The Next Economic Bubble Is Growing

Yesterday The Star Tribune posted an article about the rising number of student loan defaults.

The article reports:

A new analysis of federal student loans reveals the number of people severely behind on repaying their debt has soared in the last year, painting a bleak picture of one of the largest government programs.

The Consumer Federation of America released a study Tuesday that found that millions of people had not made a payment on $137 billion in federal student loans for at least nine months in 2016, a 14 percent increase in defaults from a year earlier. The consumer watchdog used the latest data from the Education Department, which manages $1.3 trillion in federal student debt owed by 42.4 million Americans.

 What’s striking about the findings is that Americans have a variety of repayment options to avoid default. The Obama administration expanded programs that cap monthly payments to a percentage of earnings, but even though millions of people are enrolled in those income-driven plans, there is still a disconnect.

“Despite a rising stock market and falling unemployment, student loan borrowers are still struggling,” said Rohit Chopra, a senior fellow at CFA and former student loan ombudsman at the Consumer Financial Protection Bureau. “The economy remains very difficult for so many young people just starting out.”

In recent years, as more money has become available for college loans, the cost of college has increased at levels higher than inflation. Students have also pursued degrees in subjects that may not translate well into the marketplace. The combination has created an increasing debt with a decreasing ability of students to pay back that debt.

It’s time to let banks and other financial institutions handle student loans. Historically, banks and financial institutions loan money to people with the expectation that the money will be paid back. They are careful in their lending practices. Scholarships should be made available to worthy students who cannot qualify for loans. It is time for colleges to bring their tuition into line with the overall cost of living so that students are not taking out loans they cannot afford to pay back.

About That First Amendment Thing…

On June 25th, the Minneapolis Star Tribune reported that Brian Johnson, an evangelical Christian, would be allowed to hand out Bibles on Sunday at the annual Twin Cities Pride Festival.

The article reported:

Festival organizers’ attempts to ban Johnson from the park had resulted in a Minneapolis Park Board plan to restrict his Bible distribution to a booth on the edge of the festival. Two weeks ago, his request for an injunction against that ban was denied by a U.S. District Court judge.

But Johnson’s attorneys immediately filed an emergency appeal, saying the Park Board’s plan violated his constitutional right to free speech in a public place. They asked for a quick decision, one in time for the upcoming Pride Festival.

This is clearly a free speech issue. The festival is held on public property and is open to the public. Regardless of whether or not you agree with what Mr. Johnson stands for, he does have the same First Amendment rights as the rest of us. I am grateful for the lawyers willing to defend the First Amendment rights of all Americans.

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Closing Down A Government-Funded Religious School

Scott Johnson at Power Line reported today on the closing down of the Tarek ibn Ziyad (TiZA) Academy K-8 public charter school in suburban St. Paul, Minnesota. The school was originally sponsored by Islamic Relief USA.

According to the article:

The school was housed in a building that was owned by the Muslim American Society of Minnesota. The study of Arabic was required at the school. The Arabic came in handy for the Koranic studies that follow the regular school day.

Star Tribune reporter Katherine Kersten charged that the school was a religious school operating with public funds. After her columns were published, the Minnesota American Civil Liberties Union (ACLU) investigated and sued the school and the Minnesota Department of Education.

The article further reports:

As a result of its failure to find a sponsor as required by state law, TiZA failed to open this fall. The ACLU’s case against TiZA nevertheless remains. Despite the blasé media reports on the settlements with the Department of Education and Islamic Relief USA, the ACLU Minnesota obviously obtained some highly interesting evidence in the case. The “stipulation of facts” underlying the settlement has now been approved by the court and unsealed. The ACLU Minnesota has posted relevant documents here.

Thanks to the work of Katherine Kersten, the Star Tribune has owned this story. Yet it cannot have been a pleasant experience for her to have worked on the story while inside an organization that would sooner have served as TiZA’s public relations arm than investigator or whistleblower. In its pathetic editorial postmortem on TiZA, the Star Tribune jumped straight to the ACLU lawsuit without including in its chronology the fact that one of its own writers broke the story. By contrast, the ACLU Minnesota acknowledged Kersten’s role in uncovering the scandal from the outset of the lawsuit. Wouldn’t a genuine newspaper want to tout its key role in the events? Why is this story different from any other story?

Please follow the link to Power Line to read the entire story. There were problems with the school from the start. When the case was finally brought by the ACLU, the school charged anti-Muslim bigotry in an attempt to intimidate the investigators. The article points out that one of the weapons used by the Muslims when they are challenged to obey American laws is to charge bigotry against Muslims. The laws of America should apply to all of us equally, and they should be enforced equally. We need to remember that when dealing with any group that is looking for special privileges.

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