U.S. Bank to exit the federal student loan business

In light of the revelation that U.S. Bank will exit the business of federally subsidized student loans, I thought it timely to post two very relevant stories I wrote a while back:

Audit: Fifth Third Violated Federal Loan Laws
Bank denies charges, points to changes in legal interpretation
Kristy Conlin The News Record
Published: Sunday, January 11, 2009

Cincinnati-based Fifth Third Bank is under fire for violating federal laws prohibiting the use of financial incentives to market and secure federal student loans, according to a report that comes as the result of an audit conducted by the U.S. Education Department’s Inspector General.

Representatives for Fifth Third deny any laws were violated and instead insist the transactions in question, which involve student loan originators MSA Solution, Pacific Loan Processing and Law School Financial, were for the transfer of loans, not the marketing or solicitation of loans. According to Fifth Third, the buying and selling of existing loans is a common practice.

The Education Department is recommending disciplinary action against Fifth Third. Such action could include fines, removal of federal guarantees for the loans or removal of Fifth Third from the federal loan program.

(Read the full article here or here.)

Tuition rises, loan limits idle

Kristy Conlin The News Record
Published: Thursday, May 8, 2008

The student loan market is getting harder to navigate, thanks in part to the decision by some lenders to get out of the student loan business in addition to the growth of the alternative loan market.

Alternative loans (sometimes referred to as private loans) have risen in popularity in the last seven years and often come into play when there is a gap between educational costs and traditional financial aid.

The cost of tuition nationwide has increased 30 percent in the last five years, according to the American Association of State Colleges and Universities. The limit for freshmen borrowing via federally funded loans, however, is about the same as in the 1980s, according to Connie Williams, director of student financial aid at the University of Cincinnati.

"The lending industry saw a market there," Williams said. "We do have students who have larger loans, especially in their senior year when they've used all their federal grants."

(Read the full article here or here.)

*My take: First of all, I'm surprised this story is about U.S. Bank and not Fifth Third. I think U.S. Bank's explanation, as reported in Cliff Peale's article, is disingenuous at best. Of course they'd prefer to move to the private loan business - what banker truly wouldn't want to? Doing so allows for big interest dollars in the highly lucrative private/alternative student loan business. In any event this is bad news for students, students in the Tri-State area and across the country.

*Note to big time media: This story isn't over. The surface has only been scratched. You all have some digging to do.

Much ado about nothing?

Seems this cartoon is causing a bit of a flap, especially for members and representatives of the National Organization of Women. (Thanks to Daryl Cagle and Rob Tornoe for putting the cartoon, along with commentary, on their Web site. Click here to check it out). The cartoon, by Bill Bramhall, was printed in the New York Daily News (maybe my favorite newspaper ever).

So, as you can likely figure out, the gist of the complaint is that the cartoon is sexist, as it depicts efforts by numerous people to silence Gillibrand using any means possible from corks to socks to gags to "the hook."

Bramhall says the cartoon is an editorial on the predilection of some of our esteemed senators to use more speaking time on the floor than they are are allotted. Plus, Gillibrand has apparently made something of a habit of this practice. Her failure to wrap it up in a timely manner during the Sotomayor hearings ultimately was the genesis, according to Bramhill, for the cartoon.

Marcia Pappas, NOW-NYS president, disagrees. She suggests the cartoon is one more example of a patronizing patriarchy in which women are told to "sit down and shut up."

At this point I think her perspective is a bit over the top. Heartfelt, I'm sure, but a little too politically correct, especially when taken in the context the cartoon's creator describes.

Pappas really loses me though when she goes full on crazy. That's the only way this statement can be explained: “Bramhall’s phallic symbols send a clear message that women are good for only one thing."

Call me crazy, but you have to really be looking for those so-called phallic symbols to see them.

It's not easy for me to say she's wrong about this. But she is.

I admire Pappas' efforts to defend women. I consider myself to be a feminist and I see sexism in a lot of places - women's pay vs. men's and the political status and perception of women are the two areas that cause me the greatest distress. (I'm still not over the GLARING mistreatment Hillary Clinton received during last year's primary campaign). But still ...

Sometimes a cartoon is just a cartoon.