Payday Lenders Target our Armed Forces

USA Today:
As many as one in five members of the armed services are being preyed on by loan centers set up near military bases that can charge cash-strapped military families interest of 400% or more, a new Pentagon report has found.

“We're seeing a growing trend of folks who are not eligible to deploy because of financial problems,” says Capt. Mark Patton, commander of Naval Base Point Loma in California. Patton says debt problems can cost some servicemembers their security clearances.

This is just brilliant. I thought soldiers were supposed to be safe on their home base.

Filipino Student Txtivists: An Adventure Story

They organize protests via cell phone text messages.

"When Estrada was ousted, we realized the power of texting,"
said Palatino, the slight, well-spoken president of a
national youth party. "Since then we have never stopped
using it to advance our causes."
...
At 1:45, Palatino's phone pinged again, this time with the
message: "ASSEMBLE RIGHT NOW!"

A smile crossed his face. With a few more taps of his
thumbs, he forwarded the command down the text brigade
ranks. He sent it to those on his phone list, and each who
received it did the same. In seconds, about 1,000 students
were in the street, stopping traffic and sending cars and
bicycle taxis scattering.
Two students quickly hooked up a public address system to
the battery of a vehicle. One by one, leaders climbed on top
of it to fire up the crowd. Palatino demanded that President
Arroyo do more to end the killings and allocate more money
for universities.
"Books, not bullets!" he shouted.

We American kids really need to get on this. Where's our national youth party? Where's our texting armies? All of y'all Facebook people, what's up??

Times continued great coverage of class, economy

I think it's great the Times made this the lead story today:

The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity — the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards — has risen steadily over the same period.

As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s.

Update:a followup story:
The nation’s median household income rose slightly faster than inflation last year for the first time in six years, the Census Bureau reported yesterday.
The rise, however, had little to do with bigger paychecks — in fact, both men and women earned less in 2005 than 2004. Rather, census officials said, more family members were taking jobs to make ends meet, and some people made more money from investments and other sources beyond wages.

Dazzling Demographics

Some 55 million youngsters are enrolling for classes in the nation’s schools this fall, making this the largest group of students in America’s history and, in ethnic terms, the most dazzlingly diverse since waves of European immigrants washed through the public schools a century ago.


They're the Millennials. And they're coming to getcha.

Love and Loans

Headline: Getting married? Now you can register for student loan relief

via this website.

A Couple of Katrina Stories

From TomPaine, on public housing; from Village Voice, on neighborhood rebuilding (bunch of photos there by me and some awesome ones from Bart Everson, a blogger, community activist and all around nice guy.) I also interviewed Maitri V-R and Karen Gadbois, two more New Orleans community activists who blog.

On the wider front, some good stories in the Times and Times Magazine, some great ones in the Times-Picayune , and this one's from Reuters.

Fair and Balanced?

You can catch me in a Fox News documentary this Sunday night, the 27th, at 8 PM Eastern (note new time). The title is
Why Does College Cost so Much--And is it Worth it?

The star is, um, Newt Gingrich. Yup, that Newt.

They filmed me in the basement of a local cafe where i sometimes bring my laptop...it was a long time before i could go back there. : )

Diagnosis: Deficit Addiction

From TomPaine.com:
For the past few decades the federal government has been racking up massive amounts of debt without frightening away lenders thanks to a sterling reputation of debt repayment. Those days, however, may be gone as we stand at the precipice of the retirement of the Baby Boom Generation and our political leaders are increasingly unable to prepare for the impending crisis. Today, as yet another fiscally irresponsible and reckless session of Congress winds down, we find ourselves confronting a half-trillion dollar war (so far); a massive, multibillion dollar Gulf Coast rebuilding effort; a looming energy crisis; a $260 billion deficit and an $8.5 trillion national debt. But the real challenges lay ahead, toward the obligations to this nation's citizens, and the magnitude of the problem should give even the most reckless of congressional members pause.

----Isn't the deficit basically an example of intergenerational imperialism? Generations X, Y, and those beyond us are subject to taxation without representation.

Excellent Essay on the Meaning of Student Debt

From Dissent, via Alternet.

DEBT IS NOT just a mode of financing but a mode of pedagogy. We tend to think of it as a necessary evil attached to higher education but extraneous to the aims of higher education. What if we were to see it as central to people's actual experience of college? What do we teach students when we usher them into the post-welfare state university?

College Rankings

And whether we're doing them right, in the NYT business section:

So do we spend too much time worrying about college rankings? Or not nearly enough?

Not so long ago, college administrators could respond that they seemed to be doing just fine. American universities have long attracted talented students from other continents, and this country’s population was once the most educated in the world.

But it isn’t anymore. Today the United States ranks ninth among industrialized nations in higher-education attainment, in large measure because only 53 percent of students who enter college emerge with a bachelor’s degree, according to census data. And those who don’t finish pay an enormous price. For every $1 earned by a college graduate, someone leaving before obtaining a four-year degree earns only 67 cents.

Last week, in a report to the Education Department, a group called the Commission on the Future of Higher Education bluntly pointed out the economic dangers of these trends. “What we have learned over the last year makes clear that American higher education has become what, in the business world, would be called a mature enterprise: increasingly risk-averse, at times self-satisfied, and unduly expensive,” it said. “To meet the challenges of the 21st century, higher education must change from a system primarily based on reputation to one based on performance.”

Privatizing Higher Ed

The Commission on the Future of Higher Education published its final report yesterday. I'm down in New Orleans, so I haven't had a chance to read it and will post when I have. The Times focuses on the calls for increased federal grants (great), standardized tests (!) and federal monitoring (!!) of colleges (David Horowitz and his uber-Orwell "Students" for Academic "Freedom" must be thrilled).

ON the tests, I'll quote a correspondent from my email inbox:

I'm totally against state standardized tests. It will erode the integrity of higher education just like it
has to early education. The government needs to learn that it can't stick it's nose into everything. Let
the market determine the strengths and weaknesses of our higher education system and allow it to adjust
accordingly or perish.

MSNBC Covers MyRichUncle

What's striking to me about this story is that basic facts about the student loan program are being covered as news--that students have a choice of lenders, for example, or that lenders are insured by guarantee agencies and in turn by the federal government.
People don't understand this stuff, because it's demonically complicated, and that may be the biggest way that students suffer.

Unfair Internships--The Blog

Someone has set up a blog to examine the "Unfair Internship" issue. From the FAQs:

What’s an “unfair internship”?
It’s an entry-level position with normal responsibilities that benefit the employer but called an “internship” so as to avoid paying an entry-level salary or any salary at all.

What’s a “fair internship”?
It’s an internship that should be called an apprenticeship: the intern receives a lot of coaching (more than a regular new staff), his presence is more of a burden than a benefit for the organization. If the intern receives an entry-level salary, with normal responsibilities, it’s a job by another name.

It includes resources on what to do if you see that your internship is illegal under the Fair Labor Standards Act.
It also has a fair assessment of my NYT piece. I want to clarify one point: I stated in the piece that internships are not real jobs, only simulations.

Some internships involve real work. In that case, I think the intern should be fairly compensated as this blog argues.
Some internships do not involve real work. They involve busywork, and lots of staring at computer screens. In that case, I think the intern should quit.

Starbucks Labor Revolutionary Canned

My post is over at Huffington Post.
A couple of commenters point out that Starbucks jobs are better than your average retail job. They pay around $7 an hour and you can get health benefits. True, but I still support the Starbucks workers' fundamental right to organize.

What's the real federal deficit?

USA Today says, according to an audited financial statement produced by the government's own accountants, it's more than twice as much as the official $318 billion figure--$760 billion. That's not including Social Security & Medicare--it's mostly because of the cost of federal employee pensions& retiree benefits.

Am I a dork because I think an article discussing& simplifying federal budgets and accounting methods is really cool?

The Catch-22,000

This Alternet article, sent my way by Liberal Arts Dude, is a seriously eloquent and illuminating testimony from one type of person most hurt by student loans. It seems this young woman, who now owes over $70,000, had just the wrong combination of low family income, high achievement, high aspirations, and an enduring belief that more and more education would vault her over the wall into the mythical "middle class" where hours are shorter, salaries bigger, and debt no big deal:

"To be fair, I made the choices that put me in this situation. I attended an expensive university 3,000 miles from home. I stayed at that school, even though I could get a cheaper education elsewhere. I studied an impractical subject that I loved, then continued my studies at an obscure foreign university. I wasn't always aware of financial consequences.

Yet I made my choices based on the values I had been taught -- that helping others is more important than making money for yourself, meaningful career is more important than net worth, and brains, determination, and charisma are the key ingredients of success. I realize now that I subscribed to the fantasy of an equal society, when in fact everyone's options arise from class, race, gender, and a thousand other subtle differences in our experiences, assumptions, and privileges...What is writ large in corporate bankruptcies, withering federal programs and industrial outsourcing is writ small in stories of impossible choices and shattered educational dreams. The real tragedy is not that America's young people can't afford their college education -- the tragedy is that they are told their entire lives that education is their birthright and a chance to social mobility, and then are forced to watch that birthright crumble under the weight of unbearable debt."

I think this girl is totally right, and it's terrible what happened, but she also made mistakes that others can learn from. I so wish I could give everybody this news:

1. You likely don't need a graduate degree to do what you love, unless what you love is to practice medicine. (this girl decided to enter a master's program in "social change.")

2. Your first job is probably going to suck. You stuck out school for four years, so give the first job a chance for 2 years [she was "burnt out" after 6 months as a union organizer and "retreated" (her words) back to school. Big mistake.]

3. Big student loan debt is a big deal.

US Economy Worse Than Europe's

When it comes to income inequality and employment for disadvantaged populations. That's according to the Center for Economic and Policy Research :


“Is the U.S. a Good Model for Reducing Social Exclusion in Europe?,” by economist John Schmitt and researcher Ben Zipperer, found that the United States fares worse than Europe on a range of social and economic indicators, including most measures of poverty, health, education and crime rates.. the U.S. is the most unequal of the major OECD countries, with a higher Gini coefficient, lower relative incomes among poor households and a bigger gap between rich and poor. The report notes that:
- The U.S. has a smaller share of low-income workers that make it to higher income levels than any other OECD country. This contradicts the widespread belief that American workers have a much greater chance of getting ahead than do European workers.

In totally unrelated news, House Republicans pulled a major slime move this week, passing a $2 minimum wage increase BUT tying it to a repeal of the estate tax, which helps a tiny percentage of the very very rich. NYT: Democrats criticized the decision as a cynical charade intended
to give Republicans the appearance of supporting an increase in the
minimum wage through a bill that would not clear the Senate because of
opposition to an estate tax change aimed at extremely affluent
Americans.

"In all my years here, this is the height of hypocrisy," said
Representative Sander M. Levin, Democrat of Michigan, who said
Republicans considered a raise in the minimum wage only out of fear of
losing House seats in November. "If you really cared, you would have
acted long ago. This is not an election-year conversion; it is an
election-year trick."

Best Loans May Be Outside University Preferred list

Obvious, but bears repeating:
Colleges and universities do not always push students toward the lenders with the best rates, Bloomberg News Columnist John Wasik said.

In many cases, because of marketing agreements, students are given a list of preferred lenders, generating the perception that they are the best loans available because they are chosen by the school.

The best deals are often to be had outside financial aid offices, certified public accountants said.

House Reauthorizes Vocational Ed

Congress voted strongly to reauthorize the Vocational Education Act, which Bush recommended getting rid of.
From Congressman George Miller's press release:
"President Bush wanted to eliminate this program entirely, which would have cut $1.3 billion from programs that train today's workers and future workers for high- wage, high-skill careers." The bill supports high school and post-secondary programs.

I saw an ad for one of these programs on the subway the other day, training women for nontraditional jobs like electricians and engineers.

Geraldo at Large

I didn't get to meet Mr. Rivera but the clip's on the website. Mostly about credit cards.

David Brooks is Full of It

I was crafting a response to David Brooks's column on why tuition assistance for families having trouble paying for college is useless, but this TimesSelect reader did it for me:

James Hathaway, Charlotte, N.C.: Predictably, you are making excuses for why the government shouldn't be spending money, though there is a clear need for the expenditure. Yes, there are many social reasons why some students fail to complete college besides finances, but that doesn't mean that there isn't a desperate need for financial support. For those of us who are not in the standard tax bracket for financial conservatives, the cost of college — even the cheapest state schools — has become prohibitive, and continues to become more so. Many of the social problems you cite are really red herrings, either issues that are insoluble — for instance, the divorce rate — or prohibitively expensive to fix, like public education.

I've been working in higher education for over 20 years and have seen the stress that college cost puts on even highly motivated students. Many work full-time while trying to carry a full course load and then — guess what? Yes, many are poorly prepared and many are unmotivated, but the financial burden is generally one of the most likely straws to break the camel's back.

More to the point of the current legislation, as Congress continues to cut things like Pell Grants, is the fact that unless something is done quickly, the number of students who drop out or who don't apply at all is going to increase rapidly. My own children have guidance counselors who advise vast swaths of their charges to go to community college instead for the first two years because it is cheaper in the long run. But it's actually not. You worry periodically about the future competitiveness of America — think about this a bit the next time before you create more spin for why it is futile to support education in America.

MyRichUncle Backlash

The Chronicle says the nation's financial aid administrators aren't happy that MyRichUncle took out an ad saying they have special relationships with lenders and don't always steer students toward the best deal.

"In its advertisement, MyRichUncle says some financial-aid administrators take "kickbacks" and "payola" from lenders who wish to become exclusive providers of loans on the administrators' campuses. None of these charges is particularly new. Over the past several years, Democratic lawmakers, student-loan watchdog groups, and even some loan-industry officials -- as well as the Education Department's own inspector general's office -- have urged the Education Department to be more aggressive in ensuring that lenders abide by rules that prohibit them from offering colleges inducements to secure applicants for federal loans. Despite these misgivings, department officials have largely refused to regulate in this area, leaving it up to the loan industry to police itself (The Chronicle, October 17, 2003, and November 28, 2003)."

Here's the kicker: Two financial aid advisors go on to say, well, even if MyRichUncle offers the best loan deal going right now, they won't tell students about it--because MRU hasn't established the right relationship.

""I told their representative not to visit me," said David R. Gelinas, who is the financial-aid director at the University of the South and also a member of [NASFAA]s board. "I told him that I found their approach to be offensive."
Walter O'Neill, assistant vice president for financial aid at Roosevelt University, agreed. "There's going to be a backlash against the company because they have shown that they don't have integrity or credibility.""

How is it showing a lack of integrity or credibility to publicize widely known and substantiated charges about an industry where you're trying to do something different? It's like a plumber in an ad saying, "some plumbers will overcharge you. They inflate the bill cause they're getting kickbacks from suppliers. Ask a plumber these questions to find out how independent they are. And trust us, cause we're telling you this."

Colleges Step Up to Ease Burden for Interns

Yay!
Internships have displaced casual hourly jobs as the more typical summer experience for college students — one that may provide valuable professional contacts or even lead to full-time employment after graduation. In a survey by Vault.com, which tracks student employment trends, 62 percent of college students planned to do an internship this summer, up from 41 percent two years ago.

But as many as half of all internships are unpaid or low-paid, career counselors say. Some students even effectively end up paying tuition to do unpaid internships because some companies, concerned about labor laws, require students to receive academic credit for the experience. And so college administrators nationwide have become more concerned about access to internships at all socioeconomic levels. The solution, they say, is to provide financial assistance.

“It’s all about equality,” said Lanch McCormick, the associate director of undergraduate career services at Yale, which also subsidizes summer internships. “It’s all about being able to offer these opportunities to all students.”

That's right, and that's great. But what about asking companies in these industries to contribute, too?

More on Interest rate competition

This article suggests " The higher interest rates on federally guaranteed student loans may make private loans a more affordable alternative because they may include lower interest rates."

I wonder if that's true. Right now private loans are running almost 1.5% on average above federal student loans. But the interest rate hike and especially the fixed rate does leave room for price competition.

Truth in Advertising

I wrote aboutMyRichUncle, an upstart student loan company founded by two 20-somethings (full disclosure, one of whom is a friend of a friend) in Fast Company about six months ago. Back then their angle was private loans with low rates and their own proprietary lending criteria:

Their proprietary software predicts student income based on transcripts, school, course of study, and other data; a business student with stellar grades might get a .25% reduction over a pottery student with a spotty record. Khan and Garg believe they can drive down defaults by knowing their borrowers better, but they also offer unique sweeteners: They can get you your money in five days (versus several weeks with traditional lenders) or make interest-rate reductions if you choose automatic payments. MRU’s basic variable APR was 6.38% in January 2006, near the lowest in the industry.

Yesterday MRU had a 2-page ad in the Sunday New York Times announcing their entry into the federal student loan business. A couple of things made me say, "wow!" One is that they are to my knowledge the first company ever to discount federal student loans, 1.5 to 2 points below the federally allowable rate. The second is that with a full page list of questions to ask your student financial aid administrator, they are publicizing to students and families all of the shady practices that go on between lenders and schools, and making sure people know that they have a right to choose a lender beyond their school's "preferred" list.
In current circumstances, I still think a student should usually choose a direct student loan because of the extra protections available. But I am very into what MRU is doing. It's great for students to have a real alternative.

Article on Sallie Mae's Growing Clout

IN the NYT business section. A little credulous and ignoring some of the political issues in there, such as this graf:

Changes in the law — including longer repayment periods on loans, bankruptcy overhaul [TRY: THE ELIMINATION OF BANKRUPTCY PROTECTION FOR BORROWERS] and the rise of products that let students refinance their debts at more manageable rates — have not only brought default rates to record lows but also attracted swarms of new lenders. And during the Clinton administration, the federal government itself got into the direct lending business, essentially competing with the banks.

Colleges that Profit when Student Loans Grow

Interesting press release from the National Direct Student Loan Coalition. Maybe right-wingers who think that government spending is the real problem in the student loan equation should look into reforming the loophole that allows colleges to profit directly by lending loans to their students.

The National Direct Student Loan Coalition Calls on Congress to Fix the Eligible Lender Trustee Loophole

In defiance of the intent of Congress when it recently passed restrictions on the School as Lender (SAL) program, some colleges and universities have found a loophole that allows them to garner profits from their student borrowers far in excess of what they could ever make through SAL.

Using an eligible lender trustee to manage their lending function for them, schools can bypass SAL restrictions imposed by Congress and lend not only Stafford to their graduate students, but PLUS loans, Graduate PLUS loans, and undergraduate Stafford loans as well. The U.S. Department of Education has confirmed to the Coalition that they consider this activity legal under current law.

When it created the School as Lender option in the Federal Family Education Loan Program (FFELP), Congress did not intend to create a major profit center for institutions of higher education, but simply to ensure that institutions could potentially serve as lenders of last resort to their students when banks refused to do so. Fortunately, the need for serving as a lender of last resort no longer exists.

School as Lender is in and of itself bad public policy – it is harmful to students who often have higher loan fees than through traditional federal programs, harmful to taxpayers when the less expensive Direct Loan Program volume decreases, and harmful to institutions of higher education who jeopardize their credibility through a profit-scheme that is rife with conflict of interest and inherent incentives to increase the cost of education.

In addition, this eligible lender trustee loophole has the potential to not only decrease loan volume in both DL and traditional FFELP, but could inevitably lead to the weakening and ultimate demise of the FFEL program itself.

Congress must quickly move to close this eligible lender trustee loophole to protect the integrity of the federal student loan programs.

Adult Dorm Life

NYT, on 20somethings sharing apartments in a building in Harlem:

Asked how adult-dorm life differed from college-dorm life [29-year-old], Mr. Fenn said: “You’re not really at the same place where you were psychologically. Now, for me, I’m kind of wondering: When does this end? When do I get to be able to buy a place and settle down?”

also interesting...

New York City has long been a magnet for the young, well educated and ambitious. According to a report published by the Census Bureau in 2003, nearly 132,500 young, single, college-educated people poured into the New York metropolitan area between 1995 and 2000, more than into any other metropolitan area in the United States.

“Sometimes we underestimate how important that is in generating the city’s creativity,” said Frank Braconi, chief economist for the city comptroller’s office. “To the degree that housing costs become a barrier to that group, it can in the long run sap us of that creative potential that we would otherwise have.”

What surprised me about this article wasn't any of the facts but the rents people are paying for "affordable" housing. $850 a month? That's why you have to shack up as quickly as possible, so you can share a one bedroom or a studio. When I first moved here, in 2002-2003, I was living for awhile with five people in a three-bedroom apartment.

Live Blogging at the Campus Progress Conference-the change track

I couldn't be there but you can read about it here. I like this idea of a panel about "Making Change a Career."

"They all made it sound so easy (other than the whole graduating magnum cum laude from Harvard Law) and maybe that's because it is: find what you want change, what needs to be changed, and do it." Well, that's the thing, i guess--If you can afford to graduate magnum cum laude from Harvard law without $200K in debt, then yes, there are some awesome opportunities out there to0 do well and do good. If you can't then there are still awesome opportunities out there, but it's gonna harder.

I was talking to pioneering social entrepreneur, Bill Drayton of Ashoka, for a story the other day and he told me that he's extremely optimistic about young people lining up for opportunities in the change-the-world industry. "People see that this is the best job available. It has the fastest growing salaries-- gaining on the private sector--values and work line up perfectly, there's so much demand, almost no glass ceiling, and your colleagues are high value, not cynical." This guy David Bornstein wrote a book called How to Change the World about an explosion in the nonprofit or pro-social sector. "Around the world, the fastest-growing segment of society is the nonprofit sector, as millions of ordinary people--social entrepreneurs--are increasingly stepping in to solve the problems where governments and bureaucracies have failed."

Big news--and good news, for anybody who's young ambitous and worried like me about the future.

The View

This Friday, July 14, you can catch me on the first five minutes of ABC's The View. Booking on this show has been an interesting process--far more prep for this "chat" show than for any of the news programs I've been on. I'll see how it goes.

National Shitstorm

WaPo: " A Driven President Faces a World of Crises."

I am hard-pressed to think of any other moment in modern times where there have been so many challenges facing this country simultaneously," said Richard N. Haass, a former senior Bush administration official who heads the Council on Foreign Relations. "The danger is that Mr. Bush will hand over a White House to a successor that will face a far messier world, with far fewer resources left to cope with it."

And they're just talking about international issues here, not the national debt, social security, health care, global warming or energy dependence

Making Connections

I recently heard from a couple of interesting and somewhat related writers/bloggers: Kevin Smokler (news, books, movies, websites, cultural commentary, etc) and "The Liberal Arts Dude." ("About the trials and tribulations of being a Liberal Arts graduate in the job market. Sound advice, amusing stories and information that relate to young adults feeling their way around the job market for the first time.")

I'm Teaching A Writing Class

If you live in New York (especially Brooklyn) you can come take a non-fiction writing workshop starting in August. Go to the Sackett Street Workshop for more information.

We will use exercises, published work, and group discussion ofstudents' work to talk about craft as it relates to nonfiction. Eachwriter will have the opportunity to have their writing critiqued inclass, receiving detailed feedback from the instructor and theirfellow classmates.Class size is limited to eight writers to insure each participant'swriting receives the attention it deserves.We will also cover freelancing, pitching, and getting published.Each writer will meet privately with the instructor for a detailedanalysis. The instructorspends two or more hours on each critiqued piece.The fee for the 8-week session is $350, which includes a reading atNight & Day (5th Avenue, Park Slope, Brooklyn).Please apply at www.sackettworkshop.com to submit a writing sample ofany type of nonfiction.

The Democrats Take Up Student Loan Debt

As student loan interest rates hit 6.8% on Saturday, the Democrats are trumpeting their plan to cut those rates in half. Such a measure would save the typical student borrower (who they're putting at $17,600 in loans) over $5600 in interest through the life of the loan.
It's not exactly a comprehensive solution, more like a middle-class handout. But why shouldn't these loans be subsidized to be much cheaper than market rate, when the capital for them is underwritten by the federal government?

The Dems also have a forum with testimony now from hundreds of students and parents on student loans.
I've said it before and I'll say it again: i'm happy with anything that saves students money.

Solidarity, Class War, and Wal-Mart

A thoughtful debate on Slate over everyone's favorite corporate punching bag: Wal-Mart. I didn't think economists Jason Furman was making that much sense though. He seems to believe that low-wage workers are all people incapable of holding higher-skilled jobs, that they're defined by the crappy jobs they hold now, as in this comparison of Best Buy (low-pay, low-skill) and Stereo Exchange (higher skill, higher pay);

Imagine that Best Buys across the country were replaced by Stereo Exchanges. We would have more "good jobs" and fewer "bad jobs." The average wage in the electronics retail sector would go up. But where would all the former Best Buy workers go? Most of them wouldn't work at Stereo Exchange.

Barbara Ehrenreich sensibly asks him, why not?
She wants to see the working class fight for better conditions--a living wage, etc--more or less the way they did it the first time, through solidarity, in the streets. (Yes, she's a socialist. got a problem with that?) I wish.

Yeah, I'm talking "class war" as a solution to poverty and rising inequality. But remember, the working class didn't start this war and—mainly due to the weakness of the unions and the pusillanimity of the Democrats—has been fairly supine in the face of repeated attacks. I say it's time to fight back. What's your solution?

Right on!

The New American Dream

I was interviewed for an interesting column by Penelope Trunk in the Boston Globe about what our generation wants out of life. Essentially, since the old American dream has been taken away from us, now we want something else: mobility, flexibility, the chance to shape our own destiny. It's easy to be less materialistic when you actually have less stuff.

CBS Evening News does "Generation Debt"

They featured a married doctor couple with $500,000 of education loans.

Good News on Interest Rates!

From the US Pirgs:

Yesterday afternoon Minority Leader Nancy Pelosi and Congressman George Miller committed to cutting student loan interest rates in half to 3.4% if the Democrats take back Congress.

Reason enough in your pocket to do some phone banking come the fall?

New Huff Post Post

On free-spending higher-ed conservatives...

A Marker

This blog went up exactly a year ago, at the end of June, as I was finishing up Generation Debt.
In August, I published a piece in the Washington Post Outlook Section about young people and activism. Then Katrina hit & I went home to New Orleans, turning in the final text literally the day before I left. Then $12.7 billion was cut from student loan programs and Sallie Mae's favorite congressman was elected house majority leader and the book got some press and I flew to Idaho to talk to high school and community college students...Now the column has ended, I'm preparing a new chapter for the paperback due out in January with a new subtitle, visiting more campuses, and writing about personal finance and debt and next-generation business.

Hear me on On Point Radio

Talking about student debt with Elizabeth Warren et.al. It was a pretty good hour.

Huffington Post on Daily Lattes

I'm blogging over at the Huffington Post these days. Here's my latest.

Born at the Wrong Time

New economic studies suggest that a graduate's first job does, in fact, determine their lifetime economic position:

"in today's economy starting at the bottom is a recipe for being underpaid for a long time to come. Graduates' first jobs have an inordinate impact on their career path and their "future income stream," as economists refer to a person's earnings over a lifetime."


Daniel Gross, any comment?

Student Loans Top Dem Agenda

USA Today: WASHINGTON — Democratic House and Senate leaders are planning to reduce the cost of student loans and prescription drugs, raise the minimum wage and launch an effort to develop alternative fuels if they win back control of Congress.

Excellent Washington Post Op-ed

E.J. Dionne is right. This is a huge question mark.

"For the past 15 years, progressive free-market politicians have offered an appealing mantra about how to save the middle class: What's needed, they've said, is heavy investment in education and job training to allow people to make the transition from the "old" economy -- those auto jobs -- to the new. "What you earn depends upon what you can learn," President Bill Clinton said over and over.

There's certainly some truth to that still, but in the global economy, competition is fierce even for high-end jobs requiring great skill and education. To think otherwise is to deny the obvious: that the people of India and China, to pick just the two obvious examples, are gifted, energetic, ambitious -- and numerous."

Credit Report, Report

My second of two columns on the credit industry for tompaine.com. This one is about the egregious situation with credit reporting.

Update: Posted to Alternet; dozens of comments. Many say, Hey, why not opt out of credit system?
Also, 2 number typos: correct FICO range = 300-850, and 700-677 = 23.

Um, Can I have my $1 million Now?

Go USA Today ! Front page story on graduates (mostly grad students) with eye-popping 6 figure loan balances. I think we've officially hit a tipping point here.
Mr. Swarthout comments astutely:

Still, students remain willing to load up on loans in large part because studies have long shown that an investment in college pays off. (Like students are really going, 'I've read the research on this and blah blah, college is worth it.') The Census Bureau has estimated that college graduates will earn about $1 million more over their lifetimes than individuals with only a high school diploma.

The problem for borrowers with heavy debts is that the loan payments arise long before the higher salaries do, says Luke Swarthout of the Higher Education Project. Most graduates are expected to start repaying their loans soon after they leave school. Besides earning modest starting salaries, they often have to shoulder the costs of moving to an expensive new city. "The problem is, you don't get the $1 million when you graduate," Swarthout says.

Debt was the Cover Story

Of the New York Times Magazine yesterday. I was quoted in the article on student loan debt, by Jon Gertner.

"It's not about whether these policies are stopping these people from applying to college, though there is some evidence that they are," Kamenetz, a 2002 Yale graduate, says of the rising borrowing rates. "It's whether they're fair, whether they represent our ideals as a society and whether in the long term they're effective as compared to the policies of other countries that are pulling ahead of us."

Wise words from Elizabeth Warren: "Warren is convinced that rising levels of undergraduate debt have diminished the potential — long taken for granted — of a four-year degree to deliver someone into the middle class. "We tend to talk about student loans in the abstract, 'Ten or twenty thousand dollars — it's not that much,"' she explains. "But I think it's really about what it means to be 28 and try to make loan payments and health insurance premiums and still put something aside for a down payment for a house. Think about how much extra room you have to have in your budget to cover those three things. Most can't do it."

I also found this ironic: While [Susan Dynarski] agrees that student borrowing has risen steadily, she counters that critics like Kamenetz need to put that debt into perspective: "Credit card debt is up, car debt is up, people are spending more," she says. "Among all of those sources of debt, a college education is one of the best reasons to go into debt."

I doubt Professor Dynarski was actually addressing this point to me directly, because when we met she told me she had read & enjoyed my book. Because the whole point of Generation Debt is precisely to put student loan debt into "perspective" alongside the debt that is engulfing our entire society. And that's exactly what this article, in the context of this issue, does.

Testimony by a Former Slate Intern

on the intern issue, using most of the same data points (and a link to my piece, thanks!). She actually talked to a labor lawyer, which is cool.

"But interns generally don't report their employers to the Labor Department for the weeks they spend at the copy machine. They're too grateful. "

There's that word again...

The "Plight" of Student Lenders

Solid op-ed by an Arizona congressman on the state of the student loan industry.

The Republican Congress keeps giving big favors to the big-pocket student loan lenders while students and families feel the brunt of their greed.

Congress must restore the real value of federal aid by cutting the student loan interest rate in half and moving towards a Direct Loan system. Only then can we begin to help students overcome debt burden and realize their dreams of going to college. The very competitiveness and strength of our country depends on it.

A Coda

"Life's Work" in the Times this week is about kids competing for a PR internship at a big firm.
Eight of them, out of 20 finalists, out of 200 applicants, will be awarded a $400 a week summer internship. Hey, that's a living wage, so that's good! More specifically, you could easily afford to live here.
Lisa Belkin hits two themes that ring true for me:
....competition has ratcheted up over the years, and this generation of students — students who need a Nobel prize just to get into college — are conquering peaks to gain experience that might lead to their first jobs...
but on the other hand, there is
...a shift in the mind-set of the most sought-after candidates. Not only do they tend to respect something they must compete for, but they also demand more from a job than a future and a paycheck." These kids, they have dreams. Crazy, I know.

ps. a brilliant friend leapt gallantly to my defense vs this guy. The ensuing conversation focused on the question: should you be grateful to have a job at all?
In this economy, yes. All other things being equal? Gratitude is certainly what I experience every time I sell a story, or get off the phone with a kind editor. We all do work for lots of different motivations and have lots of emotions around work. I am reading a fascinating book that touches on that right now.

But good feelings are not sufficient. I think if you're performing useful work that you ought to be paid a decent wage; that's the contract implicit in work and it used to be federal law, before our minimum wage flatlined to a 60-year low. This belief, of course, makes me a BIG FAT LIBERAL.

W/r/t unpaid internships, the argument goes like this: EITHER the interns are doing absolutely nothing useful, in which case the value for them is nil and for the firm nothing but added expense, OR they are performing useful work that adds value to the firm, in which case they are subject to minimum wage laws.

In America as recently as the 1980s most people who had jobs also had employer-provided health care and a good number had pensions. These benefits were hard won mostly by union organizers over decades, first in the streets at risk of life and limb, later by big union bureaucracies working in collusion with government and business to provide deals that benefited all parties--not without corruption, on all sides. However, today, that instrument of negotiation on behalf of workers has essentially withered, and workers' benefits have withered right along with it.
(caveat: globalization blah blah, lots of other factors. But why no labor provisions in international trade agreements that enabled globalization?)
[Btw, the overwhelming reason young workers aren't unionized is not just that they're young but that the majority of them are employed in the minimum-wage, low-wage, service workforce, making up the bulk of that workforce. And the average age in unionized working-class jobs is going up because--surprise!--people hold onto those jobs.]

This generation of youngish influential educated workers especially seem to have internalized this "brand called me" New Economy crap that we're all entrepreneurs, and we're going to become the boss very very soon, so we don't need (or deserve?) benefits or any modicum of security. So yeah, I do think we need a more "agonistic labor-capital relationship". Just as a corrective. Some call it "resistance."
Oh, you guys got me--i'm a 'bloggin now!

Al Franken-berry

I'll be on the Al Franken show this afternoon at 1:30 pm. You can listen online.

Summing Up

I'll be on cable TV --somewhere--tomorrow morning to talk about this internship piece. Comcast cable network to be precise.
I can honestly say this is the most bloggoriffic response i've ever gotten to anything I've written. By the professional opinion-mongerers, I've been called everything from "baffling...a funhouse mirror" to "unbearably lame" to a "manure-spreading puppet" (a farm implement used in Bali?). And oh--for some reason this annoys me the most--"hot."
There's a lot of boys out there with time on their hands.
On the other hand, I am someone's hero. And someone else is "with me all the way." And someone else thinks I have "great points." Who are these analysts? Surprise! They are current unpaid interns/struggling college students.

This person thinks I stole her idea. It's a good article, but no--mine was assigned on May 7.
Anyway. I think the following comment--the last comment on this post--restates the main (strongest) point of my op-ed quite clearly and well.
I made a bunch of suggestions in the piece of a new way of thinking about internships. This was intended for people to mull over and compare with their own experience--it was far from a policy proposal, as some literal-minded DC types seem to take everything, and no, I am not an economics PhD (although I did have one econ PhD read it before I submitted it). On those terms, I guess I am proud of the whole thing, namecalling and all.

Lindsay wrote: I think we can all agree that unpaid and underpaid internships are, on the whole, regressive. Working for free is a luxury.
It is becoming increasingly common for students to take these unpaid stints, not only in public policy and alternative media, but also for more "glamorous" jobs in profitable companies. For example, internships in the entertainment industry and the established media are frequently unpaid or very poorly paid.

This isn't just a problem for students and their families. It's a larger social issue. We complain about the echo chamber and the bubble effect in the mainstream media. Unpaid and underpaid internships are increasingly important part of people's career paths in these fields. This is bad for the media and for society at large because it discourages anyone who can't afford to give away their time.

"Do you Get this A lot?"

From my email inbox:
Anya,
Very nice op/ed in the Times. Impressive and true. I myself had to make the difficult choice between doing an unpaid internship on Capitol Hill or earning money back home, and, coming from a relatively modest Midwest background, was certainly aware of the "rich kids" club... But perhaps it worked -- currently I'm a staffer for a Congressman from Indiana.
One question, and I imagine you get this a lot: Isn't your agenda a bit whiny, considering your cause represents a bunch of overeducated twentysomethings blessed with countless advantages? I think you're on to a real problem, but isn't it way more important to worry about the truly poor and disenfranchised rather than graduates of our best colleges who can't find "good" employment right away? Personally, I'm more worried about the former.

My response:
Hi B,
Yes, I get this a lot, but not from people who really take the time to understand my work. If you'll read my book, you'll find that I devote equal time, space, and effort to both the college educated and the 2/3--the majority--of young people who do not have a college degree, whose 20s are likely to be a succession of low wage service industry jobs, credit card debt, and a degree of hopelessness about the future. In no way am I working only on behalf of privileged kids like you and me. But I'm speaking to kids like us because I think that educated middle class kids need to make common cause with the people their age in their cities, maybe even their former classmates in public schools, who have little chance of getting ahead in this economy. The way to do that is to realize how the current institutions hurt everybody. The high cost of college, for example, falls the hardest on the working class and racial minorities, keeping them out of school altogether at much higher rates. But it also puts a burden on the middle class and people on the edge of it who carry high loan burdens that affect their career choice, ability to buy a house and start a family.

I am working very hard to correct this perception of whininess. In some ways, it has to do with the way my book has been marketed--putting me and my story at the front and center, which really isn't appropriate since I am one of the most fortunate people I know (which I say right up front in the first pages of the book). It also has to do with the fact that the New York Times, for example, (which asked me to write this piece on this topic) is slightly more interested in printing stories about the children of its affluent readers than about people they don't know. Almost everywhere the book has been covered, reviewers focus on the "people like us" in the book and not on the many stories of working class young people, those who grew up on public assistance or as first-generation Americans.

His response:
Hi Anya, nice to hear from you. It makes me feel much better that you have the broader perspective. Whew :) I understand how the marketing thing can be frustrating -- it annoys me when reading the Times or even Newsweek that it's so obviously they're not speaking to, or even for, average Americans. Their "normal" is probably the top 10% of the population at minimum, and I hate how they write as if this is the everyperson's experience.

Hopefully the success of your message will give you a platform to press the broader issues you mentioned -- namely how our institutions aren't really good for anyone. Still, I'm not exactly comfortable with your idea of treating the problems of people like you and me together with the problems of those lacking college degrees, struggling through vocational school, etc. But definitely could be a winnnig political strategy.

My response:
It's more than a strategy to me. The way I see it, once you have accepted that there are problems and you are the type of person who thinks about them and wants to do something about them, then there are 3 options:
1) Advocate solely for people like yourself, on a basis of shared identity. You are on absolutely solid ground when it comes to "identity politics" and authenticity, BUT your problems might not be the worst ones out there.

2) Advocate for the people who you think are the worst off, while maintaining that you have nothing in common with them. "I am helping you, because I am altruistic, but obviously I am much more fortunate than you and therefore I am just lending you my advanced expertise and energy."

3) Advocate for yourself AND the people you think are the worst off. Ally yourself with people whose background and options in life may be very different from yours, on the basis of what you DO have in common (including both good things and problems), and advocate for what you think will honestly help both of you.

Any thoughts?

Credit Counselors are often Scammers

Here's my latest Tom Paine column to that effect...

Education is a Right

Depressing report in the Times today from "Renaissance Village," a grim trailer park for hurricane refugees in Baker, LA, north of Baton Rouge, where the kids aren't going to school because of (take your pick) racism, depression, apathy, post-traumatic stress disorder, overcrowding, ignorance, lack of services. I wrote about this distressing situation back in October.

The Times Most Emailed

Yesterday's Op-Ed just made it to the top of the Times' Most E-mailed List. This doesn't make it a better article, but it means it's striking a chord with lots of people, which is awesome to me. I have also gotten surprisingly overwhelmingly positive feedback via email and blog comments (One American Prospect blogger called it "brilliant").

One correspondent described the piece to me as dealing with the "economics of the overeducated," a phrase that sounds a little derisive out of context, but she's right. The school-to-work and labor market systems that we have now, they're not just bad for poor people. They're bad for middle-class people, and even some rich people, and society as a whole.

The second-most-emailed Times story this week is a great counterpoint to mine. It's about the trend of high school dropouts going to college, especially for-profit colleges, which accept them and their federal aid dollars in large numbers without regard for their low chances of success, in the ultimate in social promotion.

That's Just, Like, Your Opinion, Man

I have an op-ed in the New York Times today, which expands on a digression I made in the book about the value of internships.

Update: I posted about it on the Huffington Post. I will be contributing to them occasionally from now on, and will post links back and forth.

Also, a number of the people who've responded have wished that I dwelled more on the unfair class implications of internships--the fact that you have to be able to pay to get your foot in the door. A story by Jennifer 8. Lee in the NY Times 2 years ago underlined this point, which I think is a very good one.

A reader writes:

I had several friends who were forced to make a choice over whether to gain valuable experience and connections as an unpaid intern or earn money that summer and live at home. Many of them were forced to choose the later thus leaving them out of the summer internship club with nothing to put on their resume and losing out to those with enough money. I call it a club because that’s exactly what it is – if your family has enough money then you’re in. If you’ve walked around Capital Hill in summer time you’ll know exactly what I’m talking about.

Right on the Nose

International Herald Tribune via TimesSelect:

Globalization - the almost instantaneous movement across borders of ideas, technologies, capital and goods - is a tremendous creator of wealth. But more than a decade after new technologies and the Cold War's end started driving modern global economic integration, it's not clear the process is also a good distributor of wealth.

Indeed, there's plenty of evidence that the growing wealth disparities in countries from Latin America to Asia are attributable in part to the divide between those with the capacity to board the globalization train and those left stranded by it.

A case can be made that if slavery was the overriding moral issue of the 19th century, and totalitarianism of the 20th, inequality and poverty will be those of the 21st. Communism is passé; the issues that gave rise to it are not.

"Profound Effects" of College Debt

According to this survey, 42% of those with loans 1 to 15 yrs out of school are living "paycheck to paycheck" compared to 24% of those without loans; 34% have sold a possession to make ends meet compared to 17% of the debt-free.

Gore Poem

I saw Al tonight at Town Hall in Times Square. My post about it is up on the Village Voice website, but in the meantime, here is a poem on the necessity of increasing intensity when talking of the urgency of planetary alteration.

O Regal
Al Gore,
Go Real.
Are Log,
Or Gale,
Or LA, e.g.,
Lo-Rage?
Re-Goal!
Go Lear!
Lo, Rage
Galore
O Large
O Regal
Al Gore.

Retirement Benefits Monster

Sez USA Today:

Taxpayers owe more than a half-million dollars per household for financial promises made by government, mostly to cover the cost of retirement benefits for baby boomers, a USA TODAY analysis shows. Federal, state and local governments have added nearly $10 trillion to taxpayer liabilities in the past two years, bringing the total of government's unfunded obligations to an unprecedented $57.8 trillion. (projected over 75 years).

I used to have this Sesame Street book when I was a kid called "There's A Monster At the End of This Book" where Grover is all scared of the monster, trying to stop you from turning the pages, and at the end he realizes...the monster is him.

"Apocalypse Now"

I am an apocalyptic thinker by nature. I don't know how I got this way as I had a quite happy childhood, but my mind naturally trends toward the possibility of civilization-ending disaster. I think maybe it has to do with my first childhood fit about the finality of death, which came when i was 9 years old, trying to get to sleep the day after touring a small exhibit on the Holocaust at a local church. I remember distinctly the thought that this was a horror my mother could not take away, even though she managed to comfort me enough that I fell asleep. And it wasn't just my own death, although that was part of it. It was the possible death of millions.

Tonight I saw that Al Gore movie., presenting its three irrefutable, irreconcilable truths:
1. The tragedy is already in motion.
2. Its predictable consequence is the end of civilization.
3. The solutions are already known.

Irreconcilable. Except with immediate action.

Ps. Here is Bill Moyers giving a gloomy commencement speech:
"We're sorry. We're really sorry for the mess you're inheriting. We are sorry for the war in Iraq. For the huge debts you will have to pay for without getting a new social infrastructure in return. We're sorry for the polarized country. The corporate scandals. The corrupt politics. Our imperiled democracy. We're sorry for the sprawl and our addiction to oil and for all those toxins in the environment. Sorry about all this, class of 2006. Good luck cleaning it up."

You're going to have your hands full, frankly. I don't need to tell you of the gloomy scenarios being written for your time. Three books on my desk right now question whether human beings will even survive the 21st century. Just listen to their titles: "The Long Emergency: Surviving the Convergence Catastrophe"; "Collapse: How Societies Choose to Fail or Succeed"; "The Winds of Change: Weather and the Destruction of Civilizations."

Microlending Online

Salon story on a site where you can sign up to borrow and lend money to peers, cutting out the credit card company middleman. Back to the days of personal trust and a handshake?

"Looking at it from 10,000 feet, this is a great idea," says Elizabeth Warren, a professor at Harvard Law School who's an expert on bankruptcy law. "It could have the wonderful effect of making markets work the way they should, driving down the amounts charged for loans to the true marginal cost."

The Ever-Dying American Dream

From a late review of Gen Debt last week in The Oregonian: "Kamenetz's underlying sense of entitlement to some lost guarantee -- the American Dream being guzzled by the boomers before our very eyes -- can be grating..."

From an essay by Meghan O'Rourke in Slate: "... what Philip Rahv once said was the ur-aim of American literature: to contemplate "the discrepancy between the high promise of the American dream and what history has made of it.""

I'm not saying that my book's a work of literature, but the theme is an enduring one.

Ralph Nader on Sallie Mae

Student Loan Justice sent out an email tonight about the reactions they've gotten since the 60 Minutes piece on Sallie Mae a couple weeks ago--
"So...I've received over a thousand emails in the past two weeks. I've answered them all personally. Its been pretty overwhelming, but I've been awestruck to read about all of your situations. Suicides, wrecked families, destroyed lives, being forced to leave the country, living "underground"--I've heard about all of these in the past two weeks. All because of Student Loans. STUDENT LOANS. How in God's name did this country get so badly off track?

I would say that at this point, this is a bonafide grassroots movement, and you are the first members- "

They pointed me to this essay by Ralph Nader on Counterpunch about Sallie Mae, which hits all the highlights:

Originally a government-sponsored enterprise like Fannie Mae, Sallie Mae was privatized in 1997 and is now the largest private lender to students. But not entirely private. The federal government is its guarantor. Michael Dannenberg of the New America Foundation told Leslie Stahl:

"It may be called 'private'but it's not private at all. Frankly it's a socialist-like system. It's not as if this private entity is assuming any risks. No, no, no. The law makes sure that this so-called private entity has virtually no risk."

Bogus Credit Counseling Agencies

I wrote an online piece for the Voice yesterday about the IRS crackdown on these places that are supposed to help you fix your credit.
You can do anything that a credit counselor can do, although they make it easier. That is, you can call your credit card companies yourself to negotiate lower interest rates and work out a payment plan. Making the payments on time is up to you.

Fast Company Story on Social Networks

I have a feature in the June issue of Fast Company magazine, about the social change potential of next-generation social networks (after Myspace).
...And the paper's editor is going on TV to talk about it!

In these Times Gendebt Article

"Debt Becomes You." Clever.

Hit 'Em Where it Hurts

NY State proposes a special tax on commercial (for-profit) colleges to recoup the extra costs of policing the many that are fraud and scam artists. Read my take on the industry in Slate here.

Sign the Petition to Fix Complicated Student Loan Rules

This Project on Student Debt "administrative petition" advocates for some awesome reforms in the student loan rules that would help the people struggling the most. This is a regulatory petition with a real chance to influence quality. You can also send an email to Margaret Spellings, the Secretary of Education. Check out Edie Irons' guest post on the Rock the Vote Blog or the website for more info.

Credit Counseling Agencies are Bunk

The IRS is basically gutting the entire "credit counseling" industry, saying these nonprofits don't deserve their nonprofit status because of endemic corruption, herding people into plans where the payments are so low their debt just climbs higher.The 40 companies stripped of their tax status account for 40% of the industry's revenue. Heavy duty irony here--these are the guys (besides collectors) who make the profits off peoples' debt.

Hillary Apologizes for Maligning Gen Debt

I would be remiss if I didn't comment on this story: Hillary Clinton, on her mad rush to out-scold the GOP, said that my generation "thinks work is a four-letter word," only to apologize after being called out by her 26-year-old daughter Chelsea.

I have to say, I don't recall a similar case where a politician reversed herself after being publicly rebuked by his or her own child. That on its own says something about family relationships and authority between Boomers and Gen-Debt. Which goes right to the funny dynamic wherein the Boomers, who have been maligned all their lives as self-indulgent & entitled, who *created* this "instant gratification culture," point the finger at their kids for absorbing their very own values.

And what of the criticism itself? Facts, please. More young people than ever before are enrolling in college, and they're working an average of 31.6 hours a week while they're students. Young people make up a plurality of the retail, grocery, and department store workforce, and a majority of those toiling for minimum wage. Entitlement exists, materialism exists, throughout our culture. Scapegoating young people with it is--I daresay--kinda lazy.

Nationwide college graduation rate for blacks is 42 percent, compared to 62 percent for whites.

But structured peer mentoring programs can help, sez the NYT.

ps. That's a six-year rate, the standard way it's measured. That's 47% higher for whites. That's at both public and private colleges.

Best College-Grad Job Market in Years

sez USA Today. This is according to a recruiting industry organization the National Association of Colleges and Employers. I am thrilled to see this basically good news, of course. Yet the spin on the story is a little heavy handed, to wit:

"Stronger starting salaries: Nearly nine out of 10 employers say competition for college hires has increased, and more than 20% have raised, or plan to raise, their starting salaries, according to NACE."

Sorry, but shouldn't that read, "Though nearly 90% of employers say competition has increased, ONLY A LITTLE OVER 20% EVEN HAVE PLANS TO raise starting salaries" ? Plus the increases they quote, 5.4% for accounting and 5.3% for computer engineering? Not so much more than inflation, and less than tuition went up last year.

Dangers of SL Debt

I am quoted in a Christian Science Monitor story.

Change in the Air for Retirees

In Gen Debt I looked at evidence that the 60 year old American model of retirement--65, gold watch, and out--is fading, replaced by longer years of work and more uncertainty. The implications for all Americans, including Gendebt-ers are multifold: as caretakers, workers competing for jobs held by older and more experienced workers, and eventually retirees ourselves. Lots on this, if contradictory, in the papers lately.

The NY Times ran a Sunday story saying more people are planning to work part time after "retirement." "There are, of course, broad social and economic reasons for the emphasis on continuing work — notably, the decline in availability of traditional pension plans and health benefits, and the need for older workers to provide for themselves over a lengthening lifespan." Yet the LA Times has a study by McKinsey&Co showing "American workers, who face growing financial pressure to stay in the workforce, are far more likely to be forced into an early retirement than many expect, according to a study being released today." Reasons include health crises and downsizing, where older workers are eliminated first.

So people want to work longer but they may not be able to? This is kind of like the increased contingency for young workers. IF you're comfortable and self-supporting, it looks like flexibility and freedom. If you're struggling, it looks like a cold cruel world.

More NOLA photos

My latest post on Villagevoice.com is a slideshow of New Orleans neighborhoods.
I came home from my trip home (?) cautiously optimistic. But hurricane season is going to be constant anxiety.

Retirement Questionnaire for FRONTLINE

Posted on request--Reply by Wednesday, May 10, if interested:

****
I'm a researcher for FRONTLINE, the documentary show on PBS, and I'm currently working on an article for our Web site (www.pbs.or/frontline) about Generations X and Y and their views on retirement. I know it's a long way off for all of us, but the decisions our elected leaders are making now will dramatically affect whether many of us can retire comfortably when we want to or must continue working for as long as we're able.

So, I'd like to speak with a broad range of young people (ages 18-35), and use their stories as examples in my article. If you're interested, please answer the short list of questions below, and return your responses to me at (Sarah_Ligon@wgbh.org) by the evening of Wednesday, May 10th. I'll contact you by e-mail for any follow up questions and to let you know if I'll be including your information in my article.

The article will appear on the FRONTLINE companion Web site to a new film by Pulitzer prize-winning journalist Hedrick Smith titled "Can You Afford to Retire?" (May 16, 2006). Here's a brief synopsis:

"The baby boomer generation is headed for a shock as it hits retirement: boomers will be long on life expectancy but short on income. In addition to Social Security, the pillars of retirement income for Americans have been either lifetime corporate pensions or employee-contribution plans such as 401Ks. But both retirement strategies are in trouble. Buffeted by pension cuts, corporate bankruptcies, and the 2001-2002 stock market crash, most boomers now expect to be working into their retirement years."


NOTE: Please e-mail your responses to Sarah_Ligon@wgbh.org.

Name (first/last)*:
Age:
Occupation (please provide title as well as a short description):
Location (city/state):

When do you plan to retire?

How do you plan to fund your retirement (savings, employer pension, 401(k), part-time work)?

How much money do you think you'll need to pay for your retirement?

What is the current balance in your retirement account?

If you have a 401(k) or 403(b) plan, how is your money allocated (stocks, mutual funds, bonds, etc.)?

What portion of your retirement do you think will come from Social Security?

How do you plan to pay for health care in retirement?

Which type of retirement plan would you rather your employer offer: a lifetime pension or a 401(k)? (With a traditional lifetime pension, an employee who works for a company a number of years receives a set amount of money every year for the rest of his life. With 401(k) accounts, an employee contributes a portion of his salary to an investment account, which pays out in a lump sum when he retires. Some employers will match a portion of the employee's contributions.

* If you are not comfortable being identified by your full name or your first name, please indicate why and how you would like to be identified in our article.

Sounds of the City

My latest piece, a Note from New Orleans in the Voice on hurricane housing for musicians.

60 Minutes Piece on Student Debt...

Should be airing this weekend, May 7, possibly including interviews with some of my contacts in the student loan world like Luke Swarthout, Alan Collinge of Student Loan Justice, and Lynnae Brown the director of documentary "The Garnished Life."
I wish they'd called me but it looks like a good segment nonetheless and I still have a couple of big TV appearances coming up--stay tuned!

Fix Everything My A**

Here's a commentary I wrote for Tom Paine on the state of my hometown. I'm loving being down here and feeling somewhat optimistic about the pace of recovery overall, but it hurts to see so many citizens left out of the equation. I think it's a bad long-term strategy for renewal.

Note from New Orleans

The amount of activity here in my hometown is simply staggering, & it's hard to figure out what it all adds up to: a slow renewal, stasis, or a weird afterlife before the final end. I guess it all depends on who you talk to. Here are some pics from the weekend (published on the Village Voice website.)

Social Security&Medicare: Time is Running Short

New predictions for the exhausting of the Social Security& Medicare "trust funds": the Social Security deadline has been moved up a year to 2040, and Medicare has been moved up from 2020 to 2018.

Treasury Secretary John Snow, who is the chairman of the trustees' panel, told a news conference that the country faced a ''looming fiscal crisis as the baby boom generation moves into retirement.'' He said the administration stood ready to work with Congress to come up with a solution.

Don't hold your breath. In 1983, the last time there was a major overhaul, they waited until Social Security was literally days away from running out of cash.

Paperback News

The paperback version of Generation Debt will make its debut in January (not February) 2007. There is a new gorgeous cover and a new awesome subtitle: Generation Debt: How Our Future Was Sold out for Student Loans, Credit Cards, Bad Jobs, No Benefits, and Tax Cuts for Rich Geezers--And How to Fight Back.
There will also be a new chapter, full of activist tales from the road, and an action guide to taking control of your own finances.
I am really excited about this relaunch, I think it's going to be a smash.

On Tubbs Hill

Greetings from gorgeous Coeur d'Alene, Idaho where I am appearing as a featured speaker for the Kootenai County Financial Literacy Week. I talked to about 200 high school students yesterday about how not to get in trouble with credit cards& why it's fun to invest--really!--'cause compound interest and the Rule of 72 can work either for you or against you.
Brad Dugdale, a certified financial planner who invited me here, is also really excited about getting people to opt out of pre-approved credit offers, which you can do here. I could stand to get less junk mail.

My message is in an interesting new context here where real estate values are rising, but you can get a 3-bedroom house for just over $100K, and where kids are skipping out on community college for construction and tourist jobs.

The Nation Editor on the 2006 Election

I think there are three issues that matter in such an election. There's the Constitution - defend it; there's Iraq - get out of it; there's universal health care - pass it. Hillary Clinton on the Constitution, not there. On the war and universal health care, terrible.

Student Debt Alert Clock

A counter, courtesy of Student Debt Alert, that shows the total amount current and past students are on the hook for, WITHOUT interest. It was at $413 billion last I checked. Pretty close to the 2004, 2005 and projected 2006 budget deficits, all around $400 billion.
That's less than 25% of the nation's total consumer debt, a little over $2 trillion,
5% of the national debt, north of $8 trillion,
and 0.7% of the figure that dwarfs them all, the $53 trillion projected bill for Social Security and Medicare.

Name Check in the NYT

"The Bank of Mom and Dad." Shallow, but relatively sympathetic, take on 20somethings whose lifestyles are subsidized by Boomer parents.

Making College Affordable

Rep George Miller, D-CA, sponsored an online forum this week on college affordability, for which I submitted some "expert" testimony. If you are a student or parent, you can submit testimony here. Miller is the sponsor of a bill along with Senator Dick Durbin that would, quite simply, cut student loan interest rates in half, thus saving the Typical Student Borrower $5,600.

Wedding Day Blues

My newest story in the Voice is about Tariq Rivzi, one of approximately 2500 South Asian immigrants to New York City who have been detained or deported since September 11, many seemingly without reason.
Secret prisons and unexplained imprisonments...

UPDATE: Tariq Rivzi was released April 20, I learned. On parole, no explanation. Amazing coincidence, no? Go to the Council on Peoples' Organization if you want to get involved and help more New Yorkers in his community, with legal clinics, afterschool programs, ESL classes, or a donation.

U Michigan Speech Today

Big props to the Michigan Organization of Students, who are trying to start an undergraduate union and are staging a three-day teach-in called Tent State University. I spoke today on the steps of the library in Ann Arbor about the French example and why students should encourage others to fight for their own economic interests--and provide a positive alternative.
For more about the Tent State movement, go here.

Mom to Kid: You're On Your Own for College

An amazing story climbing the NYT most-emailed list: the laissez-faire economic order has finally reached the family, with parents leaving kids on their own more and more to pay for ginormous college costs. Don't take my word for it:

"What I've really seen in the last 10 years is a generational shifting of the responsibility" to pay for college, said Ellen Frishberg, director of student financial services at Johns Hopkins University in Baltimore. "Our parents helped us pay for school. These parents are not as willing to help their children pay for school."

"It's such a new phenomenon that there's not a lot to compare it to," said Christine W. McGuire, director of financial assistance at Boston University. She said changing attitudes about debt were behind the trend. "We're so comfortable with debt burden now as a society, and the parents already have a significant debt burden of their own, they may not see it as a big deal if students are also taking on large amounts of debt," she said.

Maggie Walsh, a senior at McIntosh High School in Peachtree City, Ga., said that although her top choice for college this fall was New York University, she was worried about the cost, which could come to more than $30,000 a year for tuition alone, according to N.Y.U.'s Web site. As a Georgia resident, she said, she could take advantage of a state scholarship program that offers full tuition at any public state university to any high school student with a B average.
"I've been thinking about it," Ms. Walsh said. "If I don't get any financial aid from such-and-such a college, is it worth going into years and years of debt? It's starting to look like more and more of a bad idea."

French Young People Win--But for What?

An amazing demonstration of youth power--they got that discriminatory law overturned. But what now? They're still 22% unemployed. Entreprenueurial incentives? Liberalize somewhere else? Do they have an alternative?

Newsday Reviews

Check it out

Gen-Clash

Some funny blog-reviews of my Canadian radio debate on "The Current" today with Leonard Steinhorn, author of The Greatest Generation, about how grateful we should all be for the Baby Boomers and their contributions to diversity and tolerance. Steinhorn has a conversation-stopping habit of quoting shocking instances of retro racism and sexism to bolster his argument. He seems especially offended by the fact that African-Americans once used toxic bleaches to lighten their skin and hair. True but what of today's tanning-salon craze? Turnabout is fair play I must say.
A more serious problem was that he didn't engage either my argument (Boomers are leaving America quite a mess to clean up) or Professor MacMillan's (the 60s were complicated, and besides, where did all those conservatives come from?) but instead kept repeating his talking points.
ps he was 20 minutes late keeping me waiting in Boston and MacMillan in Toronto.
pps. I know my voice is a little high and girlish. I was getting over a cold yesterday so it was prob breathier than usual. Working on it though.

Imagining the Future of Global Warming

I think this is a brave, important piece. It's about envisioning what we need to do--not just wringing our hands.

Climate change should be the primary driver in our biggest decisions over the next 20 years. It should define our major economic investments, tax policies and foreign policy. It is that big. It is that big of a threat, that big of an opportunity. It is not merely one of many important issues -- it is the issue that will define our generation. It is our destiny.

Wages Up, Workers Scarce in China

Fascinating. It had to happen I guess.

The shortage of workers is pushing up wages and swelling the ranks of the country's middle class, and it could make Chinese-made products less of a bargain worldwide.

They say lower down that the number of Chinese people enrolled in college has tripled since 1999, to 14 million (US has 15 million). And minimum wages are up 25% in three years in the big cities.

Reprint in the Times

A little article I wrote last month for Men's Health on "What's Your Spending Style?" rated a mention in the Saturday business section of the NY Times.