Dametra Williams: From Homeless to Prosperous

Stories are the creative conversion of life itself into a more powerful, clearer, more meaningful experience. They are the currency of human contact. — Robert McKee

Bleary-eyed and groggy, I snap to attention at the sound of my blaring alarm. The clock reads 7am. Of all my waking moments, this one consistently ranks at the bottom of my list.

But day after oh-so-early day, there’s one thing that gets me out of bed and out the door to our San Francisco office: the story of Dametra Williams.

A single mother, Dametra worked full-time while living in a homeless shelter, building up enough money to rent a bad apartment in a worse neighborhood. Her daughter, Yvonne, risked losing a private scholarship due to poor grades. Hope was in short supply.

Then Dametra joined EARN, where she created a spending plan and set savings goals for her future. Eventually, Dametra saved enough money to hire a much-needed tutor for Yvonne, securing the grade-based scholarship that was keeping the teenager enrolled at a private high school.

Soon after, Dametra herself earned a private scholarship to Mills College — and, I’m excited to say, recently graduated. She’s now starting her own business in the Bay Area.

Dametra’s story isn’t meant to be kept in a box (or, in modern lexicon, a private YouTube channel). It’s destined to be shared, to inspire generations of hardworking Americans who’ve got the vision but lack financial resources and know-how.

That’s why in early July, EARN hired Matt Silva, our new Levi Strauss Communications Fellow, to document the powerful stories of our Savers. As he gets his feet wet, expect more videos, photos, and blog posts on our Facebook, Twitter, and YouTube channels — not to mention right here on the EARN blog!

When I walk into work every morning, I’m reminded of the triumph of the human spirit. Now it’s your turn to be inspired.

Until next week,

Charlotte
Social Media Fellow

Should For-Profit Colleges Face Stricter Regulations from Uncle Sam?

Defaults on student loans are on the rise. And according to current data, a main cause may be the recent surge in enrollment at for-profit colleges.

In recent years, the sheer number of these schools has grown considerably, with enrollment climbing from about 365,000 students to almost 1.8 million. For-profit colleges draw the greater part — sometimes 90% — of their funding from federal aid. Since higher enrollment equates to more money, these for-profit schools have a strong economic incentive to encourage students to enroll. Unsurprisingly, a growing body of evidence suggests that this dynamic has led for-profit colleges to encourage students to take on heavy debt loads, often enticing students with false assertions about how much money they’ll earn upon graduating.

It is crucial that policy makers address the question of how the government ought to support these institutions, both to ensure fairness in policy making and, most importantly, to protect students. Heavily indebted students already face enormous financial strain, and the sputtering US economy, not to mention several decades of limited job creation, according to many pundits, will only make matters worse. If these students fail to complete their degrees and are forced to compete in the job market with college graduates, they’ll certainly face even greater obstacles.

Yet for-profit colleges portray themselves as champions for working people and minorities. The new ad campaign that Corinthian Colleges, Inc., a California-based corporation, rolled out in the New York Times and Wall Street Journal this week clearly indicates how the company seeks to position itself as sympathizing with low wage workers. But when situated within its pattern of abusive behavior — in 2007 alone, Corinthian was both sued by the State of California for exaggerating its record of placing students in well-paying jobs and federally investigated by the U.S. Department of Education for “waste, fraud, and abuse of federal education dollars” — this positioning looks downright fraudulent.

Posing as prospective students at 15 for-profit institutions, agents from the Government Accountability Office (GAO) recently discovered that admissions officials at for-profit colleges often engaged in fraudulent, deceptive or dishonest marketing tactics. Admissions officials also lied about the total costs of their schools’ programs, exaggerated the employment opportunities and salaries that prospective students could expect after graduation, and sometimes told students that they could not speak with financial aid counselors until after they had enrolled.

In 2009, students at for-profit colleges received more than $4 billion in Pell Grants and more than $20 billion in federal loans. These same students, however, defaulted on their loans at a rate of 11.6%, compared with 6% of students at public non-profits and 4% at private non-profit colleges. According to the Department of Education, in 2008-2009, students at for-profit schools were 26% of federal student loan borrowers, yet they made up 43% [pdf] — almost half — of defaulters.

The above findings reflect the moral hazards that emerge when a private for-profit industry thrives on federal subsidies without appropriate oversight. As a result of the GAO investigation, the Department of Education has recently proposed new regulations that aim to tighten eligibility requirements that private for-profit colleges must meet before receiving federal student aid. If these regulations are enacted, for-profit colleges will only be eligible to receive federal aid if 1) 45% of their former students are paying down the principle of their federal loans or 2) their students graduate with a debt-to-earning ratio of less than 8%.

The direct impact of tighter regulation would cause 5% of for-profit colleges to become ineligible for federal aid. In addition, 55% of for-profit programs would be required to inform students that they may not earn enough after graduation to repay their loans. Perhaps this will put us on the right track to reclaiming an educational aid system intended to empower students — not saddle them with a lifelong burden of debt.

Until next week,

EARN’s Policy Team

Photo credit: alancleaver_2000

Grassroots Constituency, Here We Come!

California, like many states, continues to struggle with passing a state budget and providing the resources that some individuals and families need to survive. Meanwhile, in these changing economic times, the number of Golden State families living from paycheck to paycheck, if they still have one, is steadily increasing.

Now, it’s certainly easy to be disheartened by these facts. But here at EARN, we also acknowledge that the economic crisis has provided us with a rare opportunity: the chance to meaningfully engage an emerging constituent base for the first time, by bringing voices and ideas of low-wage constituents to groups that directly influence California’s asset building policy agenda.

With years of proven success in helping low wage workers create and sustain wealth through innovative programs, we are now proudly laying the groundwork for building a large grassroots constituency that can advocate for policies that create greater opportunities for prosperity.

And so, this summer, EARN launched its constituency-building efforts, with the intention of building a statewide policy and research agenda that is driven by an engaged and active constituent base.  The first phase of this work, which we’re conducting right now, is listening to people who represent the diversity of California, especially those who lack access and opportunities to basic financial services.

Our inaugural partners in this ambitious effort include Families in Schools in Los Angeles, Greenlining Institute, Long Beach Interfaith Community Organization, and PICO federations in the San Joaquin Valley. These partners have an impressive and long standing history of engaging directly with low-wage workers in California and have advanced multiple social justice issues, such as providing quality jobs, affordable housing, and quality education for poor neighborhoods and communities of color. In the future, we plan to broaden our partnership base, ensuring that the diverse voices of California constituents are represented in our research and policy agendas.

What will we gain from these sessions? Fundamentally, we’ll understand more directly the serious challenges that keep low-income families from financial success. But we’ll also hear stories of hope, some of which may spark ideas and solutions for reducing asset poverty and creating long-term financial security.

Social change does not only occur at the state capital. Rather, its roots are formed in our neighborhoods, cities, and regions. Accordingly, I’m thrilled about EARN’s decision to engage various parties — nonprofit partners, policymakers, and constituents alike — to advocate for local and statewide asset-building policies and programs.

Perhaps no one expresses my hope for this project better than Dr. Martin Luther King, who, in 1967, offered us this beautiful quote:

“Let us be dissatisfied until the tragic walls that separate the outer city of wealth and comfort and the inner city of poverty and despair shall be crushed by the battering rams of the forces of justice. Let us be dissatisfied until those that live on the outskirts of hope are brought into the metropolis of daily security.”

Until next week,

Sheryl Lane
Director of Constituency Building

Photo credit: Forest Service – Northern Region

Are Wealth and Health Really Related?

Think your job is killing you? You might have something there, especially if you’re underpaid and overworked.

There’s a new buzz in the public health sector about the relationship between health and wealth, something many people feel is an issue of social justice. In response, the Health Wealth Coalition, a diverse group of practitioners and researchers, held meetings in Oakland, CA, during June and August to ascertain the roots of the financial health divide. (The Coalition will convene again in October.)

Meanwhile, at EARN, we’ve also been examining the wealth–health connection. Harnessing the power of multivariate statistical analyses, we’ve examined recently released data on a representative sample of the United States – a full 428,000 people — from the Center for Disease Control.  When these people’s health is graphed relative to their age and income, the wealth–health connection is plain to see.

One of the interesting aspects of the wealth–health connection is that wealth can be defined in terms of non-material assets. Yes, health and income are correlated. But so are health and education.

According to our research, people with less than a high school education fared the worst in terms of health as they aged. People with a high school education and, possibly, some college fared in-between, while those with a four-year college degree or higher enjoyed the best health during their lifetimes.

Life satisfaction was also positively associated with both income and education, implying that the two assets can also offer psychological benefits.

On September 8, I’ll be joining EARN Vice President Camille Busette in presenting these and other findings in a new webinar, “Do Financial Assets Matter for Health?”  We encourage you to join us and learn more about this cutting-edge field.

But our research won’t stop on September 8. The EARN Research Institute that launches at the end of this month will carry out longitudinal research to track down the wealth–health connection and investigate ways to optimally improve people’s physical and psychological health through innovative financial programs and services. Stay tuned!

Until Next Week,

William M.  Lapp, Ph.D.
EARN Research Manager

Photo credit: rocknroll_guitar

Happy Belated Labor Day!

Love,

The few EARN staff members still at the office at 5pm on Friday evening