Letters to the Editor
It wasn’t our campaign issue that was such a dud, just your coverage
The story in last week’s Statesman (“Romanoff fires ‘Westwood bullet’ at Bennet, but record suggests it’s a dud”) is a mosaic of near-facts, smoothly and cynically crafted by the Bennet campaign, as well as by the senator himself. As cited in the excerpts below, there is a willful attempt to confuse Westwood-style financing with traditional student loans, thus avoiding the issue at hand.
Near-Fact #1 — At the April 23 debate, Andrew Romanoff referenced the Westwood matter, asking: “Is this the way Washington works?” The senator answered: “We just voted to take the business of doing loans away from private lenders who were not adding any value to our kids, and give it to the Department of Education, so that $65 billion more are going to Pell Grants instead of being sucked up by the private (loan industry).”
Fact — This is entirely unrelated to the issue at hand. It’s the fact that Westwood, and other for-profit schools, are not classified as student loans, allowing them to charge considerably higher rates with far looser disclosure terms. The “private lenders” the senator refers to are simply banks and other lending institutions that provide federally guaranteed student loans. The U.S. Treasury will now become direct lenders of these particular loans. This has little to do with Westwood except to the extent that a portion of their tuition can be financed this way before other sources are tapped.
Near-Fact #2 — “But something else happened between the October vote in the House committee and Bennet’s vote in March — another federal law went into effect to tighten restrictions on loans like those offered by Westwood. In February, private student loans became subject to the federal Truth in Lending Act, which establishes strict reporting and disclosure requirements on the loans.”
Fact — Again, the Bennet camp deliberately trots out another seemingly related term, “private student loan,” to suggest that students would be adequately protected. On Westwood’s own Web site, they clearly state that its “institutional financing program is not a loan.” Thirty percent of Westwood students utilize this method, the precise mechanism that invited legal action against Westwood. The federal legislation cited is inapplicable. Private student loans are typically those provided by lending institutions when an applicant has reached his/her Stafford loan cap.
Near-Fact #3 — “But isn’t there something fishy about Bennet’s campaign receiving a hefty donation just days before he votes on the financial reform bill? Hard to say, since that isn’t what happened. While it’s true the check from Westwood’s PAC was dated March 19, Bennet staffers say it didn’t find its way to Bennet campaign headquarters until a week later — four days after the committee vote the Romanoff campaign charged it hoped to influence — and FEC records show the Bennet campaign didn’t actually process the donation until three days after that, on March 29, a full week after the Senate Banking Committee approved the financial reform bill.”
Fact — It is of no importance when the Bennet campaign decided to deposit the check. It only matters when the check was written. Moreover, the Bennet campaign points to checks from two other PACs that arrived within the same time frame (League of Conservation Voters, IBEW Committee on Public Education fund), but tellingly neglected to report other PAC donations from the for-profit college industry during the run-up to legislation from which they are directly impacted:
Career College Association PAC — $1,000 on 3/23/10
EDMC EDU PAC (parent company of Argosy University and The Art Institute) — $1,000 on 3/22/10
Career College Corporation — $1,000 on 1/15/10
Near Fact #4 — “Where the House bill included extensive loopholes that allowed educational ‘gap loans’ to escape rigorous oversight, the Senate bill didn’t. The Senate’s bill — in the headlines this week as Republicans eventually agreed to allow it to come up for debate after voting to filibuster it three days in a row — establishes more sweeping powers for its Consumer Financial Protection Board than the House does in its version, which would create a stand-alone agency.”
Fact — Again “educational gap loans” is another way to describe the private loans referenced above. Colleges like Westwood offer financing (but, technically, not loans) as a last resort to students who don’t qualify for these private loans. Thus, they are talking about “rigorous oversight” of something else entirely while the matter at hand is deftly dodged. Without the addition of language in the Senate bill comparable to the Waters amendment (an opportunity not seized by Sen. Bennet), businesses such as Westwood can continue their current practices. From the Senate bill: “The Bureau may not exercise any rule-making, supervisory, enforcement, or other authority under this title with respect to a merchant, retailer or seller of nonfinancial goods or services who extends credit directly to a consumer…”
The Bennet campaign’s artful misleads have indeed been legitimized by The Statesman. We trust the issue will be revisited.
Editor’s Note: We stand by our story. We believe last week’s article, “Romanoff campaign fires ‘Westwood bullet’ at Bennet, but record suggests it’s a dud,” fairly and accurately portrayed arguments made by the Romanoff campaign, as well as the positions of the Bennet campaign and Westwood College, and what the documentary record shows.
Contrary to Teicher’s assertion, our story was based on multiple sources and was in no way “crafted by the Bennet campaign.” The Colorado Statesman’s reporting on aspects of the federal Truth in Lending Act wasn’t due to “the Bennet camp trot[ing] out” anything. Reporting on other Bennet campaign contributions resulted from an examination of freely available public records, not, as Teicher supposes, anything “point[ed] to” by the “Bennet campaign.”
However, we agree with Teicher’s suggestion that this story deserves another look. We’ll have an updated report in next week’s Statesman.