The Daily Sandwich

"We have to learn the lesson that intellectual honesty is fundamental for everything we cherish." -Sir Karl Popper

Location: Boston, Massachusetts, United States


Monday, April 23, 2007

Enrollment Climbs at School of Hard Knocks

This tidbit appeared in Robert Parks' weekly mailing last week:

Sallie Mae began as a quasi-governmental agency in 1972, but began privatizing 10 years ago. This week Sallie Mae announced it is selling itself and will become will become fully private. The CEO will walk away from the deal with about $257 million, while 10 million students will graduate with debts that average nearly $20,000.

Not a bad little bonus for making education less affordable. Today, a more detailed story turned up on the Prospect enumerating some of the problems besides corporate profiteering:

  • Bribes paid by loan companies to colleges and universities. For example, Drexel University in Philadelphia was promised $250,000 in exchange for designating Education Finance Partners as its sole "preferred lender." Since 2005, according to Cuomo's office, Drexel has steered more than $16 million in loans to the company, costing students more than available alternatives.
  • Personal conflicts of interests by some college student aid officials. At Columbia University, an associate dean owned substantial stock in a "preferred lender." At Johns Hopkins, a financial aid officer got consulting fees and had her graduate school tuition paid by Student Loan Xpress, one of the worst offenders.
  • Self-dealing by U.S. Department of Education officials. Matteo Fontana, a senior department official held at least $100,000 in stock of one loan company he was overseeing. Several other Bush officials in charge of student aid come from the industry.
It's another major success of reactionaries in the past few decades that they have managed to sell Americans on the idea that anything more structured than laissez-faire capitalism is a Bolshevik plot-- and make the common-sense conservative virtually non-existent. On one side, you have a government program with low overhead that helps millions of Americans and turns a profit. On the other, you have a costly, inefficient operation which gouges millions of Americans to fill the pockets of an already-wealthy few. Guess which one the GOP started fighting for when they took over Congress in '94?

Here's a friendly hint for those deluded enough to require it at this point:

The House [on April 20th] passed the Shareholder Vote on Executive Compensation Act, which would, “for the first time, allow shareholders of corporations to at least have a say in the salaries given to executives.” Passage came only after conservatives attempted to use a legislative device called a “motion to recommit” to kill the measure. It’s been a common tactic in the 110th Congress. “The strategy is to institute a divisive change to the bill at the last moment, often unrelated to the original intent of the legislation, hoping that the altered bill can then be defeated on final passage.”

While using such procedural moves is something both parties indulge in, it's standard stuff for today's GOP-- and while there is such a thing as manipulating the system for principled reasons, does oversight of executive pay (already something like 485 to 1 vs. US worker pay) really count? Nope.