« previous | MUCK HOME | next »
All Muck is Local: Nebraska
Call it a rookie political mistake. It's one thing for a politician to lend a hand to his constituents, particularly the ones who can afford to make campaign contributions. But please; be discreet.
Last week Nebraska Attorney General Jon Bruning ordered Nelnet, a student lending company caught up in the recent industry-wide scandal, to pay a fine of one million dollars. Nelnet has, at least twice, paid university administrators who recommended that students finance their debt through the firm. The company is also hired by universities to educate students about how to pay for college; not illegal, but surely a conflict-of-interest practice that they have agreed to stop.
So what’s wrong with this picture? Nothing, except the million dollars is actually a fine that Bruning assigned the company all the way back in April, a fine that he forgave only two weeks ago.
Bruing erased the fine after New York Attorney General Andrew Cuomo ordered a similar punishment for Nelnet. Cuomo has made investigating student lenders a focus of his office; already, several banks have been ordered to contribute to a national education fund. Cuomo announced on July 31st that Nelnet would be paying $2 million to the fund.
Upon hearing the news, Bruning immediately forgave Nelnet his part of the obligation. He also used the opportunity to take a few shots at his fellow AG, saying that he “never believed that the investigation was particularly useful.” Bruning went even further, saying, "Nelnet is an ethical, decent, honest company…. I will never apologize for being a defender of Nelnet."
Admittedly, that statement is a bit misleading. After all, Bruning was removing a fine that his office placed on the company; Bruning somehow styled himself both prosecutor and defender. But more importantly, Nelnet doesn’t exactly have a sterling reputation. Only a few months before the original settlement, Nelnet settled another deal with Secretary of Education Margaret Spellings.
For two years, Nelnet had falsely classified a large collection of loans, resulting in a huge government subsidy. (The government will guarantee student lenders a return of 9.5% on certain types of loans. Nelnet incorrectly identified some loans, allowing them to earn twice market value on the investments.) Spellings informed the company that they would not be able to collect future subsidies on the mislabeled loans, but she did allow the company to keep $300 million in taxpayer money that it had already received.
Maybe Bruning was just sticking up for Nebraska (Nelnet is based out of Lincoln). Then again, Bruning might have been getting on better terms with a firm known for its generous political contributions.
Bruning has announced that he will run for the possibly vacant Senate seat of Chuck Hagel (R). HigherEdWatch.org, whose extensive coverage helped keep the story alive, has noted that the original settlement came only weeks after Bruning’s campaign got a $16,000 boost from Nelnet execs. In fact, the settlement was announced without Bruning’s office ever launching an investigation (presumably, Nelnet approached Bruning in the hopes of avoiding Cuomo’s investigation).
For now, the fine has been reinstated, and Bruning has hopefully learned a lesson both about conflicts of interest and discreet politics. He recently declared in an interview that the resurrected fine “eliminates the opportunity for political gamesmanship by those who may want to create the perception of a conflict of interest.” We’ll see if his opponents agree with him.
Josh
Zachary
If I were college age today--in the same circumstances as when I did go to college--I wouldn't have a chance of attending anything but a junior college first and then a state college, if at all. I could not attend the small, private college I went to in the '70s, and I know I'd become lost in the crowds at the large institutions in California. I'd certainly never make it to graduate school.
I was the lucky borrower of actual Federal loans for my education. These loans were at 2% interest, which could never change. I paid my loans off within five years of graduating--an impossibility today. Even though others advised that I pay the student loans off last, because the interest was so low, I wanted to pay them quickly so that more money would be available to lend to other students. (Naive? Okay, I'll accept that.)
Turning these loans over to private control was an ill-conceived policy that will have horrible effects on this country for many years to come.
Not only are we facing an era in which college graduates start out their lives with debt that most Americans never before faced until they bought homes, we are excluding those high school graduates who opt out of college altogether because of their choices: an education that will not fit their needs and goals, or crippling debt that will require their post-college life careers to focus on earnings rather than achievement, satisfaction, and contribution to society.
To these lenders and to the politicos who allowed this to happen: Shame on you. You are directly responsible for dismembering America's current and future innovation, creativity, and ingenuity.
August 19, 2007 12:13 PM | Reply | Permalink
I see our leaders are determined to lead this nation to its destruction. More and more, we are seeing the destruction of a functional society by those who have traded integrity and ethics for self serving short term gratification... usually consisting of money or power.
As long as we continue to take away accountability for those in the highest offices, we will continue to see the fall become more and more tumultuous and destructive. Note that BOTH the Reps and Dems are supporting this fall. Just take a look at the ethics bill just passed before recess if you have any doubts.
Would we support a football team where the players are making outlandish salaries, all the while aware the entire game is rigged and the game will end in a tie with both teams winning? Of course not.
We will, however support two parties who are directly responsible for the deaths of millions of people, including women and children, by lying and conning the American public into supporting wars started by false testimony. Both parties then spend a great deal of newsworthy time letting the public know they are blaming the other guys, all the time actively supporting those same people. This is not new folks. This has been occurring over the last several wars.
Having been involved in a war which was never even declared a war by Congress, but was nevertheless funded for ten years by BOTH parties in Congress, I used to to believe that nobody ever wins a war... some people just lose less. I have recently come to the conclusion that I was wrong. Some people actually DO win a war... it's those clowns in power who retain their power while sending millions of people to their death... IMHO
August 19, 2007 1:11 PM | Reply | Permalink
anonymous: "Would we support a football team where the players are making outlandish salaries ..."
Not to go off-topic, because there is a tangential similarity to what you're talking about -- but the public already does support football teams, in terms of generous public subsidies to multi-millionaire owners for facilities and real property.
Try Googling "San Francisco 49ers Santa Clara" to note the specifics of one particular example, where two municipalities are currently vying with each other to see who can punt the public interest the farthest.
August 19, 2007 6:05 PM | Reply | Permalink
http://www.thehungersite.com/
The world produces enough food for everyone. Yet over 800 million people remain chronically hungry.
A daily click at The Hunger Site will automatically give over a cup of food to those in need. Site sponsors pay for the food, which is distributed through the nonprofit organizations Mercy Corps and America's Second Harvest.
Making a difference doesn't get easier than this. It only takes a few seconds each day and it's free. Please share the power of The Hunger Site today!
https://shop.thehungersite.com/
store/item.do?siteId=220&itemId=
31442&origin=129369&ctgSource=null
Help Earthquake Victims in Peru
click for more detail click for more detail
Please help provide disaster relief for the victims of a devastating earthquake.
A powerful earthquake has hit southern Peru, and the death toll is rising quickly as search and rescue efforts continue. Thousands are injured and thousands more displaced when their homes were destroyed during the quake. Several areas have lost power and communications.
While the brunt of the damage has fallen on the city of Arequipa, the quake's devastating effects are farther-reaching, felt in the Peruvian towns of Cuzco, Pisco, Puno, and Mollendo.
For years now, GreaterGood has been working to help artisan families in Cuzco out of the poverty and hunger cycle through fair trade. Now, these families need our help more than ever.
How You Can Help:
Donate $25 today toward disaster relief. Local authorities are asking for medicines, tents, and blankets. Once immediate, desperate needs are covered, we will move toward recovery and rebuilding efforts.
Please note: Your purchase is 100% tax-deductible in the U.S.A., and you will receive a receipt from GreaterGood.org for your taxes. GreaterGood.org is an independent charitable organization devoted to addressing the health and well-being of people, animals, and the planet.
August 20, 2007 8:02 AM | Reply | Permalink
If we ever truly want to gain the edge of commerce in the global market of ideas and innovation the USA should stop pouring billions into the sinking boat of Defense waste spending. Nobody in the USA should ever have to pay for a k through 12 and 4 years of college. I don't buy into the "cost" as prohibitive. The cost of not doing it will continue the certain downslide our labor market suffers from underemployed able workers.
August 20, 2007 1:07 PM | Reply | Permalink
If the "accidental" overbilling was $300 millon, how much is the US Government paying these companies to bankrupt our children?
Code:school
August 20, 2007 3:32 PM | Reply | Permalink
So we go to college in order to earn more, in order to pay for college? I guess I'd need to consult a college grad. in order to understand how that makes any sense at all...
Code word: sheep, as in 'we the sheeple.'
August 20, 2007 4:44 PM | Reply | Permalink