Rita Valladares bounced her toddler son in her lap and gestured at a piece of paper that had her name on it, listed next to the word “defendant.”

“When I see this, it’s just so disappointing, you know?” said Valladares, 23. “My sister’s 19, she wants to get an education; but she’s afraid of getting into this type of situation.”

The piece of paper in question had been sent to Valladares courtesy of Technical Career Institutes (TCI), a for-profit college she had attended for a few weeks in the fall of 2008 before dropping out, dissatisfied with the program. She had unwittingly been enrolled in remedial-level classes she didn’t need for her major, she said, and maintained that she was told there would be no consequences for leaving when she did.

Three and a half years later the letter arrived, notifying her that she was being sued for $1,771.34 in unpaid tuition and fees.

Valladares, who also owes $2,000 to ASA College, which she also attended for a few weeks in 2009 — “That was the worst mistake I made,” she said — is one of hundreds of people who have sought assistance from the New York Legal Assistance Group after bad experiences with some of the city’s many for-profit degree programs.

There are dozens of these schools in New York City alone, their advertisements promising a brighter future plastered all over the subway. Recruiters regularly patrol Fulton Mall in Brooklyn and Grand Concourse in the Bronx, promising financial assistance and help with job placement after graduation.

But according to NYLAG Director of Litigation Jane Greengold Stevens, such promises should not be taken on faith. Too often, she said, these schools prey on vulnerable members of society — low-income New Yorkers and immigrants — looking for a way to better themselves.

“One of the most important things to understand about the process is that when a person walks into one of these places, they walk out an hour later already fully enrolled,” Stevens said.

That initial meeting often involves some form of loan application, even for students with bad credit and limited means, she said. The loans are disbursed directly to the school.

“So what’s actually happening is students are coming out of the schools with burdensome loans and essentially no training,” Stevens said. “Many people end up going back to the very low-paying job they had before.”

Valladares’ mother, Maria, a Honduran immigrant, also attended TCI. She quit her housecleaning job to enroll full-time, studying to become a nursing assistant. She graduated with an associate’s degree but was unable to find a job after failing her CNA certification. She now works two low-paying jobs: as a cashier for Rite Aid and as a teacher’s assistant.

NYLAG provides free legal counsel to low-income New Yorkers, and is working as part of a coalition that includes the Neighborhood Economic Development Advocacy Project to build a case against some of the worst-offending schools. The coalition is also seeking to convince the Department of Education to implement a massive stoppage of collections from people who have been “defrauded” by these schools.

The president of ASA, Alex Shchegol, sees it differently. No education system is perfect, he acknowledged, but emphasized the rigorous selection standards his schools sets for its teachers and ASA’s high graduation rate.

“I’m not a hundred percent aware what’s going on at other colleges,” Shchegol said. “Whether I’m aware of problems with many students, let me put it this way: I think there are more problems in the public sector.”

An advertisement for ASA College is seen on the subway.

The for-profit college industry is booming, with enrollment growing at a rate of 225 percent between the years of 1998 and 2008 — a significantly higher rate than the 31 percent growth across higher education as a whole during the same period of time.

Earlier this spring, the Department of Education announced that it would renew a push for controversial regulations on for-profit colleges. These regulations, known as “gainful employment,” would tighten underwriting standards for some student loans and protect graduates who are unable to get jobs with enough of a salary to pay back their loans.

Even if it that legislation is passed, it may not come soon enough for Valladares, who is now enrolled at Kingsborough Community College. She likes the program — she calls it a “real” college — but worries about her credit score, which has been affected by her legal woes with TCI and ASA.

“I was told if I keep having these problems with schools, I won’t be able to keep going to Kingsborough,” she said.

Follow Emily Johnson on Twitter @emilyjreports

The post Legal services group sets sights on ‘fraudulent’ for-profit colleges appeared first on Metro.us.

As if Suffolk County, home of the Hamptons and playground of the rich and famous on New York’s Long Island, didn’t have enough financial problems already.

A regulatory filing on behalf of the county dated April 16 shows it accidentally missed an interest payment on some of its debt, including $76.1 million of public improvement bonds, putting the county technically in default. Oops.

The county is wealthy with income per capita well above the national average but it has run into difficulty recently, declaring a fiscal emergency last year after an independent task force predicted a three-year deficit of $530 million.

The county could have a budget shortfall of as much as $250 million by the end of next year, local officials said last month.

The error is more of an embarrassing glitch than anything else. The missed payment — just $722.65 — would be small change for many of the county’s residents.

That will buy you fewer than 20 butter-poached lobster rolls (not the most expensive thing on the menu) at Dave’s Grill in Montauk, a quaint fishing village on the island’s northern tip, or just 10 bottles of Merry Edwards Sauvignon Blanc Russian River 2009 at La Plage in Wading River. A mere picnic.

The mistake was pointed out by the Depository Trust Company, a clearing firm, the day after it was missed and the filing says the error was the fault of the county’s escrow agent, M&T Bank.

“The county informed M&T of its error and the escrow agent immediately wired the $722.65 payment to DTC,” the regulatory filing said.

So what went wrong? The county was making the first payment in a complicated arrangement that uses $17 million in state HEAL grants for medical costs, primarily related to the Foley Nursing home, said Richard Tortora, president of Capital Markets Advisors, the county’s financial adviser.

The $722.65, part of a debt payment of more than $1 million, was the portion of the payment from the HEAL grants. The $17 million is being held in an escrow account at M&T.

“M&T for reasons we can’t fathom just blew it: ‘Oops it wasn’t in our system, we missed it,’” said Tortora, president of Capital Markets Advisors. Tortora said missing the payment and having to make a regulatory filing with the Municipal Securities Rulemaking Board was frustrating after months spent putting the arrangement together for the county.

M&T Bank was not immediately available for comment.

Fitch Ratings, the credit ratings agency, downgraded Suffolk County’s general obligation bond rating to A from A-plus last month, affecting about $1.4 billion of debt. General obligation bonds have the full faith and credit of the issuer and are the best gauge of how risky investors think the county is.

Fitch said it had concerns about the county’s ability to become financially stable, let alone reduce its big deficit.

The post N.Y.’s Suffolk County accidentally defaults on debt appeared first on Metro.us.

Obama’s ceremonial swearing-in at the U.S. Capitol was filled with traditional pomp and pageantry, but it was a scaled-back inauguration compared to the historic start of his presidency in 2009 when he swept into office on a mantle of hope and change as America’s first black president

With second-term expectations tempered by lingering economic weakness and the political realities of a divided Washington, Obama acknowledged the difficult road ahead even as he sought to build momentum from his decisive November re-election victory.

“We cannot mistake absolutism for principle, or substitute spectacle for politics, or treat name-calling as reasoned debate,” Obama said as he stood in the wintry cold atop a giant makeshift platform on the Capitol steps overlooking the National Mall.

Looking out on a sea of flags, he spoke to a crowd of up to 700,000 people, less than half the record 1.8 million who assembled four years ago.

Obama arrived at his second inauguration on solid footing, with his poll numbers up, Republicans on the defensive and his first-term record boasting accomplishments such as a U.S. healthcare overhaul, ending the war in Iraq and the killing of Osama bin Laden.

But battles are looming over budgets, gun control and immigration, with Republicans ready to oppose him at almost every turn and Obama still seemingly at a loss over how to engage them in deal-making.

SECOND TIME TAKING OATH

When Obama raised his right hand and was sworn in by Supreme Court Chief Justice John Roberts, it was his second time taking the oath in 24 hours – but this time with tens of millions of people watching on television.

The president beamed as chants of “Obama, Obama!” rang out from the crowd.

Obama had a formal swearing-in on Sunday at the White House because of a constitutional requirement that the president take the oath on January 20. Rather than stage the full inauguration on a Sunday, the main public events were put off until Monday.

A second inauguration marked another milestone of political passage for Obama, the Hawaiian-born son of a black father from Kenya and a white mother from Kansas. An electrifying speech at the 2004 Democratic convention as a little-known Illinois state legislator lifted him to the national stage, putting him on a rapid trajectory to the U.S. Senate and a few years later the White House.

Obama, 51, his hair visibly grayed over the past four years, sought to reassure Americans at the mid-point of his presidency and encourage them to help him take care of unfinished business. His wide-ranging speech touched on a variety of issues, including climate change and Middle East democracy uprisings.

Obama, who won a second term by defeating Republican Mitt Romney after a bitter campaign, opened round two facing many of the same problems that dogged his first term: persistently high unemployment, crushing government debt and a deep partisan divide. The war in Afghanistan, which Obama is winding down, has dragged on for over a decade.

The post Obama urges end to political name-calling as second term starts appeared first on Metro.us.

Obama on Friday accepted the invitation from the top Republican lawmaker John Boehner to address a joint session of Congress, the White House said.

In his letter to Obama, U.S. House of Representatives Speaker Boehner said Americans expected lawmakers and the White House to work together to find solutions.

The speech from the Democratic president will come in the middle of another set of difficult budget negotiations between Congress and the administration.

Lawmakers and Obama have locked horns over how to rein in the federal budget deficits, which have topped $1 trillion for the fourth consecutive year.

The most recent budget deal to avert the New Year’s day fiscal cliff of severe spending cuts and tax hikes established another set of crucial fiscal deadlines.

Obama is expected to use his speech to outline his legislative agenda, including tighter gun control after last month’s massacre at a Connecticut school.

But the president’s plans to restrict guns and advance immigration reforms will not be a priority in Congress until lawmakers and the White House resolve the next round of fiscal battles, including raising the $16.4 trillion debt ceiling.

In the latter half of February, the Treasury will no longer be able to shuffle funds around to make required government payments.

The post Obama to deliver state of the union speech February 12 appeared first on Metro.us.

We’ve brought you the grim news of the top ten colleges that have graduates swimming in the most debt. On a brighter note, let’s take a look at the top ten schools that result in the lowest amount of debt for students. See the list here.

Just over a week after a Columbia University professor announced she would be teaching a course on the Occupy Wall Street movement, the school says it will not be offering any such class. Find out more about it here.

Ever wonder where to find Paris’ finest sex shop? Do you wish you knew
which countries are best for cheap volunteer gigs? What is Bunny Chow? Freddie Pikovsky and his small, but well-traveled team of three other
full time staffers, have set out to answer those questions with the
launch of Off Track Planet, a blog-turned-magazine, aimed at young
explorers on a budget. Learn more about it here.

A guiding hand to help you navigate the confusing world of internships,
resume drafting and job interviews can make all the difference when
you’re in college or fresh out of school. Find out more about a website that matches students with professionals in their chosen field here.

The post Mentors and budget travel this week on EducationOption appeared first on Metro.us.

According to a new study by the Project on Student Debt, two-thirds of students who graduated in 2010 are facing steep student loan debt. The average amount that new grads owe is $25,250, which is up 5 percent compared to the class of 2009. The report partly blames the fact that the economic downturn happened when students from the class of 2010 were enrolled in school, forcing them to endure a spike in tuition costs, leading them to borrow more.

Surprisingly, graduates from private colleges had relatively low debt. Researchers say it could be because private colleges offer significant financial aid from endowments and fundraising. It could also be because there is a smaller percentage of students with low to moderate incomes enrolled in private schools. In other words, the students who go to these schools are the ones who can already afford to pay for them.

The study was released just a few days after President Barack Obama announced a new plan for helping graduates to ease the burden of student loan repayments. The initiative includes cutting monthly payments, bundling loans and a lower interest rate for some eligible students.

Highs and lows

The study looks at which specific colleges produce graduates with the highest and lowest student loan debt. Here are a few of the schools that made the lists:

High debt private nonprofit schools and public universities
   
1. New York University
2. D’Youville College
3. Pennsylvania State University
4. Temple University
5. University of Massachusetts Dartmouth

Low debt colleges and universities
   
1. CUNY Hunter College
2. Princeton University
3. California State University Bakersfield
4. Texas Southern University
5. Williams College

The post Post-college job hard, post-college debt easy appeared first on Metro.us.

The several hundred protesters who have gathered in Lower Manhattan as part of the Occupy Wall Street campaign have set up camp in Zuccotti Park across the street from the World Trade Center.
“Roze,” 25, came down from Connecticut for the protest and vowed he’s not leaving until Oct. 6.
“This has to be done. We can’t stop protesting,” he told Metro. “The world’s coming to the point where it’s fully close to destroying itself.”

The hundred or so protesters indefinitely camped out in the park — far less than the 20,000 organizers originally hoped for — have come to rail against corporate excess and the lack of jobs.

College undergrad Tess Danielson, 21, came from Gainesville, Fla. She said she’s frustrated with the weak economy.

“I just don’t like the whole situation, where I have to stay at a horrible job that I hate,” said Danielson.
But others say their message is deliberately muddled. “We don’t have a plan right now,” said Christopher Albert, 23. “The idea with all of this is talking to people and figuring out what people’s differences are.”?

Wall Street on lockdown

Security will remain tight around Wall Street all week.

The J train skipped Broad Street yesterday and will likely do so again today, as long as the protesters remain, police told Metro. Police said yesterday that seven people have been arrested since Saturday for things like jumping police barriers.

But to one man who works in the Financial District, the protesters are simply annoying.

“I think it’s a little ridiculous,” said Jamel Wright. “If they’re trying to achieve annoying the people who actually get up in the morning and are not walking around with picket signs …  they’ve achieved that.”

Follow Cassandra Garrison on Twitter @CassieatMetro.

The post Occupy Wall Street protest: They’ll be there for the long haul appeared first on Metro.us.

People who borrowed using federal student loans had an 8.8 percent default rate in the 2009 fiscal year, according to the report. That’s an increase compared with 7 percent the year before.

The most significant increase was from borrowers who attended for-profit schools. They defaulted at a rate of 15 percent, up from 11.6 percent the year before:

The rates announced today represent a snapshot in time, with the FY 2009 cohort consisting of borrowers whose first loan repayments came due between Oct. 1, 2008, and Sept. 30, 2009, and who defaulted before Sept. 30, 2010. More than 3.6 million borrowers from 5,900 schools entered repayment during this window of time, and more than 320,000 defaulted. Those borrowers who defaulted after the two-year period are not counted as defaulters in this data set.

Schools that have excessive default rates could even lose eligibility for federal student aid programs. Tidewater Technical in Norfolk, Trend Barber College in Houston, Missouri School of Barbering & Hairstyling in St. Louis, Sebring Career School in Houston, and Human Resource Development & Employment – Stanley Technical Institute in Clarksburg are all subject to sanctions. These schools each had cohort rates that either exceeded 25 percent for three consecutive years, exceeded 40 percent in the latest year, or both.

“These hard economic times have made it even more difficult for student borrowers to repay their loans, and that’s why implementing education reforms and protecting the maximum Pell grant is more important than ever,” said U.S. Secretary of Education Arne Duncan.

There are some glimmers of hope, however. Some students might find respite in the form of the income-based repayment plan (IBR). Monthly loan payments are capped based on income and family size.

Officials from the U.S. Department of Education also say they are taking further steps to protect students from the risk of defaulting:

Through a series of regulations finalized over the past year, the Department has tightened loopholes to protect students from misleading or overly aggressive recruiting practices; taken action to ensure that institutions are offering high-quality programs; and established rules that require career college programs to better prepare students for gainful employment or risk losing access to federal student aid.

The post Borrowers of federal student loans defaulting at higher rate appeared first on Metro.us.

Part of this may be because the federal government ensured that lenders had funds to lend to students throughout the recession. With no supply constraints and a federal guarantee taking losses in the event of a default, lenders had little need to curtail their lending and every incentive to expand it. This permitted borrowing to remain robust at the cost of poorer performance.

Students in the northeast part of the country, brace yourselves. The report says you have an average of $8,337 to $12,701 in student loan debt in comparison to students in other parts of the country who waiver between $5,390 to $8,337. The cost of education has shot through the roof over the last decade, more than doubling since 2000, according to the report.

While more people may be choosing to go to college because they see it as an investment that will help them get a better job, it also means more of the future workforce will find itself with looming debt. The job market is still bleak, even for people with those diplomas. Eventually, that could end up discouraging students from certain higher education options, leading to a more uneducated workforce:

 Fewer people may pursue higher education should the returns fall and the required debt burdens continue to rise. The implications for the macroeconomy of a decline in higher education enrollment are twofold. In the short run, weaker demand for educational services would be a drag on consumption, at a time when the economy continues to suffer from a shortfall in aggregate demand. Longer term, a less educated work- force would necessarily be less productive, putting the U.S. at a disadvantage relative to other countries.

The report concludes by saying, “Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place.”

You might want to be sure you can do that before taking on the responsibility (and debt) of college.

The post Could fear of looming debt discourage choosing college? appeared first on Metro.us.

According to Justin Draeger, the president of the National Association of Student Financial Aid Administrators, if President Obama isn’t even sure whether Social Security checks will be issued, it doesn’t look very good for the future of student financial aid.

“I think there is a huge question mark out there,” says Draeger. “If the ceiling is not raised and the government doesn’t have enough revenue, than we will get into a situation where there are a lot of uncertainties about what the government will or won’t pay for.”

Even if a deal is reached by the August 2nd deadline, student financial aid will most likely still take a hit. NASFAA provides a side-by-side comparison of two competing proposals to reduce the deficit by Senator Majority Leader Harry Reid and House Speaker John Boehner. Both would eliminate interest subsidies for graduate and professional students for programs beginning on or after July 1, 2012.

Getting worried? Draeger says the best thing you can do is stay informed. “The advice we always give is to stay in contact with your school’s financial aid office. They will have the most up-to-date information,” he says.

In the past week, concerned students have taken to the Internet in an effort to protect financial aid.  The organization Save Pell encouraged people to get the word out through social networking campaigns that Pell grants are at risk of being reduced.

If you’re concerned about the future of your financial aid, you can take it one step further, Draeger says. “Pick up the phone and contact your congressional delegation and urge them not to enact spending cuts on the backs of students and to reach an agreement to ensure that they have access to the student financial aid.”

The post Debt crisis: What does it mean for your student financial aid? appeared first on Metro.us.

The Washington Post reports that House Majority Whip Kevin McCarthy played a clip from the movie for his fellow lawmakers in an effort to promote the same sense of unity that only criminal cohorts from Boston can understand. Well, actually it was an attempt to get everyone to agree on a plan to solve the debt ceiling standoff.

In the scene that McCarthy played, Ben Affleck’s character, Doug MacRay, comes to his bank robber friend Jem Coughlin, played Jeremy Renner. MacRay says, “I need your help. I can’t tell you what it is. You can never ask me about it later. And we’re going to hurt some people.” In response, Coughlin simply asks, “Whose car are we gonna take?”

Now that’s friendship.

In an optimistic move, outspoken Republican Representative Allen West reportedly then stood up and said, “I’m ready to drive the car.”

If by “hurt some people,” these GOP colleagues are saying they are ready to move forward with an agreement that will prevent the government from defaulting on its debt, we’re all for it.

The post Is Ben Affleck’s ‘The Town’ helping to solve debt crisis? appeared first on Metro.us.

White House Chief of Staff Bill Daley warned that there would be a “few stressful days” ahead for financial markets, with the deadline to lift the $14.3 trillion U.S. borrowing limit — now only nine days away.

Daley, appearing on the CBS television program “Face the Nation,” quickly added: “In the end, there’s no question in my mind the government of America will not default.”

But the path forward toward a deal was murky.

With Asian markets set to open in a few hours, Democrats and Republicans traded blame for the inability to strike an agreement. The two sides are deadlocked over Republicans demands for a short-term debt-limit increase that would force President Barack Obama to request further borrowing authority in early 2012.

The post ‘Stressful days’ as debt talks drag on appeared first on Metro.us.