ's intervention, what would?) This sent a signal to the student loan industry that action against it from DOJ under the Higher Education Act was unlikely.  Bending or breaking rules might eventually have to be stopped, but there would be no consequences, even requirements to reimburse.  This set the stage for widespread loan servicer dysfunction in the subsequent decade, adding billions of dollars of debt onto student and parent borrowers.  Secretary Miguel Cardona recently announced the cancellation of $39 billion of such debt, which appears to be only a first installment.

3.  In 2016, another small group of colleges held discussions to try once again to limit college aid to the non-needy, which might have led to reform of legacy admissions as well.  (Legacy admissions are sometimes explained as a way for colleges to raise funds, but those funds are often returned back as aid to non-needy students.)  According to a chapter in a soon-to-be-published book about "enrollment management," when DOJ learned of these discussions, it demanded that the colleges preserve any records as possible evidence of violations of the Sherman Act.  This gave the enrollment management industry (historically associated with lenders) the green light to roar ahead on making so-called merit aid even more of a priority over need-based aid at many colleges.  The financially needy would have to rely on ever greater student loan debt.  

4.  In 2023, DOJ's solicitor general appeared before the Supreme Court on behalf of President Biden's student loan cancellation effort under the HEROES Act.  A key question in oral argument was whether the State of Missouri, out of its relationship with the Missouri-based student loan servicer MOHELA, had standing as a plaintiff.  Elizabeth Prelogar argued for DOJ that Missouri did not have standing, but inexplicably (a huge surprise to me), said MOHELA would have standing if it had been a plaintiff.  This gave the Supreme Court majority an opportunity to make a much shorter leap to give Missouri standing, if DOJ was conceding that MOHELA had it.  

I thought at the time (and still do) that this was a huge gaffe tactically and an abrupt reversal of DOJ policy.  In 2016, the loan servicer PHEAA asked the Supreme Court to take up, on certiorari, a 4th Circuit decision that PHEAA was not an arm of Pennsylvania.  The Court asked the solicitor general to advise it of the position of the United States on the question.  In the summer of 2016, in the DOJ solicitor general's office, both PHEAA counsel and counsel for two plaintiffs against PHEAA gave presentations.  (I was present for the plaintiffs.) In a written response to the Supreme Court's request shortly thereafter, the solicitor general counseled the Supreme Court to deny certiorari to PHEAA, on grounds that it was not an arm of Pennsylvania, which the Court then did in January, 2017.* 

The relationship of PHEAA to Pennsylvania is substantially the same as MOHELA to Missouri.  What made Elizabeth Prelogar suddenly argue that MOHELA would have had standing?  The Supreme Court had denied PHEAA certiorari on essentially the same question.  Why didn't DOJ raise this?  Neither Missouri nor MOHELA had standing until DOJ gave MOHELA away in oral argument.  It was then inevitable for Chief Justice John Roberts to exploit it in his written decision.  

It can be argued that the Supreme Court majority was bent on making the student loan case another notch in its belt supporting a "major questions doctrine," regardless of roadblocks in its way, but why was DOJ such a willing party to it on the question of standing?** On such points is the course of history determined.  

It is another example of how DOJ has made dubious decisions on student loan matters for decades, which have disadvantaged borrowers and have actually undermined the federal government's own programs to help the financially needy.  DOJ actions have driven up borrowing and its inactions have contributed to a broken student loan servicing system.  Its gaffe hangs over future attempts to provide student debt relief.  

What will done about it?  DOJ has recently shown signs that it is beginning to understand how it has been hurting the financially needy, and how some colleges have tried to use their (now-expired) statutory exemption from the Sherman Act to collude in favor of merit-heavy enrollment management schemes.  Is DOJ's decision to file a statement of interest with the court in the Henry case a long-overdue reversal?  Probably not.  DOJ still has a long way to go.***   


*See Dan E. Moldea, Money, Politics, and Corruption in U.S. Higher Education (2020), pp. 125-126.

**DOJ and the Solicitor General were more impressive in defending the use of the HEROES Act as the basis for student loan relief, although many experts believe the HEA would have been a better choice.  Unfortunately, DOJ also disadvantaged itself on the matter of the relief apparently being so costly that it triggered a "major question" in the view of some on the Court.  The relief could and should have been scored at a "minor question" level by subtracting debt cancellation already (April, 2022) announced and owed borrowers as a result of servicer dysfunction, as well as subtracting uncollectible amounts already subject to the Federal Claims Collection Standards (FCCS), 31 C.F.R. Subt. B, Ch. IX, which is under DOJ and Treasury jurisdiction.  The numbers presented to the Court were double- and triple-counting, and should have been unduplicated.  Had they been, the sharpest written exchange among justices in modern Court history, which has shaken the Court's standing in the eyes of the public, could have been avoided.

***From the DOJ statement of interest: "The United States offers no view on Plaintiffs’ antitrust standing, their factual claims, the proper definition of “need-blind,” the application of any applicable statute of limitations, or the separate motions to dismiss...."  In other words, in its statement DOJ offered the court a way out of the case without ever looking at how exactly financially needy students were being forced into higher levels of debt, despite the plaintiffs' detailed descriptions of enrollment management schemes that were illegal if for no other reason than they were secretive and not disclosed as required by the Higher Education Act (see citations below).  Rather than dealing these schemes a coup de gras, DOJ is choosing to soft-pedal them. 

34 CFR § 668.42 Financial assistance information.


(1) Information on financial assistance that the institution must publish and make readily available to current and prospective students under this subpart includes, but is not limited to, a description of all the Federal, State, local, private and institutional student financial assistance programs available to students who enroll at that institution.

(2) These programs include both need-based and non-need-based programs.

(3) The institution may describe its own financial assistance programs by listing them in general categories.

(4) The institution must describe the terms and conditions of the loans students receive under the Federal Family Education Loan Program, the William D. Ford Federal Direct Student Loan Program, and the Federal Perkins Loan Program.

(b) For each program referred to in paragraph (a) of this section, the information provided by the institution must describe -

(1) The procedures and forms by which students apply for assistance;

(2) The student eligibility requirements;

(3) The criteria for selecting recipients from the group of eligible applicants; and

(4) The criteria for determining the amount of a student's award. 
[Emphasis added]    

34 CFR § 668.71 Scope and special definitions.

(a) If the Secretary determines that an eligible institution has engaged in substantial misrepresentation, the Secretary may -

(1) Revoke the eligible institution's program participation agreement, if the institution is provisionally certified under § 668.13(c);

(2) Impose limitations on the institution's participation in the title IV, HEA programs, if the institution is provisionally certified under § 668.13(c) ;

(3) Deny participation applications made on behalf of the institution; or

(4) Initiate a proceeding against the eligible institution under subpart G of this part.

Will Merlin Hear these Birds in the Future?

August, 2023

Lincoln — The bird identification app Merlin heard the following birds during the early mornings of July 23-29 on the north half of our tallgrass prairie and riparian woods at 5840 West Superior.  

The property is in the process of receiving a conservation easement, but two neighboring properties to the north and east, currently grasslands, may soon be developed.  If that happens, how many of these species will disappear?  Likely a majority of them.  

July 23. Red-eyed Vireo, Downy Woodpecker, Northern Cardinal, American Goldfinch, Black-capped Chickadee, Field Sparrow, American Crow, House Wren, Red-headed Woodpecker, American Robin, Song Sparrow, Cedar Waxwing, Blue Jay

24. (additional) Vesper Sparrow, Upland Sandpiper, Eastern Kingbird, White-breasted Nuthatch, Common Yellowthroat, Baltimore Oriole, Rose-breasted Grosbeak, Eastern Wood-Pewee, Red-bellied Woodpecker, Gray Catbird, Grasshopper Sparrow, House Finch, Red-tailed Hawk 

25. (additional) Cooper's Hawk, Great-tailed Grackle, Eastern Meadowlark

26. (additional) Dickcissel

27. (additional) Yellow-throated Vireo

28. (additional) Great-crested Flycatcher, Brown Thrasher

29. (additional) Killdeer

Total July 23-29: 34 species

Unexpectedly absent from the Merlin list (heard or seen at other times):  Great Horned Owl, Barred Owl, Yellow-billed Cuckoo, Northern Bobwhite, Yellow-shafted Flicker, Red-winged Blackbird, Tree Swallow, Barn Swallow, Eastern Bluebird, Orchard Oriole. 

And what about butterflies and other pollinators?  Monarchs were spotted frequently during the last week of July, especially on Whorled milkweed, Common milkweed, and Butterfly milkweed.  Wachiska Audubon reports in its August newsletter that the 17-acre aforementioned grassland to the east, owned by the City, "was hayed a few weeks ago, and by the end of July the native grasses and forbs had really taken off.  There were dozens of common milkweed plants that were over two feet tall after the haying and some timely rains...."  Wachiska deserves credit for clearing invasives from this parcel to give grassland birds and pollinators a chance.  

Speak for Yourself, David Brooks

August, 2023

Washington — David Brooks made a splash with his column "What if We're the Bad Guys Here?"

We can condemn the Trumpian populists until the cows come home, but the real question is: When will we stop behaving in ways that make Trumpism inevitable?

Speak for yourself, David Brooks. Just when will you stop? You're long overdue.

Some of us have been trying to behave responsibly, reaching out to the Trumpian populists to address their real needs, to demonstrate to them that democracy works, that they do not need to follow a dangerous authoritarian to get their voices heard and their needs addressed.

I've spent years working on the Farm Bill (which should be called the Food Bill), trying to get elected officials on both sides of aisle to make the bill a vehicle to address crises in rural (and culturally rural) areas, such as the lack of healthy food, the faltering health care system, and the deaths of despair caused by obesity and opioids. One solution would be to bring back the Extension Service to address nutrition and wellness. Do you know what the Extension Service is, why it is trusted when other institutions are not, and why channeling help through it could make a big difference in political as well as physical health? Do you and your fellow Bad Guys (the so-called elites) ever think in these terms? Not in my experience.

I've spent even more years trying to stop the nation's student loan system from widening class and race inequalities.  With rare exception, I have not noticed you and your fellow Bad Guys engaged in this effort. Now higher education is widely distrusted, especially by the Trumpian populists, which portends ill for the nation on many levels — political, economic, and social.

So, yes, stop behaving so counterproductively, so stupidly, if I may say it that way.  For good advice, seek out people who have the highest Bad Guy credentials but have overcome them.  We're out there. Will you pitch in?


Is It Racketeering?

August, 2023

Washington — A few years ago, a Philadelphia newspaper reporter called me to validate, if possible, what he thought was an outrageous statement from a board member of the federal student loan servicer PHEAA.  The board member had told him that PHEAA did not cancel federal student loans even if borrowers qualified by law, because holding onto the loans was how PHEAA made money, not by canceling them.

I told him it was all too true and he had an obligation to report it publicly for the sake of the integrity of the federal student loan program.  Not to mention how PHEAA was adding to ever-higher debts for many who will never be able to pay them off.   

The call came around the same time a PHEAA employee asked me for advice on how to fight his dismissal for objecting to how PHEAA was misleading borrowers through its call-center operations.

It was not long until the attorneys general of Massachusetts and New York both sued PHEAA on behalf of their states' borrowers.  

The U.S. Department of Education, however, took the side of PHEAA.  In a March, 2018, notice from Secretary Betsy DeVos, the Department claimed that neither states nor borrowers could bring actions against PHEAA because of "federal preemption" under the Higher Education Act.  (Talk about federal overreach!) The Department also ended its cooperation with another federal agency, the Consumer Financial Protection Bureau, with regard to student loan borrower complaints.  The Department of Justice even attempted to intervene against the Massachusetts lawsuit. 

These actions were led and coordinated by former PHEAA employees who rotated through the Department of Education.

Fast forward to 2023.  Several state and federal judges have knocked down the "preemption" attempt to bilk borrowers and the Department of Education has, appropriately, begun to make remediations to those victimized. 

In the Federal Register of July 24, 2023, Secretary Miguel Cardona finally reversed the bizarre attempt to protect servicers from borrowers, and from states acting on behalf of borrowers.  He announced the return to "cooperative federalism," the foundation of the Higher Education Act of 1965.  This follows his action earlier in the month to cancel $39 billion of student debt that was the result of improper servicer actions.

An experienced attorney with considerable federal experience is now asking, in part on behalf of family members who have been borrower victims, if PHEAA's willful behavior is an example of illegal conduct under the Racketeer Influenced and Corrupt Organizations act (RICO).   It certainly seems to be.  If this isn't racketeering, it's hard to imagine what would be.   

PHEAA is no longer a federal loan servicer; much of its portfolio has been transferred to MOHELA, a servicer with its own set of credibility problems.  But that does not mean a RICO lawsuit against PHEAA could not be brought.  

Moreover, at what point should colleges have been obligated to warn potential borrowers of the risks involved in taking out student loans, that servicers could and would undermine the terms and conditions of the loans, and that consumer protections would be erased in the process?  Would the FTC and SEC permit the marketing of such products in other sectors of the economy?  Surely not.    

I regret that I was never able to help the PHEAA employee who was fired.

To my knowledge, the Philadelphia newspaper reporter never made public what the PHEAA board member told him.  Had he done so, perhaps that $39 billion — and counting — figure would have been much lower.    




Secretary's Bombshell

July, 2023

Washington — After yesterday's bombshell announcement by the Secretary of Education that the government would cancel $39 billion of student loans for over 800,000 borrowers, it's time to get answers as to what's going on here.  

The Secretary said it is necessary to act to correct mistakes that were made in a broken lending and servicing system, which is one way of putting it.  A more accurate way would be to call it what it is:  finally, a quantification of years of massive waste, fraud, abuse, mismanagement, malfeasance, deception, and racketeering.

While I applaud the work of those dedicated employees at the U.S. Department of Education who have been working tirelessly to bring fairness to victimized borrowers (you know who you are), here are questions that must now be answered about the ongoing debacle that has been festering for many years:

  • What did the government know and when did it know it?  
  • Was there inside help for the perpetrators from within the Department of Education and Department of Justice?
  • Will there be clawbacks from any loan servicers or will taxpayers have to pay the entire cost of the cancellations?  
  • Will there be an investigation and prosecutions?  

If there is an investigation, I stand ready to assist to the extent I can shed light on these and related questions.  When the government knew can be pinpointed; who assisted inside the government can be identified.  Evidence is abundant.  Some is already public; some would have to be released by the government itself.  

This morning I received an email from a student loan borrower in Oregon who had been victimized badly over the years, into whose case I looked in much detail.  She was notified yesterday that most or all of her remaining loan balance would be cancelled.  I had taken up her case directly with the Department, which kindly allowed me to describe exactly how lenders and servicers worked their frauds and deceptions on her.  She wrote: "This is GREAT news and a huge relief."

This is being repeated in 800,000 households today.  Again, I applaud those in the Department of Education, and in the borrower-advocacy community, who have worked so hard for this moment.

As a taxpayer, however, I want investigations and accountability.*  And corrections to the "broken system" that gave rise to it all.  


* How is the $39 billion being scored on the government's books?  In the case of the Oregon borrower, she had already paid back nearly all of her original principal and her balance was almost wholly attributable to lender and servicer "mistakes," as the Secretary put it.   It was never properly an account receivable and its correction requires no government outlay.   A further scoring question:  how much of the $39 billion would have duplicated the Biden administration's cancellations under the HEROES Act?  To the extent the HEROES cancellations would have zeroed out about half of the eligible borrowers' accounts, it would be duplicative.  Because the policy behind the $39 billion was announced months before the HEROES cancellations, it should have been considered current policy and scored to reduce the HEROES cost estimate that the Supreme Court used to convince itself that the HEROES cancellations constituted a "major question."  As more and more victimization of borrowers is revealed — wait for discoveries on Parent PLUS loans — it will become apparent that the HEROES cancellations were not so major after all.    

Mixed Supreme Court Messages

July, 2023

Washington — Talk about mixed messages.  Take these two, from Chief Justice John Roberts' majority opinions on, respectively, the recent affirmative action and student loan cancellation cases.  They seem to go against the thrust of the balance of the two opinions:

Nothing in this opinion should be construed as prohibiting universities from considering an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise. 

We hold today that the act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.

I interpret these passages if not as invitations, at least as openings for the Biden administration to reshape the higher education landscape, which badly needs it.   

Many colleges and universities themselves had turned affirmative action, in practice, into a fig-leaf coverup for admissions and financial aid discrimination against the lower income, ironically putting financially needy black students disproportionately into debt.  Now is a chance to change that, by starting to look at all relevant factors in both admissions and financial aid.  

As for student debt cancellation, the way now seems clear for the Secretary to use his compromise and settlement powers under the Higher Education Act to remediate wrongs committed against borrowers who have been victimized by well-documented debt traps.  Now is a chance not only to provide relief to borrowers, but to gather public support for such cancellations as a matter of fairness.  Borrowers did not sign up for the kinds of predatory lending practices they too often encountered at every step of the way.  The Biden administration has not done a good job of explaining that, and it has cost them dearly.  Had they fashioned debt relief around fairness from the outset, we would all be in a better place today.* 

Among the first statutory or regulatory provisions to modify would be interest rates (and fees) that brought in more revenue, for a decade, than was necessary to cover the cost of the program, and then compounded at high rates when borrowers fell behind, reducing the possibility that they could ever pay off their debt.  

Another provision to modify relates to bankruptcy, to bring it closer to how other consumer debt is treated. 

The Biden administration should also move to shut off any suggestion that the Supreme Court's awkward stretch to make MOHELA an arm of the State of Missouri gives MOHELA and other loan servicers sovereign immunity.  Borrowers and consumer protection agencies, now more than ever, need to be able to hold them accountable for mistakes and deceptions. 

These actions should not be made in a vacuum, but with an eye toward higher education reforms that reduce reliance on student (and parent) debt.  The whole country is waiting for leadership.  I suggest getting back to cooperative federalism, also known as skin-in-the-game for states and institutions.  

As to timing, it would be a mistake to try to channel everything through negotiated rule-making.  Early and decisive action is necessary in the face of a looming loan re-payment crisis.  

Advice: while it may be tempting simply to fulminate against the Supreme Court, in order to stir up anger in the base, the better course is to use the openings the Court left open to actually solve problems. 

*A crucial number to know, which the Biden administration has never provided, is how much of the $1.6 trillion in debt is principal and how much is interest, fees, capitalized interest, penalties, negative amortization, and the like.  This would be helpful in fashioning a compromise and settlement initiative that would be widely accepted by the public, if explained.  




Virginia Family Research

June, 2023

Lincoln — This, the month of the new official American holiday Juneteenth, is a fitting time to look at the history of slavery in the Virginia branch of our own family.  I've been a subscriber to the genealogical research service Ancestry for several years.  The following is a summary of what I've found.  

It also presents an opportunity to raise questions about others' conclusions on certain slavery related matters, some of which seem off-base and in need of correction. 

Most of my ancestors emigrated from Sweden to America in the late 19th century, but my paternal grandmother's roots go back to early colonial Virginia.  Through her, Ressie Mae Zicafoose Oberg, I am a 3rd cousin, six times removed, of our fourth president, James Madison, and a 1st cousin, five times removed, of our twelfth president, Zachary Taylor.  Both were slaveholders.  

Madison, father of the Constitution and drafter of the Bill of Rights, did not free his slaves but left them to his wife Dolley, with the provision that they not be sold without their consent. Taylor also did not free his slaves, asking only in his will that in their old age they be "made comfortable."  

As to my direct ancestors, several Virginians were slaveholders.  Among the earliest were generations of Strother families, of English emigrant origin, dating from the mid-17th century and accounting for the presidential connections.  In the late 18th century, however, Anthony Dabney Strother and his wife, Frances Eastham Strother, freed their slaves on grounds that the practice was immoral, according to an account written by their son Philip Eastham Strother, who became a Methodist minister in Kentucky.  Henceforth my line of Strothers, who descended from another of the couple's sons, Francis, in Pendleton County, Virginia, were not slaveholders.  

Judge Harlan M. Calhoun, a very distant relative, wrote in a foreword to his father's local history of the Civil War, "There had been virtually no slaveholders in Pendleton County."  A closer inspection, unfortunately, shows this is not true.* Notwithstanding the Strother example, my ancestral lines in that mountain county west of the Shenandoah included slaveholders among the Hull, Wimer, Simmons, Ruhlman, Phares, and Hoover families. 

Ancestor Peter Thomas Hull (1706-1776) emigrated to the area, via Pennsylvania, from the German Palatine.  His daughter Catherine married the Palatine emigrant Peter Zickafoose (Ziegenfuss), creating the Zicafoose line in America. Hull's son Captain Peter Hull, who led a Revolutionary War militia company against Cornwallis at Yorktown, eventually became one of the largest slaveholders in the area, with sixteen slaves in 1810.   

Ancestor Philip Wimer (1756-1839), whose parents perished at sea in 1771 as the family emigrated from Frankfurt to Philadelphia, became indentured to a Pendleton County miller.  He subsequently joined Captain Hull's unit and later became a slaveowner in the county along with his son, Philip Wimer, Jr.  (After the Civil War, in the 1880s, with slavery a memory, his grandson Peter B. Wimer moved the family to Lancaster County, Nebraska, near North 84th and Agnew Road, where he was joined by his daughter Susan [whose mother was Sarah Strother], her husband William Clark Zicafoose, and their children Otto and Ressie Mae.)   

Ancestor Leonard Simmons, along with his son Captain Henry Simmons and grandson William George Simmons, also became slaveowners in Pendleton County in the first decades of the 19th century. The 1810 census shows that our 4th great-grandfather Captain Henry Simmons (1760-1825) owned four slaves. His 1823 will gave his slave Reuben to his son William George Simmons. The will also provided that if his "negroe man Larrence...and negroe woman Else should get so old as not to be abel to maintain themselves the heirs must maintain them..." Other slaves owned by Captain Simmons, according to his will, were Anthony, Daniel, Elsey, Hannah, Fanny, and Judey.

Ancestors Christian Ruhlman, Johnson Phares, and Michael Hoover owned fewer slaves.  Michael Hoover at his death had only one slave, Jim, and in his will gave him his "entire freedom."  I don't know what kind of person Michael Hoover was, but to his credit he did what two presidents wouldn't — give a slave freedom. 

Of interest is that several of these families acquired land as a result of Revolutionary War service, and then acquired slaves to work it. 

Census records and wills do not reveal much as to the hows and whys of slave ownership in these families.  Unlike other areas of Virginia, there were no cotton or tobacco plantations in the county, along the branches of the South Potomac River, hence the numbers of slaves owned was fairly small.  By the onset of the Civil War, the numbers had diminished.  Only three of the above families had slaves in Pendleton County as late as 1860.  

Back to the Strother family, in particular to our 2nd cousin, four times removed, David Hunter Strother, pseudonym 'Porte Crayon.'  He was a famous writer and illustrator known throughout America in the mid-19th century for his stories and illustrations in Harper's Monthly.  As far as I can determine, neither he nor his branch of the family owned slaves.  Revisionists** in recent years suggest he was both a slaveowner and a propagator of ugly stereotypes of slaves.  This seems wrong and a slur on his reputation.  His illustrations of the 1859 trial of John Brown and his two black co-defendants — runaway slaves — were sympathetic and aided the abolitionist cause.  A Virginian from Martinsburg, he joined the Union army, fought in thirty battles and approved the burning of VMI for teaching treason; he became a brevet brigadier general and after the war was a supporter of Reconstruction, especially of education for the formerly enslaved.  His detractors need to look at his life and work more closely.

As I was growing up in the company of my grandmother, she and the family spoke of their heritage as "Pennsylvania Dutch" (Dutch meaning Deutsch, or German), not Virginian.  Which was quite true, because several of the ancestors came from the German Palatine, first to Pennsylvania then on to Virginia.  Whether they knew much about the rest of their heritage, including slavery, I don't know.  

In all families there are heroes and rogues, sometimes even combined into single individuals; I'm curious about them all, especially now with more tools to look into both the good and the bad of family history.    


 *The reason Judge Calhoun distorted the historical facts was to make the case that our relatives who fought for the Confederacy were motivated by principle and that defense of slavery had nothing to do with it.  He wrote: 

Confederate soldiers of that county [Pendleton] were not believers in or supporters of the institution of slavery.  They fought for their conception of the rights of the people as individuals and for local self-government, much as their forbears had fought for such principles in the War for Independence. 

For some reason, he could not acknowledge that many of those Confederate soldiers had actually grown up in slaveholding families in Pendleton County. See 'Twixt North and South, by Harrison M. Calhoun, edited by Harlan M. Calhoun, Former Judge, Supreme Court of Appeals of West Virginia, McCoy Publishing Company, Franklin, WV, 1974, p. xi.    

**See, for example, "Race and the Rise of a Mass Visual Culture: The Case of David Hunter Strother’s Virginia Illustrated" by Christopher Lukasik, American Literary History, Volume 32, Issue 3, Fall 2020, Pages 446–479,  The author writes, misleadingly:

The publication of David Hunter Strother’s Virginia Illustrated under the pseudonym Porte Crayon in Harper’s Monthly (1854–56) provides a compelling case study through which to consider the role of race in the development of a US mass visual culture. The media combinations found within and the reception history of Virginia Illustrated demonstrate the importance of racialized viewing to the early success of Harper’s Monthly at a critical moment in media history. To be sure, Virginia Illustrated circulated racist stereotypes to be mass consumed, but the image/text operations of Strother’s literary sketches and illustrations also extended the privileges and pleasures inherent in the performance of the white male gaze to the expanding readership of Harper’s Monthly....  

This fashionable academic jargon is simply not an accurate description of the man who was chief of staff to the Union general (coincidentally his mother's first cousin) who emancipated slaves in three states before Lincoln's own emancipation of them.  Porte Crayon's detractors either want to distort his life for their own purposes or they have not done their homework on him.    


States: Beware of Education Policy Dangers

June, 2023

Lincoln — States like Nebraska are taking up ideas that have superficial appeal as good education policy but are fraught with dangers the states haven't thought through.

One such idea is completion of the federal FAFSA college financial aid application as a requirement for high school graduation, as described in a recent article in the higher education trade press.

I would not recommend it.  Do states understand that FAFSA data are often shared by colleges with enrollment management consultants to determine family price sensitivity?  Here is how Josh Mitchell in his book The Debt Trap describes what one such typical consulting company does with FAFSA family income and other data.  

Firms like Ruffalo Noel Levitz help schools determine how much to discount for each student to make as much money as possible overall. The firms use hundreds of variables – including race, home address, SAT scores, parental education level and wealth, and even how many times the student visited campus during recruiting – to gauge each student’s “price sensitivity.” That phrase refers to how much his or her family might be willing and able to pay. The firms study the behavior of the past three years of freshman classes and then suggest, down to the dollar, what the school should charge students of different characteristics.

More than requiring students to fill out the FAFSA, states should first be pressing the federal government to crack down on colleges and their enrollment management consultants who use data collection against the interests of students, families, and, ironically, federal financial aid programs themselves.  The secretary of education already has the necessary authority, under current law, to prohibit practices that undermine higher education access.  

Another suspect idea is providing generous state tax credits for contributions to private and parochial elementary and secondary schools, on the theory that this will provide more opportunity for  disadvantaged students, including minorities.  But the money may not wind up being applied to that purpose, in practice.  Money is fungible. 

States should look at the experience of U.S. higher education when federal grants, loans, and tax credits were made widely available to financially needy students and families.  Tuition-charging institutions soon adjusted tuition levels, tuition discounts ("scholarships"), and loan offerings to maximize income, employing sophisticated enrollment management consultants to shape admissions and financial aid policies.  The end result, in the case of higher education, has been more opportunity for the non-needy and increasingly large debt burdens for minorities, as documented in many analyses of the distribution of student and parent debt, by race

States would be wise to prohibit those K-12 schools benefiting from state tax credits from offering loans to pay tuition as part of dubious and downright unconscionable enrollment management plans, to head off a repeat of the nation's backfired higher education experience.*  At a minimum, states should require such schools to meet standards for admissions and pricing that regulate discredited scholarship displacement, lead generation, and recruiting practices.    

I do not express these cautions from any particular political, ideological, or religious standpoint.  Rather, the concerns are based on a career in public budgeting and finance during which I have seen many education policies result in opposite effects from those intended, and in diminished government fiscal capacity to address real educational challenges as they arise. 


*  Loans are already a common means for families to pay private K-12 tuition.  The formidable enrollment management company EAB is positioning itself to move into K-12 education with the same techniques it employs in higher education, to maximize institutional revenues and enhance brand identification.  One prominent K-12 lender that was a U.S. Department of Education postsecondary contractor is no longer, due to many successful lawsuits including one from the federal Consumer Financial Protection Bureau.