ECM Post Review - No new student loans

No new student loans

TO THE EDITOR:

The primary financial backer and genius behind the Minnesota Tax Payers League and “No New Tax” pledge, William Cooper CEO of TCF bank, has decided his bank will no longer participate in the federal student financial aid loan program.

In its “No New Student Loan” pledge, Minnesota’s largest hometown bank will no longer support the educational aspirations of thousands of Minnesota families. Financial aid offices across the state are scrambling to find money for this year’s graduating seniors.

The hypocrisy and what lies beyond the Class of ’08 should concern us all. If banks can opt out of the federally insured program; how will Minnesota’s families pay for college? How will Minnesota remain competitive? Where is corporate responsibility?

Under the thinly veiled guise of “helping hard working Minnesotans”, Mr. Cooper and his Tax Payers League work to serve their own financial interests - period.

When Mr. Cooper isn’t wasting tax payer money suing Minnetonka police to weasel out of a snowmobiling fine or Minnetonka Water District for allowing tour boats too close to his multi-million dollar mansion, he’s in the office of Governor Pawlenty finding ways to reduce his taxes – not yours.

My Swedish grandfather was always suspicious of offers for anything “free”. And there is still a lesson in that for all of us today.

Santa Claus, the Tooth Fairy and the Easter Bunny are not about to fix our roads. And people like William Cooper and the Tax Payers League really don’t care.

Wade Vitalis
Shafer

Comments (2) add comment

Taxpayer: ...

Hi Mr. Vitalis,

Someone is going to need to tell Mr. Robert Walz of North Branch that his standing as “Most Prolific Letter to the Editor Writer in Chisago County” may be in jeopardy.

I was not familiar with the issue you were concerned about here so I had to go looking for some information. I found an article in the Pioneer Press that discusses this at the following link : http://www.twincities.com/ci_8...st_emailed

Even though the majority of your letter is devoted to disparaging Bill Cooper, TCF and the Tax Payers League, the pretext that you use for this is your concern about TCF’s decision to not participate in Federal Family Education Loan Program. According to the article “The College Cost Reduction and Access Act that became effective Oct. 1 reduced the insurance the federal government pays to lenders on defaulted loans, increased the loan fee lenders pay to the federal government and reduced subsidies for lenders.” It would seem that Government action at least in part is the impetus for TCF exiting this program.

Your response to this? “If banks can opt out of the federally insured program; how will Minnesota’s families pay for college? How will Minnesota remain competitive? Where is corporate responsibility? “ So are you saying that banks should NOT be ALLOWED to opt out of the program? Banks should be required by law to make these loans under what apparently are not very good terms? In ten years when we have all these former students and parents of students saddled with 10’s of thousands of dollars worth of the student loans that they can’t make payments on I’ve little doubt that we’ll be reading letters to the editor from you or others decrying the predatory student lending practices of TCF and how irresponsible and greedy they were to lend all that money to people with no income and no collateral.

I came across an interesting table on the MN Office of Higher Education web site: http://www.ohe.state.mn.us/tPg...83b1925b6a

According to this table the cost of tuition and fees at the U of M has risen 1,739% since 1971, and 312% since 1988 (the last time the gas tax was increased). In the immortal words of Mr. Walz – “this is highway robbery” (albeit he was talking about gas prices). Even in inflation adjusted dollars tuition expense at the U is up 250% from 1971 and 135% since 1988. During this same time period, Minnesota’s per capita Personal Income is growing at roughly half the rate of tuition expense and so our students and parents continue to lose ground.

Perhaps your ire might be better directed at our public colleges and universities here in Minnesota and their spending practices rather than TCF’s lending practices. Perhaps you should be writing letters insisting that our Universities and colleges start focusing on educating Minnesota’s students for a fair price rather than focusing on their own resume’s and building monuments to themselves.

The root problem here is not that banks aren’t lending students enough money nor is it that there aren’t enough federal and state grants. The problem is that our public universities spend far too much money on things that do not benefit many of their students and in fact are detrimental to most because the resulting increases in tuition expense have become prohibitive.

March 27, 2008

wade vitalis: ...

Yes - tuition has increased. And "yes" it is becoming increasingly more difficult for families like yours and mine to plan for education expenses. We agree on that 100%.

A significant portion of the increase in tuition has been cuts to higher education from the State of Minnesota. Research, which is at the heart of the U of M, costs more each year - not less. The economic benefit to the state from the fruits of this research is enormous.

Each year facilities get older; techonlogy speeds up and class sizes grow. Add in inflation and it's hard to imagine higher education ever becoming less expensive.

But where some see it as merely an expense to be reduced, others see it as an investment to be preserved because of the benefit to our economy, our families and the region.

Who benefits most from higher education? First, the student - and close second the business community who needs the brightest and best to run their companies.

I would argue if businesses had to pay for the cost of the education their employees have coming into the job, they'd lose money - big time. Not to mention the publically funded research! But they don't pay those expenses. Families bear that cost along with tax payers.

Which brings me back, I know you've heard this before, to tax incidence and who pays how much of the tax burden in the State of Minnesota.

As I demonstrated in my comments addressed in responding to your questions under Bob Barrets letter (plase take time to read those - I commented again with some links and facts for you)you and I pay 11.9% in taxes while those earning $350,000 or more pay 8.3%.

The link also shows per capita taxes dropping th past 4 years and a 2005 Finance report stating middle and lower deciles will see their tax liability increase (us), while the higher deciles (rich) will see their tax liability drop. The tax reductions we've had in Minneosta have benefited the rich in this State - not you and I.

Which leads me to the point that we have less money for higher education. And loans will be even more inportant. And TCF, whose CEO championed the tax reductions and who benefits the most as a millionaire, now feels no obligation to support the hard working families of Minnesota.

That just seems wrong to me. TCF, for $32 million got naming rights to the new U of M Stadium. The value of that purchase is tremendous. And you and I as taxpayers will pay way more than that to build the stadium.

In addition TCF has received exclusive right to all ATM's on campus. This company of William Cooper's, a good friend and supporter of Governor Pawelnty, will take the college students money but not give them a loan?

It couldn't be more text book greed. And I, for one, think it is patently wrong and morally repugnant for TCF and William Cooper to have their cake and eat it too while you and I struggle with taxes.

It's about fairness. It's about there being "no free lunch" for anyone. It's about being responsible coporate partners with the community it serves.

That was my point.

Thanks for reading - goin' to church to pray for patience and understanding.

God knows I need it!

Wade

March 30, 2008

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