AlterNet.org: Education

Arresting a Teen Girl for Dozing Off in Class? Why Normal Kid Behavior Is Treated As a Crime or Psychiatric Disorder

David Rosen, AlterNet — Thu, 16 May 2013 12:05:00 -0700

What happened to kids being kids?

Brianna Pena, a 5-year-old, was told she could not return to her kindergarten classroom at her Bronx, NY, charter school until she was “psychiatrically cleared” to return by a medical professional. It was her first day at a new school. She didn’t know anyone and repeatedly cried, “Nobody cares about me!” School officials insist that Brianna kept “yelling and throwing chairs” during the incident. Administrators placed her on a list of so-called “psychiatric suspensions.”

In Bartow, FL, Kiera Wilmot, a 16-year-old student was expelled from Bartow High School and arrested for conducting an unapproved chemistry experiment. She combined some household chemicals in an 8-ounce water bottle and the top popped off, giving off a small explosion. According to the school principal, Ron Pritchard, "she made a bad choice. ... She wanted to see what would happen [when the chemicals mixed] and was shocked by what it did.” She was charged with possession of and discharging a weapon on school property.

Brianna’s and Kiera are but two examples of the growing “discipline” crisis besetting schools throughout the country. School administrators are resorting to an increasing number of questionable tactics to address problems associated with the breakdown of the classroom as a learning environment. These include the use of local EMS workers to remove pre-teen children as well as such high-tech methods as RFID tracking and CCTV video surveillance. An increasing number of officials are resorting to aggressive in-school policing, with on-campus uniformed and armed officers ticketing and arresting more and more kids. All to contain “disruptive” students often engaged in what was once considered bad behavior but is now criminalized conduct.

Reports that American education is in crisis appear in the media almost every day. From Pres. Obama to mayors across the country, everyone complains about the country’s supposedly failing education system. Each promises to fix the problem – and it only seems to be getting worse. Yet, efforts to police schools reflect the further shifting of education spending from the classroom to the administrative apparatus of control.

A major contributing factor to this crisis is the failed “zero tolerance” discipline program promoted by the Bush administration and still in force in school systems throughout the country. Like its abstinence-only sex ed program, Bush policies made a serious issue worse. The effort to enforce classroom discipline through the expulsion and punishment of students is an example of the moral absolutism propagated during much of the last few decades. It further extends the “school-to-prison pipeline” by aggressively incarcerating ever-younger children, particularly African-American and Hispanic youth.

***

Some cities, like New York, are increasingly turning to costly emergency medical services to restrain students. Cashmiere Turner, a 7th grader at New York’s Intermediate School 151 in the Bronx, struggled both academically and socially in the classroom. Her mother, Sonya, repeatedly sought school administrators’ help with her daughter’s learning problems and the bullying she faced, but was ignored. In October 2011, school officials claimed that the troubled teen acted out, attempting to harm herself. They contacted Cashmiere’s mother, who rushed to the school only to find that the officials had also contacted the local EMS. Refusing to let Ms. Turner take her daughter home, EMS workers and police officers brought her to a local hospital that found her neither a threat to herself nor others. She was released, but not before the hospital billed her mother an estimated $1,300 for services rendered.

The city’s Board of Education (BOE) reports that during 2010-2011 school year, EMS was called 947 times to handle disruptive or dangerous kids; this is up 12 percent from the previous year. Nelson Mar, an attorney with Legal Services NYC-Bronx, represented both Brianna Pena and Cashmiere Turner, warns, “minor children are removed by EMS for childhood behavior or misbehavior which does not rise to the level of a medical emergency.” He points out that at one Bronx hospital, there were 58 EMS calls from schools during a 10-day period in February 2011. Most troubling, doctors and psychologists found that only 3 percent of the kids brought to an Emergency Room were admitted to the hospital.

Under Mayor Michael Bloomberg’s stewardship, removal and suspension are among the principal means to enforce discipline in the classroom. According to the New York Civil Liberties Union (NYCLU), the BOE’s “Citywide Standards on Discipline and Intervention” – the discipline code -- reported infractions increased 49 percent and “zero tolerance” infractions resulting in a suspension doubled between 2001 and 2010.

Part of this increase was due to the nearly two-fold increase in the number of code “infractions,” from 38 (2001) to 67 (2007). The NYCLU found that infractions range from using profane language and throwing chalk to being insubordinate and can lead to a student’s suspension from school for a year. And “zero tolerance infractions” are the worse, misbehavior requiring suspension. Over the last decade, they jumped from 7 (in 1998-2001) to 29 (2007-2008, 2008-2010); they declined to 21 (2010-2011). Not surprising, black students, who make up a third (33%) of the student population, received more then half (53%) of the suspensions.

In New York, school administrators have increasingly turned to EMS to address disciplinary problems. Mar reports that in the 2011-2012 school year, 3,435 calls were placed to the EMS, up from the 3,024 calls in 2009-2010, a 13.5 percent increase; these calls are separate from calls to NYC police that, during the same period, declined to 241 from 291, a 17.2 percent decrease. “The practice of removing misbehaving students by EMS is a costly waste of EMS and hospital resources,” Mar warned.

* * *

A high school student from Hoover, AL, was recently beaten by a school official and then arrested for falling asleep in school, according to a recent lawsuit. Ashlynn Avery is not your typical teenager. She suffers from diabetes, asthma and sleep apnea. Sadly, while sitting in the in-school suspension room and reading “Huckleberry Finn,” she dozed off. She asserts that the classroom supervisor seized the book and hit her with it; he claims it was an accident. The police were called and the girl was “forcefully” arrested, causing her to have a seizure, vomit, pass out and end up in the hospital.

To enforce discipline, school systems across the country are employing harsher techniques and turning to the local police. In Maine, educators report an increase in school disruptions with students pulling fire alarms and scratching and bruising teachers. The state is considering allowing teachers to use restraints or seclusion on misbehaving students; the current bill limits such actions to those authorized in writing by a student's parent, whether this will remain in the final bill is an open question. In Connecticut over the last few years, nearly 1,700 students were arrested, almost two-thirds of them for breach of peace, minor fights and disorderly conduct. In-school busts account for 20 percent of all youth arrests in the state.

In Georgia, school misbehavior incidents bring in the local police. In Milledgeville, GA, a small town about 90 miles from Atlanta, Salecia Johnson, a 6-year-old student at Creekside Elementary School, was handcuffed and taken away in a patrol car to the police station. According to the Baldwin County schools Superintendent, Geneva Braziel, the police were called due to Johnson’s "violent and disruptive" behavior that threatened other classmates and school staff. In Clayton County, police recently arrested seven students at the North Clayton High School for disorderly conduct; Precious Woods was busted for spiting on a fellow student who had thrown a trashcan at her and Trinell Kennedy was arrested for using profanity during the same incident.

In Albuquerque, NM, during the 2009-2010 school year, 900 of the district's 90,000 students were referred to the criminal justice system. More than 500 of were handcuffed, arrested and brought to juvenile detention. More than 200 were arrested for minor offences, including disorderly conduct, resisting arrest, refusing to obey and interference with staff. (In response to a 2010 class-action lawsuit, student arrests fell by 53 percent.)

Things are far worse in Texas. In a 2010 report, Texas Appleseed, a public-interest group, found that each year more than 275,000 non-traffic tickets are issued to juveniles. It reports that the vast majority of offences are due to classroom disruptions and disorderly conduct. It noted that in 1989, only 9 school districts in Texas had separate police agencies while in 2010 more than 160 had police units. Ticketed students received fines of between $250 and $500 or do community service in lieu of fines.

* * *

Steven Teske, MA, JD, and a Judge, Juvenile Court of Clayton County, Jonesboro, GA, writing in the Journal of Child and Adolescent Psychiatric Nursing, defines zero tolerance as “policies operate under the assumption that removing disruptive students deters other students from similar conduct while simultaneously enhancing the classroom environment.” His detailed analysis makes clear not only that the policy doesn’t work, but contributes to the deepening crisis of American education and harms children.

The concept of zero tolerance originated during the Reagan-era’s so-called “war on drugs.” It entered the educational sector in 1994 when Pres. Bill Clinton signed the Gun-Free Schools Act that required a student’s 1-year suspension if s/he was found possessing a firearm. In the wake of the Columbine shootings of 1999, the law has been expanded to include any so-called weapon, including Kiera Wilmot’s chemistry experiment. Under Pres. George W. Bush’s No Child Left Behind program, zero tolerance was linked to teaching-to-the-test policies as a solution to the education crisis.

The increased policing of the classroom is part of the effort to transform schools from “educational” institutions that cultivate citizenship to “training” campuses inculcating workplace discipline. It is a battle that has shaped American education since mass public schooling was introduced more then a century ago.

In New York during the ‘90s, Mayor Rudolph Giuliani adopted a zero-tolerance city-management approach as part of his “get-tough" policies. It originally was designed to curb minor offenses, like squatters in abandoned buildings, subway graffiti artists, squeegee car-window cleaners, panhandlers and street prostitutes; they were part of the “quality of life” troubles gripping the city. In parallel, Giuliani implemented a zero-tolerance program in city schools to address such issues as fighting, smoking and other forms of inappropriate behavior.

Zero tolerance policies are now being applied to a broad range of disciplinary infractions, both major and minor. A 2012 report by the U.S. Department of Education's Office for Civil Rights (OCR) makes clear the painful consequences of zero tolerance. It warns, “minority students across America face harsher discipline, have less access to rigorous high school curricula, and are more often taught by lower-paid and less experienced teachers.” It found that African-American students, particularly males, make up 18 percent students, but 35 percent of suspended students and 39 percent of those expelled. Suspended students face a greater risk of dropping out of school or getting involved in criminal activity even though their initial misbehavior was minor.

A host of factors are contributing to the increase in behavior-based disruptions. Shrinking school budgets have lead to increased class size and cut backs of in-school therapeutic support. Teachers are not sufficiently trained to deal with in-class disruptions. Mounting child and family poverty rates, especially in poor and minority communities, only aggravate a bad situation.

Behavior problems are real issues; they interfere with teaching and learning and are occurring throughout the country. A recent study by Scholastic magazine and the Gates Foundation found that 68 percent of elementary, 64 percent of middle school and 53 percent of high school teachers reported increased behavior problems.

Local and state officials across the country are making school discipline a political issue. In 2012, New York City Council Member Robert Jackson declared: “I’m tired of hearing stories about children who are having tantrums or behavior problems being taken out of school by police or EMS! ... This is unacceptable! … Having police and EMS respond in these situations is both expensive and traumatizing for children and youth.”

Also in 2012, Maryland’s State Board of Education banned zero-tolerance approaches. They replaced the failed policy with one emphasizing rehabilitation over punishment, believing it would led to more classroom time and higher achievement for students. In Florida, following a much-publicized 2007 case in which the police arrested a kindergartner who threw a tantrum during a jelly bean-counting contest, a bill was introduced to block police from arresting children who commit acts that do not pose serious safety threats.

In the wake of Newtown, CT, shootings new question have arisen about the effectiveness of zero tolerance. In December 2012, Sen. Dick Durbin (D-IL), chairman of the Senate Judiciary Committee’s Subcommittee on the Constitution, Civil Rights and Human Rights, convened the nation’s first Congressional hearing on “Ending the School-to-Prison Pipeline.” He stressed that instead of making schools safer, the policy has redefined “rather normal behavior” into criminal activity.

Many civil liberties lawyers, educators and parents believe that the zero tolerance approach to classroom misbehavior needs to be replaced by one based on a more humane classroom environment and whole-person curriculum. They point to such programs as Positive Behavior Interventions and Support (PBIS), Safe Responsive Schools (SRS) Restorative Practice and “social-emotional learning” as alternative programs. “Although many of these approaches are already utilized in some form in many public schools in New York City,” Mar warns, “the BOE has not adopted a policy requiring all NYC public schools to utilize these methods.” “Instead,” he adds, “the BOE fails to even encourage the use of these in their policies.”

Only by ending the tyranny of zero tolerance and providing full financial and other support to schools, especially in poor and minority neighborhoods, will the school-to-prison pipeline be broken. And only then will we begin to meaningfully address the deeper crisis of American troubled education system.

* * *

David Rosen writes the Media Current column for Filmmaker and regularly contributes to CounterPunch, Huffington Post and the Brooklyn Rail, check out www.DavidRosenWrites.com; he can be reached at drosennyc@verizon.net.

Inside the Cooper Union Occupation’s First Hours

Zachary Bell, Waging Nonviolence — Thu, 16 May 2013 11:55:00 -0700

Students took to President Jamshed Bharucha’s office demanding that he resign over his proposal to introduce tuition, a policy that would break the school’s 155-year tradition of free education.

Since last Wednesday, students at Cooper Union, a private free university in New York City, have staged an occupation of the president’s office in protest of the announcement that the school will begin charging tuition. As the occupation now goes into its second week, let me recall my eight-hour visit during its first full day: Thursday, May 9.

That morning, students took to President Jamshed Bharucha’s office demanding that he resign over his proposal to introduce tuition, a policy that would break the school’s 155-year tradition of free education. Later that day, all nine of Cooper’s full-time art faculty and some 200 students signed a statement of no confidence against Bharucha.

The administration repeatedly warned the occupiers — by then more than 100 engineering, architecture and art students — that they could face disciplinary actions, which could include being denied their degrees. The administration then proceeded to block the water fountains on the seventh floor with plywood and screwed the bathroom doors shut. It sent armed guards into the building. (The administration later said it wasn’t aware the guards would be armed.)

Yet the siege quickly broke. Administrators had told students that they would be given an ultimatum to leave in the early afternoon, but, later, they moved the deadline to 6:30 P.M. The students stayed put, and around 7:30 P.M. Vice President TC Westcott came into the president’s office and discussed options with the students. She said that the security guards and police were standing down and that Bharucha wanted to speak with them. Many students were distrustful, and someone asked her to explain why the administration locked students out of the bathrooms.

“The logic was that we wanted you to leave,” Westcott replied. She said that the administration was still considering its next moves.

For a few hours, students strategized over pizza in a post-ultimatum haze. Mike D’Ambrose, a master’s engineering student, explained the rationale of the campaign.

“It’s a one-way street once you start charging tuition,” he said, citing the City College of New York, which abandoned its commitment to free education in 1976 and never looked back. Bharucha made headlines when he announced a new plan for the university that called for sliding scale tuition based on need, meaning that some students would pay as high as $19,000 while others would still receive full scholarship.

Saar Shemesh, a transfer student studying art, feels that tuition would change the character of the historic institution: “It would mess up the dynamic that we’ve created here.” To Shemesh, it’s crucial that students are “not indebted to their parents, and not indebted to the government.” She transferred to Cooper from Brooklyn College, and she said that whereas socio-economic lines divide many campuses, Cooper Union stands out as an exception.

Around 9:30 P.M., Saskia Bos, the dean of the Cooper Union School of Art, and Sam Messer, the associate dean of the Yale School of Art, arrived at the occupation. Broadcast over the Free Cooper Union live-stream, Messer asked the students, “But how will this end? President Bharucha is not going to step down in the next week.” Victoria Sobel, an art student in her senior year who has helped organize the occupation, replied, “Why are you so sure? We were told two hours ago that we would be forced out, and we’re still here.”

The students appeared divided whether to speak with President Bharucha, an opportunity Bos was offering to arrange. Casey Gollan, an art school senior, rejected the offer — to applause from the room — explaining that Cooper students could arrange to meet with the president at any time as part of university policy. Still, last week when Gollan tried to arrange one of these meetings, Bharucha didn’t show up. “It’s called university governance,” Gollan said. “And we’ve seen how it doesn’t work.”

Many students charged that Bharucha’s absence from campus during the affair — and his avoidance of certain students since they occupied his office back in December — is indicative of his poor leadership and his fear of the Free Cooper Union campaign. Students said that if they were to meet with Bharucha at this point, it would be on their own terms, in his occupied office.

After the two deans departed, students began discussing the future of the occupation. Gollan admitted that since the occupation was “open and fluid,” students could come and go from Cooper Union’s seventh floor as they pleased, which made consensus decision-making process difficult. Yet it also made the occupation more sustainable than most — allowing students to go to class, eat, take a shower and then return to the president’s office. It also meant that more and more people in the broader Cooper Union community could get involved — swinging by the office and signing the no-confidence statement — without having to fear retribution or an overnight lock-in.

According to the students, if the no-confidence statement were to receive enough signatures from the faculty of the architecture and engineering schools, it would initiate a legal process in which the board of regents would investigate the behavior of the board of trustees, which determined the tuition policy and appointed President Bharucha. It would take some time for the school’s bureaucracy to make such dramatic changes, but this potential for delay didn’t seem to deter the students in their midnight meeting on Thursday. After all, they had a lawyer, free food and each other. When someone asked what would happen if the occupation went through graduation, grins and raised fists filled the room — followed by a few uneasy laughs.

As the meeting closed around 1:00 am, a student erased the “2” on the blackboard next to “Days of Cooper Union Occupation,” and sketched in a block letter “3.”

At the end of my nearly eight-hour sojourn to the seventh floor, I stepped into President Bharucha’s office one last time. It was draped in deep maroon emanating from a row of standing stage lights fixed with red filters. The students were deliberating over blueprints for their final projects, riffling through bags of donated protein bars and Indian food, and constructing conjoined sleeping arrangements with mounds of blankets and pillows.

It was a familiar art-school scene — except that it was in the president’s office.

On Monday the students met with President Bharucha, who agreed in the conversation to raise the following requests with the board of trustees: to arrange a meeting between the board of trustees and 15 student representatives, to add a student with voting rights to the board of trustees and to provide public minutes for all board meetings. While short of keeping Cooper Union free, these gains could change how the school is governed in significant ways for the future.

The students are now deciding whether, once again, to demand Bharucha’s resignation.

A Handy Reference Guide on Who is Donating to Corporate-Style Education Reform

Jessie B. Ramey, Yinzercation — Wed, 15 May 2013 12:14:00 -0700

As Big Money continues to shape public education, it can be hard to keep all the players straight — from wealthy individuals, to foundations, to corporations. Here's your guide.

The way some of them throw around the green stuff, you'd think corporate style education reformers were made of money. Oh, wait. Some of them are. As Big Money plays a bigger and bigger role in shaping public education, it can be hard to keep all the players straight— from wealthy individuals, to foundations, superPACs, astroturf groups and corporations. Here's a handy reference guide:

1. Individuals

Some of the wealthiest people on the planet are pouring their money into corporate-style education reform. Some are doing this through foundations (see below) and others are happy to invest their millions in politics to shape policy, or directly into charter schools as money-making investments. Some have a profit motive and others seem more ideologically driven (to privatize public goods, oppose union rights, etc.). One thing all of these folks have in common? Not one is an educator or education researcher. And none of their ideas is based on evidence of what actually works for kids.

Start here in Pennsylvania with charter school operators like Van Gureghian, Governor Corbett’s largest campaign donor. He makes so much money that he and his wife bought beach front property in Florida worth $28.9million, while he’s been fighting for years to keep his salary a secret. [See “Soaking the Public”]
Recall that 4 of the top contributors to all political races last fall in our state had ties to charter school operators. Wealth advisors are on record recommending that people add charter schools to their investment portfolios, especially in places like Pennsylvania. [See “Charters are Cash Cows”] Cyber charter schools are particularly lucrative investments, as the public taxpayers are currently over-paying them by $1million every single day. [See “One Million Per Day”]
How about folks like Philip Anschutz? He’s the oil billionaire with ultra-right politics who owns Walden Media, which made the anti-public school films, “Waiting for Superman” and “Won’t Back Down.” He funds groups that teach creationism in our schools and oppose gay rights, environmental regulations, and union rights. [See “We Won’t Back Down Either”]
Then there’s New York Mayor Bloomberg, who likes the idea of privatizing schools so much that he put $1million into the Los Angeles school board races last month to try to maintain a corporate-reform minded majority there. Too bad his horse didn’t win. [See “School Boards Matter”]

2. Foundations

The “big three” foundation are Gates, Broad, and Walton. Education historian Diane Ravitch calls them the “billionaire boys club,” though each has a slightly different emphasis. And there are others.

The Gates Foundation is currently funding teacher evaluation systems throughout the country. As I have argued before, not only does this focus on the wrong thing, by avoiding the issue of poverty (or even early childhood education where many agree we might most effectively concentrate our resources), it starts with the faulty assumption that we have a plague of bad teachers. Though the foundation itself has warned that teacher evaluation should not be based solely on high-stakes-testing, this is exactly what is happening all over the country (or in many places, student testing is being used for a large portion of teacher evaluation). The Gates Foundation is so large and distributes so much money that it can essentially set policy through its grant making. And combined with the Great Recession, school districts and other beneficiaries have not been able to say no to the money nor been willing to point out that the emperor is not wearing any clothes (i.e. that his “reforms” don’t work). Gates has also launched a clever campaign to shift public opinion, by strategically targeting grants to community organizations (for example, over a half-million to A+Schools this year) and astroturf groups (see below) in communities where they are working.
The Eli and Edythe Broad (rhymes with “road”)Foundation runs a non-accredited superintendents training program premised on the idea that business executives with no education experience will improve urban school districts. Both the current and former Pittsburgh superintendents are Broad Academy graduates (though Dr. Linda Lane is an educator). The Foundation promotes teacher effectiveness and competition (i.e. charter schools), and drafted President Obama’s current reform strategy. They also literallywrote the book on how to close schools, using Pittsburgh as an example. Eli Broad also continues to spend his personal millions on corporate-reform, putting a half-million into the LA school board races this spring alone. [Los Angeles Times, 4-24-13]
The Walton Family Foundation derives its money from Wal-Mart and gave $158 million in K-12 education grants last year to promote charter schools and voucher programs. Its current top grantees include Teach for America, which has come under increased scrutiny for its method of placing young college graduates with only a few weeks of training in urban schools with the neediest students, where they stay only two years. (Teach for America, by the way, is looking to set up shop in Pittsburgh and has been making inquiries about hiring a local executive director. Stay tuned.) Here in our state the Walton Family Foundation is also funding the Pennsylvania Coalition of Public Charter Schools. And they fund Bellwether Education Partners, the group hired by Pittsburgh Public Schools (through subcontract with FSG) to craft its education plan. [Walton Family Foundation 2012 Grant Report]
Let’s not overlook the role that other foundations play in education reform. Remember a decade ago when thePittsburgh Foundation, the Heinz Endowments, andGrable Foundation (the big three education philanthropies in Pittsburgh) yanked their funding from the school district, forcing them to introduce new reforms? [Post-Gazette, 7-10-02] The history books have yet to finish writing that episode – and there were no doubt both positive and negative long-term outcomes – but it illustrates the power that foundations can wield over a school district.
What about when a venerable old foundation starts behaving badly? Our big sister grassroots group in Philadelphia, Parents United, recently filed a legal complaint against the William Penn Foundation “based on the fact that they had solicited millions of dollars in donations for an exclusive contract” with a consulting group, with an agreed “set of ‘deliverables’ such as identifying 60 schools for closure, mass charter expansion, and unprecedented input into labor and contract negotiations – without the School District of Philadelphia being a party to the contract.” After a legal analysis by the Public Interest Law Center that concluded the foundation was essentially engaging in illegal lobbying and funneling private donations for the purpose, Parents United joined the Philadelphia Home & School Council, and the Philadelphia branch of the NAACP in bringing the complaint. [Parents United, 2-14-13]

3. SuperPACs

The Citizens United ruling opened the door to massive spending by corporations in politics and ushered in the era of superPACS. Without spending limits, now we are seeing just how much influence money can buy in politics (where education policy is set).

Students First PA PAC (not to be confused with Michelle Rhee’s national organization, see below), started in 2010 by three Philadelphia investment brokers to funnel millions into the state races of pro-voucher candidates. Co-founder Joel Greenberg is on the board of the American Federation for Children, a national group run by Betsy DeVos with mega-wealthy (and ultra-right) backers including the Koch brothers, who have used the super PAC to channel their out of state dollars into Pennsylvania politics. [See “It’s All About the Money, Money, Money”] And Gov. Corbett tapped Joe Watkins, the chairman of Students First PA, to be the Chief Recovery Officer for the struggling Chester Uplands school district last year – a bit like putting the fox in charge of the hen house, since he now has the power to hand those public schools over to charter operators. [See “Taking the Public out of Public Education”]
Fighting Chance PA PAC shares a name with a campaign launched by the “Pennsylvania Catholic Coalition” last spring, an effort associated with the Philadelphia Archdiocese, which has been lobbying hard for voucher legislation to fund its struggling schools. The new PAC was entirely financed by three wealthy Philadelphia hedge-fund founders who started the Students First PA PAC, because apparently one super PAC on your resume is just not enough. And their largest contribution? To Rep. Jim Christiana, a Republican from Beaver County (site of the proposed Dutch Royal Shell cracker plant) who introduced last year’s voucher-in-disguise EITC tax credit bill. Rep. Christiana also received money from the Walmart PAC. [See “2-4-6-8 Who Do We Appreciate?”]

4. Astroturf groups

Astroturf groups are fake grassroots organizations. They are funded by deep pockets, manipulated to look like local efforts to give the impression that they represent real community opinion. But they are as authentic as a field of plastic grass.

Operating at the national level are groups such as Michelle Rhee’s Students First. Rhee is best known as the former Chancellor of the D.C. school district where she publicly fired a principal on film as part of her massive school closure effort there. She became well known for supposedly increasing student test scores, but there are now serious questions of large-scale cheating (by adults). Students First promotes her privatization agenda of charters and vouchers as well as merit pay and teacher evaluation systems based on high-stakes-testing. The Walton Family Foundation just gave the organization $8 million. [Washington Post, 5-1-13] At the same time, Rhee has been caught inflating the number of members in her organization to make it appear that it has a much broader base of support by using deceptive petitions (for un-objectionable issues such as anti-bullying) on the progressive change.org site to capture the names of unsuspecting new “members.” [DianeRavitch, 8-3-12]
Parent Revolution practically wrote the book on how to create an astroturf organization. Founded in California by a charter school operator – with major backing from Gates, Broad, and Walton – the group got a “parent trigger law” passed and then hired agents to convince two towns to turn their schools over to the them. But many parents later said they had been purposefully misled and filed lawsuits to try to stop the conversion of their schools to charters. [See “Won’t Be Silent”]
Closer to home, we learned just last week that the Gates Foundation is backing a new astroturf group here in Pittsburgh. Called Shepherding the Next Generation, the Washington D.C. based organization has been trying to recruit churches – especially in our African American communities – to preach the Gates agenda of teacher evaluation. [See “Astroturf”] Having one of the wealthiest people on the planet funding outside organizations like this to come into a community and shift the public conversation seriously erodes democracy. This is not about promoting an authentic community dialogue, but about promoting a specific ideology of school reform.

5. Corporations

Perhaps not surprising, corporations control some of the big money at stake in corporate-style education reform. Here are a few to keep your eye on.

Testing companies have significantly benefitted from the dramatic expansion of testing under No Child Left Behind. Nationally, we are spending $1.7 BILLION a year testing our kids. [Brown Center on Education Policy at Brookings, report Nov. 2012] And corporations likePearson Education, Inc. and McGraw Hill spend millions lobbying state legislatures to keep their products in favor. [Republic Report, 5-4-12] The new national Common Core Standards are also creating a bonanza for companies that make textbooks and assessment materials.
Pennsylvania has a contract with Data Recognition Corporation. Taxpayers in the Keystone state are footing the bill for average spending of $32.2 million a year on testing students. [Brown Center on Education Policy at Brookings, report Nov. 2012] That’s a lot of money that is not getting spent on actually educating children.
Struggling school districts are increasingly turning to hybrid or “blended” learning models to deliver content at least partially on-line as a cost-savings measure. A major 2010 Department of Education review of the literature found that blended-learning does not offer better learning outcomes for students, but it will surely be good for corporate bottom lines. Pearson is promoting its Connections Learning as the solution to schools looking to close their achievement gap and reduce the cost of teachers.
Finally, don’t forget about ALEC, the American Legislative Exchange Council where corporate members write business-friendly laws and have them introduced word-for-word into state legislatures. In education reform, ALEC promotes the unregulated expansion of charters and vouchers, keeping both unaccountable to the public while taking away control from local democratically elected school board officials. In Pennsylvania, ALEC issued a guide helpfully pointing out how legislators could get around our troublesome constitution, which prevents public money from being spent on religious schools. The Gates Foundation granted $375,000 to ALEC from 2010-2013, before cutting all ties with the organization last spring after becoming the target of an online petition that gathered over 23,000 signatures in just a few hours. [See “There’s Nothing Smart About ALEC”]

Now that’s a lot of money coming from a lot of sources. It’s helpful to think about the “big tent” metaphor here: there are many Big Money players in this tent, with multiple motivations. Clearly some are driven by profit motive and stand to make a lot of money. Some share ultra-right interests in de-unionization and de-regulation and are happy to push those interests in the field of education. Many others are driven by an ideological agenda of corporate-style education reform. One thing is for sure: all that Big Money under one big tent is having an enormous impact on our public schools.

College Execs have Private Jets? New Report Finds Public University Presidents Live Large

Alyssa Figueroa, AlterNet — Tue, 14 May 2013 11:16:00 -0700

While college students struggle to afford an education, public university presidents are making big bucks.

A new report released by The Chronicle of Higher Educationon Monday revealed that public university presidents in the U.S. are doing quite well financially.

The report lists public university presidents’ compensation for the 2012 fiscal year. Graham Spanier, former president of Penn State University, who was forced out after his handling of the Jerry Sandusky child abuse tragedy, topped the list by bringing in $2.9 million. This includes a base pay of nearly $351,000, a deferred pay of $1.2 million and a severance package of $1.2 million.

Jack Stripling, the Chroniclereporter who worked on the survey, told The New York Times: “The fact that Graham Spanier turns out to be the highest paid president in the country says something about the nature of compensation packages for people who leave under a cloud. … Severance agreements are often very lucrative.”

Following Spanier, Jay Gogue of Auburn University had a compensation package of $2.5 million, and E. Gordon Gee of Ohio State University $1.9 million. Gee received the highest base pay of all the public university presidents at $830,439. The New York Timesreported that Gee enjoys a “lavish lifestyle,” which includes “a rent-free mansion with an elevator, a pool and a tennis court and flights on private jets.”

Stripling told the Timesthat public university presidents have seen much growth in their compensation packages over the years. The $600,000 to $700,000 compensation package range saw the highest growth, as it included 28 presidents in 2012 — up from 13 in 2011.

An increase in deferred compensation also accounts for some of the compensation package growth, as Gogue’s compensation, for instance, went from $720,000 to $2.5 million in one year after completing a five-year contract.

Overall, the median compensation package in 2012 was $441,392 — up 4.7 percent from 2011’s $421,395. The median base salary in 2012 was $373,800 — up 2 percent from 2011’s $366,519.

Meanwhile, for students, life is quite far from lavish. The median student loan debt in the U.S. is $13,600, with the average being $24,301. In total, the amount of student loan debt owed in the U.S. is $1 trillion. Funding for public universities has been cut by about 28 percent since 2008, while the cost of attending one has more than doubled since 1988. Come July 1, the interest rates on subsidized federal Stafford loans are set to double — from 3.4 to 6.8 percent — if Congress doesn’t take action.

The 182 Percent Loan? How Installment Lenders Trap Borrowers

Paul Kiel, ProPublica — Mon, 13 May 2013 12:09:00 -0700

A racket that has caused low-income borrowers a world of hurt.

This story was co-produced with Marketplace. Listen to their coverage.

One day late last year, Katrina Sutton stood at a gas pump outside Atlanta and swiped her debit card. Insufficient funds. But that couldn't be. She'd been careful to wait until her $270 paycheck from Walmart had hit her account. The money wasn't there? It was all she had. And without gas, she couldn't get to work.

She tried not to panic, but after she called her card company, she couldn't help it. Her funds had been frozen, she was told, by World Finance.

Sutton lives in Georgia, a state that has banned payday loans. But World Finance, a billion-dollar company, peddles installment loans, a product that often drives borrowers into a similar quagmire of debt.

World is one of America's largest providers of installment loans, an industry that thrives in at least 19 states, mostly in the South and Midwest; claims more than 10 million customers; and has survived recent efforts by lawmakers to curtail lending that carries exorbitant interest rates and fees. Installment lenders were not included in a 2006 federal law that banned selling some classes of loans with an annual percentage rate above 36 percent to service members — so the companies often set up shop near the gates of military bases, offering loans with annual rates that can soar into the triple digits.

Installment loans have been around for decades. While payday loans are usually due in a matter of weeks, installment loans get paid back in installments over time — a few months to a few years. Both types of loans are marketed to the same low-income consumers, and both can trap borrowers in a cycle of recurring, expensive loans.

Installment loans can be deceptively expensive. World and its competitors push customers to renew their loans over and over again, transforming what the industry touts as a safe, responsible way to pay down debt into a kind of credit card with sky-high annual rates, sometimes more than 200 percent.

And when state laws force the companies to charge lower rates, they often sell borrowers unnecessary insurance products that rarely provide any benefit to the consumer but can effectively double the loan's annual percentage rate. Former World employees say they were instructed not to tell customers the insurance is voluntary.

When borrowers fall behind on payments, calls to the customer's home and workplace, as well as to friends and relatives, are routine. Next come home visits. And as Sutton and many others have discovered, World's threats to sue its customers are often real.

The Consumer Financial Protection Bureau, the new federal agency charged with overseeing consumer-finance products and services, has the power to sue nonbank lenders for violating federal laws. It could also make larger installment lenders subject to regular examinations, but it hasn't yet done so. Installment companies havesupported Republican efforts to weaken the agency, echoing concerns raised by the lending industry as a whole.

The CFPB declined to comment on any potential rule-making or enforcement action.

Despite a customer base that might best be described as sub-subprime, World comfortably survived the financial crisis. Its stock, which trades on the Nasdaq under the company's corporate name, World Acceptance Corp., has nearly tripled in price in the last three years. The company services more than 800,000 customers at upward of 1,000 offices in 13 states. It also extends into Mexico, where it has about 120,000 customers.

In a written response to questions for this story, World argued that the company provides a valuable service for customers who might not otherwise qualify for credit. The loans are carefully underwritten to be affordable for borrowers, the company said, and since the loans involve set monthly payments, they come with a "built-in financial discipline."

The company denied that it deceives customers, saying that it trains its employees to tell borrowers that insurance products are voluntary and that it also informs customers of this in writing. It said it contacts delinquent borrowers at their workplace only after it has failed to reach them at their homes and that it resorts to lawsuits to recoup delinquent payments in accordance with state laws.

"World values its customers," the company wrote, "and its customers demonstrate by their repeat business that they value the service and products that World offers."

The installment industry promotes its products as a consumer-friendly alternative to payday loans. Installment loans are "the safest form of consumer credit out there," said Bill Himpler, the executive vice president of the American Financial Services Association, of which World and other major installment lenders are members.

About 5 percent of World's customers, approximately 40,000, are service members or their families, the company said. According to the Defense Department, active-duty military personnel and their dependents comprise about 1 percent of the U.S. population.

The Starter Loan

Back in August 2009, Sutton's 1997 Crown Victoria needed fixing, and she was "between paychecks," as she put it. Some months, more than half of her paycheck went to student-loan bills stemming from her pursuit of an associate degree at the University of Phoenix. Living with her mother and grandparents saved on rent, but her part-time job as a Walmart cashier didn't provide much leeway. She was short that month and needed her car to get to work.

She said she happened to pass by a World Finance storefront in a strip mall in McDonough, Ga. A neon sign advertised "LOANS," and mirrored windows assured privacy. She went inside.

A credit check showed "my FICO score was 500-something," Sutton remembered, putting her creditworthiness in the bottom 25 percent of borrowers. "But they didn't have no problem giving me the loan."

She walked out with a check for $207. To pay it back, she agreed to make seven monthly payments of $50 for a total of $350. The loan papers said the annual percentage rate, which includes interest as well as fees, was 90 percent.

Sutton had received what World employees call a "starter loan." That's something Paige Buys learned after she was hired to work at a World Finance branch in Chandler, Okla., at the age of 18. At that point, she only had a dim notion of what World did.

At 19, she was named branch manager (the youngest in company history, she remembered being told), and by then she had learned a lot. And the more she understood, the more conflicted she felt.

"I hated the business," she said. "I hated what we were doing to people. But I couldn't just quit."

The storefront, which lies on the town's main artery, Route 66, is very much like the one where Sutton got her loan. Behind darkened windows sit a couple of desks and a fake tree. The walls are nearly bare. Typical of World storefronts, it resembles an accountant's office more than a payday loan store.

Buys said any prospective borrower was virtually guaranteed to qualify for a loan of at least $200. Low credit scores are common, she and other former employees said, but World teaches its employees to home in on something else: whether at least some small portion of the borrower's monthly income isn't already being consumed by other debts. If, after accounting for bills and some nominal living expenses, a customer still has money left over, World will take them on.

In its written response, World said the purpose of its underwriting procedures was to ensure that the borrower has enough income to make the required payments.

With few exceptions, World requires its customers to pledge personal possessions as collateral that the company can seize if they don't pay. The riskier the client, the more items they were required to list, former employees say.

Sutton offered two of her family's televisions, a DVD player, a PlayStation and a computer. Together, they amounted to $1,600 in value, according to her contract. In addition, World listed her car.

There are limits to what World and other lenders can ask borrowers to pledge. Rules issued in 1984 by the Federal Trade Commission put "household goods" such as appliances, furniture and clothing off limits — no borrower can be asked to literally offer the shirt off his back. One television and one radio are also protected, among other items. But the rules are so old, they make no mention of computers.

Video game systems, jewelry, chainsaws, firearms — these are among the items listed on World's standard collateral form. The contracts warn in several places that World has the right to seize the possessions if the borrower defaults.

"They started threatening me," a World customer from Brunswick, Ga., said. "If I didn't make two payments, they would back a truck up and take my furniture, my lawn mower." (In fact, furniture is among the items protected under the FTC rule.) The woman, who asked to remain anonymous because she feared the company's employees, was most upset by the prospect of the company taking her piano. She filed for bankruptcy protection last year.

In fact, former World employees said, it was exceedingly rare for the company to actually repossess personal items.

"Then you've got a broken-down Xbox, and what are you going to do with it?" asked Kristin, who worked in a World branch in Texas in 2012 and, from fear of retaliation, asked that her last name not be used.

World supervisors "would tell us, 'You know, we are never going to repossess this stuff' — unless it was a car," Buys said.

World acknowledged in its response that such repossessions are rare, but it said the collateral played a valuable role in motivating borrowers. "World believes that an important element of consumer protection is for a borrower to have an investment in the success of the transaction," the company wrote. When "borrowers have little or no investment in the success of the credit transaction they frequently find it easier to abandon the transaction than to fulfill their commitments."

'Real Gibberish'

Sutton's loan contract said her annual percentage rate, or APR, was 90 percent. It wasn't. Her effective rate was more than double that: 182 percent.

World can legally understate the true cost of credit because of loopholes in federal law that allow lenders to package nearly useless insurance products with their loans and omit their cost when calculating the annual rate.

As part of her loan, Sutton purchased credit life insurance, credit disability insurance, automobile insurance and non-recording insurance. She, like other borrowers ProPublica interviewed, cannot tell you what any of them are for: "They talk so fast when you get that loan. They go right through it, real gibberish."

The insurance products protect World, not the borrower. If Sutton were to have died, become disabled, or totaled her car, the insurer would have owed World the unpaid portion of her loan. Together, the premiums for her $200 loan total $76, more than the loan's other finance charges.

The insurance products provide a way for World to get around the rate caps in some states and effectively to charge higher rates. Sutton's stated annual percentage rate of 90 percent, for example, is close to the maximum that can legally be charged in Georgia.

ProPublica examined more than 100 of the company's loans in 10 states, all made within the last several years. A clear pattern developed: In states that allowed high rates, World simply charged high interest and other finance fees but did not bother to include insurance products. For a small loan like Sutton's, for example, World has charged a 204 percent annual rate in Missouri and 140 percent in Alabama, states that allow such high levels.

In states with more stringent caps, World slapped on the insurance products. The stated annual rate was lower, but when the insurance premiums were accounted for, the loans were often even more expensive than those in the high-rate states.

"Every new person who came in, we always hit and maximized with the insurance," said Matthew Thacker, who worked as an assistant manager at a World branch in Tifton, Ga., from 2006 to 2007. "That was money that went back to the company."

World profits from the insurance in two ways: It receives a commission from the insurer, and, since the premium is typically financed as part of the loan, World charges interest on it.

"The consumer is screwed six ways to Sunday," said Birny Birnbaum, the executive director of the nonprofit Center for Economic Justice and a former associate commissioner at the Texas Department of Insurance.

Industry data reveal just how profitable this part of World's business is. World offers the products of an insurer called Life of the South, a subsidiary of the publicly traded Fortegra Financial Corp. In Georgia in 2011, the insurer received $26 million in premiums for the sort of auto insurance Sutton purchased as part of her loan. Eighteen million dollars, or 69 percent, of that sum went right back to lenders like World. In all, remarkably little money went to pay actual insurance claims: about 5 percent.

The data, provided to ProPublica by the National Association of Insurance Commissioners, paint a similar picture when it comes to Life of the South's other products. The company's credit accident and health policies racked up $20 million in premiums in Georgia in 2011. While 56 percent went back to lenders, only 14 percent went to claims. The pattern holds in other states where World offers the products.

Fortegra declined to comment.

Gretchen Simmons, who managed a World branch in Pine Mountain, Ga., praised the company for offering customers loans they might not have been able to get elsewhere. She said she liked selling accidental death and disability insurance with loans, because many of her clients were laborers who were "more prone to getting their finger chopped off."

According to several contracts reviewed by ProPublica, losing one finger isn't enough to make a claim. If the borrower loses a hand, the policy pays a lump sum (for instance, $5,000). But, according to the policy, "loss of a hand means loss from one hand of four entire fingers."

Simmons took out a loan for herself from a World competitor — and made sure to decline the insurance. Why? "Because I knew that that premium of a hundred and blah blah blah dollars that they're charging me for it can go right into my pocket if I just deny it."

In its written response, World alleged that Simmons had been fired from the company because of "dishonesty and alleged misappropriation of funds," but it refused to provide further details. Simmons, who worked for World from 2005 to 2008, denied that she left the company on bad terms.

Federal rules prohibit the financing of credit insurance premiums as part of a mortgage but allow it for installment and other loans. Installment lenders can also legally exclude the premiums when calculating the loan's annual percentage rate, as long as the borrower can select the insurer or the insurance products are voluntary — loopholes in the Truth in Lending Act, the federal law that regulates how consumer-finance products are marketed.

World's contracts make all legally necessary disclosures. For example, while some insurance products are voluntary, World requires other types of insurance to obtain a loan. For mandatory insurance, Sutton's contract states that the borrower "may choose the person or company through which insurance is to be obtained." She, like most customers, wouldn't know where to begin to do that, even if it were possible.

"Nobody is going to sell you insurance that protects your loan, other than the lender," said Birnbaum. "You can't go down the street to your State Farm agent and get credit insurance."

When insurance products are optional — meaning the borrower can deny coverage but still get the loan — borrowers must sign a form saying they understand that. "We were told not to point that out," said Thacker, the former Tifton, Ga., assistant manager.

World, in its response to ProPublica, declined to offer any statistics on what percentage of its loans carry the insurance products, but it said employees are trained to inform borrowers that they are voluntary. As for why the company offers the insurance products in some states and not in others, World said it depends on state law and if "it makes business sense to do so."

Buys, the former Chandler, Okla., branch manager, said she found the inclusion of the insurance products particularly deceitful. In Oklahoma, World can charge high interest rates and fees on loans under $1,000 or so, so it typically doesn't include insurance on those loans. But it often adds the products to larger loans, which has the effect of jacking up the annual rate.

"You were supposed to tell the customer you could not do the loan without them purchasing all of the insurance products, and you never said 'purchase,' " Buys recalled. "You said they are 'included with the loan' and focused on how wonderful they are."

It was not long into her tenure that Buys said she began to question whether the products were really required. She asked a family friend who was an attorney if the law required it, she recalled, and he told her it didn't.

World trained its employees to think of themselves as a "financial adviser" to their clients, Buys said. She decided to take that literally.

When a customer took out a new loan, "I started telling them, 'Hey, you can have this insurance you're never going to use, or you can have the money to spend,'" she recalled. Occasionally, a customer would ask to have the disability insurance included, so she left it in. But mostly, people preferred to take the money.

One day, she remembered, she was sitting across from a couple who had come into the office to renew their loan. They were discussing how to cover the costs of a funeral, and Chandler being a small town, she knew it was their son's. On her screen were the various insurance charges from the original loan. The screen "was blinking like I could edit it," she recalled.

At that moment, she realized that she could advise customers renewing their loans that they could drop the insurance from their previous loans. If they did so, they'd receive several hundred dollars more. The couple excitedly agreed, she recalled, and other customers also thought it was good advice and dropped the products.

Buys' regional supervisor threatened to discipline her, Buys said. But it was hard to punish her for advising customers that the products were voluntary when they were. "All they could do was give me the stink eye," Buys said.

But World soon made it harder to remove the insurance premiums, Buys said. She couldn't remove them herself but instead had to submit a form, along with a letter from the customer, to World's central office. That office, she said, sometimes required borrowers to purchase the insurance in order to get the loans.

World, in its response to ProPublica's questions, said Buys' assertions about how it handled insurance were "false," but it declined to provide further details.

Eventually, Buys said, her relationship with management deteriorated to the point that she felt she had no choice but to quit. By the time she left in 2011, she had worked at World for three years.

World, in the answers provided to ProPublica, said that when Buys quit, she was "subject to being terminated for cause including dishonesty and alleged misappropriation of funds." The company declined to provide any details about the allegations, but after Buys quit, World filed suit in county court, accusing her of stealing money from the company. Buys retained an attorney and responded, maintaining her innocence and demanding proof of any theft. World withdrew the suit.

'It's All About Keeping Them'

Sutton's original loan contract required her to make seven payments of $50, at which point her loan would have been fully paid off.

But if World can persuade a customer to renew early in the loan's lifespan, the company reaps the lion's share of the loan's charges while keeping the borrower on the hook for most of what they owed to begin with. This is what makes renewing loans so profitable for World and other installment lenders.

"That was the goal, every single time they had money available, to get them to renew, because as soon as they do, you've got another month where they're just paying interest," says Kristin, the former World employee from Texas.

Sure enough, less than four months after taking out the initial loan, Sutton agreed to renew.

In a basic renewal (the company calls it either a "new loan" or a "refinance"), the borrower agrees to start the loan all over again. For Sutton, that meant another seven months of $50 payments. In exchange, the borrower receives a payout. The amount is based on how much the borrower's payments to date have reduced the loan's principal.

For Sutton, that didn't amount to much. She appears to have made three payments on her loan, totaling $150. (The company's accounting is opaque, and Sutton does not have a record of her payments.) But when she renewed the loan, she received only $44.

Most of Sutton's payments had gone to cover interest, insurance premiums and other fees, not toward the principal. And when she renewed her loan a second time, it was no different.

The effect is similar to how a mortgage amortizes: The portion of each payment that goes toward interest is at its highest the first month and decreases with each payment. As the principal is reduced, less interest is owed each month. By the end of the loan, the payments go almost entirely toward paying down the principal.

World regularly sends out mailers, and its employees make frequent phone calls, all to make sure borrowers know they have funds available. Every time a borrower makes a payment, according to the company, that customer "receives a receipt reflecting, among other information, the remaining balance on the borrower's loan and, where applicable, the current new credit available for that borrower." And when a borrower visits a branch to make a payment, former employees say, employees are required to make the pitch in person.

"You have to say, 'Let me see what I can do to get you money today,'" Buys recalled. If the borrower had money available on the account, it had to be offered, she and other former employees said.

The typical pitch went like this, Kristin said: "'Oh, by the way, you've got $100 available, would you like to take that now or do you want to wait till next month?'"

Customers would ask, "'Well, what does this mean?'" Buys said. "And you say, 'Oh, you're just starting your loan over, you know, your payments will be the same.'"

The company often encourages customers to renew the loans by saying it will help them repair their credit scores, former employees said, since World reports to the three leading credit bureaus. Successively renewing loans also makes customers eligible for larger loans from World itself. After renewing her loan twice, for instance, Sutton received an extra $40.

"We were taught to make [customers] think it was beneficial to them," Buys said.

"Retail (i.e., consumer) lending is not significantly unlike other retail operations and, like those other forms of retail, World does market its services," the company wrote in its response to questions.

About three-quarters of the company's loans are renewals, according to World's public filings. Customers often renew their loans after only two payments, according to former employees.

The company declined to say how many of its renewals occur after two payments or how many times the average borrower renews a loan. Renewals are only granted to borrowers who can be expected to repay the new loan, it said.

Lawsuits against other major installment lenders suggest these practices are common in the industry. A 2010 lawsuit in Texas claimed that Security Finance, a lender with about 900 locations in the United States, induced a borrower to renew her loan 16 times over a three-year period. The suit was settled. In 2004, an Oklahoma jury awarded a mentally disabled Security Finance borrower $1.8 million; he had renewed two loans a total of 37 times. After the company successfully appealed the amount of damages, the case was settled. Security Finance declined to respond to questions about the suits.

Another 2010 suit against Sun Loan, a lender with more than 270 office locations, claims the company convinced a husband and wife to renew their loans more than two dozen times each over a five-year period. Cary Barton, an attorney representing the company in the suit, said renewals occur at the customer's request, often because he or she doesn't have enough money to make the monthly payment on the previous loan.

The predominance of renewals means that for many of World's customers, the annual percentage rates on the loan contracts don't remotely capture the real costs. If a borrower takes out a 12-month loan for $700 at an 89 percent annual rate, for example, but repeatedly renews the loan after four payments of $90, he would receive a payout of $155 with each renewal. In effect, he is borrowing $155 over and over again. And for each of those loans, the effective annual rate isn't 89 percent. It's 537 percent.

World called this calculation "completely erroneous," largely because it fails to account for the money the customer received from the original transaction. World's calculation of the annual percentage rate if a borrower followed this pattern of renewals for three years: about 110 percent.

A Decade of Debt

In every World office, employees say, there were loan files that had grown inches thick after dozens of renewals.

At not just one but two World branches, Emma Johnson of Kennesaw, Ga., was that customer. Her case demonstrates how immensely profitable borrowers like her are for the company — and how the renewal strategy can transform long-term, lower-rate loans into short-term loans with the triple-digit annual rates of World's payday competitors.

Since being laid off from her janitorial job in 2004, Johnson, 71, has lived primarily on Social Security. Last year, that amounted to $1,139 in income per month, plus a housing voucher and food stamps.

Johnson could not remember when she first obtained a loan from World. Nor could she remember why she needed either of the loans. She can tell you, however, the names of the branch managers (Charles, Brittany, Robin) who've come and gone over the years, her loans still on the books.

Johnson took out her first loan from World in 1993, the company said. Since that time, she has taken out 48 loans, counting both new loans and refinancings, from one branch. In 2001, she took out a loan from the second branch and began a similar string of renewals.

When Johnson finally declared bankruptcy early this year, her two outstanding loans had face values of $3,510 and $2,970. She had renewed each loan at least 20 times, according to her credit reports. Over the last 10 years, she had made at least $21,000 in payments toward those two loans, and likely several thousand dollars more, according to a ProPublica analysis based on her credit reports and loan documents.

Although the stated length of each loan was about two years, Johnson would renew each loan, on average, about every five months. The reasons varied, she said. "Sometimes stuff would just pop out of the blue," she said. This or that needed a repair, one of her children would need money.

Sometimes, it was just too enticing to get that extra few hundred dollars, she acknowledged. "In a sense, I think I was addicted."

It typically took only a few minutes to renew the loan, she said. The contract contained pages of disclosures and fine print, and the World employee would flip through, telling her to sign here, here and here, she recalled.

Her loan contracts from recent years show that the payouts were small, often around $200. That wasn't much more than the $115 to $135 Johnson was paying each month on each loan. The contracts had stated APRs ranging from about 23 percent to 46 percent.

But in reality, because Johnson's payments were largely going to interest and other fees, she was taking out small loans with annual rates typically in the triple digits, ranging to more than 800 percent. World also disputed this calculation.

As she continued to pay, World would sometimes increase her balance, providing her a larger payout, but her monthly payment grew as well. It got harder and harder to make it from one Social Security check to the next. In 2010, she took out another loan, this one from an auto-title lender unconnected to World.

Eventually, she gave up on juggling the three loans. By the end of each month, she was out of money. If she had to decide between basic necessities like gas and food and paying the loans, the choice, she finally realized, was easy.

'Chasing' Customers

At World, a normal month begins with about 30 percent of customers late on their payments, former employees recalled. Some customers were habitually late because they relied on Social Security or pension checks that came later in the month. They might get hit with a late fee of $10 to $20, but they were otherwise reliable. Others required active attention.

Phone calls are the first resort, and they begin immediately — sometimes even before the payment is due for customers who were frequently delinquent. When repeated calls to the home or cell phone, often several times a day, don't produce a payment, World's employees start calling the borrower at work. Next come calls to friends and family, or whomever the borrower put down as the seven "references" required as part of the loan application.

"We called the references on a daily basis to the point where they got sick of us," said Simmons, who managed the Pine Mountain, Ga., store.

If the phone calls don't work, the next step is to visit the customer at home: "chasing," in the company lingo. "If somebody hung up on us, we would go chase their house," said Kristin from Texas.

The experience can be intimidating for customers, especially when coupled with threats to seize their possessions, but the former employees said they dreaded it, too. "That was the scariest part," recalled Thacker, a former Marine, who as part of his job at World often found himself driving, in the evening, deep into the Georgia countryside to knock on a borrower's door. He was threatened a number of times, he said, once with a baseball bat.

Visits to the borrower's workplace are also common. The visits and calls at work often continue even after borrowers ask the company to stop, according to complaints from World customers to the Federal Trade Commission. Some borrowers complained the company's harassment risked getting them fired.

ProPublica obtained the FTC complaints for World and several other installment loan companies through a Freedom of Information Act request. They show consistent tactics across the industry: the repeated phone calls, the personal visits.

After she stopped paying, Johnson remembered, World employees called her two to three times a day. One employee threatened to "get some stuff at your house," she said, but she wasn't cowed. "I said, 'You guys can get this stuff if you want it.'" In addition, a World employee knocked on her door at least three times, she said.

The goal of the calls and visits, former employees said, is only partly to prod the customer to make a payment. Frequently, it's also to persuade them to renew the loan.

"That's [World's] favorite phrase: 'Pay and renew, pay and renew, pay and renew,'" Simmons said. "It was drilled into us."

It's a tempting offer: Instead of just scrambling for the money to make that month's payment, the borrower gets some money back. And the renewal pushes the loan's next due date 30 days into the future, buying time.

But the payouts for these renewals are often small, sometimes minuscule. In two of the contracts ProPublica examined, the customer agreed to start the loan all over again in exchange for no money at all. At other times, payouts were as low as $1, even when, as in one instance, the new loan's balance was more than $3,000.

Garnishing Wages

For Sutton, making her monthly payments was always a struggle. She remembered that when she called World to let them know she was going to be late with a payment, they insisted that she come in and renew the loan instead.

As a result, seven months after getting the original $207 loan from World, Sutton wasn't making her final payment. Instead, she was renewing the loan for the second time. Altogether, she had borrowed $336, made $300 in payments, and now owed another $390. She was going backward.

A summons of garnishment Katrina Sutton received. When World Finance discovered that it could not garnish Sutton’s wages, the company put a hold on her “payroll card,” a kind of debit card provided by her employer. She was left without any money to pay for the gas she needed to get to work. (Erik S. Lesser/EPA for ProPublica)

Not long after that second renewal, Sutton said, Walmart reduced her hours, and there simply wasn't enough money to go around. "I called them at the time to say I didn't have money to pay them," she said. World told her she had to pay.

The phone calls and home visitsfollowed. A World employee visited the Walmart store where she worked three times, she recalled.

World didn't dispute that its employees came to Sutton's workplace, but it said that attempts to contact "any borrower at her place of employment would occur only after attempts to contact the borrower at her residence had failed."

In Georgia, World had another path to force Sutton to pay: suing her.

World files thousands of such suits each year in Georgia and other states, according to a review of court filings, but the company declined to provide precise figures.

Because Sutton had a job, she was a prime target for a suit. Social Security income is off limits, but with a court judgment, a creditor can garnish up to 25 percent of a debtor's wages in Georgia.

"When we got to sue somebody, [World] saw that as the jackpot," Buys said. In her Oklahoma store, collecting the junk people had pledged as collateral was considered useless. Garnishment was a more reliable way for the company to get its money, and any legal fees were the borrower's problem.

World said 11 of the states where it operates permit lenders to "garnish customers' wages for repayment of loans, but the Company does not otherwise generally resort to litigation for collection purposes, and rarely attempts to foreclose on collateral."

The sheriff served Sutton with a summons at Walmart, in front of her co-workers. Sutton responded with a written note to the court, saying she would pay but could only afford $20 per month. A court date was set, and when she appeared, she was greeted by the branch manager who had given her the original loan. The manager demanded Sutton pay $25 every two weeks. She agreed.

For five months, Sutton kept up the payments. Then, because of taxes she had failed to pay years earlier, she said, the IRS seized a portion of her paycheck. Again, she stopped paying World. In response, the company filed to garnish her wages, but World received nothing: Sutton was earning too little for the company to legally get a slice of her pay. After two months, World took another step.

Sutton's wages are paid via a "payroll card," a kind of debit card provided by Walmart. World filed to seize from Sutton's card the $450 it claimed she owed. By that point, she'd made more than $600 in payments to the company.

The immediate result of the action was to freeze Sutton's account, her only source of income. She couldn't gas up her car. As a result, she couldn't drive to work.

Sutton said she called a number for World's corporate office in a panic. "I said, 'You're gonna leave me with no money to live on?'" The World employee said the company had had no choice because Sutton didn't hold up her end of their agreement, Sutton recalled, and then the employee made an offer: If Sutton's available wages in her account hadn't covered her total debt to World after 30 days, the company would unfreeze her account and allow her to start a new payment plan.

Desperate, she gave up trying to deal with the company on her own and went to Georgia Legal Services Program, a nonprofit that represents low-income clients across the state.

"Her case is terribly egregious," said Michael Tafelski, a lawyer with GLSP who specializes in collections cases and represented Sutton. World had overstated the amount Sutton legally owed, he said, and circumvented laws limiting the amount of funds creditors can seize. In effect, the company was garnishing 100 percent of her wages. It's "unlike anything I have ever seen," Tafelski said, "and I have seen a lot of shady collectors."

After Tafelski threatened to sue World, the company beat a quick retreat. It dismissed all open cases against Sutton and declared her obligation satisfied.

In its response to ProPublica, World claimed that Tafelski had bullied the billion-dollar company: "Mr. Tafelski used abusive out of court threats to accomplish an end he knew he could not obtain through legal process."

"It's common practice among lawyers to contact the opposing party to attempt to resolve problems quickly, without filing a lawsuit, especially in emergency cases like this one," Tafelski said.

As for Sutton, she had missed several days of work, but her account was unfrozen, and she was done with World Finance forever.

"If I'd known then what I know now," she said, "I'd never have fooled with them."

Five Things College Students Should Worry About Next Fall

Chris Lewis, Campus Progress — Mon, 13 May 2013 11:45:00 -0700

Whether freshman or returning senior, there's a lot of reasons for college students to be concerned about money.

It’s the time of year for high school seniors to prep for entering the real world. For many, it means wrapping up classes, choosing a college, and getting ready to go off to school in the fall.

As you know, college ain’t cheap. Here are the top five things new and returning students—and their wallets—should worry about in the fall.

1) Double Trouble
If Congress doesn’t step in, interest rates on subsidized federal Stafford loans are set to double on July 1^st, from 3.4 to 6.8 percent. Student borrowers narrowly averted the hike in 2012; if it goes through this year, it could add up to $5,000 to students’ loan costs over the course of repayment. (Campus Progress is pushing for student loan refinancing, one way to fix hefty interest rates.)

2) Austere Budgets Put the Squeeze on Students
For higher education, the political winds are stormy as Washington grapples with a conservative movement that doesn’t believe college—or maybe anything—should be a shared expense, funded together by taxpayers through federal and state governments. They would rather let you sink or swim on your own.

Recent highlights: 2012 vice presidential candidate Paul Ryan’s much-heralded budget plan would whittle away the value of Pell Grants to low-income students; all 45 Senate Republicans recently voted against easing student loan payment terms and distributing billions of dollars to American colleges; and last month, an Oklahoma lawmaker claimed “it is not our job to see that anyone gets an education” and advocated cutting Oklahoma Promise, a state scholarship program for low-income students.

3) The Sequester
While those threats to college funding have been stymied for now, the austerity-lovers can claim at least one success. The across-the-board federal budget cuts known as the sequester took a bite out of programs students care about, including $86 million for work-study jobs, new fees for student loans, and cuts to scientific research funds for universities.

4) College is Expensive, and a Struggling Economy Isn’t Helping
The cost of attending a public university, adjusted for inflation, has more than doubled since 1988. And with the recession ravaging state budgets, funding for public schools has been cut by an average of 28 percent since 2008.

It has increased the strain on students. “The steadily and rapidly increasing cost of college nationwide prompted a dramatic rise in student borrowing—a natural result as families could no longer rely on scholarships, grants, and personal savings,” according to a report released last year by Campus Progress and the Center for American Progress.

5) Being a Graduate is Tough, too
Once you have that degree you’ll have to try to put it to work (especially if you have loans to repay), and American college graduates are struggling. About half are working in professions outside their field of study, and some are even working for minimum wage.

At least some of the scarcity can be chalked up to the recent recession, but there are also troubling signs that the shortage of college-level jobs is structural: in the next decade, we’ll see twice as many new college graduates as new jobs that use their skills. How’s that for the real world?

Public School Cancels Graduation Rather Than Remove Prayer From Ceremony

Katie McDonough, Salon — Thu, 09 May 2013 12:15:00 -0700

An Arkansas public school has canceled its graduation ceremony rather than remove a prayer from the opening address.

Arkansas’ Riverside Public School District has called off its sixth grade graduation ceremony after a parent asked administrators to remove a Christian prayer from the opening address to the students. The school was contacted by a local parent, supported by the American Civil Liberties Union, over the inclusion of prayer in the public school ceremony; but rather than remove religion from the festivities, they canceled them entirely.

Sixth grade parent Kelly Adams told ABC News affiliate KAIT8 that the request to take prayer out of the opening address upset parents and students, explaining that the school’s decision to cancel was justified because “we just want to take a stand for God because we felt like out rights were taken away.”

Conceding that not everyone is Christian at the school, Adams added: “I realize they have rights too but you can’t take rights away from one group and give it to another.”

Kelly, along with other parents, have arranged to hold an alternative ceremony at a nearby church, where they will be free to pray. ”We are including everyone, everyone is invited, we want everyone to come and be a part of it,” she said of the decision to relocate.

“We’re not trying to be pushy or ugly to anybody, we just want them to know there is a God who loves them,” she said of the new ceremony.

Mad Science or School-to-Prison? Criminalizing Black Girls

Sikivu Hutchinson, Black Agenda Report — Thu, 09 May 2013 11:33:00 -0700

In many American classrooms, black children are treated like ticking time bomb savages.

“Stereotypes about dysfunctional violent black children ensure that the myth of white children’s relative innocence is preserved.”

High stakes test question: A female science student conducts an experiment with chemicals that explodes in a classroom, causes no damage and no injuries. Who gets to be the adventurous teenage genius mad scientist and who gets to be the criminal led away in handcuffs facing two felonies to juvenile hall? If you’re a white girl check Box A, if you’re an intellectually curious black girl with good grades check Box B. When 16 year-old Kiera Wilmot was arrested and expelled from Bartow high school in Florida for a science experiment gone awry it exemplified a long American-as-apple pie tradition of criminalizing black girls. In many American classrooms black children are treated like ticking time bomb savages, shoved into special education classes, disproportionately suspended and expelled then warehoused in opportunity schools, juvenile jails and adult prisons. Yet, while national discourse on the connection between school discipline and mass incarceration typically focuses on black males, black girls are suspended more than boys of every other ethnicity (except black males). At a Georgia elementary school in 2012 a six year-old African American girl was handcuffed by the police after throwing a tantrum in the principal’s office. [i]Handcuffing disruptive black elementary school students is not uncommon. It is perhaps the most extreme example of black children’s initiation into what has been characterized as the school-to-prison pipeline, or, more accurately, the cradle to grave pipeline. Stereotypes about dysfunctional violent black children ensure that the myth of white children’s relative innocence is preserved.

“Black students do not, in fact, ‘offend’ at higher rates than their white and Latino counterparts.”

Nationwide, black children spend more time in the dean’s office, more time being opportunity transferred to other campuses and more time cycling in and out of juvenile detention facilities than children of other ethnicities. Conservatives love to attribute this to poverty, broken homes, and the kind of Bell Curve dysfunction that demonizes “welfare queens” who pop out too many babies. Yet there is no compelling evidence that socioeconomic differences play a decisive role in these disparities. [ii] The fact remains that black children are criminalized by racist discipline policies regardless of whether they’re privileged “Cosby kids” or are in foster care or homeless shelters. According to Daniel Losen and Russell Skiba, authors of the Southern Poverty Law Center’s “Suspended Education” report, “ethnic and racial disproportionately in discipline persists even when poverty and other demographic factors are controlled. [iii]

National research such as the Southern Poverty Law Center’s study and the Indiana Education Policy Center’s 2000 “The Color of Discipline” report has consistently shown that black students do not, in fact, “offend” at higher rates than their white and Latino counterparts.[iv] Middle class African American students in higher income schools are also disproportionately suspended. This implies that black students are perceived by adults as more viscerally threatening. “The Color of Discipline” report found that black students were more likely to be referred out of class for lower level offenses such as excessive noise, disrespect, loitering and “threat.”[v] According to the Southern Poverty Law Center, “race and gender disparities in suspension were due not to differences in administrative disposition but to differences in the rate of initial referral of black and white students.”

“The ‘feminist revolution’ is lily white and over-exposed.”

When it comes to black girls, the widespread perception that they are dangerous, hostile and ineducable is promoted and reinforced by mainstream media portrayals. Historically, black women have never been regarded as anybody’s “fairer sex” because white women have always been the universal standard for femininity, humanity, and moral worth. On contemporary TV and in film, heroic white women abound as “new” models of bold, adventurous, breakthrough femininity. Writing on “women’s” TV portrayals recently in the L.A. Times, Mary McNamara gushed about how the current crop of small screen female protagonists were complexly layered, daring departures from the typical crone, slut and mother roles of the past. According to McNamara, “TV's female leads are breaking ground with their unexpected choices. Thanks to the feminist revolution and TV's increasing ascendancy, women are allowed to make mistakes without paying the ultimate price. It's all quite refreshing.”

Yet once again the “feminist revolution” is lily white and over-exposed. The article hails characters from “House of Cards,” HBO’s swaggering white-fest “Girls” and “Homeland,” then blithely acknowledges that the female protagonists of these shows are all white and mostly middle class. Previous pieces from both the L.A. Times and the New York Times have saluted the rise of ass-kicking female adventurers like those in the “Hunger Games”, “Zero Dark Thirty” and (even) Pixar’s animated movie “Brave” as evidence that Hollywood is becoming more receptive to strong independent female characters.

But back in the image ghetto, substantive, much less starring roles, for women of color are still less abundant than Aunt Jemima’s head scarf. The endless parade of reality show swill featuring hyper-sexual “out of control” brawling black women has long dwarfed dramatic mainstream portrayals of black women’s lived experiences, ambitions and narratives.

Thus, Kiera Wilmot’s arrest and expulsion is a national travesty. It is an indictment not just of the inveterate racism and sexism of American public education but of an image industry that still loves to see black women doing mammy, Jezebel and welfare queen to white women’s heroic explorers.

***

i See Jeff Martin and Jeri Clausing, “Police Handcuff Georgia Kindergartner for Tantrum,Huffington Post, April 17, 2012, (http://www.huffingtonpost.com/2012/04/17/police-handcuff-ga-kinder_n_1430749.html). (Accessed January 31, 2013).

ii See Daniel J. Losen and Russell J. Skiba, “Suspended Education: Urban Middle Schools in Crisis,” Southern Poverty Law Center, 2010, p. 8. “If we assume that Black and Hispanic poverty rates are similar in these districts (as they are nationally) and if we assume that Black males and females have similar exposure to poverty it becomes difficult to explain why suspension rates are so much higher for Black males than for both Hispanic males and Black females.” Losen and Skiba cite previous research that has not identified a link between socioeconomic background or poverty and high rates of suspension (e.g., Skiba, 2002, Wallace 2009, APA 2008).

iii Ibid.

iv Ibid. pp. 3-6. Losen and Skiba report that there has been a 9 point increase in black suspensions from 1973 to the present, such that “Blacks are now more than three times more likely to be suspended than whites.” Based on data from 18 districts nationwide they also concluded that white females were the least likely to be suspended and black males the most likely out of all racial and ethnic groups. See also, Russell J. Skiba, et al. “The Color of Discipline: Sources of Racial and Gender Disproportionality in School Punishment,” Indiana Education Policy Center, Policy Research Report: SR1, June 2000, pp. 1-26.

v See also Losen and Skiba, p. 10.

Punishing Students For Not Making Eye Contact? How Charter Schools' Prejudiced Policies Undermine Equality

Kristin Rawls, AlterNet — Thu, 09 May 2013 11:24:00 -0700

Charter schools are failing children of color and students with disabilities even as their supporters advocate using civil rights rhetoric.

This article is the first of a two-part series examining who is being left behind in the wake of charter school proliferation and the complicated web of profiteering that is driving the movement. Part I details many of the ways in which charter schools fail poor children, children of color and students with disabilities even as charter school supportersappropriatecivil rights rhetoric. Part II will focus on the big business of charter schools.

On the heels of news that Philadelphia will be closing 23 schools for the 2013-2014 academic year, Chicago has made an even more startling announcement: Chicago Public Schools has proposed closing 54 schools for the next academic year. The idea is to replace them with charter schools, an initiative that Democratic Chicago Mayor Rahm Emanuel has supported enthusiastically.

Enthusiasm for charter schools primarily comes from them being hailed as a panacea that could solve longstanding disparities in education quality, and possibly even turn around longstanding divides like racial disparity and economic inequality.

Without irony, the charter school movement has adopted the banner of the civil rights movement to create an aura of moral authority. Secretary of Education Arne Duncan praised pro-charter propaganda film Waiting for Superman for ushering in a “Rosa Parks moment.” And a Goldman Sachs banker famously called charter schools the “civil rights struggle of my generation.”

Ultimately, however, not only do charter schools fail children of color and students with disabilities, they often actively work against them as they try to transform students into what they imagine is the status quo. From outrageous fees to strict disciplinary codes, charter schools continuously work to target students they don't want.

Charter Schools Not a Clear Success Story

There is little evidence that charter schools are the silver bullet touted by supporters, let alone a beacon of racial empowerment. Though charter school research is new and fairly underdeveloped, the one large-scale study to date, a 2009 project conducted by Stanford’s conservative, pro-charter Center for Research on Education Outcomes (CREDO) found that a majority of charters do not outperform public schools, with more than a third actually doing worse.

Another study came out just last week helmed by the nonprofit Broader, Bolder Approach to Education, which works to address the ways social and economic inequality can affect education and academic performance. It studied the effects of school closure and charter school proliferation on three cities: Chicago, Washington DC and New York. It found that the triumphalism of the charter movement was entirely unfounded, and that the quality of education for the most vulnerable children became worse in the wake of closings and charter school growth.

How Charters Discriminate Against Disable Students

Beyond test scores as measures of achievement, there are other ways in which charter schools may be undermining equality of opportunity. Because they are, technically speaking, public entities that receive federal funding, charter schools are bound by all federal civil rights legislation prohibiting schools to discriminate on the basis of disability, race and/or socioeconomic status. State and local bodies that govern charters are tasked with guarding against discrimination.

But the truth is that charter schools may be discriminating. A June 2012 report by the U.S. Government Accountability Office reported that during the 2009-2010 academic year, about 11 percent of traditional public school students were identified as disabled. In charter schools, that number dropped to 8 percent. Plus, the study noted, “[The] proportion of charter schools that enrolled high percentages of students with disabilities was lower overall. Specifically, students with disabilities represented 8 to 12 percent of all students at 23 percent of charter schools compared to 34 percent of traditional public schools.”

The 2012 study suggests that there is not yet enough information to determine that this is happening because charter schools discriminate in a systematic way. Still, it details multiple anecdotal accounts that suggest a more systematic rooting out in the admissions process. For example, it names P.B., et al v. Pastorek, a complaint filed by the Southern Poverty Law Center and other advocacy organizations in 2010. According to the SPLC, “Students with disabilities were denied access to New Orleans public schools and often pushed into schools unable to provide them with the educational services they deserved under federal law.” The complaint cited “violations in more than 30 New Orleans schools -- including charter schools and schools operated by the state’s [post-Katrina] Recovery School District.”

Lawyers’ Committee for Civil Rights, which is also helping with the case, notes that, “[An] estimated 4,500 students with disabilities are denied equal access to educational opportunities, routinely pushed out of school, and subject to discrimination on the basis of their disabilities” every year. Since the Recovery School District began governing New Orleans education policy after Katrina, the Committee alleges, the city has failed to provide equal educational opportunities to disabled students, neglected the mandated “child find” policy to identify and serve disabled students, denied disabled students “a free appropriate education” and “unlawfully disciplined and excluded [disabled students] from educational programs.”

The changes since the crossover from traditional public schools were swift, but the complaint has been pending in federal court for more than two years now.

Though the GAO study encourages more systematic research, it does identify some causal factors that may be leading to discrimination. One is the reliance of charter schools on fundraising from private institutions. Charter school administrators told the GAO they simply did not have sufficient resources to provide the mandated disability services, particularly when it came to meeting the individual needs of students. Schools also noted that they were ill-equipped to serve students with the most severe cognitive disabilities.

The report concluded that, “[S]ome charter schools may be discouraging students with disabilities from enrolling and denying admission to students with more severe disabilities because services are too costly.” This is their excuse, but it bears repeating that this hasn’t been researched or verified. Further, charter schools have much more autonomy when it comes to the distribution of funds than other public schools. It’s not clear whether lack of funding is the real cause for discrimination—or simply unwillingness to enroll students with learning disabilities who may reduce a school’s average test scores.

How Charters Discriminate Based on Race and Class

In addition to complaints of disability discrimination, there is evidence that charter schools are doing a poor job of achieving racial equality or helping poor students. The new study by Broader, Bolder Approach to Education found that districts in the three cities that aggressively closed schools and opened charter schools to replace them increased race- and class-based achievement gaps, even as pro-charter reformers continued to cast themselves as contemporary civil rights activists.

This is perhaps nowhere more pronounced than in Chicago Public Schools (CPS), where African-American students comprise 41.6 percent of the student population, followed by Latino students at 44.1 percent and white students at 8.8 percent. CPS students are also overwhelmingly poor. Eighty-four percent of the district’s students – that’s 338,000 children – qualify for free and reduced lunch, so it’s difficult to untangle class and race here. The bottom line is that the system is not succeeding by any civil rights-era ideals.

Gary Moriello, who retired from CPS in 2007, worked as an educator for 37 years, first as a teacher and then as an elementary school principal. He tells AlterNet, “Charter schools tend to siphon off the children they want from traditional public schools.” And it’s clear who they don’t want, he says: “Special-education students, English-as-a-second-language students, students with various behavioral issues. It makes their jobs easier.”

CTU researcher Sarah Hainds says Chicago charter schools have built-in disciplinary systems that facilitate discrimination against poor children. Charter schools in Chicago follow strict codes of conduct similar to military school styles of discipline. Hainds says this is a frequently cited draw for many parents who are nervous about gang fights and shootings in their neighborhood schools.

In Chicago charter schools, strict disciplinary codes are one way charter schools can target and remove students they don’t want. In 2012, three public education advocacy organizations, Voices of Youth in Chicago Education (VOYCE), Parents United for Responsible Education (PURE) and the Advancement Project, teamed up to research and report on the effects of the demerits system. One of the most egregious groups, a charter authorization organization called Noble, earned $200,000 a year in net profits simply from enforcing its severe discipline code, in which each minor infraction costs $5.

Noble requires that children sit up straight and maintain eye contact with the teacher when addressed. Briefly averting eyes? That’s a demerit. Students can earn demerits for speaking faltering English or speaking in black or Southern dialect, as they are required to “articulate in standard English” at all times. New English learners are not exempt from this policy. The study found that families were being charged for “any infraction on a list of prohibited conduct…that pretty much describes the full gamut of teenage behavior including such minor issues as having a shirt button unbuttoned or being seen with a bag of chips or sharpie.” Twelve demerits means children must take a discipline class that costs an extra $140. At more than 12 infractions? That’s two discipline courses at $280. Noble’s schools “will not waive these fees, even for low-income families, and about 90 percent of Noble students are low-income.”

Hainds says, “Some children’s families can’t afford to pay for the demerits, and they get kicked out of the charter schools. When fees reach $280 or so, that’s just too much for many families.” Rules are so strict that it’s nearly impossible to avoid demerits, and the demerit system has become a way of rooting out the poorest students.

Plus, the rigid disciplinary system gives new meaning to the phrase, “school-to-prison pipeline.” Chicago Public School parent Mikki Kendall, whose eighth-grade son currently attends a Hyde Park school marked for closure, tells AlterNet she would sooner homeschool than send her child to a charter school. She notes that the extreme military-style discipline fosters a system in which “children are treated like criminals.” Indeed, the dangers of what Kendall aptly calls the “militarization of the ‘hood,” including the policing of inner city schools,are well-documented as bad for children. Yet the harsh discipline goes unchecked.

Some of the marginalization may even happen by default. Both Hainds and Kendall point out that children who attend the charters already have some advantages over many of their peers. Hainds explains:

They are kids whose parents went online, filled out the application, completed all the steps of the application process and made all the formal agreements to enroll their children. A child with a single mother who works multiple jobs to care for multiple children—that is not the child walking in the door of a charter school.

And even though decades of U.S. educational history have borne out the truism that separate cannot be equal, Department of Education data shows that charter schools have some of the most race- and class-based segregation in the country.

Charter Schools Take Schools from Parents and Children

In addition to the ways in which charter schools fail vulnerable children who enroll or try to enroll in them, their very existence almost always comes at a cost to existing traditional schools and the students who attend them. School closings are one manifestation of this cost that policymakers rarely discuss. Hainds tells AlterNet that Chicago’s community schools have deep roots in the often tight-knit communities they serve: "At school closing hearings, people constantly say that it’s as if CPS is erasing their history. There are schools where three generations of family members have attended. There’s a ton of pride, even if a school has low test scores and discipline issues, it’s still the center of their community. CPS has closed schools that are named after important African Americans—again, it’s like CPS is erasing history."

Then there is the psychological impact of being uprooted. Hainds notes that students “feel that CPS has given up on them—that instead of helping their schools, CPS just shuffles them somewhere else.” While CPS is promising to do better for next year, it misplaced and failed to assign at least 250 students to new schools last year. Hainds adds, “CPS even acknowledges that it can’t force parents to send their kids to the designated schools, which actually means that it does not know where all 30,000 kids will enroll next year.” She notes that this upheaval has historically caused a decline in academic performance.

Safety is also an important issue. Kendall explains that many students attend her son’s Hyde Park school because their own neighborhoods are unsafe. Many schools that will serve as alternatives are located in less safe neighborhoods. Neighborhood children, meanwhile, may be asked to walk an additional eight blocks to school through or to areas that put them at greater risk. Hainds shares these concerns, noting that many schools are located in areas with heavy gang area, and “surrounded by foreclosed homes, busy streets [and] viaducts.” She says security will be heightened, but says this is no solution because it only “criminalizes the children.”

On top of everything else, closing and charter proliferation can disempower parents. First, Hainds notes, longer walking distances may prevent many parents from being more involved in their children’s education simply because they have neither a car nor a bus route that goes the distance.

Kendall notes that parents are finding it very difficult to access reliable information about the school closings. Sometimes they are told that registration is too low, sometimes that their schools are under-performing. Privatization via charter schools means that schools are less accountable to the public, including parents. She points out that parents have little recourse to combat disciplinary overreach, which further marginalizes parents.

Ultimately, Kendall fears, school closings, displacement and charter proliferation are creating a “lost generation of kids.” She says, “I can get my kids through with homeschooling if I have to,” but asks, “What happens to kids who don’t have parents with the education or resources to do this?” For people who appropriate civil rights rhetoric with such abandon, corporate school reformers in Chicago appear almost shockingly unconcerned with this question.

Helen Gym, a parent, activist and former teacher—now with Parents United for Public Education and online education resource the Notebook—tells AlterNet:

I see schools as an intrinsic part of communities, particularly marginalized communities, where people are fighting to make voices heard. We have to realize this is not about education. It’s about recognizing that our public schools are the largest, most stable, and most passionate defenders of equity, access, and aspirational hope in this country. In every other sector of this nation, those things are under attack. This is about the evolution of our country, and it is inextricably linked to issues of race, class politics, equity and justice—all longtime, core struggles for people. If we understand that, it makes the path forward a little clearer…There has been incredible pushback in Philadelphia. No matter what happens, the record will show that there were many people who united and stood against the closings. It’s not just about how politicians vote — it’s about who we are as communities and a society, and who showed up when we needed to fight.

So if evidence increasingly mounts showing that school closings and charter proliferation, the question becomes, “Why do we keep closing schools and building new charters in the first place?” The short answer: Profit.

It’s clear that parent advocates like Kendall and Gym, public intellectuals like Ravitch and many more will continue fighting to stop the march toward endless school closure and mass charter school proliferation. But the grassroots movements fighting these trends are in for quite the battle, especially when it comes to wealth and government influence — things their opponents have in abundance.

Who Is Profiting From Charters? The Big Bucks Behind Charter School Secrecy, Financial Scandal and Corruption

Kristin Rawls, AlterNet — Wed, 08 May 2013 20:16:00 -0700

What we know about the financial incentives offered by charter schools.

This article is part of a two-part series that looks at mass school closings targeting America’s inner cities and the promise of charter schools as a magic solution to alleged “failing schools.” Part I explained how the charter school movement cynically appropriates civil rights rhetoric, but often leaves the most vulnerable students worse off than before. In Part II, AlterNet looks at a more likely motivation for the “reforms”: Profit.

Studies shows that charter schools don’t typically outperform public schools and they often tend to increase racial and class segregation. So one must wonder, what exactly is motivating these school “reformers”? And why have they pushed for more and more closure — and new charter schools — at such an unprecedented rate in recent years?

Pro-charter supporters will tell you that it’s time for public institutions like our schools to start competing more like for-profit institutions. Test scores and high enrollment, then, define success. Unsuccessful schools, they say, should close just as unsuccessful businesses do. For neoliberal school reformers from today’s Arne Duncan-led Department of Education to scandal-ridden movement leader Michelle Rhee to billionaire Bill Gates, it is taken on faith that market principles are desirable in education.

But since it’s not clear that market principles are benefiting students on a large scale, it seems likely that something else is at stake. And reformers may be more than a little disingenuous in publicly ignoring that other, less high-minded thing: Profit. Critics of charter schools and school closings point out that proponents may not really be motivated by idealism, but by self-gain.

But who precisely is profiting? And how? Untangling answers to these questions is a more daunting task. Compared to public schools, charters schools are an extremely unregulated business. They contract with private companies to provide all kinds of services, from curriculum development to landscaping. Most of the regulations that bind charter schools are implemented at the state level. And unlike public institutions, the finances of charter schools are managed on a school-by-school basis. Because they are not consistently held accountable to the public for how they distribute funds, charter schools are often able to keep their business practices under wraps, and thus avoid too much scrutiny.

For an article of this scope, it’s impossible to describe the profit issue in anything approaching thorough and accurate generalization. Instead, we will look at a couple of decades-old federal incentives for charter investment that may have helped pave the way for the explosion of charter schools today, and provide some examples and snapshots of what is happening on the ground in those major cities where the charter school movement is most influential.

Hedge Fund Managers and Real Estate Developers

As AlterNet has previously reported, two little-understood policies helped pave the way for the kind of charter growth we are seeing today. One, called the New Markets Tax Credit (NMTC), began in 2000 at the end of President Bill Clinton’s administration. According to the Treasury Department, the credit combines:

…the private sector and the federal government—to bring economic and community development to low-income communities. From job creation to increased access to essential educational, health, and retail services, and from the rehabilitation of blighted communities to the development of renewable energy sources, NMTC projects have benefited neighborhoods throughout the country.

And what precisely is the NMTC doing to restore these so-called “blighted communities”? It’s providing hedge fund managers and wealthy real estate investors with opportunities to cash in on the charter school boom. The government frames it as a useful tool that builds communities up, operating on the assumption that charter schools provide some sort of de facto restoration. But as Part I demonstrated, they don’t.

But they do provide wealthy investors with a 39 percent tax credit that more than doubles returns on these investments within just seven years. As NY Daily News reporter Juan Gonzalez reported for Democracy Now!, “this is a tax credit on money that they’re lending, so they’re collecting interest on the loans, as well as getting the 39 percent tax credit.” And that’s not all. As Gonzalez explained, the federal government “piggyback[s] the tax credit on other kinds of federal tax credits, like historic preservation or job creation or Brownfield’s credits. The result is, you can put in $10 million and in seven years double your money.” So, if you put in a couple million dollars, you’ll have double that amount within just seven years.

Until recently, most of this money has been filtered through large non-profit organizations like the Gates Foundation, but it can also be done through for-profit companies. In order for donors to be eligible for the tax breaks, they must give to something classified as a Community Development Entity. The federal website explains this can be either a “domestic corporation or partnership.” And it must have “a primary mission of serving LICs [Low Income Communities].”

Maybe this helps explain why, in 2011, former tennis champion Andre Agassi helped set up a $500 million startup fund for his Canyon-Agassi Charter School Facilities Fund, the first for-profit organization of its kind. In addition to any profits to be made from this for-profit CDE, how much did Agassi himself contribute? How much will he see doubled on the taxpayers’ dime within about seven years? He’s never said. The credit may also explain why Facebook CEO Mark Zuckerberg donated $500 million in stocks to a variety of organizations that distribute charter school funding in 2012, or why he opened his own foundation, called Startup: Education, to build new charter schools.

Then there’s David Brain, head of large real-estate investment firm Entertainment Properties Trust, who appeared on CNBC in 2012 to tell audiences just how profitable charter school investment has become. He explained, “Well I think it’s a very stable business, very recession-resistant. It’s a very high-demand product.” Asked about the most profitable sector in real estate investment, Brain said, “Well, probably the charter school business. We said it’s our highest growth and most appealing sector right now of the portfolio. It’s the most high in demand, it’s the most recession-resistant. And a great opportunity set with 500 schools starting every year. It’s a two and a half billion dollar opportunity set in rough measure annually.”

Real-estate developers have a particularly interesting stake in the business of charter school development. Yes, they receive the standard huge tax breaks. But they can also help charter schools acquire properties in large cities like Philadelphia, Chicago or New York, where prices are high and there isn’t much room for new buildings. In places where acquiring space can involve fierce bidding wars and eminent domain conflicts, well-off real-estate developers profit from charter school growth since they will help new schools get established for a price. Eminent Properties Trust boasts, “Our investment portfolio of nearly $3 billion includes megaplex movie theatres and adjacent retail, public charter schools, and other destination recreational and specialty investments. This portfolio includes over 160 locations spread across 34 states with over 200 tenants.” When real estate developers acquire these charter school properties, they charge charter schools for rent payments, which are not price-capped.

Charter management group Charter Schools USA recommended that rental costs should not exceed 20 percent of a school’s budget, but a 2011 investigation by the Miami Heraldfound that 19 schools in Miami-Dade and Broward alone spent more than 20 percent of their budgets on rent; one in Miami Gardens 43 percent.

This can get especially egregious when the interests of real estate developers and charter management companies intertwine. When this happens, there is no check on escalating fees, as the management companies charged with governance and oversight are motivated to allow higher and higher rental fees. Again, according to theMiami Herald Report:

Many of the highest rents are charged by landlords with ties to the management companies running the schools, The Miami Herald found. At least 56 charter schools in Miami-Dade and Broward counties sit on land whose owners are tied to management companies, property records show.

For example, the Lincoln-Martí Charter School in Hialeah paid $744,000 in rent last year — about 25 percent of the school’s $3 million budget, even after the landlord reduced the rent by $153,000. The previous year, the school spent one-third of its income on rent, audit records show.

Records show the landlord, D.P. Real Estate Holdings, and the management company are run by the same man: former Miami-Dade School Board member Demetrio Perez Jr. Perez’s son, Demetrio J. Perez, works at the management company, which operates three Lincoln-Martí charter schools.

Real estate holders who acquire charter management firms in Florida and elsewhere are circulating money directly back into their own pockets.

Private Companies and the Lack of Accountability

But the involvement of large corporations goes well beyond the development of for-profit firms like the Canyon-Agassi Fund — or even non-profits with deep corporate interests like the Gates Foundation. Charter schools, unlike most traditional public schools, contract with for-profit companies for everything from curriculum development to construction. It is well-known that charter schools are big business, but it’s harder to pin down concrete numbers. When money leaves a donor’s pocket, it is usually funneled through a CDE, which isn’t required to release information about who its donors are, or how much they’re spending. From there, the CDE donates the money to charter management organizations. The endless cycle of shuffling funds works like money laundering. It functions to hide the original sources of funds. And it’s all legal.

Even though most of the details remain hidden, we do know that privatization in education is a lucrative business. In January, a firm called Capital Roundtable – which touts itself as “America’s leading conference company for the middle-market private equity community” – held a Master Class called “Private Equity Investing in For-Profit Education Companies.” The conference website noted, “For-profit education is one of the largest U.S. investment markets, currently topping $1.3 trillion in value.” The event was hosted by Harold Levy, a former chancellor of the New York City Schools System who promoted charter proliferation during his tenure. Now he manages Connecticut investment company Palm Ventures. One of the major focuses of the firm involves funneling individual investments into for-profit charter-school related companies. As a former finance lawyer for Citigroup, Kaplan and Saloman Brothers, Levy is quite the expert on getting rich this way.

Companies are not shy about promising huge returns on charter school investment. The difficulty lies in the fact that it’s harder to show just how much individual hedge funders and companies are profiting from the investments. There are very few accountability mechanisms, and it can be difficult for the public to protect the public from shoddy job performance.

Gary Moriello, an educator since 1970 and Chicago principal between 1987 and 2007, tells AlterNet of an alarming experience visiting a Chicago charter school in what he calls a “notorious housing project on the near North side.” The school occupied what looked on the outside like a nice, shiny new building, but it wasn’t really equipped to serve students properly. Why? The private company that had provided the construction had no real stake in serving students or making education better. Moriello remembers:

As soon as I went inside, I could see that it was built on the cheap. There was no gym; students just had to go outside throughout the winter. There was no lunchroom. Instead, tables were set up in a hallway, and lunches were brought in from outside the school.

It’s no surprise that for-profit companies, which are motivated solely by maximizing profit, might want to keep overhead costs as low as possible.

And even by the flimsy legal standards in place to protect the public against charter school industry corruption, charter schools across the nation are failing. They are mired in financial scandal—and have become synonymous in many districts for mismanagement. A frequently updated blog called by California-based researcher Sharron Higgins, called Charter School Scandals, provides a running tally of these scandals throughout the country, and they are vast. A quick perusal of the blog suggests that these scandals are happening over and over again, even if few mainstream media outlets are willing to connect the dots about what is going on.

Here are just a few examples of what seems to be a pretty large-scale problem:

In February 2012, an audit showed that Las Mantañas Charter School of Las Cruces New Mexico had over-estimated its actual 2011 assets, including land and large equipment. It must have taken heroic measures to over-estimate anything, since the school also under-reported assets like expensive equipment that cost up to $5,000. On top of this, the school was unable to account for almost $85,000 spent that fiscal year.

In March, Keystone Education Charter Center of Pittsburgh came under fire when the Pennsylvania State Ethics Commission found that a Mercer County charter school director was leasing properties to the schools with no management company approval.

Then, in April, Houston Gateway Academy was found charging illegal fees for student enrollment.

These are not isolated cases of cronyism, misjudgment, mismanagement or treating children unfairly for profit. Higgins’ website suggests that it’s happening over and over, week by week, in every region of the country where charter schools are operating. Chicago Teachers Union (CTU) researcher Sarah Hainds tells AlterNet that lack of transparency makes it hard to untangle all the corruption and mismanagement underway. She says it’s difficult provide a thorough analysis of the effects of public-private contracts in the Chicago area alone, and that it all comes into play in a complicated “web of construction contracts and testing contracts.”

In addition to the work of the Chicago Teachers Union, Hainds says several people are researching profiteering in charter schools, including multiple Chicago reporters, a coalition of more than 100 professors across 25 local universities, called Chicagoland Researchers and Advocates for Transformative Education or CREATE, and a local non-profit called the Better Government Association. She says,“Everyone is trying to figure this out. That’s how hard it is.”

One company that comes up over and over in discussions about charter education is K12 Inc. or more commonly referred to as simply K12. K12 is particularly influential in Chicago and Philadelphia charter schools, contracting with the school system to provide online schooling with links to the rightwing Christian homeschool movement.

K12 got off its feet under the leadership of Bill Bennett, the frequent CNN commentator and conservative Christian who once offered this crime reduction platform on his radio show: “[Y]ou could abort every black baby in this country, and your crime rate would go down.” Bennett had to resign from the company over this comment, but it’s not clear that his influence has waned. K12 notoriously treats creationism as legitimate science and the Bible as a useful history book. Other educators report racist language and glorification of the Confederacy — again, in a curriculum designed for school proliferation in inner cities.

And more than any other single company, K12 has provoked national outrage on both left and right for poor school performance and questionable financial practices. A 2011 report, for example, showed that K12 had been spending millions in taxpayer funding every year on private advertising rather than actual education. And strangely enough, they were marketing to the Christian homeschooling crowd, not the inner city children for whom these online charters are allegedly being set up. The company has stayed true to its roots, in any case; Bennett’s base has always been Christian homeschoolers, not actual public education.

Wealthy Foreign Nationals

But you don’t have to be a citizen, resident or domestic business executive to get a break from the federal government when you invest in charter schools. Since the Immigration Act of 1990, investors have had the opportunity to purchase visas for their families by investing in hotels, ski resorts and you guessed it — charter schools. It’s called the EB-5 visa for Immigrant Investors. That’s right, wealthy foreigners can contribute just $1 million toward urban charter school development — or $500,000 to a rural area or area with high unemployment — and get visas for the whole family.

For a piece of legislation that has been around for 23 years, EB-5 is not very well understood. Among people who do know about it, the popular perception is that it’s fairly new; even the headline of a 2012 Reuters article about the subject called it a “new U.S. visa rush,” even though there is nothing new about it. Its justification? Investors are “job creators” whose donations will ostensibly create a whole 10 new jobs with that $1 million. Every year, the federal government hands out 10,000 of these visas.

The perception that it’s new may have something to do with the fact that charter schools have proliferated quickly in the past 23 years. Though foreign nationals may have previously focused on, say, opening new ski resorts, charter school demand has risen in recent years, particularly since the 2008 financial crisis — and ensuing austerity — led policymakers to start looking for more private solutions to traditionally public institutions.

Last October, Reuters reported that:

Wealthy individuals from as far away as China, Nigeria, Russia and Australia are spending tens of millions of dollars to build classrooms, libraries, basketball courts and science labs for American charter schools…And Florida, state business development officials say foreign investment in charter schools is poised to triple next year [in 2013], to $90 million.

A total of 150 schools located in Texas, Ohio, Illinois and various urban inner cities are funded by Turkish investors affiliated with “followers of Fethullah Gülen, a charismatic Turkish preacher of a moderate brand of Islam whose devotees have built a worldwide religious, social and nationalistic movement in his name,” according to the New York Times. That means he’s been instrumental in creating the largest single charter school network in the entire country. And the New York Times doesn’t provide the whole story, but what Gülen claims on his own website. According to himself, Gülen is also a big proponent of interfaith dialogue and world peace. But any detailed reporting on him finds that his followers operate more like those of Lyndon LaRouche’s political cult than like actual proponents of interfaith dialogue, world peace or any other cause.

Even so, Gülen is championed in the world of corporate education reform. He’s even garnered accolades from Bill Clinton and Barack Obama. Maybe Gülen’s influence in charter school policy is in part what inspired Falun-Gong cult member Lotus King Weiss to try opening six charter schools in Manhattan’s Chinatown in April.

In any case, it doesn’t appear that Gülen’s schools have created the American jobs promised in the visa loophole. Instead, Turkish teachers and employees have been shipped to the United States to fill charter school jobs. Meanwhile, with each wave of school closings, schools lose hundreds of teachers, staff and administrators from these communities for good. Some get rehired in other schools, but many remain unemployed. Corruption in these schools has brought investigations into financial and hiring decisions. But all of this is immaterial to foreign investors with big money to spend. Even if they’re not getting the huge tax breaks afforded to residents of the U.S., America’s for-profit education industry is big business on an international scale. It’s no wonder that more and more people are adding education to their investment portfolios.

More Research Still Needed

Ultimately charter school profiteering happens in very different ways throughout the United States. It’s all under-regulated, but never in exactly the same way. In some states, charter authorization organizations must have non-profit status; they simply contract with for-profit entities. In others, private companies are free to set up charter schools. Some states have oversight in place that prevents the proliferation of the charter movement’s worst examples, like K12 cyber schools. In some school districts, there are many teacher-led charter schools that do have better records; these tend not to partner with huge companies or set up large charter organizations.

The geographical differences from place to place are so vast that it’s very hard to generalize. The details must be sorted out piece by piece, in a systematic way, by a well-funded organization with as much institutional support as CREDO if we’re ever to get a useful macro-study. For now, what we have is a growing body of snapshots that are beginning to suggest similar themes, like lost public accountability and corporate overreach.

But ultimately, we do know there isn’t much evidence that this corporate wealth ever trickles down in education — or that it creates jobs, revitalizes communities or saves education. Like every other business, profit is its endgame, and profit will always trump the interests of students, educators, parents and public good. Companies may have discovered something they call “corporate social responsibility” over the past decade, and for a time their interests sometimes match up with the good of most people. But this doesn’t last forever.

The scariest thing about charter schools is the lack of accountability. Over and over, the interests of profit are trumping the public good. The unregulated business model does not work for education. It works for profit, but as Part I showed, it disenfranchises vulnerable communities. And cities that have been in the school charterization business for a long time now, like Chicago, Philadelphia and New Orleans, should provide ample warning of what is to come in education if it continues to go in this direction. Governors set to aggressively step up charter school deregulation like North Carolina’s Pat McCrory should take heed. The barely regulated business of charter education is so corrupt that it’s hard to keep all the misdeeds hidden, even when you’re legally permitted to hide many of them.

We’ve all been fed the lie that this is about equality of opportunity and civil rights. But the more the charter school industry undermines equality and civil rights, the clearer it becomes that this was never about helping children in the first place.

WATCH Elizabeth Warren: Students Should Get ‘Same Deal’ On Interest Rates As Big Banks

Naima Ramos-Chapman, Campus Progress — Wed, 08 May 2013 15:42:00 -0700

"The federal government is going to charge students interest rates nine times higher than the rates they charge the biggest banks."

Sen. Elizabeth Warren introduced her first bill in the Senate today, the Bank on Students Loan Fairness Act, which would prevent Stafford loan interest rates from doubling this summer by dropping rates for one year from 3.4 percent to 0.75 percent, the rate at which the government loans money to big banks through the Federal Reserve discount window. If Congress fails to act by July 1 this year, interest rates on Stafford loans reserved for undergraduates will double from 3.4 percent to 6.8 percent.

Though the bill would only quash the hike for one year, Warren noted the short-term solution would allow lawmakers to shift focus to working on a long-term solutions to address the student debt crisis.

"The student debt problem in this country is a quite but a growing problem," said the Democratic senator from Massachusetts. "This will give them relief while giving Congress a chance to find a long-term solution. Doubling interest rates on new loans will just increase pressure on our young people. These young people didn't go to the mall and run up charges on a credit card. They worked hard; they stayed in class; they learned skills; and they borrowed what they needed to get an education."

Warren also proposed moral arguments as to why Congress should act to ensure American student loan borrowers get the "same deal" on loan interest rates as financial institutions do.

"The federal government is going to charge interest rates nine times higher than the rates they charge the biggest banks," she said. "The same banks that destroyed millions of jobs and nearly broke the economy. That isn't right. We shouldn't be profiting from our students who are drowning in debt while we're giving a great deal to the big banks."

"We should be investing in our young people so they can get good jobs and grow the economy," she said.

Last year, when rates on Stafford loans were also set to double, young people mobilized and averted the hike thanks to the successful #DontDoubleMyRate campaign.This year, Campus Progress, though it supports congressional action on preventing the rate hikes on Stafford loans, is also calling on congress to think of long-term solutions to the student debt problem facing 37 million Americans of all ages with the #ItsOurInterest campaign.

One way Congress could lessen the burden for millions of American student loan borrowers is to allow refinancing on their student loans. The idea is simple: By providing student loan borrowers the same benefits that mortgage and credit-card borrowers and even the government have enjoyed during the recession, we could lower monthly payments, give graduates a fair chance to actually pay off debts, and inject more money into our struggling economy.

"Allowing borrowers to refinance their student loans is a critical first step to solving the student debt crisis," Campus Progress' Director Anne Johnson said earlier this year, launching the It's Our Interest campaign. "As we start this new campaign, we call on the White House, Congress, and federal agencies to release their own proposals so we can make this happen and bring relief to millions of Americans and their families."

Why We Need A Moratorium On The High Stakes Of Common Core Testing

Jeff Bryant, Campaign for America's Future — Wed, 08 May 2013 15:20:00 -0700

When the entire existence of the school can hinge on test results, students are stressed and robbed of valuable instructional time.

By now it’s become clear to anyone willing to pay attention that our nation’s obsession over education standards and testing has gotten out of hand.

Ratcheting education standards ever higher at the same time we cut supports that schools and students need to reach those standards never made any sense to begin with. And the value placed on testingisn’t yielding the return promised in terms of significantly better results for children and improved evaluations of teachers and schools.

Nevertheless, new tests with even higher stakes are being rolled out across the country. The tests are purported to align to new curriculum standards called the Common Core that are strongly backed by the Obama administration and many education advocates from across the political spectrum.

But curriculum materials aligned to the new tests are generally not available for teachers, and educators complain they’ve not been trained in how to teach to the new standards.

In a moment of sanity last week, a leading proponent of the new standards-aligned tests, Randi Weingarten, leader of the American Federation of Teachers, defected from the run-up to implementation and called for a moratorium on the high stakes associated with the Common Core and its new tests.

“We aren’t saying students shouldn’t be assessed,” Weingarten declared. “We aren’t saying teachers shouldn’t be evaluated. We’re not saying that there shouldn’t be standardized tests. We’re talking about a moratorium on consequences in these transitional years.”

She called for an “implementation plan” with more time and input from frontline teachers and “field testing” of the new tests to gather data on the results without punitive “high-stakes” consequences attached.

AFT’s stand quickly got the approval of The Nation’s Katrina vanden Huevel who wrote for The Washington Post, “In today’s high-stakes climate, families have come to dread the endless parade of bubble sheets that now dominate their kids’ lives. Many feel that the emphasis on standardized tests has focused instruction on how to answer multiple-choice questions instead of how to reason and think critically.”

Of course, we all remember taking tests during our school years. And education standards for public schools are nothing new – most states have had them for years.

But testing today is different. Teachers’ and principals’ jobs – indeed the entire existence of the school – can hinge on the results, creating a super-charged atmosphere for the students that stresses them and robs them of valuable instructional time.

Testing and standards have their place for sure, but current education policies have crossed a line and given standards and testing more emphasis than they deserve at the expense of other important initiatives.

Test Obsession Runs Wild

If you hadn’t noticed that America’s obsession with testing students has gotten out of hand, maybe this will get your attention.

Last week, a CBS outlet in upstate New York reported that a “4th grader, hooked to medical machines and IV’s, undergoing pre-brain surgery screening was asked to take a New York State test from his hospital bed.”

The boy has “life-threatening epilepsy” and, according to his mom, was “hooked up to an EEG . . . an IV in his hand and he’s wearing a pulse oximeter in case something happens with his oxygen levels.” Nevertheless, a teacher was dispatched by the state to administer the test.

New York State’s test obsession was perhaps an attempt to outdo Florida where, last month, a local reporter in that state noticed that the state was determined to get a test score from a 9-year-old boy who “has never attended school . . . . was born premature at four pounds with only a brain stem and can’t speak or see.”

In an update of this story, Valerie Strauss reported from her blog at The Washington Post that the boy indeed was made to complete the test, “meaning that a state employee sat down and read it to him, as if he could actually understand it.”

If these stories seem to be just extreme examples, not at all representative of what states are doing to emphasize the tests, then why does at least one state have a protocol for what to do when students vomit on the test? Astonishingly, should the student be judged capable of resuming the test, the procedure is to “give their testing materials back to them to continue testing” – and if not, “secure the testing materials in a plastic bag.”

Elementary school teacher Dan Brown reported at The Huffington Post that test-security procedures at his school caused a student to wet himself during the test. “Several students in my class, as well as others around the school, vomited on the day of the test. One boy, Dennis, could not stop shaking,” Brown wrote.

A running commentary from New York teachers who recently administered the new English Language Arts tests has been posted online, which conveys a consensus view that the exams were too long, students didn’t have enough time, students were visibly stressed during the tests, and test questions did not reflect what teachers had taught.

As students stress out about the emphasis placed on the tests, they’re also being robbed of valuable instructional time. In addition to the hours and hours of test prep teachers increasingly conduct, schools also devote more time to motivating students to do well on the tests. In Washington, D.C., “school staff stage academic pep rallies, produce rap videos and raffle off prizes,” The Washington Post reported.

The same sorts of elaborate motivational strategies to psych students up for tests have been reported in Pennsylvania, New York, New Jersey, Texas and Florida.

Now, connecting these tests to new nationwide standards has the potential to make the stakes even higher.

Does Common Core Make Things Worse?

The fact that the new tests are aligned to the Common Core has gotten many people particularly riled. As The Wall Street Journalrecently reported, “the Common Core effort is under attack” from political factions of all kinds – especially conservative Republicans.

Journal reporter Stephanie Bachero noted, “Indiana’s Republican-controlled legislature . . . legislatures in Michigan, Alabama and several other states . . . and the Republican National Committee” have all sought measures to curb funding and implementation of the new standards.

The supposed advantages of the standards were summed up by a reporter in The Washington Post, who wrote, “The standards are designed to ensure that, for the first time, third-graders in Maine will acquire the same knowledge and skills as their peers in Hawaii. Once states begin testing against the new standards, it will be possible for the first time to compare test scores across communities and states.”

But the transition from “theory to reality,” the Post reporter noted, is what’s bringing out the “critics.”

At FairTest.org, the website for The National Center for Fair and Open Testing, there is an ongoing tallynews of “Testing Resistance & Reform News” related to the tests, including parents opting out their students from the tests, teachers refusing to give the tests, students walking out of school in protest of the tests, and pundits and leaders of all stripes raising objections.

The fact that some of the voices protesting Common Core and its related testing can at times sound extremist – that the standards teach “communism is good,” for instance – should not be a rationale to dismiss reasonable objections to the standards and the tests.

Education journalist Sam Chaltain observed that there is a “growing willingness to publicly acknowledge . . . that tests do not align well with the latest research into how people learn; that they prevent adults from measuring higher-level thinking in children; and, most importantly, that there are better ways to evaluate student learning and growth.”

Chaltain singled out “mini-rebellions” against testing around the country including a Montgomery County Maryland superintendent who has called teacher evaluations based on test scores “insanity,” teachers in Seattle who have boycotted the tests, and legislation in Texas to reduce testing.

Chaltain looked at “specific and realistic alternatives” to the current thinking, but these alternatives simply won’t do for those bent on “education reform.”

The Status Quo Objects

Many who were quickest to object to AFT’s moratorium resorted to conventional wisdom that has ruled education policy for nearly 20 years.

These views tend to be grounded in deep suspicion that teachers will only do the “hard work” when they are “held accountable.” What the status quo crowd wants for teachers to be “accountable” to, of course, is test scores – the very thing being over-emphasized by the current policies.

An even stranger argument is to object to the AFT moratorium based on the timeline benchmark used to implement failed NCLB policies – hardly a yardstick worth measuring up to – and the fact that a lot of time and money has already been invested in these Common Core tests, which is again, not a persuasive call for more time and money.

However, the real danger to the standards and testing regime is not that they “won’t work.” As the Shanker Institute’s Matt DiCarlo recently observed, a far more dangerous outcome is that they will.

“We most certainly should hold schools accountable for their results, and there are, at least at the moment, relatively few feasible alternatives to standardized tests,” DiCarlo wrote.

But, Di Carlo cautioned, “Educational outcomes, such as graduation and test scores, are signals of or proxies for the traits that lead to success in life, not the cause of that success.” (emphasis original)

What our current emphasis on standards and testing is doing is to “mold policy such that livelihoods depend on increasing scores” rather than molding it to what really matters: the teaching and learning of “skills – including the critical non-cognitive sort –” that are critical to success in work and in life. (again, emphasis original)

“I’m troubled,” DiCarlo concluded, “by the possibility that, if we don’t pull back the reins, this research may eventually show that we pushed the pendulum to its ultimate breaking point and structured a huge portion of our education system around measures that were only useful in the first place because we didn’t use them so much.”

That outcome would be terrible for education and the wellbeing of children. But it’s what’s becoming the norm in education policy today.

Time For A Pause

What should be noted is that most teachers actually see some reason to proceed with implementing of the Common Core, according to a survey of the AFT membership.

Indeed, in a recent editorial in the education trade newspaper Education Week, a classroom teacher defended the standards, saying, “The common core can be an opportunity to shift the work of learning from our own backs onto the shoulders of our students, where it belongs – and that’s the heart of progressive education.”

But at a time when our education system is being so starved of the resources it needs, should we be funneling ever more cash toward a “pig in a poke” like standards-based testing while research-proven remedies such asearly childhood education continue to go unfunded?

Even the most ardent devotees to the standards and testing regime should be convinced of the need to pause and reflect on what kind of results this “movement” has wrought, consider why no other country in the world is hurtling down this path, examine the evidence with the skepticism it deserves, and, yes, support a moratorium.

How 'The Economist' Got it Wrong — America Still Needs Affirmative Action

Sean McElwee, AlterNet — Wed, 08 May 2013 12:08:00 -0700

With the Supreme Court considering taking up affirmative action, The Economist’s cover story last week erroneously argues that it's time for an end to the policy.

With the Supreme Court considering Schuette v. Coalition to Defend Affirmative Action, affirmative action has entered into the public eye again. Notably, TheEconomist’s cover story last week argues that its time for an end to affirmative action because:

Before the 1960s, when the foundations of affirmative action were first laid down, most blacks were poor, few served in public office and almost none were to be found flourishing at the nation’s top universities, corporations, law firms and banks. None of that is true today.

But is it really time to get rid of affirmative action? There are two arguments for affirmative action: first that diversity in education is good for students (there is solid research backing up this assertion, which The Economist recognizes) and second that the obstacles an African-American student has to overcome just to apply to college merits a leg up.

Since The Economistconcedes the first point (arguing that while diversity is good, we can achieve it without affirmative action), the second argument is the one they primarily attack. And yet it couldn’t come at a worse time. The wealth gap between whites and blacks has grown, in fact, it has tripled. The study by Thomas Shapiro, Tatjana Meshede and Sam Orso find that a college education is a huge driver of that gap. A study by Martha J. Bailey finds that the college entry gap between the rich and poor has widened drastically over the past 40 years, driven largely by inequality.

The truth is, African-Americans aren’t flourishing in public office. There are only two African-American senators (and there has only ever been one black senator in the south, and he was appointed, not elected). There is currently only one black governor and there have been few in the last 100 years. Much of President Obama’s cabinet isconspicuously white and male. The truth is that blacks are drastically underrepresented in the political sphere. There have only been 13 black CEOs of a Fortune 500 company. Ever. Another study finds that a mere 14 percent of college presidents are minority.

African Americans still deal with the legacy of racism and oppression. Many blacks alive today can remember redlining, and lack of a home is still a major driver of black poverty. The average inheritance of a black baby boomer is $8,000 while the average inheritance of a white baby boomer is $65,000. Elementary and high schools are still highly segregated and schools with high minority populations are underfunded. In these circumstances, affirmative action is not an unfair boost, it is rather an equalizer. Students who grow up in poverty, attend an underfunded and understaffed school, who don’t get preschool or summer school and still manage to score close to pampered child in public school certainly deserve aid.

The Economist believes that with the abolition of affirmative action, we’ll have more meritocracy. But that’s unlikely. Martha Bailey (cited above) finds that the main reason for the college entry gap between rich and poor is not due to cognitive ability, but rather poverty, “Even among those who had the same measured cognitive skills as teenagers, inequality in college entry and completion across income groups is greater today than it was two decades ago.”

But does affirmative action help? The Economist cites the research of Richard Sander extensively. Sander published a study in 2004 that found that black students who were accepted into school because of affirmative action failed to obtain a degree and therefore there should be less affirmative action. Odd that The Economist doesn’t even consider a critique of that study, published later that year by David L. Chambers, Timothy T. Clydesdale, William C. Kidder, and Richard O. Lempert. Chambers et al found that:

Out analyses of both the NSLSP [National Survey of Law School Performance] and BPS [Bar Passage Study] thus reveal that Sander is wrong when he concludes that the current lower performance by African Americans in law school is ‘a simple and direct consequence of the disparity in entering credentials between blacks and whites.’ It is not.

They find that without affirmative action, “both the enrollment of African American law students (particularly at the fifty or eighty most selective schools) and the production of African American lawyers would significantly decline.” The same thing is likely to happen in other colleges. Without affirmative action, the already dismal numbers for African-Americans entering and graduating college may decline even further. Someday we’ll be at a point where we can end affirmative action. The Economist(and much of the Supreme Court) is jumping the gun.

"Issue Ad" Scam By Right-Wing Education Group Uncovered in Wisconsin

Brendan Fischer, PR Watch — Wed, 08 May 2013 07:57:00 -0700

American Federation for Children deceived public about how much they were spending to sway elections.

Dark money nonprofits spent hundreds of millions in the 2012 elections, but reported only a fraction of that thanks to an "issue advocacy" loophole that requires only limited disclosure for ads that don't explicitly urge viewers to vote for or against a candidate. Federal and state elections officials have rarely probed whether a group's so-called "issue ads" are really intended to influence elections -- but in Wisconsin, a politically-active nonprofit exposed its issue ad charade on its own.

Group Gave Contradictory Messages to Elections Board and Funders

The American Federation for Children, a 501(c)(4) nonprofit organization that supports school privatization through "vouchers" and other programs, told Wisconsin's elections board it spent only $345,000 on state legislative races in 2012. Like many nonprofit groups active in the 2012 elections, the actual total spent around the elections was much higher, but it was never disclosed publicly because AFC claimed the spending was about "issues" rather than supporting or opposing a particular candidate.

AFC sang a different tune for funders.

In a document titled "2012 Election Impact Report" obtained by Dan Bice of the Milwaukee Journal-Sentinel, AFC boasted that it spent $2.4 million in Wisconsin helping elect nine pro-privatization legislators to office. The disparity between what was reported and actually spent is likely attributable to the "issue advocacy" loophole. And most importantly, voters never knew who actually provided the funding for the ads.

“This episode exposes what a hoax this ‘issue ad’ charade really is,” said Mike McCabe, director of the Wisconsin Democracy Campaign, which filed a complaint with Wisconsin's Government Accountability Board about the undisclosed spending.

“They told their funders one thing and state election authorities a totally different story about what all this spending was for,” McCabe said.

Will Elections Board Investigate "Issue Ad" Scam?

Under Wisconsin law, which tracks federal election rules, reporting and disclosure requirements are only triggered when an ad explicitly calls for the defeat or election of a candidate, or when it is "susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate." Many organizations in Wisconsin and nationally have skirted disclosure requirements by running "issue ads" that don't fall under this rubric, and claiming with a wink-and-a-nod that their ads are not intended to influence elections -- and the state elections board has not questioned these often dubious assertions.

Nationally, as the Center for Media and Democracy and U.S. PIRG Education Fund documented in the report Elections Confidential, dark money nonprofits that do not disclose their donors reported spending around $300 million on the 2012 elections, but the actual total was certainly much higher because of the "issue ad" loophole; there has been limited scrutiny of this secret spending by federal authorities.

But AFC might come under closer scrutiny from Wisconsin's elections board since it admitted that all of its spending, including its "issue ads," was intended to influence Wisconsin elections.

It appears AFC is planning to put up a fight. The group is represented by election lawyer Jim Bopp, an activist attorney who has worked for years to strike down clean election laws and who was the chief architect behind the controversial 2010 Citizens United case. Bopp also represented Wisconsin Supreme Court Justice Michael Gableman in 2008 when he was facing ethics charges before the state Judicial Commission over deceptive ads run against his opponent, which Bopp framed as an issue of "free speech."

"The American Federation of Children Got Exactly What They Wanted"

AFC has long been promoting school privatization in Wisconsin, and this year stands to make significant gains: Governor Scott Walker has added a variety of non-fiscal items to the budget, including an expansion of the voucher program that sends taxpayer dollars to private schools, and provides taxpayer-funded vouchers for all students with disabilities, and creates a state commission to authorize charter schools over the objections of local school districts. The proposals track American Legislative Exchange Council (ALEC) model legislation.

As part of the $2.4 million spent electing Wisconsin legislators, AFC's "2012 Election Impact Report" shows the group spent more than $325,000 to help elect freshman Republican Rick Gudex to the state Senate, who won by less than 600 votes. But the group told the elections board it spent only $145,000 on the Gudex race.

AFC got what it paid for: Sen. Gudex is one of three state Senators who have pledged to vote against any budget bill that does not expand the state's "voucher" program that uses taxpayer dollars to send kids to private schools.

"The American Federation of Children got exactly what they wanted," McCabe said. "They want legislators who will go to the mat and make expanding the voucher program the bottom line."

The group was organized and is funded by the billionaire DeVos family -- heirs to the Amway fortune -- and its chief lobbyist is disgraced former Wisconsin Assembly Speaker Scott Jensen, who was convicted of three felonies for misuse of his office for political purposes and banned from the state Capitol for five years (though the charges were later reversed and dropped as part of a plea agreement).*

In the 2012 gubernatorial recall race, American Federation for Children was one of Governor Scott Walker's top PAC supporters, reporting $1.1 million in expenditures on his behalf. They also reported spending $1.3 million helping GOP Senators facing recall in 2011. It is not known whether additional spending was not disclosed.

* Correction May 9: The article originally stated, erroneously, that Scott Jensen's three felony charges and statehouse ban were "reduced" on appeal, but those charges were dropped as part of a plea agreement, after an eight-year long legal battle, where Jensen pleaded no contest to a misdemeanor ethics charge. We regret the error.

AlterNet.org: Education

Arresting a Teen Girl for Dozing Off in Class? Why Normal Kid Behavior Is Treated As a Crime or Psychiatric Disorder

Related Stories

Inside the Cooper Union Occupation’s First Hours

Related Stories

A Handy Reference Guide on Who is Donating to Corporate-Style Education Reform

Related Stories

College Execs have Private Jets? New Report Finds Public University Presidents Live Large

Related Stories

The 182 Percent Loan? How Installment Lenders Trap Borrowers

The Starter Loan

'Real Gibberish'

'It's All About Keeping Them'

A Decade of Debt

'Chasing' Customers

Garnishing Wages

Related Stories

Five Things College Students Should Worry About Next Fall

Related Stories

Public School Cancels Graduation Rather Than Remove Prayer From Ceremony

Related Stories

Mad Science or School-to-Prison? Criminalizing Black Girls

Related Stories

Punishing Students For Not Making Eye Contact? How Charter Schools' Prejudiced Policies Undermine Equality

Related Stories

Who Is Profiting From Charters? The Big Bucks Behind Charter School Secrecy, Financial Scandal and Corruption

Related Stories

WATCH Elizabeth Warren: Students Should Get ‘Same Deal’ On Interest Rates As Big Banks

Related Stories

Why We Need A Moratorium On The High Stakes Of Common Core Testing

Related Stories

How 'The Economist' Got it Wrong — America Still Needs Affirmative Action

Related Stories

"Issue Ad" Scam By Right-Wing Education Group Uncovered in Wisconsin

Related Stories