Category Archives: Ethics Violations

Sallie Mae’s time has come

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One of the worse examples of government interference with education was the creation of the Sallie Mae program. Like all so many government programs, it was created with good intentions. But, also like so many (all?) government programs, it was fraught with unintended consequences.

The original version written in 1972 was to provide a means of low cost, government guaranteed, student loans. When I was in college in the late ’60s, my tuition was $195/quarter plus student fees of another $50. My wife and I attended Southern Illinois University at Carbondale, SIU. SIU was on the quarter basis at that time instead semester, Fall, Winter, Spring and Summer quarters. My room and board was $100/mth at a Christian dorm.

Few students at that time did not work while attending classes. SIU had a student work program paying a starting wage of $0.75/hour. Many students, my wife and I included after we were married in 1968, attended school full-time and worked 40 hours a week as well.

My wife and I also had small scholarships that reduced our tuition costs. Others without scholarships got student loans—commercial loans through their local bank or other financial institution. Education costs were low and affordable.

Until the FedGov got involved.

Sallie Mae eliminated the risk from student loans. One of the unintended consequences of Sallie Mae was the eliminating the need for students to self-finance their education. Another unintended consequence was that market forces no longer regulated tuition costs.

With a reduction of risk, commercial loan providers expanded their programs. Colleges, realizing that the market constraints from the commercial loan providers were gone, began to raise tuition. The result has been a steady increase of tuition of 7.5% per year!

Higher Education Bubble: College Tuition Doubled Over the Last 10 Years vs. +52% for Medical Care

The chart above illustrates graphically the “higher education bubble” by comparing the annual increases in the CPI for “College tuition and fees” (7.45% per year since 1978) to annual increases in the CPI for “medical care” (5.8% per year since 1978) to annual increases in the median price for new homes (4.3% per year) to the annual increases in the “CPI for all items” (3.8% per year). 

Mark Perry is a is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.).

In 2010, the Obama administration, through Sallie Mae, took over all student loans. Whatever market forces that still existed through commercial loan providers, were removed. Any constraint on colleges and universities to control costs also disappeared. Sallie Mae would rubber stamp student loan applications and the colleges could raise costs in a continuing loop.

Until it came time to pay the piper.

Dave Ramsey has a radio program playing on a local station every morning. As I sit here writing my daily blog post, I listen to the people on his show narrating their circumstances. People call in to his show reciting their woes and debt, debt often reaching six figures. More often the largest segment of this massive debt is student loans.

I sit here listening to people who have spent well in excess of $100,000 for a Bachelors degree in what? Social work…art history…counseling…a variety of professions that pay…$30K – $$50K per year. The costs to repay these loans push all too many into bankruptcy—except student loans from Sallie Mae can’t be removed via bankruptcy. Only death will excuse a student loan.

It’d be one thing to run up such massive debt if you would be entering a profession that paid well. But social work!? Counseling!?

Sallie Mae has become just another federal welfare scam. People are being taught that a degree is the path to the good life. Then, once they have that degree, reality wnrwea and they discover there is no market for counselors, social workers, art historians, and in many areas, teachers.

The job markets in many fields, including education, is over saturated. That leaves those recent graduates with…flipping burgers. It’s no wonder, now, that the libs are preaching that the minimum wage, which was sold as a “training” wage, must be raised to be a living wage. The problem with the liberal logic is that raising the minimum wage means fewer can be employed.

What Sallie Mae has done has been to pollute the educational process—raising the cost of education, increasing personal debt, and diluting the value of higher education. Indirectly, Sallie Mae has fed the increase of unemployment through that devaluation of education.

What should be done to restore value to education and reduce costs? A good start would be the elimination of the Department of Education. Barring that, disband Sallie Mae and return the student loan program back to commercial institutions and let them, again, make loans on a risk basis—no federal guarantees.

With the return of student loans to the market, market forces will once again be in affect for colleges and universities. When attendance drops due to excessive tuition costs, those colleges and universities will be forced to reduce tuition—or cease to exist.

With a return of reality, education will be value given for value received. If you can’t afford the tuition, there are alternatives available to meet education cost—including work. Yes, it may be a return to the ’60s—affordable tuition, market driven education, a return of working while attending classes, maybe, wonder of wonders, a return of conservative educators and an end of the failed socialist infestation that led us to this mess.

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Elections have Conseqences

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Elections, and actions, have consequences. Missouri is suffering under those consequences as more and more revelations are uncovered about the illegal release of confidential information to the FedGov—in particular, to the DHS and the IRS.

The first case of individual data being illegally collected was disclosed when the Department of Revenue, through their licensing bureau, refused to issue a CCW permit. The DoR has been collecting and scanning private documents and forwarding that information out of state in violation of Missouri law.

One CCW applicant refused to submit the requested documents. The Dor refused to issue the permit—although the DoR has no legal authority to refuse a permit once it has been approved by the county’s Sheriff! That applicant sued the DoR and a Judge issued the Injuction prohibiting the DoR from collecting any further data pending the resolution of the suit.

Jay Nixon initially denied the accusations. However, later, in testimony before the state legislature, the DoR confirmed they did collect private information as they have been accused. A Missouri Judge granted an injunction to block the DoR from collecting private data from Missouri’s citizens.

Today, new allegations broke about illegal actions by the Nixon administration. By Missouri law, personal information of the state’s CCW holders is confidential. That data is held by the DoR and can only be released for criminal investigations—individual information. The Missouri Highway Patrol admitted this week it had requested the complete CCW database from the DoR, twice, and had sent that information to the IRS. Again, in violation of Missouri law.

Highway patrol gave feds Missouri weapon permits data

JEFFERSON CITY – The Missouri State Highway Patrol has twice turned over the entire list of Missouri concealed weapon permit holders to federal authorities, most recently in January, Sen. Kurt Schaefer said Wednesday.

Questioning in the Senate Appropriations Committee revealed that on two occasions, in November 2011 and again in January, the patrol asked for and received the full list from the state Division of Motor Vehicle and Driver Licensing. Schaefer later met in his office with Col. Ron Replogle, superintendent of the patrol.

After the meeting, he said Replogle had given him sketchy details about turning over the list, enough to raise many more questions. Testimony from Department of Revenue officials revealed that the list of 185,000 names had been put online in one instance and given to the patrol on a disc in January.

Schaefer has been investigating a new driver licensing system. He and the committee grilled the revenue officials for several hours in the morning and again at midday before they admitted the list had been copied. The investigation was triggered by fears that concealed weapons data was being shared with federal authorities.

Under Missouri law, the names of concealed weapon permit holders are confidential. The only place in Missouri where the names of all concealed carry permit holders is stored is among driver license records. Permit holders have a special mark on their licenses indicating they have been granted the privilege of carrying a gun.

The list was given to the Social Security Administration Office of Inspector General, Schaefer said he was told.

“Apparently from what I understand, they wanted to match up anyone who had a mental diagnosis or disability with also having a concealed carry license,” Schaefer said. “What I am told is there is no written request for that information.”

Chris Koster, Missouri’s Attorney General, whose office is administratively under the Governor, has not, so far, investigated these violations of state law despite numerous request for him to do so.

What has all this to do with today’s post title? It’s the fact that Jax Nixon and Chris Koster was re-elected to office by a large margin last November. Does anyone truly believe if either, or both of them had lost that election, that the heads of the DoR, the DMV and the Highway Patrol would still be in office? If Ed Martin had beaten Koster last November, I guarantee that all three agency heads would be under investigation. If Nixon had lost his election, all three agency heads would be under suspension pending the results of that investigation.

But—neither lost and now we have a massive cover-up by Nixon’s department heads. Those are the consequences of that election. The voter’s action in that election has lead directly to this situation. Yes, elections have consequences.

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Campaign Reform: Lies and Misdirections

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Missouri democrats have opened their offensive for the next election cycle now that the 2012 elections are over. What they are attempting to do is to impose their version of McCain-Feingold at the state level. Significant portions of McCain-Feingold were later to be found unconstitutional.

A local democrat legislator is proposing similar restrictions for Missouri. The restrictions include a $5000 donation limit and exposing the contribution lists for non-profit organizations.

Michael Mahoney, a reporter for a Kansas City TV station, wrote the article below on his blog.

Reform, Including Crackdown on Hidden Money

JEFFERSON CITY, Mo. (AP) — Missouri House Democrats on Tuesday called for new campaign finance rules and stiffer ethics laws that cap political contributions, limit gifts from lobbyists, require departing legislators to sit out before becoming lobbyists and impose new reporting requirements for some not-for-profit groups.
Democrats said they believe the proposal is a priority for Missourians and that, if necessary, they could attempt to take the issue directly to voters through an initiative petition. Lawmakers return to the state Capitol in January for their 2013 session.

…

The wide-ranging legislation would cap campaign contributions for legislators and statewide elected officials at $5,000 per donor for each election and would limit gifts lawmakers and immediate family members can accept from lobbyists to $1,000 annually. Legislators also would be barred from working as paid political consultants while in office and would need to wait at least two years after leaving the Legislature before returning to lobby former colleagues.
In addition, the Missouri Ethics Commission would gain the authority to launch its own investigations instead of waiting for a compliant to be filed, and the ability to move campaign contributions among political action committees would be restricted.

The pertinent portion of the proposed reform is this.

The House Democrats’ most recent proposal also adds some new issues. For example, it would require not-for-profit organizations contributing money for political purposes to disclose their donors. During this year’s elections, there were instances in which a political action committee that is required to report on its finances received contributions from a not-for-profit group that is not required to report its donors. That made it difficult to determine the original source of the money.

That last sentence is the true motivation. The democrats want those donor lists. Those conservative contributors would soon find themselves targets. The entire reform plan has one goal—to get those donor lists. If you read Mahoney’s entire column, you’ll discover that dems attempted to “reform” campaign finances in 2010. Their scheme failed when the proposed legislation was modified once it was out of committee. When that failed, they had one of their judges (why is it always the same Cole County judges?) declare it unconstitutional on some technical grounds.

I’m sure there is one or two RINOs around the state who will sign onto this proposal and allow the dems to claim it’s bipartisan. The reality of it is that it is never bipartisan, just another skirmish in the continuing battle between us and them in Jeff City.

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