Congress and "Crisis Point" in Public Higher Education

February, 2020

Washington – This month, New America released Stephen Burd's latest work, "Crisis Point: How Enrollment Management and the Merit-Aid Arms Race Are Derailing Public Higher Education."

It is a sobering look at how too many colleges and universities have willfully failed in their mission to provide, as best they can, affordable higher education.  They have allowed themselves to be distracted by institutional prestige rankings and other baubles antithetical to the purposes for which they were established.

Two passages in the report stand out in particular.  The first shows how the distorted priorities of the institutions have contributed to the nation's student loan crisis: 

[T]he data suggest that a substantially larger share of students take out student loans at schools that spend their aid primarily on non-needy students than at those that devote most of their aid to meeting financial need, and they take out far heavier debt loads. In 2016– 2017, for instance, an average of 69 percent of seniors graduated with an average debt load of $27,893 at schools that devoted 90 percent or more of their aid to non-needy students. In contrast, an average of 55 percent of seniors graduated with an average debt load of $22,214 at schools that spent 10 percent or less of their aid budgets on non-needy students that school year.

The second suggests what might be done about it:  prioritize federal appropriations to student-aid programs that "make demands on the do their part in helping [low-income] students."

[F]ederal intervention is needed to rein in the enrollment management industry and put the brakes on the merit-aid arms race for good.  The federal government clearly has an extremely compelling interest in curbing these harmful practices. It spends tens of billions of dollars annually through the federal Pell Grant program trying to keep college accessible and affordable for low-income students. But the Pell Grant program has a major design flaw. It makes no demands on the colleges that receive the funds to do their part in helping these students. The federal campus-based aid programs—the Supplemental Educational Opportunity Grant program (SEOG) and Federal Work-Study—are many magnitudes smaller than the Pell Grant program. But they do not contain its design flaw. They require colleges to at least partially match the money they receive from these programs.

Despite the commendable analyses and the insightful policy prescriptions contained in "Crisis Point," Congress seems bent on continuing only more of the same that has resulted in the crisis.  This week, House appropriators will begin hearings on FY 21 higher education spending.  The first hearing questions to testifiers should be in reference to this new Stephen Burd report, to start to move public policy back in a direction to decrease student loan burdens and to make sure institutions are doing their part in the effort. 

The Coming National Breakups, 2021-2025

February, 2020

Washington – Barring some unforeseen stroke of good fortune, the months and years immediately ahead look grim around the globe.  Breakups of nations are increasingly likely.  The United Kingdom is under strain as never before, what with Scotland pressing for independence and Northern Ireland in an untenable situation after Brexit.  Australia faces an economic breakup with its fossil fuel industries. The European Union will have difficulty holding together without a strong successor to German Chancellor Merkel.  The continent of Antarctica is literally breaking up as record temperatures cause its ice shelves to collapse into the sea.

In the United States, the prospective re-election of Donald Trump as president, a divisive destroyer of democratic norms, will cause many states firmly under opposition party control to re-examine their roles in our country's federal system.  The states of the Northeast and West Coast in particular may look at asserting what remaining sovereignty they have left to fend off a national government led by an increasingly autocratic president unconstrained by traditional checks and balances.  Areas of likely conflict:  environmental protection and climate change, judicial process, consumer protection, immigration, and health and education.

States have sovereignty, sometimes called police powers, to establish and enforce laws protecting the health, welfare, and safety of their populations.  These powers are confirmed in the U.S. Constitution's Tenth Amendment.  States also have their own constitutions, many of which guarantee rights similar to those in the U.S. Constitution.  States have their own statutes, courts, and jurisprudence.

State sovereignty is limited by the U.S. Constitution's supremacy clause, but that clause is itself limited to situations in which there is conflict between national and state governments.  There is much waxing and waning of states' sovereign powers over more than two centuries.  In recent decades, state sovereignty has been strengthening under federal judges who, looking backward rather than forward, associate it with political conservatism and not with a growing need for a check and balance against an autocratic chief executive.

How would states exercise their sovereignty as a check on the president?  States do not have powers of "nullification" of national laws or executive orders, but neither are they bound to use their tax support or law enforcement personnel to support them.  This describes the case in so-called sanctuary cities where state and local law enforcement entities do not carry out the directions of the federal Immigration and Customs Enforcement agency, in part out of concern that they violate the rights of persons under state constitutions.

The principle can be applied to other situations where health and safety of state populations are at risk from federal agency directives.  As the president relaxes or eliminates controls on dangerous pesticides, for example, states can step in with their own statutory and executive measures, backed by their own law enforcement.

The nation's student loan crisis provides an example wherein state interests in providing consumer protections override the attempts of the U.S. Department of Education to "preempt" the student loan field.  The department has argued in federal court, unsuccessfully, that students loans are under sole federal jurisdiction even as they are egregiously mismanaged.  The federal supremacy clause is not applicable to this or other areas where the federal government's powers under the U.S. Constitution must yield to state sovereignty. 

Some states are looking now at which areas they believe their populations are most threatened by a Trump re-election, and what actions they can take to protect themselves.  One answer is interstate compacts, authorized by the U.S. Constitution.  An example might be uniform state emission standards for fossil fuels.  Although some interstate compacts are subject to approval by Congress and to a veto by the president, they are not if they do not encroach or interfere with the "just supremacy" of the United States.

Therein lies the potential for conflict, even armed conflict.  Suppose several states join together in an interstate compact to abide by the Paris agreement on emissions and a governor shuts down a methane-emitting, fossil fuel facility in his or her state, only to see the president try to nationalize the State Guard or use local law enforcement in order to keep the facility open.   What would the governor do, allow it or oppose it on grounds of the state's own police powers?

Or suppose the president attempted to nationalize a State Guard to operate detention camps of asylum seekers, whose confinement was a violation of the state's own constitutional protections, which in turn were modeled after the U.S. Constitution's Bill of Rights.  This would test the limits of "just supremacy" of the federal government over the states, inasmuch as individuals' rights against the government were themselves developed by a federal jurisprudence that has recognized the importance of state sovereignty as a check and balance in our division-of-powers system of government. 

It is a very real possibility that the United States could divide over such questions in the next few months and years.  It is plausible in the 2020 elections that, as in 2016, President Trump would lose the popular vote but win the electoral vote and, as in 2018, Democrats would retain power in many large states.  This could precipitate movement of populations among states if people begin to feel that the rights and benefits they enjoyed under the federal government are now best protected by the laws and enforcement powers of states that are comparatively more life-affirming than those (many in the heartland) characterized by vicious cycles of deaths of despair.

In recent days, the president has given a glimpse of what his second term may portend: a federal justice system directed by whim and grudge, a federal bureaucracy cowed by fear of reprisals, and an approach to climate and environmental challenges that is nothing if not an existential danger.   

Voters in 2020 should think about these matters and ask candidates at all levels of government for their positions on them.  So should the news media, which are so attuned to a 24-hour news cycle that they cannot conceive of a possible fracturing of the country only months ahead. 

Remedies for Three Democratic Blunders (Part II)

February, 2020

Washington – In the previous post, I identified three huge mistakes by Democrats since 2016.  They were truly unforced errors that now require immediate remediation if Democrats are going to have better outcomes in 2020.

First, Democratic presidential candidates must recognize that voters overwhelmingly prefer less divisiveness in our polity and are poised to reward candidates who offer it in a believable way.  A Democratic candidate who would commit to working with responsible Republicans to repair our international alliances, for example, would show the kind of leadership and courage voters are hungry for.

I'd recommend that a candidate commit now to naming bi-partisan envoys, immediately upon inauguration, to all U.S. strategic partners to re-assure them of our international goodwill.  For Republican envoys, none would be better suited than James Mattis and H.R. McMaster, formerly of the Trump Administration but doubtless patriots.  The candidate would make the equivalent commitment for domestic issues, to restore our Constitution's checks and balances.

Note that these commitments are not ideological, so there is no movement left, center, or right.  That's also what many voters yearn for: less ideological strife.

Second, Democratic candidates at all levels need to pay attention to what voters are saying in rural areas and heartland states.  There are many reasons why so many Obama voters chose Trump in 2016, and they are not going to come back to Democrats through condescension.  Voters want believable policies to offer hope to rural America.

Actually, almost all Democratic candidates now have impressive rural policy platforms on which to run, but they are still lacking emphasis on what should be an obvious connection: agricultural production and healthy food.   As a Democratic friend of mine sarcastically put it, "Who'd ever think that agriculture was connected to food?"  Democrats need to talk not only about completely re-writing the Farm Bill to provide for carbon sequestration, but to demand healthy food to curb our nation's diabetes and obesity epidemics.  Democrats must not only talk about prescription drug prices and insurance coverage for pre-existing conditions – treatments of symptoms – but go after the obvious causes of the declining health of millions.

The absence of a strong rural policy effort cost Democrats the Senate in 2018 (see Part 1) and Democrats are behind the eight-ball for 2020 as well.  Republicans are participating in secret meetings about the need for huge changes in the way we approach agriculture. But Democrats, so far, have not chosen to lead, even as they see rural America votes slipping away once again in the upcoming elections.

Third, Democrats must not give up on holding Trump accountable for his indecency, corruption, and wrongdoing.  The House missed the opportunity for censure, but there is still time for completing the historical record for impeachment out of the sentiment first expressed in the Declaration of Independence, for a "decent respect to the opinions of mankind."

This need not get in the way of other House business, such as pressing the Senate – hard – for consideration of the hundreds of bills that the House has passed and the Senate has ignored.  Voters are not happy with the Senate for denying documents and witnesses in the impeachment trial.  Conviction and removal of the president from office are no longer viable options, but the book is still open on lessons learned, and by whom.  Voters, whether they supported conviction or not, do not like an outcome in which cheating the trial process out of witnesses is rewarded.

Above all, most voters want to be "for" something, not just against.  They want a positive pull.  Democratic candidates who offer (1) less divisiveness, (2) positive policies that address real issues, and (3) governance rooted in our country's founding documents, will do well.  Unfortunately, that's not the way many of them are heading.

Three Huge Democratic Blunders (Part I)

February, 2020

Washington – Since 2016 I have seen, sometimes close-up, three colossal blunders by national Democratic leaders.

First: Hillary Clinton's failure to campaign effectively in key rural states, which cost her the election.

Second: the decision, following that loss, by Senate Democrats not to compete on rural issues in key states in 2018, which prevented Democrats from taking control of the Senate even as they would win the House.

Third: House Democrats' decision not to pursue both censure and impeachment of Donald Trump in 2019.  It should not have been seen as either/or; impeachment only was never a winner.  The consequence of impeachment acquittal has been an actual rise in Trump's popularity.

As to the Clinton 2016 election failure, this was entirely predictable, as I wrote two months before the election.  She needed a bold stroke to win, but failed to act.  Why did not more people see this coming?

As to the Senate Democrats' strategy to retake the Senate following the Clinton defeat, it can only be described as doomed from the outset.  Democrats needed a strategy to hold seats in rural heartland states, especially Indiana, North Dakota, and Missouri.  As insiders explained to me, however, Senate Minority Leader Schumer, Senate Campaign Chairman Van Hollen, and Senate Agriculture Committee Ranking Member Stabenow deliberately decided not to bring out a bold Democratic plan for rural America through the 2018 reauthorization of the Farm Bill, as a platform on which to campaign.  Their reason?  Anything coming out of "Washington" was bound to be unpopular, so it would have to be everybody for himself or herself regarding rural issues.  The whole Senate Democratic Caucus signed on to this losing strategy.  Consequently, not only did Democrats fail to take the Senate in the otherwise blue-wave election of 2018, they even lost a seat, net.

Regarding the impeachment acquittal, it was foreordained because the Senate was still in Republican control, not to mention that a supermajority is a requirement for conviction.  Democrats should have had a censure strategy to leverage the argument that if Trump wasn't going to be removed, he should at least be disciplined.  Democrats got neither, despite a convincing argument to which many Senate Republicans had to accede, that Trump had committed serious wrongdoing in Ukraine.  Now Democrats go into the 2020 presidential election with Trump emboldened to get away with even more.

These three blunders have built on themselves to devastating effect.  I don't see much sign that Democrats even acknowledge these critical strategic mistakes, let alone correct for them.  Subsequent blogs will offer plausible ways to overcome the blunders. 


Sasse's Impeachment Trial Votes

February, 2020

Lincoln – It's good to see former congressman John Cavanaugh weigh in against Senator Ben Sasse's tortured rationale for his votes in the impeachment trial of President Trump.  Sasse acknowledged the president was wrong but voted not to allow documents and witnesses in the trial.

John Cavanaugh, a great former state senator as well as congressman, is right on all counts in his Omaha World-Herald rejoinder.  Sasse's explanations for his votes are downright embarrassing.

Sasse's arguments actually support a vote for, not against, additional  documents and witnesses in the Senate impeachment trial, to determine the role of the president's advisers.   They also support a vote to convict, even if not to remove (for which a supermajority is required), so as to draw a line on presidential behavior, which Sasse concedes was wrong.  Sasse and up to fourteen Republicans had an opportunity to chasten, rather than to embolden, a president they know is a frightening danger to  the Constitution and the rule of law. 

If Sasse did not want to be the decisive vote to convict and remove, he could have so stated and thereby freed himself to follow the logic of his arguments. There is nothing wrong, and sometimes everything right, in counting votes and casting one's own accordingly.

Sasse failed a historic test.  So did several of his Republican colleagues, who gave their colleague Mitt Romney no cover for his courageous vote.  Romney is now in physical danger for saying what he concluded was simply and obviously the truth, as he saw it unfold in the trial.  Lamar Alexander also failed the test and made his vote all the worse by suggesting that, although the House managers proved their case in his mind, removing the president by the prescribed Constitutional process would throw gasoline on the fire of national divisiveness.  All tin-pot dictators in the world would love to have such supine lawmakers in their legislative branches.   The fire that comes to mind when Lamar Alexander suggests one is the Reichstag Fire, and the rationale for his vote like that of Paul von Hindenburg, and we know how that turned out.

And then there is Nebraska Senator Fischer, who in 2016 asked Donald Trump to step down from his presidential candidacy, in the name of decency, in favor of Mike Pence.  The impeachment vote was her chance, again in the name of decency, to take the same position.  Obviously decency is not what it used to be, to Senator Fischer.  She did not, even when given the opportunity of a symbolic vote to chasten Trump, so much as equivocate.  For shame.

Tunisia, 1971

February, 2020

Washington – Forty-nine years ago last month, a small group of Germans and I flew from Stuttgart to North Africa to see Nabeul, Hammamet, Kairouan, Tunis, and Carthage (what's left of it).

We traveled by Atlantis Air to Tunis, then took rickety vans late into the night, over rough roads lined with prickly-pear cactus, to our hotel on the sea at Nabeul, known as Tunisia's ceramics capital.  From there we spent several days venturing to Hammamet, known for its beaches, and then to the Islamic holy city of Kairouan, founded inland in 670 a.d.

Kairouan, which seemed closer in culture and economy to the 7th century than the 20th, is known for its oriental carpets.  We spent much time in darkened rooms admiring thick wool masterpieces, learning how many years each took to make by hand.  My travel companions went on a buying spree.  I was satisfied to take back a few tiles from Nabeul and a chance to meet and enjoy the company and culture of Tunisians.

Carthage was destroyed by the Romans and remains a ruin, outside Tunis.  Also near Tunis is Sidi-bou Said, an artists' colony.  Tunisia is noted for its unusual light, captured best by August Macke, a German artist who died in WWI.

Tunis was the site of the beginning of the Arab Spring in 2010.  I was not surprised and imagined the streets where it took place.

The nearly fifty year old photographs below show Nabeul, Hammamet, and, in Kairouan, a street scene and carpet wares.

Navy Shore Duty in Stuttgart, Germany

February, 2020

Lincoln –  Time once again to look back a half-century.

In 1969, after my two-and-a-half years of sea duty on USS Rainier and USS Arlington in the Far East, my Navy personnel detailer thought I deserved shore duty and asked where I'd like to be assigned.  I asked for the Defense Communications Agency–Europe, in Stuttgart, Germany, where there was an open slot for a Navy officer.

So from Yokosuka, Japan, I traveled first to Lincoln for two weeks' leave; then to Washington, DC, for a short assignment at the Pentagon's Navy Annex, during which President Eisenhower's funeral took place; then to Fort Monmouth, NJ, to Army satellite school; then to Stuttgart for the next two years.  It would change my life.

DCA–Europe was located in the Stuttgart suburb of Vaihingen at the former Kurmärker Kaserne, which was built for the German army's Seventh Panzer Regiment in 1936-37.  The post was also the headquarters of the U.S. European Command, so there was a lot of U.S. Army brass present.  DCA, made up of personnel from all uniformed services, operated the U.S. communication circuits in Europe and the Middle East.

At first I was a DCA watch officer, then became a circuit engineer. My duties occasionally took me around Europe to inspect communication sites.  I was in Venice for the 1969 moon landing, enroute to a remote site in Italy.

There was also much opportunity for personal travel, often with my DCA colleagues: to Munich, Paris, Zurich, Salzburg, Strasbourg.  On arrival in Stuttgart I immediately started working on learning the German language.  After some months I joined the Metropolitan Club, a German-American organization of young people dedicated to friendship, culture, and language.  We often toured in and around Stuttgart.  It was at a Metropolitan Club Christmas party in Nelligen that I met my future wife, Annette Rohrberg.

In August, 1970, my active duty obligation expired; I left the Navy in Stuttgart but remained there until May, 1971, teaching for the University of Maryland on Army posts in Stuttgart and Mannheim.  In 1970 and 1971, I had ample time for a visit from my Nebraska family, then for extensive travel with German tour groups throughout Tunisia, the Soviet Union, and Turkey. 

The photographs below show the Eisenhower funeral procession; the Officers' Club at the U.S. European Command in Vaihingen; Oktoberfest in Munich with Marine Captain Mick Zwick on the left and Dagmar Shannon and her husband Navy Lieutenant Bill Shannon at right; Stuttgart Zentrum; my Nebraska family on the Adriatic in Italy; and an outing in the Black Forest with Annette.

Drilling Down on $22.3 Million of Student Loan Fraud

February, 2020

Washington –  In an earlier post, I noted that while Secretary of Education Betsy DeVos was illegally collecting approximately $20 million from student loan borrowers whose loans had already been cancelled, she was simultaneously considering how to let a student loan lender off the hook for $22.3 million of false claims against taxpayers.

The potential gift to lender Navient has erupted into a public policy imbroglio covered by Forbes, Fox, Yahoo, and others.

Presumably federal magistrate judge Sallie Kim, who is weighing further contempt of court penalties against the Secretary, will not view this favorably.

The $22.3 million at issue needs a closer look.

Navient, as lender, argued last year before an administrative law judge that it should get the same treatment as other lenders, which made similar claims for taxpayer subsidies many years ago and did not have to repay them.  Although that is the superficial rationale for Navient's argument, what exactly was it that the others got away with?

In 2007, Secretary Margaret Spellings told the Washington Post that the lender claims in question, involving widespread lender manipulation of loans among tax-exempt bond issues, were indeed illegal, but the Department of Education bore some responsibility for confusion about the claims.*  Therefore, she was not going to ask for a return of payments already made, a sum in the hundreds of millions of dollars, but only cut off additional claims prospectively.

A crucial question therefore arises: did the lenders originally think their claims were actually legal?  Did they know – or should they have known – that they were making false and reckless claims?

This question needs review so as to put the current Navient argument to rest.  Answers are available if anyone wants them.

An extensive public record exists as to what lenders believed about their claims, including documents and depositions from lender Student Loan Finance Corporation (SLFC).  In April of 2003, a consulting firm known as Aurora Consulting, led by former managers of lenders Nellie Mae and Sallie Mae, told SLFC that they could increase their government subsidy by moving loans among bond issues and would do so for a 2% share of the extra "take."  Tellingly, without benefit of legal opinion, and without asking the Department of Education if such additional subsidies were legal, SLFC claimed over $15 million of additional taxpayer funding.

PHEAA, another lender, started loan transfer manipulations and illegal claims even earlier than SLFC.  Internal documents at PHEAA, discovered in 2017, contained the admonition to its employees, "don't ask ED for its opinion – it's likely to be an answer we don't like." PHEAA's additional take was over $116 million.

Even more explosive records exist, should anyone wish to draw back the curtain on what lenders really thought about their claims.  It would reveal breathtaking greed, mockery, and violations of the Sarbanes-Oxley Act.

It's more than a coincidence that the managing director of Aurora Consulting, and a beneficiary of the SLFC kick-back, is now the Chief of Staff and head of strategy at Navient and is looking once again for an indulgent Secretary of Education, this time Betsy DeVos, who will not enforce the law and will make yet another gift of taxpayer funds to the student loan industry.   If Secretary DeVos goes along with Navient, she will be overturning the findings of the Department's Office of General Counsel, the Office of Inspector General, and an administrative law judge, all of which have concluded that the claims were always false, illegal, and should be paid back.

This is now a showdown as to who really runs the Department of Education.  A review of the $22.3 million in question would also be of inestimable value in understanding the background context in which servicers illegally collect from hapless borrowers while the Secretary ponders yet another illegal gift to corrupt players in the student loan industry.   

*Lenders were getting inside help from Department political appointees who were former lender officials.  They provided tips to lenders as to when to expect audits and how to prepare for them. Some appointees held stock in the lenders they were regulating.  Some violated recusals in order to aid the student loan industry, to which they returned after their government employment.