Tuesday, November 25, 2014

Top British independent schools are for children of oligarchs as British parents are priced out of the market says leading head

Top independent schools are for children of oligarchs as British parents have become priced out of the market, according to a leading headteacher.

Andrew Halls, head of King's College School in Wimbledon, south west London, said an 'endless queue' of rich families from outside Britain had led to a rise in fees at the £20,000-a-year school.

He claims the 'limitless' costs had forced local lawyers, accountants and military officers to stop sending their children there and it was a 'ticking time-bomb' he likened to the 2008 financial crisis. 

The 185-year-old school, which has been named by Sunday Times as independent school of the year, charges £19,455 a year for senior school boys aged 13-18 and girls aged 16-18.

Mr Halls told the paper: 'We have allowed the apparently endless queue of wealthy families from across the world knocking at our doors to blind us to a simple truth: we charge too much.

'Somewhere along the way, first the nurses stopped sending children to us, then the policemen, the armed forces officers, the even the local accountants and lawyers.

'The most prestigious schools in the world teach children of the very wealthiest families in the world.

'We are in danger of coming across as greedy because we can charge what appears to be limitless fees, but in truth there is a fees time-bomb ticking away. It feels like the build-up to the banking crisis.'

The cost of sending a child to private schools has risen by about a fifth in the last four years - around four times faster than rises in earnings, according to recent research. 

Mr Halls suggested a collapse could be brought about by the supply of foreign families eventually drying up, while British families could elect to send their children to high-performing state schools.


Teachers’ Challenge of Political Spending by Unions Appears Headed for Supreme Court

Christian schoolteachers who object to being forced to help finance the political agendas of unions yesterday moved a step closer to having their case heard by the U.S. Supreme Court.

A three-judge panel of the U.S. Court of Appeals for the 9th Circuit issued an order that allows the teachers to petition the Supreme Court to consider their argument that California’s “agency shop” law is unconstitutional because it requires them to pay for political activity they do not support.

The teachers unions could ask the full 9th Circuit to reconsider the panel’s ruling. But Terry Pell, president of the Center for Individual Rights, the non-profit public-interest law firm representing the teachers along with the international law firm Jones Day, does not expect the unions to do so.

“The next stop is the U.S. Supreme Court,”  Pell told The Daily Signal adding:

This ruling [from the 9th Circuit] happened much more quickly lhan we had a right to expect. It’s a big step forward. The panel hit the nail on the head. There’s nothing left for the 9th Circuit to do. This is a question of law that has already been decided so it has to go to the Supreme Court.

Pell said the teachers are likely to petition the Supreme Court to hear the case by early January and the court to decide whether to take it in March or April. A ruling would not be expected until 2016.

Rebecca Friedrichs, a fourth-grade teacher in Anaheim, and nine other state schoolteachers–along with the Christian Educators Association International–last summer sued the California Teachers Association, several local unions and the National Educational Association.

California’s “agency shop” law makes payment of union dues a requirement for public employment. The Daily Signal previously reported that Friedrichs and her co-plaintiffs argue the law is unconstitutional because it requires them to finance political activism they oppose.

The California Teachers Association, the largest affiliate of the National Education Association, has argued that non-union employees should pay “fair share” fees because non-union members benefit from union representation.

Under the California agency shop law, schoolteachers are not required to join the union, and they can opt out of the approximately 30 percent of dues the union acknowledges are overtly political.

California teachers, who typically spend up to $1,000 a year in dues, can apply for a refund and generally receive $300 to $400 back. But Friedrichs has said this process brings scrutiny and stigma from the union and colleagues.

Pell said that, beginning in the mid-20th century, the Supreme Court essentially “carved out an exception to the First Amendment” where labor law is concerned in a series of decisions that culminated in the 1977 Abood v. Detroit Board of Education ruling.

In the interest of maintaining “labor peace,” the court reasoned, it was necessary to guard against “free-riders” who might dissent from the union position but still benefit from the collective-bargaining process.

Financial disclosure forms show the California Teachers Association spent more than $211 million on political activities from 2000 through 2009.

The union spent more than $26 million to oppose Proposition 38, a ballot measure that would have created a school-voucher program in California.

The union spent $50 million in 2005 to oppose three measures, one of which would have made changes to the probationary period for new teachers and another having to do with school-funding requirements. More closely related to this case, the third ballot initiative would have prohibited use of agency fees for political contributions without workers’ consent.

Friedrichs and several of the other teachers who filed suit have resigned from the California Teachers Association and now belong to the Christian Educators Association International.


A Third of All Federal Student Loans Could Go Bad, Treasury Advisory Committee Warns

Four years after the federal government took over the student loan program, nine percent of student loans are in default and another 23 percent have the potential to go bad as well, according to a report by the Treasury Borrowing Advisory Committee (TBAC).
“Millions of student-loan borrowers are in default on their student loans; many more could face default in the near future,” Deputy Treasury Secretary Sarah Bloom Raskin said during a Tampa speech on Nov. 6th, two days after the report was released.

According to data released Nov. 7 by the Federal Reserve, Americans currently owe $1.3 trillion on their student loans. The level of education indebtedness has increased 84 percent since 2009.

”Since the passing of the Student Aid and Fiscal Responsibility Act of 2010 (SAFRA), all federal student loans are made directly by the Department of Education and funded by the U.S. Treasury,” the TBAC report explained. “For a variety of reasons, loan growth is increasing and default rates are high and rising.”

And the current nine percent default rate, which exceeded auto loan delinquencies for the first time ever, is likely the tip of the iceberg.

In June, President Obama issued an executive order allowing borrowers to cap their loan payments at 10 percent of their monthly incomes. But TBAC pointed out that “the principal and interest on the loans capitalize” during this period, “making balances larger for students and exacerbating repayment potential.”

“Outstanding balances [are] declining more slowly than originally anticipated due to both increased volumes of loans in deferral and forbearance as well as longer loan tenors,” the advisory committee said. “Behind the default rate is a shadow book of potential future defaults, reflected in the volume of loans in deferment and forbearance. Those loans add 23% to the 9% that are already listed in default.”

The Class of 2014 is “the most indebted ever,” according to the Wall Street Journal, which pointed out that the average student loan increased 35 percent between 2005 and 2012, while the median salary for 25-to-34-year-olds with a bachelor’s degree decreased 2.2 percent. “It that continues, debt burdens could start to become more unwieldly,” the WSJ noted.

Although supporters of SAFRA initially assured American taxpayers that the federal takeover of the student loan program would save them $87 billion, TBAC says it will likely wind up costing taxpayers more than $88 billion instead.

And that estimate “does not include the potential cost or benefit associated with recent proposals to redesign elements of the student lending program, including: (i) reducing the interest rate; (ii) increasing repayment options; and (iii) addressing the pace of origination with a focus on qualifying institutions eligible for such programs.”

The personal consequences of default for some 40 million Americans with outstanding student loans are substantial. They include a damaged credit rating, loss of tax refunds and other government benefits such as Social Security, fines, revocation of professional licenses and possible wage garnishment until the debt is paid.

“While fixed-rate student debt is insulated from interest rate risk, given the consequences of default discussed earlier, political pressure may nevertheless mount to forgive or extend student debt,” the report added. If that happens, “the gross cost of maturity extension in order to increase the probability of repayment would be approximately $220 billion.”

The report also explained how the failure of many students to graduate is undermining the main goal of the student loan program.

“Today an average of 40% of students at four-year institutions (and 68% of students in for-profit institutions) do not graduate within six years, which means they most likely do not benefit from the income upside from a higher degree yet have the burden of student debt….

"This outcome contrasts to the goal behind the Federally subsidized student loans which has been to ensure access to higher education, economic opportunity and social mobility,” and raises “questions about the value of loans for most borrowers.”

“Failure to graduate remains the most deadly of traps for higher education,” the Treasury committee warned.

According to a March study by the New America Foundation, 40 percent of the trillion-dollar student debt was spent on expensive graduate programs, with one in ten borrowers racking up more than $153,000 in combined undergraduate/graduate student loans..

But the study points out that “students pursuing these degrees already have an undergraduate degree, and they should be far more informed consumers. Therefore, they shouldn’t need a lot of public support to finance their next credential.”


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