The Growing Scandal in Student Loans
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With Congress investigating an $85 billion industry, the government's top student-loan regulator is stepping down. How widespread are kickbacks and fraud? How can students and parents assess their return on investment when tuition costs $50,000 a year? Also, an update on the Griffith Park fire in Los Angeles and, on Reporter's Notebook, when five gallons of gasoline is not five gallons of gasoline? You might be getting pinched at the pump.
Making News
Update on the Fire in Griffith Park ()
Los Angeles is looking for temperatures in the 90's and strong winds today. That's bad news for firefighters in Griffith Park, where 600 acres have burned and 150 homes as well as major tourist attractions have been evacuated. Andrew Blankstein reports for the Los Angeles Times.
Guests:
- Andrew Blankstein: Reporter for the Los Angeles Times, @anblanx
Main Topic
The Growing Scandal in Student Loans ()
Education Secretary Margaret Spelling heads to Capitol Hill tomorrow to answer questions about student loans. With tuitions rising toward $50,000 a year at top institutions, student lending is an $85 billion industry. Investing in education is a lot like buying a car, with discounts and interest rates as important as faculty qualifications or student performance. Private lenders compete with the federal government, and friendly college administrators have taken gifts, trips and stock options. New York State Attorney General Andrew Cuomo is just one investigator into reports of unethical and possibly illegal practices that include kickbacks to college loan officers who've recommended private lenders to parents and students. Yesterday, Theresa Shaw, Spelling's top student-loan overseer announced her resignation. How can students and parents tell if they're getting their money's worth? Is the Department of Education doing its job? Why is it so expensive to go to school?
Guests:
- Robert Shireman: President of the Institute for College Access and Success
- Jonathan Glater: Business writer for the New York Times
- John Dean: Special counsel for the Consumer Bankers Association
- Malcolm Getz: Professor of Economics at Vanderbilt University
- Anya Kamenetz: Columnist for Yahoo Finance
Links:
- Student Loan Sunshine Act (HR 890)
- Secretary Spelling on resignation of Theresa Shaw
- Glater's article on 'incentives' to financial loan officers
- Glater's article on resignation of Theresa Shaw
- New York Times article on student loan debt
- Getz's 'Investing in College: A Guide for the Perplexed'
- Kamanetz's 'Generation Debt: Why Now Is a Terrible Time to Be Young'
Reporter's Notebook
Customers Get Less than They Paid for with 'Hot Fuel' ()
Gasoline and diesel fuel expand when temperatures rise and shrink when it cools down. That means in warm weather you're probably getting less than you pay for. The difference may not be much for a single tank, but it all adds up. "The overcharge is rampant, legal and hard for consumers to spot. But it's no secret," says the Los Angeles Times, which reports that "oil companies acknowledge and regulators allow" the retail sale of fuels that have expanded because of warm temperatures, but don't deliver the amount of energy they're supposed to. Elizabeth Douglass wrote the story.
Guests:
- Elizabeth Douglass: Energy writer at the Los Angeles Times
Links:
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