Work Hard, Study Hard and Still Get Left Behind

The American Dream mythology says that if you work hard and play by the rules you can be a success. This mythology ignores the fact that people born into affluent families have a far greater chance of attaining financial success than people born into lower income families precisely because of all the advantages and privileges that come with affluence. Those who rise out of poverty and achieve the American Dream are extremely rare and the exception to the rule.

A new study, “Working Hard, Left Behind,” by the Campaign for College Opportunity, found that over 33% of California families are low income (earning less than $45,397 for a family of four) despite their hard work. The state currently ranks #1 in the nation in the number of working poor families. The solution, the Los Angeles Times argues, is higher education. Since Californians with Bachelor’s degrees earn $1,340,000 more in their lifetimes than those with only high school diplomas, making everyone go to college would necessarily solve the problem, right?

According to the Times, the study found that “higher education is a proven pathway from poverty to prosperity for working Californians.” However, in science we generally require a high level of evidence before we can say we have proof and the evidence simply isn’t there to say that higher education is a “proven pathway to prosperity.” Consider all the unemployed people with higher degrees.

Both the Times, and apparently the researchers at the Campaign for College Opportunity, have confused correlation with causation. Yes, people with college degrees do tend to earn more than those who lack them, but that doesn’t mean that the degree is the cause of their financial success. Affluence increases the chances that a person will do well in grades K-12, increasing the chances of getting into a four-year college and succeeding there, as well. While college achievement does indeed correlate with future financial success, affluence correlates with both academic success and financial success. Thus, it is entirely possible, indeed likely, that familial wealth is the cause of future financial success, in part because it increases the chances of academic success.

The conflation of correlation with causation has led the Times and the Campaign for College Opportunity to some absurd policy prescriptions, like proposal that we increase enrollment of low income adults in colleges, while doing nothing to directly address their poverty. Of course it would be wonderful if the state were to increase funding for its universities and community colleges and provide the financial aid so that every adult in the state could attend college, or even just provide childcare for single mothers, but this would not solve the problem for several obvious reasons. Many low income adults lack the prerequisite skills to succeed in college, including literacy, self-confidence, and study skills. Indeed, many have the equivalent of an elementary school reading level or a long history of academic failure. Many are working full time to support their families and simply lack the time and energy to complete college classes on the side.

Considering that a wealth-based achievement gap exists by the time children are three (and it tends to grow as children move through the education system), it would be a lot more efficient to invest in programs that reduce poverty and material insecurity for families, that encourage parents to read and play with their children, that improve perinatal and children’s health, as well as preschool programs that prepare kids for kindergarten. This would front load the system by increasing the number of people graduating high school with the skills to succeed in college.

However, there is another problem with the Time’s and the Campaign’s reasoning: Even if everyone graduated from college there would continue to be a significant wealth gap. Want and privation are products of wealth and privilege, which in turn are products of an economic system based on exploitation. So long as there is an employing class that pays its employees only a fraction of the value of the goods and services they produce, pocketing the rest as profits, there will continue to be poverty. Likewise, as long as workers accept their dependence on employers, especially without a fight, there will continue to be a downward spiral in wages for everyone, including the college educated. Consider, for example, how much the average middle class, college educated family has lost in personal wealth over the past five years, or the overall decline in living standards that has been occurring since the 1970s for all but the richest Americans.

Debit Card Financial Aid Scam Hits Thousands of California Students

Huck/Konopacki Labor Cartoons

Close to half of California’s community colleges and numerous other colleges and universities are now disbursing financial aid through debit cards contracted through Higher One, the Bay Citizen reports. According to the U.S. PIRG Education Fund, Higher One is the largest player of its kind in the U.S., with 520 partner campuses, enrolling over 4.3 million students nationwide.

Not only do students have to pay fees in order to access their financial aid, but Higher One has been accused of charging multiple fees, aggressively marketing their products and violating customers’ privacy. Earlier in the year, Ventura College student Sherry McFall filed a class-action lawsuit against Higher One, accusing them of creating bank accounts for students without their consent. The suit also claimed they improperly disclosed fees.

Traditionally, students would receive a financial aid check which they would deposit in their bank. They could then write checks against those funds or withdraw cash, as needed, to pay for food, rent, books or other expenses.

With the Higher One debit cards, students can still do this, but only after transferring the funds to another bank account. It is much easier to simply use the card as a debit card, which many do, especially after being bombarded with advertisements from the company telling them this is the fastest and easiest way to access their money.

Once they start using their cards, Higher One has numerous ways to skim off portions of their financial aid. For example, there are several fees that are charged upon activation of the card, as well as 50 cent transaction fees each time the card is used to make a purchase, according to the Bay Citizen report. Furthermore, if students use an ATM that does not belong to Higher One, they also get charged $2.50 by Higher One, plus whatever fees are charged by the ATM. And if they do not use their account for six months of longer, they are assessed a $10 month fee.

While Higher One says it will vigorously fight the lawsuit, it admits in its own annual report that persuading students to activate a Higher One account is part of its sales efforts. Furthermore, in an interview in the New Haven (Conn.) Independent, Higher One President, Miles Lasater, said that half of its revenues ($88 million in 2011) come from additional fees.

Education Cops Rough Up Black Man for Wife’s Student Loan Default

Thanks to Angus Johnston, of Student Activism blog, for finding this one.

Kenneth Wright, who lives in Stockton, California, said that federal agents sent by the Department of Education (DOE) busted down his door without warning Tuesday morning, and left him for more than six hours handcuffed him in the back of a police car. He says it was all because his estranged wife defaulted on her student loans. Acting on orders of the DOE, a SWAT team broke into his home at 6 am and roughed him up before arresting him. (You can see video footage here).

The feds deny that the raid was about a student loan default, but a spokesperson from the department’s Office of the Inspector General said that they “conduct about 30-35 search warrants a year on issues such as bribery, fraud, and embezzlement of federal student aid funds.”  They also said that it was federal agents, not a local SWAT team, who arrested Wright.

Embezzling student aid funds sounds an awful lot like defaulting on them, but with the implication that she was a crook and did it on purpose. Is this the fed’s new way to criminalize poor people who try to go to college? When Wright went to the Stockton police to complain, they showed him a search warrant from the DOE stating that he (or his wife) owed on a student loan.

Regardless of his wife’s actual or perceived crimes, she was not there and he had nothing to do with the matter. Yet he was grabbed by the neck by the SWAT team, handcuffed and dragged out to a police car in his skivvies, all in front of his three children. His small children were detained for 2 hours.