The Obama administration tightened student loan underwriting in 2011, intending to weed out risky borrowers. Within a year or two, some historically Black colleges and universities were on the verge of closing, because their students disproportionately depended on the parent PLUS loan program. The changes were reversed by 2014.
Where this was said
At 25:02 · chapter starts 24:30
Lieber recounts the cautionary tale of the Obama administration's reform attempt. In 2011, facing a system that was clearly generating bad outcomes, the administration tightened underwriting standards for the parent PLUS loan program, intending to prevent the most financially precarious borrowers from taking on debt they couldn't repay. Within a year or two, however, it became clear that the reform had a devastating side effect: a number of historically Black colleges and universities were on the verge of going out of business. Their student bodies disproportionately depended on the parent PLUS loan program, and once those students lost eligibility, they could no longer afford to attend. The administration faced an impossible choice and by 2014 had essentially reversed course, restoring the looser standards it had sought to eliminate. [1] — Ron Lieber "The Obama administration tightened student loan underwriting in 2011, intending to weed out risky borrowers. Within a year or two, some his…" 25:02 The lesson Lieber draws is uncomfortable: the student loan system is so entangled with institutional survival that even well-intentioned reforms carry enormous collateral risk.
When the Obama administration tightened loan underwriting, some historically Black colleges and universities came close to shutting down because their students heavily relied on the parent PLUS loan program.
Factories that replaced coal engines with electric ones in the early 1900s got only 6% efficiency gains. Those that redesigned their entire factory around electricity got a 3x productivity improvement. Swapping AI tools into your existing structure will give you 6%. Rebuilding around AI will give you 10x.
Lebanese terrorists backed by Iran were holding American hostages throughout the Reagan presidency. Reagan had loudly campaigned against negotiating with terrorists — putting him in an impossible position that his team quietly decided to ignore.
During the Iran-Iraq War, the US openly supplied Iraq with weapons, training, and intelligence. At the same time, Oliver North was secretly funneling missiles to Iran. The US was playing both sides of a shooting war.
Oliver North traveled to Iran under the alias 'William P. Goode' with a fake passport. CIA Director William Casey allegedly gave him cyanide pills so he could kill himself rather than be tortured if captured. He returned safely and the deal moved forward.
The Pentagon sold missiles to the CIA for $3,700 each. The CIA sold them to Richard Secord at cost. Secord sold them to Iranian middleman Ghorbanifar for $10,000 each. Ghorbanifar charged Iran even more. The profit — including $3 million in interest in one Swiss account — was diverted directly to fund the Nicaraguan Contras.
America secretly transferred 2,000 missiles and missile parts to Iran in 8 shipments over more than a year. Only 3 of 7 hostages were released. Three more were taken. The net result was zero freed hostages and a full-blown constitutional scandal.
On October 5, 1986, a CIA Contra supply plane flew a weapons drop at 2,500 feet in broad daylight. A Sandinista soldier shot it down. The only survivor, Eugene Hasenfuss, had borrowed a parachute from his skydiving brother. He was captured, paraded in front of cameras, and told the Sandinistas everything he knew.
The CIA supply operation used a front company called Southern Air Transport, widely known to be a CIA cover. Crew members of the downed plane carried their Southern Air Transport employee IDs in their wallets. One also had a business card directly linking him to Oliver North's office in Washington.
When the scandal broke, Oliver North and his secretary Fawn Hall conducted what became known as a 'shredding party,' destroying a day's worth of documents. The full truth of Iran-Contra may never be known because of what was fed through that shredder.
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