Sexual Assault: Never The Victim’s Fault

          It has been said that a society is ultimately judged by its crimes, and perhaps rape is the crime by which our society will be evaluated.  The definition of sexual assault as provided by Brown University is as follows: “Sexual assault is the legal term for rape, and it also encompasses other behaviours beyond forced sexual intercourse. Sexual assault can be any unwanted sexual contact, such as unwanted touching, fondling, or groping of sexual body parts. It can be committed by the use of threats or force or when someone takes advantage of circumstances that render a person incapable of giving consent, such as intoxication.” The statistics regarding sexual assault in the United States are astounding.  According to RAINN (the Rape Abuse and Incest National Network – www.rainn.org), a woman is sexually assaulted every two and a half minutes.  Further, they claim that one in every six American women is a victim of sexual assault.  Finally, they state that 44% of sexual assault victims are under the age of 18.  This is clearly an unacceptable state of affairs.
          But these numbers are not the ones I want to discuss in this article.  Sexual assault is a peculiar crime in that it is a crime which victims are hesitant to prosecute.  RAINN suggests that half the sexual assaults committed are never reported to police.  This severely restricts the means that our justice system can take action against the perpetrator.  One never hears about a convenience store clerk who decides not to prosecute a robber or a victim of a carjacking declining to press charges, but somehow sexual assault seems to be a special crime.
          The question on the tips of your tongues, no doubt, is: “Why is sexual assault so underreported?”  One of the primary reasons sexual assault is underreported is that victims are afraid they will not be believed.  One common response to sexual assault charges is to doubt or blame the victim.  Our society has a pervasive belief that women frequently lie about sexual assault.  This is a myth.  According to the F.B.I., only 5.5% of reported sexual assaults are determined to be unfounded (which includes cases in which the judge found that there was insufficient evidence to convict).  Other reasons women give for not reporting sexual assaults include fear of reprisals, desire to avoid an intrusive and uncomfortable rape examination, and the belief that sexual activity is a personal matter. 
          These reasons reveal a deeper problem – mistrust and mistreatment of women in our society.  It is considered valid to argue that if a woman wears a short skirt, she is inviting rape.  This is a fallacy however.  Do we tell jewellers that they were inviting robbery by displaying their jewels in their store windows?  Do we tell victims of car-jacking that they invited a car-jacking by having nice cars?  No we do not.  All I am asking you is to extend to victims of sexual assault the same courtesy we extend to victims of other crimes.

Go to

http://dsc.discovery.com

Copy and paste into the search:

New Earth-like Planet ‘Habitable’

Read for yourself.

Hi, it’s Tim from Pandora,

I’m writing today to ask for your help.  The survival of Pandora and all of Internet radio is in jeopardy because of a recent decision by the Copyright Royalty Board in Washington, DC to almost triple the licensing fees for Internet radio sites like Pandora.  The new royalty rates are irrationally high, more than four times what satellite radio pays and broadcast radio doesn’t pay these at all.  Left unchanged, these new royalties will kill every Internet radio site, including Pandora.

In response to these new and unfair fees, we have formed the SaveNetRadio Coalition, a group that includes listeners, artists, labels and webcasters.  I hope that you will consider joining us.

Please sign our petition urging your Congressional representative to act to save Internet radio: http://capwiz.com/saveinternetradio/issues/alert/?alertid=9631541

Please feel free to forward this link/email to your friends - the more petitioners we can get, the better.

Understand that we are fully supportive of paying royalties to the artists whose music we play, and have done so since our inception.  As a former touring musician myself, I’m no stranger to the challenges facing working musicians.  The issue we have with the recent ruling is that it puts the cost of streaming far out of the range of ANY webcaster’s business potential.

I hope you’ll take just a few minutes to sign our petition - it WILL make a difference. As a young industry, we do not have the lobbying power of the RIAA. You, our listeners, are by far our biggest and most influential allies.

As always, and now more than ever, thank you for your support.

-Tim Westergren
(Pandora founder)

I.

Introduction

            This paper is an attack on the orthodox Aristotelian virtue ethics tradition.  In this essay I will argue that virtue ethics (as envisaged by Aristotle) has a seriously flawed understanding of the notions of moral responsibility and blameworthiness which emerges from their self-undermining account of how one develops morally. 

            Before we continue, I’d like to acknowledge a small terminological dispute I anticipate my philosophical opponents will inevitably bring to bear.  I know that the language of morality is uncomfortable for an Aristotelian, but it need not be.  First of all, whether or not it would be better for humanity if we did, we do not live in a Greek polis.  Much of the advice Aristotle gives assumes that we belong to a particular sort of community.  Aristotle believes that political participation in these communities is essential to living a life of virtue.  However, we do not live in communities like those Aristotle suggests.  Our cities are massive.  New York City, for example, has more inhabitants than did all of ancient
Greece during Aristotle’s time.  Yet our proximity to each other hasn’t resulted in the formation of strong inter-personal bonds.  As we walk the streets of cities such as NY, it is hard not to feel entirely anonymous.  Not only are modern society and the Aristotelian polis different, but our conception of justice is fundamentally different Aristotle.  Our conception of justice is predicated on the language of morality.  Our courts do not find defendants “virtuous” or “vicious,” but rather “guilty” or “not guilty.”  Of course this need not mean that we ought to relegate Aristotle to the intellectual dustbin of history.  Aristotle’s writings may still have relevance to this modern world.  Aristotle’s advice on how to be virtuous may be reinterpreted as advice how to be moral. 

            Secondly, and more importantly, this paper primarily concerns the matter of moral development.  Moral development, at least in the sense in which I use it in this paper, is part of Aristotle’s larger project of ethical development.  Whether or not you share my belief that Aristotle’s teachings may be easily applied to morality, it must be admitted that the question “How do you become moral?” is an aspect (I would argue the most important aspect) of the larger question “How do you develop virtue?”[1]  While I betray my own preference for the language of morality by referring to the development of good people as “moral development,” one could very well replace every mention of “moral development” with “ethical development,” or “character development.[2]”  Since this paper discusses the process of becoming a good person, both the language of virtue and the language of morality are appropriate.

            The ultimate source of the Aristotelian’s inappropriate ascriptions of responsibility and blameworthiness is the following: the Aristotelian wants it to be the case that (1) individuals can be held responsible for their characters.  But, he admits that (2) society, specifically those individuals who give him moral guidance and help him develop ethically are hugely influential over what sort of character he will end up with.  The Aristotelian admits that without the right kind of moral mentor to oversee his ethical development, the individual in question will not develop a good character.  I will show that while the Aristotelian wants to believe that (1) (individuals are responsible for their character), and indeed ascribes responsibility and blameworthiness as if (1) were the case, his belief that (2) (society has a huge influence on what sort of character he will develop) makes his belief in (1) untenable.  We will begin with a discussion of Aristotle’s theory of moral development.  Then we will address the question of whether or not someone who didn’t benefit from an ideal upbringing could develop a good character.  Ultimately we will conclude that one who didn’t have a good moral mentor couldn’t develop a good character, and thusly shouldn’t be blamed for his failure to become virtuous.

II.  Aristotle’s Theory of Moral Development            Whereas Aristotle’s primary philosophical predecessor, Socrates, concluded that virtue cannot be taught, Aristotle concludes that virtue indeed can be taught – but with the caveat that virtue can only be taught to certain individuals in certain circumstances.  Aristotle tells us that “the virtues come to be present… in us who are of such a nature as to take them on” (NE 1103a)[3].  This suggests that only people lucky enough to have a nature capable of receiving the virtues can acquire them.  Aristotle is quick to suggest a distinction between two types of virtue, moral (excellence of character) and intellectual (excellence of thinking).  He writes, “excellence of thinking is for the most part, both in its coming to be and in its growth, a result of teaching… while excellence of character comes into being as a consequence of habit, on account of which it even gets its name by a small inflection from habit” (NE 1103a).  Aristotle also suggests that we do not inherit virtue: “Therefore, the virtues come to be present neither by nature nor contrary to nature” (NE 1103a).  Thus, we have the beginnings of an account of how we acquire virtue – we are not born with it, but we must work at it and attain it through habit.  Aristotle suggests we develop virtue similarly to the way that we develop a skill.  He writes, “Again, of all the things that come to us by nature we first acquire the potentiality and later exhibit the activity (this is plain in the case of the senses; for it was not by often seeing or often hearing that we got these senses, but on the contrary we had them before we used them, and did not come to have them by using them); but the virtues we get by first exercising them, as also happens in the case of the arts as well. For the things we have to learn before we can do them, we learn by doing them, e.g. men become builders by building and lyreplayers by playing the lyre; so too we become just by doing just acts, temperate by doing temperate acts, brave by doing brave acts” (NE 1103a).   

To bolster this claim, Aristotle suggests that the development of a person is analogous to the development of a state.  Aristotle states, “This is confirmed by what happens in states; for legislators make the citizens good by forming habits in them” (NE 1103b).  Aristotle then tells us that in addition to merely practicing the skill that we wish to learn to do, we need to be instructed in that skill.  He writes, “It makes no small difference, then, to be habituated in this way or in that straight from childhood, but an enormous difference, or all the difference” (NE 1103b).  We should take notice that it is a matter of luck as to which way we are habituated – since we do not choose our parents who will habituate us into thinking some things are good and other bad.  I want to draw particular attention to the emphasis that Aristotle places on being properly instructed in our moral development.  The ideal circumstances Aristotle envisions for ideal moral development would consist of a pupil who has a character receptive to receiving the virtues who is taught by a teacher or mentor who knows and can instil the right habits in him.  We will attend to the question of whether or not someone who didn’t benefit from these ideal circumstances could still become moral later in this paper.IIIa.Habituation in Moral Development            In order to begin our inquiry into the particulars of Aristotle’s account of moral development, we ought to begin with a detailed discussion of the role that habituation plays in Aristotle’s schema.  To understand the function of habituation, we must address a dichotomy that Aristotle establishes between two types of moral beliefs/knowledge.  Aristotle believes that there are two types of moral knowledge, knowledge of “the that” and knowledge of “the because.”  The former is a belief that something is right or wrong.  The latter, on the other hand, is knowledge of why something is right or wrong.  Aristotle writes (and quotes Hesiod):“For, while we must begin with what is known, things are objects of knowledge in two senses some to us, some without qualification. Presumably, then, we must begin with things known to us. Hence any one who is to listen intelligently to lectures about what is noble and just, and generally, about the subjects of political science must have been brought up in good habits. For the fact is the starting-point, and if this is sufficiently plain to him, he will not at the start need the reason as well; and the man who has been well brought up has or can easily get starting points. And as for him who neither has nor can get them, let him hear the words of Hesiod:  

            Far best is he who knows all things himself;,            Good, he that hearkens when men counsel right;            But he who neither knows, nor lays to hear            Another’s wisdom, is a useless wight” (NE 1095b). 

It is important to note that Aristotle thinks that “the that” is a starting point.  The goal is to end up with and understanding of both the intermediary “the that,” and the terminal “the because.”  How is “the that” supposed to aid our moral development?  To begin with, “the that” shouldn’t automatically call to mind the image of a teacher giving a student an inviolable moral law.  Rather, “the that” can simply involve a student observing an morally significant interchange between two agents.  Miles Burnyeat elaborates, “But even where the advice is general, this need not mean he is taught that there are certain rules of justice, say, which are to be followed as a matter of principle, without regard for the spirit of justice and the ways in which circumstances alter cases.  What Aristotle is pointing to is our ability to internalise from a scattered range of particular cases a general evaluative attitude which is not reducible to rules or precepts” (Burnyeat 72)[4].  Thus, “the that” is established as a starting point on the road to “the because.”  That there is no explicit proof for his claim that learning “the that” is necessary for moral development is largely due to the nature of ethics (at least as Aristotle sees it).  Burnyeat suggests that Aristotle believes that “We first learn (come to see) what is noble and just not by experience or induction from a series of instances, nor by intuition (intellectual or perceptual), but by learning to do noble and just things by being habituated to noble and just conduct” (Burnyeat 73).  Perhaps a contrast will help elucidate this view.  Whereas we might learn that a heater is hot and burns us if we touch it through sense perception, we learn about ethics by engaging in ethical behaviour.  Burnyeat is quick to prevent us from erroneously concluding that what Aristotle means to suggest is that virtue simply requires practice, but rather, that habituation has a cognitive capacity in that it actually helps us learn what is noble or just (Burnyeat 73).  And indeed, not only do we learn what is noble and just through habituation, but, as Burnyeat points out, “the capacity for ‘noble joy and noble hatred’ grows from habituation” (Burnyeat 76).  Indeed, Burnyeat distinguishes between two senses of learning to enjoy something (such as enjoying a noble action): learning to enjoy something (which I argue is analogous to “the that” in that both of these senses require the learner to take on faith the beliefs of others, either that something is noble or that something is enjoyable) and learning that something is enjoyable (which seems similar to “the because” in that this type of learning transcends the faith in others of the former type and supplants it with coming to know for oneself that something is enjoyable or noble) (Burnyeat 76).  Aristotle places particular emphasis on the importance of finding what is noble and just enjoyable.  He writes: “We must take as a sign of states of character the pleasure or pain that ensues on acts; for the man who abstains from bodily pleasures and delights in this very fact is temperate, while the man who is annoyed at it is self-indulgent, and he who stands his ground against things that are terrible and delights in this or at least is not pained is brave, while the man who is pained is a coward. For moral excellence is concerned with pleasures and pains; it is on account of the pleasure that we do bad things, and on account of the pain that we abstain from noble ones. Hence we ought to have been brought up in a particular way from our very youth, as Plato says, so as both to delight in and to be pained by the things that we ought; for this is the right education” (NE 1104b). 

            It is not just that one who knows “the because” knows what is right and wrong, but also that one who knows “the because” is less likely to be tempted to act wrongly since he will find acting well pleasurable and acting badly painful.            Thus we see the important role that habituation plays in Aristotle’s conception of moral development.  Habituation, in its early stages, helps us to identify what the noble or just thing to do is (from advice from teachers or other moral mentors).  Later, it becomes a means of becoming used to doing the noble or just thing so that it will become second nature to us to act well.  Later still habituation will help us to transcend our mere belief that some action is noble or just and helps us to learn why the just or noble act is just or noble.  Finally, habituation will cause us to not only learn to find the just or noble action pleasant, but will help us learn that the just or noble action is pleasant.  This in turn makes us more likely to act well because acting poorly will seem unpleasant to us.III.Can Someone Who Lacks Aristotle’s Ideal Upbringing Become Virtuous?

            Now that we’ve established how important habituation is to Aristotle’s conception of moral development we must turn our attention to the question of whether or not a person could still develop morally (in the Aristotelian conception) if he lacked this early moral education.  Aristotle’s conception of moral development relies on the establishment of “the that” to reach the goal of “the because,” but without good parents (or surrogate moral mentors) to help us learn “the that” and instil in us the good habits necessary to attain virtue, it would seem that attaining “the because” becomes an impossibility.  Aristotle himself emphasises the great influence of one’s inherited character and one’s early moral education on the path to virtue.  He states that arguments alone are not enough to make all men good (NE 1179b).  While arguments may move men of good character (those “gently born” and “generous-minded”), the many are moved exclusively by fear (NE 1179b).  It is essential to realise that Aristotle himself acknowledges a limit to the influence of reasoned argument on “the many.”  Finally, Aristotle acknowledges the near impossibility of rendering such a person good when he writes, “What argument would remould such people? It is hard, if not impossible, to remove by argument the traits that have long since been incorporated in the character” (NE 1179b).

Indeed, it must be conceded that the prospects of one not born with a noble character and without the benefits of a fine moral education are altogether bleak.  Burnyeat’s summation of the importance of one’s early upbringing helps drive home the point I wish to make: that if one lacks an excellent early moral education, one cannot (or at barest minimum, one will not in all likelihood) develop a proper sense or morality.  Burnyeat sums up, “Thus the picture forms as follows.  You need a good upbringing not simply in order that you may have someone around to tell you what is noble and just… but you need also to be guided in your conduct so that by doing the things you are told are noble and just, you will discover that what you have been told is true” (Burnyeat 74).  Finally, I think that Aristotle’s comments in Book Three on the subject of how a bad man sees his conduct precludes any conclusion but that if one lacks a proper early moral upbringing, one simply cannot attain virtue.  Aristotle states that “different things appear good to different people, and if it so happens, even contrary things… in truth, the good is the object of wish, but for each person, the apparent good; that that which is in truth an object of wish (is really a good thing) is an object of wish to the good man, while any chance thing may be so the [wish of] the bad man… For each state of character has its own ideas of the noble and the pleasant” (NE 1113a). 

Thus, even if one could theoretically habituate oneself into good habits, one still runs into a still more fundamental problem, namely: if one has been raised badly and are a bad man, one simply will not regard one’s actions as wrong because one will consider the wrong sorts of things to be good and thus will simply not be motivated to “mend your evil ways,” as the saying goes.  Thus, since the character one happens to inherit and the early moral education one is subjected to are not in one’s control, and these two factors determine (or are at minimum hugely influential as to) whether or not one will attain virtue (or in more modern terms, will become a person of good morals), then we cannot fairly blame one for failing to develop a good character.

IIIb.

Aristotle Condemns the Man of Poor Character

            After condemning the voluntarily ill man for his illness on the grounds that he had a chance to not become ill, Aristotle says the following: “So, too, to the unjust and to the self-indulgent man it was open at the beginning not to become men of this kind, and so they are unjust and self-indulgent voluntarily; but now that they have become men so it is not possible for them not to be so” (NE 1114a).

            We can consider Aristotle’s condemnation of people who become unjust appropriate only if they had a good upbringing and still failed to attain virtue.  If they were never offered what is ultimately necessary for success, they can hardly be said to have thrown away their chance!  To condemn those who did not receive a sufficient early moral education seems patently unfair.  Not just unfair, but entirely at odds with what Aristotle’s rationale for why it is ok to blame some and pardon others for their misdeeds.  

IV.

Concluding Remarks            Because of the great influence one’s early moral education bears upon the character an agent will develop inherent to the Aristotelian picture of moral development, it is almost impossible for an Aristotelian to successfully argue that agents are responsible for the characters they end up with.  As a result, it is patently unfair to blame an agent for his failure to develop a good character.  Keeping in view the Aristotelian’s unfair ascription of responsibility to agents who fail to develop morally (due to their lack of an acceptable moral mentor), I’d like to suggest another seemingly unfair practice in which the Aristotelian indulges.  It seems to me that Aristotle has created a system of moral/ethical evaluation that it in itself unfair.  It seems plausible that if we are going to value people (regard them as good or bad people) based on their character, then all people ought to be able to develop a good character.  For those that fail to attain virtue, it should be because they failed in that endeavour, not because it was never possible for them to succeed in the first place (for lack of a good moral mentor or lack of a virtuous disposition).              It is intuitively plausible, that if some people, through no fault of their own, are physically incapable of being moral agents, that the system which renders them as such is deeply flawed.  Why is such a system flawed?  It is because the very notion of morality seems to suggest universal accessibility for all its participants.  Consider the idea of a contest – a swimming contest.  Imagine if we said that people were good or bad based on whether or not they were competent swimmers.  Would we consider that contest fair for paraplegics who, due to factors out of their control (their multiple amputations), are physically incapable of swimming?  No.  We would say that the contest was not fair because some of the participants are a priori incapable of winning the contest.  Can you imagine a paraplegic willingly entering a swimming contest and consenting to be condemned as bad people if they failed to succeed in the contest?  So it seems that the underlying force of my argument is derived from the notion that virtue (and indeed so too morality) ought to be fair – should be accessible to all who agree to be judged by that rubric.  Just as no paraplegic would willingly assent to a swimming contest, no person who would be a priori excluded from Aristotle’s conception of a virtuous person (both those who are born without a character receptive to the virtue, and those who lacked a proper moral upbringing) would consent to being judged by a system that inherently excludes them from success.V.The Last Word            My critique of Aristotle’s virtue ethics has focused on the fact that due to the significance Aristotle places on external influences on our character as we develop morally, it is nearly impossible for an Aristotelian to hold an agent responsible for his character (especially if his upbringing has been woefully insufficient).  I argued that perhaps the problem is standard of an ethical (or moral) person that Aristotle provides.  I’ve argued that if people are a priori incapable of living up to the standard of morality, that the standard is unfair.  My opponents have argued that my appeal to fairness is fundamentally unfair to apply to an Aristotelian virtue ethicist.  They have argued that the notions of fairness and universal inclusiveness are ideas altogether foreign to a Greek such as Aristotle and to charge him with violating them is to merely arbitrarily impose a value of modern society upon the ancients.            First, I will admit bluntly that I am imposing a modern value on virtue ethics; however, my imposition is not at all arbitrary.  As I reminded us in my introduction, we do not live in a Greek polis, and if Aristotle’s virtue ethics cannot be transported out of the polis and into the modern metropolis, then I fear that is the worst for Aristotle.  So, while purely academic studies of Aristotle ought to be particularly sensitive to the difference between the moderns and the ancients, if we are to retain anything of value from Aristotle, it must be relevant to a modern (qua contemporary) reader.  I have charged Aristotle’s ascriptions of responsibility and blameworthiness of being unfair.              Why do I think that fairness ought to be considered one of the fundamental building blocks of morality?  To give a complete answer to this question is an essay of its own.  However, we ought to consider the following.  First off, it is almost impossible to imagine any version of morality that was not fair.  A morality that condemned the innocent and pardoned the wicked is not a morality at all.  Fairness, and fair treatment for all a society’s constituents, seems patently obvious as a good criteria of morality (I say criteria and not criterion because I think that there are other criteria in addition to fairness which constitute morality, but that is another essay altogether). 

            Secondly, fairness is a norm that we moderns have embraced.  We believe that all people deserve fair treatment in the eyes of the law.  Why is this?  Is it because we, if we were to be tried in our courts, would want to be treated fairly (the Golden Rule “treat others as you would want to be treated”)?  Is it because we believe that treating others fairly is commanded by the categorical imperative (Kantians)?  Is it because we think that treating each other fairly expresses a virtuous character (virtue ethicist)?  Or is it because we think that we attain the most fortuitous consequences by treating each other fairly (consequentialism)?  I would argue that all of these reasons are legitimate (i.e.: good) reasons to include fairness as a requirement of morality.  The fact that a person using mere common sense, a Kantian, a modern virtue ethicist, and a consequentialist can agree that fairness ought to be a requirement of morality is a strong reason to endorse it.  Because we are all subject to value judgments based on whether or not we live up to the standards of morality (those who do not are deemed “immoral” or “bad” people) we all ought to agree on what the standards of morality are.  And fairness is a value upon which we can agree, arguably more than any other criterion of morality.   

Respectfully, 

Jonathan P. Figdor

Vassar College 06

Harvard Divinity School 09 

[1] After all, morality enters Aristotle’s picture at barest minimum in his admission that one cannot be virtuous without doing the right thing (in the right way),  Ultimately, Aristotle himself judges actions.  Aristotle specifically says “The sense of disgrace is not even characteristic of a good man, since it is consequent on bad actions. It is for voluntary actions that shame is felt, and the good man will never voluntarily do bad actions” (NE 1128b).

[2] This is to preclude an Aristotelian from trying to hide behind the language of virtue ethics.  Because this essay discusses how to develop into a good person (a person who has the virtues), trying to argue that there is a difference between morals and ethics gets the Aristotelian nowhere.

[3] McKeon, Richard, Introduction to Aristotle (specifically referring to Aristotle’s Nicomachean Ethics).

[4] Burnyeat, Miles, “Aristotle on Learning to Be Good,” in Amelie Rorty’s Essays on Aristotle’s Ethics.

There is one more person checking the skunk than I thought.

That is great, if I could I would rescind  my vote that the skunk is dead because of that 4th vote.

I’m not being facetious.

Cheers!

william

Next week the Daily Skunk will become theStudentLoanSkunk.com

In about December, when I was having such a hard time getting all my loans together and was trying to figure out exactly how my disaster occured, I started busting the chops of my financial aid advisor on the school as lender program (simply asking simple questions).

It was obvious to me immediately, that he didn’t want to talk about it. he tried to brush it off and direct the conversation to something we had previously talked about.

With some specific questions that I had been told to ask by Allen from student loan justice he eventually gave me the answer that the school did profit from being a lender (of course), but they give it back to the students through scholarship and what not (yeah right!). He assured me that they weren’t like some other schools that are lenders and use it to build new buildings, etc. Hmm, actually my old school has jsut started with an expansion that will almost double the size of their complex.

Sounds fishy to me.

william

Please see the folowing post -justice is starting to be served (minimally). We are going to see a lot more of this I hope.

Check this out, I hope they investigate the last school I attended.

http://www.cbsnews.com/stories/2007/04/11/national/main2673044.shtml

This is the story from the link above.

Another Settlement In Student Loan Probe

Sallie Mae Agrees To Pay $2M Into Educational Fund, Change Some Business Practices

ALBANY, N.Y., April 11, 2007

(AP) The nation’s largest student-loan provider will alter its business practices and pay $2 million into a fund to educate students and parents about the financial aid industry as part of a settlement announced Wednesday in a widening probe of the student loan industry.

SLM Corp., commonly known as Sallie Mae, also agreed to adopt a code of conduct created by New York Attorney General Andrew Cuomo, who is heading the probe.

Cuomo said the expanding investigation of the $85 billion student loan industry has found numerous arrangements that benefited schools and lenders at the expense of students. Investigators say lenders have provided all-expense-paid trips to exotic locations for college financial aid officers — who then directed students to the lenders.

Cuomo is now investigating alleged kickbacks to school officials who steered students to certain lenders.

Investigators found that many colleges have established “preferred lender” lists and entered into revenue-sharing and other financial arrangements with those lenders. Some colleges have “exclusive” preferred lender agreements with the companies.

The newly established code of conduct prohibits revenue sharing between lenders and schools, mandates disclosure of relationships between colleges and lenders, sets restrictions on how lenders are chosen for school “preferred lender” lists, and bans gifts or trips to university employees from lenders.

Sallie Mae is the second lender to agree to the code, which is aimed at making the loan process more transparent.

Sallie Mae, which serves almost 10 million borrowers and has relationships with more than 5,600 schools, agreed to stop running call centers or provide other staffing for college financial aid offices, stop paying financial aid officers for serving on advisory boards and will no longer pay for any trips for college loan officers.

Citibank, which does business at about 3,000 schools, last week agreed to donate $2 million to the same fund as part of a settlement with the Attorney General’s office.

So far, six schools — the University of Pennsylvania, New York University, Syracuse University, Fordham University, Long Island University and St. John’s University — have agreed to reimburse students a total of $3.27 million for inflated loan prices caused by revenue-sharing agreements, Cuomo said.

Those schools, along with all 29 four-year State University of New York campuses and St. Lawrence University, also agreed to abide by the code of conduct.

Within the past week, six financial aid officers at various schools and a federal Department of Education official were placed on leave after Cuomo’s office said they received stock, consulting fees or other compensation from Student Loan Xpress. The company was acquired by CIT Group Inc. in 2005 when it bought Education Lending Group Inc.

Last week, Cuomo sent subpoenas to Reston, Va.-based Sallie Mae, requesting information on any current or former employees who had worked at the Education Department over the past six years.

CIT on Monday suspended the top three executives at Student Loan Xpress amid its own investigation into the unit’s business practices.

Also Wednesday, Sen. Edward Kennedy, D-Mass., said he has asked the Securities and Exchange Commission to open an investigation into the student loan scandal.

Kennedy, who chairs the Senate education committee, asked the SEC to look into the transfer of stock from the current president of Student Loan Express, Fabrizio Balestri, to loan officers at three schools and one senior official at the U.S. Department of Education.

In a letter sent to the SEC on Tuesday night, Kennedy said his own investigation revealed that Balestri apparently acquired the stock through a private placement at a discount and then sold it to the others at a discount.

Kennedy said Balestri sent the officials a “Memorandum of Gift,” purporting to show he gave them the stock for free, but Kennedy said all of those receiving stock paid something for it.

The sale of private placement stock could be considered a securities violation, depending on when the sale took place.

FOR IMMEDIATE RELEASE
April 5, 2007

JOHN EDWARDS STATEMENT ON RECENT STUDENT LENDER SCANDALS

Chapel Hill, North Carolina - In response to recent scandals over colleges’ ties to student lenders, Senator John Edwards today called for fundamental reform of the student loan programs: 

“The point of guaranteed student loans is to guarantee that students can afford college, not guarantee that banks get immense profits.  But it’s not working the way it should.  Bankers are racking up huge profits, students are facing increasingly large debts, and colleges are stuck in a conflict of interest.

“We need to fix the student loan program to take banks - which are just an expensive middleman - out of the process, and focus on making sure young people aren’t crushed by debt by the time they leave college.  We should make all loans directly from the Education Department, like a quarter of college loans are already.  This one step would free up more than $6 billion a year that could be reinvested in making college more affordable.  It would also let students know that college officials have their best interests at heart.”

The largest student lender, Sallie Mae, saw its stock go up 1,900 percent between 1995 and 2005, while tuition and fees climbed 63 percent.  It paid its CEO $225 million in the five years before he retired in 2005; meanwhile, it charged students rates as high as 28 percent.

Earlier this week, New York State Attorney General Andrew Cuomo announced that Citibank and five universities agreed to pay $5 million to students to resolve an investigation into their student loan practices.  Yesterday, the New America Foundation discovered that three college financial aid directors had personal investments in a lender they recommended to their students.  The financial aid director at Columbia University has been placed on leave.

Edwards has long supported the Direct Student Loan program, which makes loans from the federal government and serves about a quarter of students today.  In 2003, Edwards asked the U.S. Department of Education to enforce federal laws against lenders paying colleges to increase their loan volume.  At the time, the department postponed action in deference to an industry attempt at self-regulation.”

 –30–

Paid for by John Edwards for President.

From Studentloanjustice.org

This from our friends at the New America Foundation…

NEWS SCOOP: Stock Options Provided to Financial Aid Officers by Student Loan Provider

Higher Ed Watch Investigation Prompts Columbia University to Put Aid Administrator on Leave; Prompts New Round of NYS AG Subpoenas as Well

Stephen Burd | April 4, 2007

As per an investigation by the New America Foundation, Higher Ed Watch has learned of several financial aid administrators who had significant personal investments in a publicly traded, for-profit student loan company.

According to a September 2003 SEC filing by Education Lending Group (see chart on page 18), the original owner of the lender Student Loan Xpress, financial aid directors at Columbia University, the University of Southern California, and the University of Texas at Austin, were preparing to sell 10,500 shares of stock in the company, which were worth more than $100,000 at the time.

read more on this here: http://www.newamerica.net/blogs/2007/04/stock

William