Street art by Nils Westergard

Street art by Nils Westergard,
titled “Isabelle,” in Los Angeles (photo by the artist)
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Tens of thousands being dropped from US student loan relief program

By J. Cooper
15 November 2017

October marked 10 years since the George W. Bush administration enacted the Public Service Loan Forgiveness (PSLF) program as an incentive to young college graduates to pursue careers as teachers, in government, or at non-profit institutions. The program was advertised as a way for some recent graduates to see an exit sign on their student loan debt.

In 2006, average student loan debt for undergraduates was just under $20,000. For graduate students it was nearly $40,000. For the class of 2016, average undergraduate debt had climbed to $37,172. For graduate students, the average is considerably higher. In that same period, college tuition has increased 63 percent.

Over the past 10 years over half a million graduates have signed up for PSLF. However, according to a recent article in Rolling Stone, more than half of those have been disqualified for myriad bureaucratic reasons. Last month a total of only 137 individuals were deemed eligible to have the balance of their student loans wiped clean. Thousands are just finding out that their years of paying on time won’t count under the federal forgiveness plan because they took out the wrong type of loan, their employer has been disqualified, or their original lender sold the loan to an unqualified institution. President Trump’s budget proposes eliminating the program entirely for borrowers after July 2018.

As many of these borrowers are now discovering, if your employer hasn’t provided the correct proof of employment in a qualifying position, if the loan you are carrying is not through the sole federal direct-loan program, if you have missed even one of the 120 payments required within the 10-year span, or if you paid extra in one payment and skipped the next, you can be disqualified.

New York Times article from October 27 profiles a 46-year-old teacher who enrolled in the PSLF plan the year it was announced, thinking he had done everything according to the rules, only to discover in 2015 that he had been enrolled in a “particular type of ineligible payment plan and would need to start his decade of payments all over again.” One of the online comments from November 5 announces that several class action suits have been launched on behalf of borrowers who were not informed their loans were out of compliance.

Another commenter says: “By the time I’d learned that [one of the loans did not qualify], my loans had ballooned to $90k because I was only paying interest on them with 8.5 percent. … that nonsense impacted my career choices (deciding to stay in nonprofits to secure the forgiveness), my retirement funds, and my sanity. I will end up paying more than $55K in interest on my $60k loan. Truly criminal.”

Among the thousands disqualified or affected are teachers, doctors, lawyers, even police. A lawsuit by the American Bar Association was filed earlier this year after the Department of Education (DoE) announced it had “rescinded without explanation the association’s status as a qualified employer under PSLF and notified ABA employees and others who had previously been approved for participation in the program that they no longer qualified,” according to the DoE website.

Most of those applying for the PSLF program are those with postgraduate degrees. Currently there is no limit on the amount a graduate student can borrow, and it is not uncommon for a graduate student to embark on their first job out of school with $100,000 in debt. To discover, after 10 years working at a public service job, known for low salaries, that you don’t qualify for the program after all, not only impacts the financial wellbeing of the individual, but can have serious psychological effects.

Jason Delisle, a resident fellow at the American Enterprise Institute, a conservative think tank, revealed that when the PSLF program was first created, it was intended to be small and unattractive. “Washington policymakers did not foresee the program growing to its current size. After all, 10 years is a long time to work in a qualifying job, so many experts thought people wouldn’t sign up,” he wrote in Politico in July. “They also thought borrowers were averse to making loan payments linked to their incomes, as hardly anyone enrolled in an earlier version of the government’s income-based repayment plan.”

In fact, Delisle speaks for that section of the ruling elite who are determined that not even a small segment of students in debt will get any relief. Delisle argues that the PSLF program should be eliminated because it encourages graduate students to maximize their debt load, since the larger amount will be forgiven after 10 years. It’s easy for him to ignore the dire consequences for those who get the reality check that they don’t qualify after they have made their regular payments and then face decades of additional payments when they thought they might be able to buy a house or start a family.

As of July this year, the interest rates for Direct Loans increased to 7 percent for graduate students, and 4.45 percent for undergraduates. Trump’s budget proposal includes a provision to eliminate entirely the federal Subsidized Stafford Loan, which has traditionally allowed students to defer payment while enrolled in a college or university, and had a somewhat lower interest rate upon graduation. Another provision proposed in the House version of the next budget would require that all tuition waived, either through a federal program, employer benefit or university tuition waiver, be counted as taxable income.

The overwhelming burden of student debt for borrowers at all levels is becoming worse every year. This past spring, total student loan debt surpassed $1.45 trillion, about $620 billion more than all US credit card debt. Among the 44 million borrowers, the average monthly payment is $351. Trump is proposing to abolish subsidized federal loans and institute a single program for all federal student lending as a single income-based repayment plan at 12.5 percent of adjusted gross income. Today’s recent graduate can look forward to at least half a lifetime of penury as the cost of an undergraduate degree. And for those who can’t afford more than the interest every month, it’s a lifetime.

Currently, 11.2 percent of student loan dollars are in default and another 11 percent are in forbearance (a temporary payment suspension granted at the discretion of the lender while interest continues to accrue). According to the September 28 Washington Post, “millions of people had not made a payment on about $144 billion in federal student loans for at least nine months as of June, a 12 percent increase in defaults from a year earlier.”

Although the default rate has declined slightly from its 14.7 percent peak in fiscal year 2010, it is still well above rates prior to the 2007-2008 mortgage collapse and Wall Street crash—from 8.8 percent in 2009 and 7 percent in 2007. The total number of borrowers in default is at an all-time high, with 1.1 million new borrowers defaulting in 2016.

According to the Department of Education’s latest figures, the third quarter of 2017 saw a major increase in loans going into default for at least a second time. Thirty-thousand borrowers defaulted on $64 million. This was a jump of 7,100 unique loans in just three months. The previous record was set in the first quarter of 2016, with 24,500 borrowers re-defaulting on $57 million.

College graduates face an increasingly bleak future, despite being told that a college education is a necessity to get a “decent” job today. As has been widely reported, Americans between the ages of 18 and 34 are more likely to be living with their parents, rather than a spouse or partner. Employer-paid health care and pension plans are a relic of the past, forcing millions of college graduates to foot the bill for thousands of dollars in expenses in addition to the student loans. The average net worth of the 2016 college graduate is a negative $33,984.

This crushing debt provides fertile hunting grounds for rapacious debt collectors. For the fiscal quarter ending in March 2017, more than $2 billion had been “successfully” recouped for the lenders by 30 national collection agencies. Of this, $182 million was the result of wage garnishment. It should come as no surprise that feelings of despair and suicidal thoughts are so prevalent today.

As the teacher interviewed by Rolling Stone explained, the debt collectors “called day and night.” Calculating his “rehabilitated” debt at over $100,000, he said, “Not one dollar goes toward principal. I will never be able to pay it off. My only hope to escape from this crushing debt is to die.”

Significantly, a recent report by Experian, the consumer credit reporting agency, notes that of the generation of borrowers now making payments, aside from students currently enrolled and thus just beginning to accrue loans, millennials have the highest percentage of past due amounts on loans in repayment (not deferred). Millennials also have the highest number of loans, 4.4 on average. This is also the generation that indicated, by a majority (51 percent) in a recent poll, that they would rather live in a socialist or communist society than under capitalism.

The legacy of Obamacare: A five percent increase in heart patient deaths

15 November 2017

When one individual inflicts bodily injury upon another such that death results, we call the deed manslaughter; when the assailant knew in advance that the injury would be fatal, we call his deed murder. But when society places hundreds of proletarians in such a position that they inevitably meet a too early and an unnatural death, one which is quite as much a death by violence as that by the sword or bullet  murder it remains. (Friedrich Engels, The Condition of the Working Class in England, 1845)

* * *

A US government program supposedly devised both to improve medical care and cut costs has, predictably, succeeded in the latter while undermining the former. Research published Sunday in JAMA Cardiology (Journal of the American Medical Association) shows that an initiative introduced five years ago under the Affordable Care Act (ACA) to induce hospitals to reduce Medicare readmissions for heart patients has resulted in an increase in mortality rates among those studied.

Under the ACA’s Hospital Readmissions Reduction Program (HRRP), hospitals were penalized financially when heart failure patients were readmitted within a month. While the program has succeeded in reducing the number of 30-day readmissions, the number of patients who died within a year rose by 5 percentage points. According to one of the study’s senior authors, these findings could account for an additional 5,000 to 10,000 deaths annually across the US due directly to the program.

For the American ruling elite, HRRP and other schemes devised by bureaucrats at the Centers for Medicare and Medicaid Services (CMS) are part of an agenda that is as deliberate as it is ruthless: Men and women in the US are living too long into old age and measures must be taken to cut costs associated with their medical care and shorten their life expectancy. This is the deadly price that must be paid to prop up a society that is one of the most socially unequal both in terms of income and the delivery of health care.

The statistics do not lie. Study researchers analyzed 115,245 patients at 416 hospitals in the American Heart Association’s Get With the Guidelines-Heart Failure registry from January 2006 to December 2014. They examined readmission and death rates before and after the program began in 2012.

* Readmission rates within one month fell from 20 percent before HRRP penalties to 18.4 percent after HRRP (down 1.6 percent). Mortality rates, however, rose by almost the same rate, from 7.2 percent before HRRP to 8.6 percent after (up 1.4 percent).

* Statistics for readmission and mortality within one year were even more damning. Readmission within one year fell by only about 1 percent, from 57.2 percent before HRRP to 56.3 percent after. But the mortality rate within one year rose from 31.3 percent before HRRP to 36.3 percent after—a shocking 5 percent increase. These figures show that there is a direct correlation between implementation of the Obamacare policy and preventable deaths.

HRRP penalizes hospitals up to 3 percent of every Medicare dollar for “excessive” repeat hospital stays. That is 15 times more than the 0.2 percent penalty levied against hospitals with high mortality rates. In other words, while hospitals with higher rates of mortality face a minimal fine, hospitals are being substantially penalized for failure to comply with a program that is resulting in increased deaths.

Compounding the misery, financial penalties from HRRP have been shown to fall disproportionately on academic medical centers and “safety-net” hospitals where “higher readmission rates are associated with the higher case-mix complexity and lower socioeconomic status,” according to the study, i.e., those treating poorer and sicker patients. In such settings, hospitals are incentivized to “game” the system by delaying admissions, increasing observation stays or shifting inpatient-type care to emergency departments, to the detriment of patient welfare.

The US mortality rate rose in 2015 in the first year-over-year increase since 2005, with life expectancy falling between 2014 and 2015 from 85.8 years to 85.6 years for men, and from 87.8 years to 87.6 years for women. According to the Centers for Disease Control and Prevention, this decline was due to an increase in eight of the 10 leading causes of death in the US, including heart disease, stroke, Alzheimer’s disease and suicide.

With heart disease rising, there is no other way to interpret the penalties imposed by the ACA for early readmission of heart patients than a deliberate effort to see more men and women die. US corporations are already reaping a grim dividend from this downward trend, with at least 12 major corporations reporting this summer that they have reduced their estimates for how much they could owe in pension and other retirement obligations by a combined $9.7 billion due to shorter life spans.

It is fitting that the health care overhaul known as Obamacare was the instigator of HRRP, an irrefutable demonstration that the ACA was the first major volley in the bipartisan drive to restrict access to affordable health care and sharply reduce the length of workers’ lives.

As the World Socialist Web Site explained as early at 2009, the Obama administration’s health care “reform” established a framework for the insurers, the corporations and the government to drastically reduce the health benefits available to low- and middle-income individuals and families. The aim is to limit the amount that the government must pay out for health care and Social Security payments, as well as what corporations must pay in pensions and other retirement benefits.

Health care in the Obamacare era has nothing in common with quality, near-universal health care, as Obama initially pledged. It is based entirely on the for-profit health care system in America, including the insurance companies, giant hospitals, health care chains and pharmaceutical companies. Any repeal of the ACA—and its replacement with “Trumpcare” or any other legislation—will maintain the class-based delivery of health care and undoubtedly worsen it for the majority of Americans.

The empirical proof provided by research published in JAMA Cardiology that an ACA program has predictably caused increased deaths should serve as a stark warning to the working class. This Obamacare program is of a piece with the bipartisan attack on jobs and living standards, the attack on immigrants and democratic rights, and the drive to war.

This assault will inevitably provoke enormous social opposition among workers and young people. This opposition must be channeled into the fight for a progressive overhaul of the health care system that takes as its starting point an end to privately owned health care corporations and medicine-for-profit and the establishment of socialized medicine, democratically administered by a workers’ government, providing free, high-quality health care for all.

Kate Randall

http://www.wsws.org/en/articles/2017/11/15/pers-n15.html

How not to fight Judge Roy Moore

14 November 2017

Judge Roy Moore, the Republican candidate for US Senate in the December 12 special election in Alabama, is a diehard reactionary and enemy of the working class. He has a long record of ultra-right politics as a law-and-order prosecutor and a judge who claimed that the Bible and not the Constitution was the supreme law of the land. He is a political reactionary who would turn the clock back a century, if not more, in terms of the rights of women, blacks, gays and other minorities.

His campaign for the Republican nomination for US senator from Alabama, to fill the vacancy created by President Trump’s appointment of Jeff Sessions as attorney general, had the backing of openly fascistic elements such as former White House aides Sebastian Gorka and Stephen Bannon, the chief executive of Breitbart News. Opposing Moore in the runoff election is a right-wing Democrat, former US Attorney Doug Jones, who advocates increasing US military spending even beyond the stratospheric levels set by Trump and the congressional Republicans, in part to benefit the array of US military bases across Alabama.

The challenge in fighting against this choice of two reactionaries is to expose the politics of both capitalist parties: the ultra-right populism of Moore, who claims to be fighting for the predominantly rural population of Alabama against the “Eastern establishment,” and the mainstream corporate agenda of Jones, who has overwhelming support in the most affluent areas of Birmingham, Mobile and Montgomery, where he is seen as a more reliable and respectable defender of propertied interests.

Something very different is happening now, however, with the intervention of the corporate media, beginning with a lengthy article in the Washington Postlast Friday depicting Moore as a sexual predator who attacked at least one victim when she was 14 and he was 32 and a county prosecutor. After a weekend media frenzy sparked by the initial report, another accuser has come forward charging that Moore assaulted her decades ago, when she was 16.

The media campaign has touched off a wave of declarations by leading congressional Republicans that Moore should withdraw as the party’s candidate and the election should be postponed so that a new candidate can be substituted. Senate Majority Leader Mitch McConnell said Monday that Moore had been disqualified by the charges against him.

The conduct alleged against Moore is repugnant. But there has been no criminal indictment, no trial, no judicial procedure of any kind in which the accounts of his accusers, and Moore’s denials, can be tested in accordance with the rules of evidence. Given the nearly 40 years that have elapsed since the alleged offenses, there never will be such a legal proceeding since the statute of limitations has long since expired.

Even if the allegations against Moore did lead to a trial, one of the requirements of due process is that there remains a presumption of innocence for the defendant until a jury returns a finding of guilty. This is an axiomatic democratic principle that has been completely forgotten in the current atmosphere. In the wake of the torrent of accusations of sexual misconduct against numerous Hollywood figures, charges of sexual abuse and even rape are treated as indisputably true as soon as they become public.

Those on the American “left” who have embraced the anti-Moore charges, and the “me too” sexual abuse campaign more broadly, must confront the serious implications of the abandonment of the principle of “innocent until proven guilty.”

It is not quite 20 years since allegations quite similar to those now rocking Hollywood and the Alabama US Senate race were leveled against a sitting president of the United States. The World Socialist Web Site was implacably opposed to the politics and policies of Bill Clinton, who as US president was the leader of world imperialism, waging a criminal war against Serbia, bombing Iraq, attacking Somalia and Sudan, and threatening war against North Korea and China.

But we opposed the witch hunt organized by the Republican right wing, using the investigation by Independent Counsel Kenneth Starr into Clinton’s sexual relationship with Monica Lewinsky. We denounced the impeachment of Clinton as an attempted political coup, an effort by the Republican right to use issues of personal sexual behavior to overturn the results of two presidential elections. (In the event, the Republicans failed to obtain the necessary votes in the Senate to convict the impeached president, and Clinton remained in office.)

If we were transported back in time 20 years, knowing what we know about the subsequent evolution of the Clintons and the Democratic Party, we would take the same position that we took in 1998. Although it must be said, in the current atmosphere of sexual witch-hunting, Clinton would never have been elected in 1992 (in the face of the Gennifer Flowers scandal), and he would certainly have been impeached in his first term (when the Paula Jones lawsuit was filed), rather than winning reelection.

Those who wish to apply the principle of “guilty as soon as accused” to Judge Roy Moore must consider what precedent is being established for the future. What happens when a nominally left-wing candidate for president, say, Bernie Sanders in 2020, faces similar allegations and salacious reports? It is not difficult to imagine Breitbart, Fox News and the Wall Street Journal leading the charge, producing women to allege misconduct by Sanders in his college days or during his bohemian existence as a carpenter in Vermont before he turned to politics. In the present environment of hysterical piling-on, Sanders could expect mass desertions from his campaign and overnight political collapse.

The presumption of innocence is a democratic principle with far-reaching implications. If Roy Moore were to be removed as the Republican candidate by means of such allegations, after winning a clear victory in the party primary, how would this develop the political consciousness of working people in Alabama, or in the United States as a whole?

Those working people who mistakenly support Moore and the Republican Party, against their real class interests, would see rank hypocrisy, as a candidate was driven out of the race for offenses that were both unproven and not much different from those alleged against several presidents, including Clinton, Trump and even, most recently, the 93-year-old ex-President George H. W. Bush.

The successful use of such charges to achieve a political result would only encourage the proliferation of such mudslinging. American political life is already debased: Donald Trump is, after all, the elected president. To turn elections into a referendum on the alleged sexual practices of the candidates would only debase it further. And what debases political consciousness and drives public debate into the gutter aids only the right wing, which thrives in an atmosphere of ignorance, prejudice and slander.

It is noteworthy in this context that leading Republicans who have condemned Moore have done so on an explicitly antidemocratic basis. The 2012 Republican presidential candidate, Mitt Romney, declared, “Innocent until proven guilty is for criminal convictions, not elections.”

Roy Moore is a despicable right-wing bigot who supports the criminalization of homosexuality and has twice been removed as chief judge of the Alabama Supreme Court for refusing to abide by such constitutional norms as the separation of church and state (as when he refused to move a three-ton monument to the Ten Commandments from the grounds of the state’s highest court), and for instructing probate court judges to continue to enforce a state law banning same-sex marriage that had been overturned by the federal courts.

But the struggle against such a political figure requires the political education and mobilization of the working class, including the impoverished white workers of Alabama to whom Moore addresses his appeals based on religious fundamentalism and social backwardness. A campaign against Moore based on unproven—and admittedly unprovable—allegations of sexual impropriety contributes nothing to—in fact, cuts across—the political education of working people.

Patrick Martin

http://www.wsws.org/en/articles/2017/11/14/pers-n14.html