Friday, February 19, 2010

Heck, Go For Broke: Sue The Department of Education!

Law students should feel betrayed by a system that seemed to promise them so much and then pulled the rug out from under when jobs never materialized. The fact is, this is the American education system now catching up with law students.

Go back a couple of decades and you’ll find all sorts of dismayed young people fresh out of graduate school working at Xerox shops, tearing tickets at multiplexes, or driving delivery trucks. These were the kids that didn’t go into a “reliable” course of study such as law, business, engineering, or medicine. These were the history majors, philosophy majors, art majors, and anything else left over in what suddenly became the big bad pedagogical wasteland called the humanities.

Our American education system did not start out to be a trap for the young and idealistic, stripping them of their dreams and dignity. Ever since the 1980s, the effect has been a gradual metamorphosis, tempered by a new era of hardball business practices and the tail end of the Cold War--it wasn’t a victory for America, after all, it was a victory for Capitalism!

Along the way there were signs that this runaway Capitalism wasn’t quite the ticket to utopia the new age economists were predicting: the Savings and Loan debacle at the end of the 1980s, the bubble bursting in the 1990s, and now the meltdown of practically the entire financial system, thanks to a few bold speculators trying out Ponzi schemes and writing bogus mortgages.

Take it from one of these grumbling grads of yester-decade: you haven’t even seen the best of it yet. When I started law school in 2008 at the age of 50, the first order of business was to pay off a defaulted student loan before I could start borrowing the bigger student loans law school required. The student loan I had to pay off was from my masters degree in 1982, for which I had borrowed up to $12,000. The balance I had defaulted on was about $5,000. I defaulted on this $5,000 back in 1996 when I finished my PhD and couldn’t get any more deferments.

For 15 years of my life, I kept the Department of Education’s collection agencies on the run. If you ever default on your student loans, you’ll find quickly that the worst thing you can do is talk to them, try to reason with them. By the way, these agencies believe they are staying within the laws of debt collection but they are not: they will use abusive language, profanity, and deception to try to get you to hand over anything you might have lying around the house to make a payment. They will tell you that the Department of Education should not be “messed with” (sounds like a threat to me, however weird). When I somehow let slip that I did have a position as an adjunct professor, they found out where and tried to garnish wages. Because the school that had hired me was laundering my status improperly, with the unions by the way doing absolutely nothing on my behalf to correct the impropriety, I lost that “position.” It seemed the debt collection agency would rather I have no money coming in than enough money to pay them.

There is plenty of blame to go around for the state of affairs we live in today. The more you complain about it, the more you’ll get average Americans stepping forward to tell you that you should blame yourself. And guess what? You will start blaming yourself. The last thing you ever thought you’d be when you picked up that masters degree diploma was some sort of Horatio Alger story. Don’t the rags-to-riches stories always start out with the rags being worn by children (i.e., who were born into poverty)? Now we have well-fed, even bratty educated young adults who got straight As in graduate school slipping into poverty. But guess what, there are no riches at the end of the rainbow. They slip into poverty and stay there.

And do I really have to illustrate this for all those new-age economists who believe I’m unfairly engaging in some sort of class warfare? In 2001, I got a “job” at Barnes & Noble as a clerk. It was a minimum wage job, which meant that an 8-hour day earned you $40. Even if you could put in a 40-hour week, which they won’t let you do because then you’ll be full-time and eligible for benefits, you’d make $160 per week, $640 per month, $7,680 per year. The average rent in the area of this Barnes & Noble on Manhattan was $1800 per month. I also found out the hard way that this Barnes & Noble was engaging in a Wal Mart technique of changing your work schedule every week so you were supposed to keep your private, personal schedule free--they were trying to keep you from getting a second job. Most of the fellow workers at Barnes & Noble, a few of them with graduate degrees, couldn’t even get bank accounts: they would line up at the cash register to cash their paychecks every week. Better get used to this situation, young JDs, because this is what the powers that be in America have in store for you.

I take that back. Don’t get used to it. Above all, don’t blame yourself.

Let’s sue the Department of Education in a big class action suit. Above all, there is no reason why these student loan debts should be different than any other debts: if you can’t pay them back in seven years, they should be taken off the books. Here’s another interesting piece of information: in Germany and other European nations, there is no tuition. Money is actually seen as a corruption to the system. I'll drink to that!

The American education system is set up so that a young adult with no debt to his or her name, signs a piece of paper, and a seven-figure amount immediately goes from the Government into the coffers of a law school--a shiny building filled with air-conditioned offices. Remember the pages of material your financial aid office had you read before you signed the promissory note? They made you also sign a statement that if you are not satisfied with the education you get, you can’t claim your money back. What kind of legal issue does that raise?

The truth is, the Department of Education knows that the student loan system is improper and unethical. Why else would they have you sign all those documents and create a special class of loan that can never be written off the books? This is a special class of consumerism where in order to go to school, you have to sign away your rights. I can also speak from the experiences of a close member of my family that even though the Department of Education promises that the loans will be forgiven if you become disabled and unable to work, forget about them keeping this promise. It doesn’t matter how carefully you gather your doctors’ notes and put all your ducks in a row, the matter goes before an entirely anonymous “panel” of sorts that rejects your claim and sends it back to you on an unsigned form letter.

Used car dealers and snake oil salesmen have nothing on the Department of Education. Young idealistic students fresh out of undergraduate programs are not just keeping the buildings at law school shiny and the air-conditioning running. Their life blood is being tapped to pay for the families and comfortable life styles of their law professors. If this isn’t class warfare, what is?


  1. I agree with everything you say. I told my friend the other day (he has defaulted), they should change the saying to "The only thing guaranteed in life are death, taxes, and student loans!"

    My mother is permanently disabled and they would not cancel her student loans. It is a messed up system.

  2. Let's sue on the theory of fraud, estoppel, and unconscionability!

    Once we defeat them in the courts, let's take it to the political arena and abolish the DOE. The feds have no business in education.

    The legal battles will be atrocious, but the best position we're in is educating the consumer on the grassroots level.

  3. thanks for chiming in veryspoiledgirl. I checked your site--I grew up in Sacramento area as well.

    I hope you have or will write to your Senator about your mother (try Feinstein--she's not up for re-election).

  4. I totally agree with suing the Depart. of Ed., I also have a website up with about 40 documents from them and Sallie Mae, everything that they have sent me proves that I don't owe this debt, but they just keep claiming I do! I did NOT sign a promissory note, so they claim the "application" is now the signed promissory note, they say I attended 60%, the records that they sent to me clearly shows that I was on Grace Period for over 3 months before the LDA that they swear by... etc. there is too much to list here. Come see yourself, everyday I find more falsehoods, so it is a work in progress...


  6. So true. I have had 18 surgeries and i was on an income contengent program when my taxes suddenly dissapeared. The dept if edu said they did not take them or certify me and the irs has proof they took them at the time my balance was around $4300 and they took $6969. Then collection calls started to come saying i owe $39000! I have been disputing this since 2011. They said i consolidated in 2011 which i did not do. I keep asking them to validate it and they keep sending me papers from 2000. So now while in dispute they took not only my federal but my state taxes as well totaling more than $9000 for loans that should have been paid off in 2011 with my taxes and should have received a refund from the overage.

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