Mojo - December 2010

For-Profit College Loan Fail

| Wed Dec. 22, 2010 11:29 AM EST

Here's a shocking new statistic that puts the ongoing regulatory battle between for-profit colleges—the University of Phoenix, Kaplan University, and so on—and the Department of Education into context.

According to new data from the DoE released on Wednesday, 46.3 percent of all loan money lent to students at two- and four-year for-profit colleges in 2008 would eventually go into default. By comparison, the overall default rate in 2008—lumping together loan money given out to students at community colleges, for-profits, and traditional undergraduate and graduate schools—was only 15.8 percent. You know something's wrong when the for-profit default rate, dollar per dollar, is nearly three times higher than the rest of academia.

And 2008 is no anomaly, either. Looking at the graph below, you can see that, since 2004, the for-profit college default rate has always exceeded all other colleges by a healthy margin.


From the Department of Education.

So what does this mean? It certainly gives the DoE more ammunition to defend its proposed "gainful employment" regulations, a crackdown the for-profit industry has fought tooth and nail. The DoE's regulations would mandate that for-profit college graduates earn enough to repay their federal loans, or else the schools could lose access to federal loan funding. That would be a serious blow to much of the industry, which relies on such funds to survive. Most colleges receive 75 percent of more of their revenue in federal loan funding; at others, like the University of Phoenix's parent company, Apollo Group, federal dollars comprise upwards of 90 percent of the revenue. (The legal limit is exactly 90 percent.)

But if more than four in 10 students at for-profit colleges default on their federal loans each year, how well is that government money being spent? That's the question the Education Department has been asking for quite some time. It's unclear when the department will fully implement its gainful employment rules, but with statistics like these, it's hard to see why the department shouldn't crack down on for-profit colleges.

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We're Still at War: Photo of the Day for December 22, 2010

Wed Dec. 22, 2010 6:30 AM EST

U.S. Army Pfc. Carlos Ortiz stands guard while engineers from the Zabul Provincial Reconstruction Team (PRT) show contractors a proposed bridge erosion control site near Qalat, Afghanistan, Dec. 13, 2010. Zabul PRT is comprised of Air Force, Army, U.S. Department of State, U.S. Agency for International Development and U.S. Department of Agriculture personnel who worked with the government of Afghanistan to improve governance, stability and development throughout the province. (DoD photo by 1st Lt. Brian Wagner, U.S. Air Force/Released)

Corn on "Hardball": Mitch McConnell's Monumental Obstructionism

Wed Dec. 22, 2010 3:14 AM EST

David Corn and Jonathan Allen joined Chris Matthews on MSNBC's Hardball to discuss the complete obstructionism and partisanship of Mitch McConnell and the GOP.

David Corn is Mother Jones' Washington bureau chief. For more of his stories, click here. He's also on Twitter.

Virginia's Anti-Gay-Troops Lawmaker Speaks (VIDEO)

| Tue Dec. 21, 2010 3:31 PM EST

Yesterday, we brought you news of Virginia state Delegate Bob Marshall and his plan to keep gays out of the state's National Guard, no matter what the Union federal government says about Don't Ask, Don't Tell. Marshall declined to return a call to his cell phone by Mother Jones, but he was happy to expand on his beliefs for DC television station WUSA. Video's below, but here are the money quotes (h/t Washington Post). Open mouth, insert foot. But not in a gay way!:

  • "If I needed a blood transfusion and the guy next to me had committed sodomy 14 times in the last month, I'd be worried."
  • "It's a distraction when I'm on the battlefield and have to concentrate on the enemy 600 yards away and I'm worried about this guy who's got eyes on me."

[NOTE: Marshall has never been on a battlefield. Though in his youth he did take combative positions on incest and staffing the military ranks. And in the interceding years, he's become something of an expert on power lines.]

For his part, Virginia Gov. Bob McDonnell—who someday might like to be president of the entire United States, not just commander in chief of the Army of the Potomac—told listeners to his monthly radio show that he wasn't supporting this particular Marshall plan:

We can't have two different systems in the federal and National Guard...Whatever the final guidelines of the Department of Defense I would expect the National Guard bureau in Virginia to adhere to those rules so we would have one set of rules for the entire military.

There's a new battle of Richmond brewing! And this time it feels as if, no matter who wins, the South is definitely losing.

DC Ticker on ABC News: Lieberman, Buy; McCain, Sell.

| Tue Dec. 21, 2010 12:08 PM EST

I've previously explained the DC Ticker I compile most days, which is now being featured weekly on ABC News' website show, Political Punch, hosted by Jake Tapper. Here are the picks featured on the latest PP:

* Joe Lieberman, buy — As a leading proponent for repealing Don't Ask/Don't Tell, the senator whom progressives love to hate scored a major progressive victory. Time to kiss and make up?

John McCain, sell — It's one thing to be a cranky flip-flopper who wins a political battle; it's quite another to be a cranky flip-flopper who loses. The repeal of Don't Ask/Don't Tell showed the limitations of McCain's curmudgeonly influence.

* Jon Kyl, sell — The White House appears confident it will win ratification of the START treaty--and that's only possible by rolling Kyl.

Pete Rouse, buy — Does it seem the White House is running a little smoother these days? Or is it just the eggnog?

You can receive the almost-daily DC Ticker report by following my Twitter feed. (#DCticker is the Twitter hashtag.) Please feel free to argue with my selections—though all decisions of the judges are final. And please feel free to make suggestions for buy or sell orders in the comments below or on Twitter (by replying to @DavidCornDC).

DC Ticker is merely an advisory service. It and its author cannot be held liable for any investments made in politicians, policy wonks,or government officials on the basis of the information presented. Invest in politics at your own risk.

A Stealth Attack on Financial Reform?

| Tue Dec. 21, 2010 11:52 AM EST

The campaign to kneecap the Dodd-Frank financial reform bill just keeps gaining steam. First, it was Rep. Spencer Bachus (R-Ala.), the incoming chairman of the House financial services committee, who pledged to repeal federal regulators' power to dismantle "too big to fail" banks, as spelled out in Dodd-Frank. Bachus also tried unsuccessfully to block the "Volcker Rule," which would limit banks' trading for their own benefit and investments in riskier hedge and private equity funds. The man Bachus beat to the run the financial services committee, Rep. Ed Royce (R-Calif.), a leading Republican on financial issues, has similarly attacked aspects of the legislation, seeking to chip away at the power of the new Bureau of Consumer Financial Protection.

In the Senate, both parties are now set to approve a measure that would drastically undercut Dodd-Frank. After Senate GOPers rejected a new omnibus spending bill that would fund the government through October, their Democratic counterparts offered what's called a "continuing resolution"—a short-term plan to keep government running through March. There's just one problem: That resolution doesn't include previously promised money for implementing Dodd-Frank.

As ThinkProgress points out, the Securities and Exchange Commission and the Commodity Futures Trading Commission were due to receive budget increases—from $1.1 billion to $1.3 billion and $169 million to $286 million, respectively—to handle the new workload from Dodd-Frank. But the short-term funding resolution doesn't include those increases, endangering the ability of both agencies to meet their regulatory mandates. In other words, it wounds a major piece of legislation not yet a year old. "The implementation of that good and historic law is in jeopardy if the CFTC doesn’t have increased resources," said Bart Chilton, a CFTC commissioner.

The continuing resolution has yet to be finalized, which means there's still time to boost the agencies' Dodd-Frank funding. If Congress fails to do so, three years' worth of hearings, negotiations, and back-room deal-brokering will go to waste.

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Harry Reid Goes SNL

| Tue Dec. 21, 2010 11:15 AM EST

The latest email from Senate Democrats about the New START treaty is a doozy:

More Child Brides, Please

| Tue Dec. 21, 2010 7:00 AM EST

Rep. Ileana Ros-Lehtinen (R-Fla.) has yet to assume the gavel of the House Foreign Affairs Committee. But in these waning days of the 111th congress, she's wasting no time hacking away at this country's credibility as a champion of basic human decency. Her most recent masterpiece: killing a bill that commits the country to combating forced child marriages abroad, and directs the Obama administration to develop a multi-year strategy to address the issue. Ros-Lehtinen's objections? That it's too expensive, and could be used to promote abortions.

Under normal procedure, the 241 votes the bill received on Thursday would've been enough to win its passage. But thanks to a rule (designed to expedite legislation by disallowing additional changes) invoked by House Speaker Nancy Pelosi (D-Calif.) the bill needed a two-thirds majority—or 290 yeas—to pass, a vote count that supporters of the bill from both parties still expected to meet easily. After all, its Dick-Durbin-penned cousin in the Senate passed unanimously.

Ros-Lehtinen tried to thwart the bill by raising concerns over its five-year, $108 million price tag. But once she failed, it should have been smooth sailing. Foreign Policy's Josh Rogin breaks down what happened next:

[A]bout one hour before the vote, every Republican House office received a message on the bill from GOP leadership, known as a Whip Alert, saying that leadership would vote "no" on the bill and encouraging all Republicans do the same. The last line on the alert particularly shocked the bill's supporters.

"There are also concerns that funding will be directed to NGOs that promote and perform abortion and efforts to combat child marriage could be usurped as a way to overturn pro-life laws," the alert read.

But the bill doesn’t even include any abortion-related funding. Still, Ros-Lehtinen's blast was enough to scare off any remaining pro-lifers who hadn't been sufficiently freaked out by her warnings about its cost.

Ros-Lehtinen's efforts to thwart this bill show that she wants to do as much as she can, as early as she can, to frustrate plans to improve the mechanics of diplomacy. In what should have been a win for bipartisan decency, scare tactics won the day. Between Ros-Lehtinen's unwavering skepticism of global diplomacy, hard-line approach towards Iran and North Korea, and unabashed slamming of the State Department and foreign operations, it's becoming clear what sort of foreign policy course the GOP intends to chart over the next two years: one that dismisses the pursuit of humane objectives.

We're Still at War: Photo of the Day for December 21, 2010

Tue Dec. 21, 2010 6:30 AM EST

SANGIN, Afghanistan - A special forces company commander meets with village elders and 1st Kandak, 209th Afghan National Army Corps, counterparts to discuss military operations in the Sangin District area at an undisclosed forward operating base in Helmand Province April 13. Photo via US Army.

Corn on "Countdown": McCain's Lame Duck Whine Fest

Tue Dec. 21, 2010 3:37 AM EST

David Corn joined guest host Chris Hayes on MSNBC's Countdown the discuss the whining and bitterness on display from John McCain and Lindsey Graham after the Obama administration won several key victories in the lame duck session of congress.

David Corn is Mother Jones' Washington bureau chief. For more of his stories, click here. He's also on Twitter.