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European Central Bank president explains economic meltdown

Jean-Claude Trichet, president of the European Central Bank, explained the attitude behind every asset bubble in history using four simple words:

“This time is different.”

He said such mindsets always pervade in the buildup to a crash.

Trichet, described by Newsweek as the fifth most powerful person in the world, lectured to a nearly full Owen L. Coon Auditorium at Northwestern U. on Tuesday about financial meltdowns and the efforts of central banks to mitigate their consequences.

“He’s one of the four or five major leaders involved in managing the financial crisis,” said Lawrence Christiano, the Northwestern economics professor who introduced Trichet.

“There was (Federal Reserve Chairman Ben) Bernanke, who was the key, and (former New York Federal Reserve president and Treasury Secretary Timothy) Geithner, but in Europe, there was Trichet. He moved vigorously … and supplied enormous amounts of cash and dollars.”

Trichet said the meltdown served as a “sanguine reminder” that all economies are subject to asset bubbles, or times when prices of economic goods or financial instruments, such as stocks and bonds, spike due to what former Federal Reserve Chairman Alan Greenspan famously called “irrational exuberance.” Inevitably, bubbles burst and prices crash because the values of the underlying economic factors did not go up during the bubble. As Trichet described it, “The real economy introduces limits on euphoria.”

“Those who don’t know history are doomed to repeat it,” Trichet said, quoting Edmund Burke.

Comparing the current crisis to the savings and loan crisis of the 1980s and the dot-com bubble at the beginning of the millennium, Trichet said a commonality of financial crises was an excessive amount of credit available before the crashes compared with levels of gross domestic product, a measure of economic output. With a large graph projected above him showing a spike in a key interest rate spread in 2008, Trichet said another common factor of the crises was a tightening of credit and rising interest rates in the money markets, the means by which banks lend to and borrow from each other.

Trichet said although financial crises might have similarities, each event was still unique.

“Given the idiosyncrasies, history may provide little guidance in dealing with the specificities,” he said. Central banks need to “be prepared to act rapidly and decisively in response to a crisis.”

“The ideas made a ton of sense,” said Ben Vannier, a second-year Kellogg student. “You want to be alert. … Crises can’t be avoided.”

When Trichet was asked by an audience member for his opinions on the ongoing Greek fiscal crisis, Trichet said little more than that each country that uses the euro is responsible for its own fiscal health. Another student asked if the ECB will engage in buying government bonds to further ease tight credit markets in Europe and reduce the risk of a Greek bond default. Trichet said only that “we are following our own rules and I would not comment more.”

Some students said they were put off by how closely Trichet stuck to his script.

“He didn’t really meet my expectation,” Weinberg junior Sherry Wu said. “He was very general, very vague. I would’ve liked more concrete policy recommendations.”

Christiano said lack of oversight contributed to the problem in the United States, where “there is a great distrust of government regulations … and the regulators had to kind of look away for this to happen.”  Christiano also added that the Federal Reserve in the U.S. faces much greater political pressures compared with the ECB, which he said was very independent, though “no government institution is ever independent from the society it’s in.”

He said Europe’s problems stem more from a common currency among separate governments.

“The problem in Europe is that they formed a monetary union without a political union,” he said. Explaining some risks the lack of a strong political union poses, Christiano said Greece dodged treaty conditions meant to prevent fiscal crises with “wildly profligate deficits.”

Trichet also gave a few general guidelines that central banks, which control national economies’ monetary policies, should follow in the future. He said they must be flexible and keep in mind their immediate goals, which for the ECB is price stability, adding that monetary policy is not a cure-all.

“Alone it will not suffice,” he said.

After assessing the history and causes of recent crises, Trichet spoke about the creation of the European Systemic Risk Board. The board will identify and assess risks in the financial sector, issue risk warnings and make policy recommendations for remedial action by regulators outside the ECB, which unlike the Federal Reserve, does not regulate banks.

Concluding his speech, Trichet quoted one final author, H.G. Wells:

“Human history becomes more and more of a race between education and catastrophe,” Trichet said.

He said central banks should walk away from the recent financial crisis with greater wisdom.

“Thanks to a prompt global response … catastrophe has been avoided,” Trichet said. “We must ensure the appropriate lessons are learned.”

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For cadets, war simulations are no game

Ten ROTC cadets lay prone, shoulder to shoulder, waiting to fire their M-4 carbines.

“Lock and Load. Turn your selector switch from safe to semi. Engage your target.” Each cadet loaded a magazine, centered the front sight posts inside the rear sight aperture, exhaled smoothly and squeezed off three quick rounds.

With each pull of the trigger, compressed air — not a cartridge — kicked the rifle back.

The virtual rounds plinked into a target projected on a screen some 20 feet across the room, and a computer connected the dots, showing the cadets how consistently they shot.

After a few tries, half the cadets had “zeroed” by putting two consecutive bursts within a four-centimeter circle. They stood up and watched their peers who, like first-year Cadet Faith Gilbertsen, struggled to find the mark.

She was losing balance by crossing her legs, her sight picture was obscured because she had been taught to shoot with both eyes open and she wrapped her index finger too tightly around the trigger, the senior cadets told her.

“It definitely made me see that I need to work on a few things,” Gilbertsen said.

She didn’t zero that night, but by the end of the weekend, she was beginning to reach out to targets on the 300-meter live-fire range.

When she graduates, Gilbertsen, like most Army ROTC cadets, will commission as a second lieutenant in command of a full platoon of soldiers, likely in a warzone. That transformation from civilian to commander isn’t fast or easy.

“We can teach them only so much that’s book-based,” said Capt. Ryan Curl, Army ROTC enrollment officer. “Most of what they do is going to have to be based on their knowledge and experience.”

Thursday: 2200

Looking up at the clear northern Minnesota sky, Cadet Sean DeBruzzi said it was nice to be out of the city. At its heart, Camp Ripley, a 53,000-acre site north of Little Falls, seems as far from civilization as possible.

A carpet of maple and oak leaves covers the vast forest and makes silent cadet movement nearly impossible.

Fields and marshes break up the haphazard thickets of aspens that cloud cadets’ line of sight.

Friday: 0200

After a night on the simulator and field stripping an M-4 carbine, cadets bunked in modest barracks.

Trading off every half hour, some woke from their narrow cots to pace the building for fire guard duty.

They joked that the concrete and brick barracks weren’t likely to go up in flames, but in pacing the halls, cadets were preserving tradition and looking for discipline, not fires.

Friday: 1000

Shielding his face from the sun with a wide-brimmed Stetson and dark sunglasses, a wiry bus driver — a civilian contracted to shuttle the cadets between training exercises — spoke as loudly about American politics as did his stars-and-stripes vest.

He lamented the “unpatriotic” direction he said the country has taken.

“It will take at least one more civil war to get this country right again,” he said to the few cadets within earshot.

Silence.

“That’s the great thing about America,” Cadet Battalion Cmdr. Chris Holbrook said. “Everyone is entitled to an opinion.”

The discussion ended there.

Far from the battlefield, poll numbers show increasing national polarization over the war in Afghanistan.

Though soldiers and officers keep their political views under wraps, they often become the focal point of war debates. As recently as Thursday, anti-war protestors marched past the Armory where ROTC is based.

The demonstrations rarely become confrontational, but if they do, cadets have little room for debate.

“It’s nothing that getting into a shouting match or poorly representing the country I’m serving is going to help at all,” junior Cadet Kate Roberts said.

“We are here to protect those freedoms,” said Maj. Doug Leonard, one of the cadre, the administrators and officers who instruct cadets. “We hope that people understand that if we didn’t have a strong military in this country, we’re not guaranteed that we would have these freedoms forever.”

President Barack Obama has announced that he plans a full withdrawal of American troops from Iraq by the end of 2011. Last December, Obama laid out a strategy for Afghanistan that has sent an additional 30,000 troops to that country and a drawdown beginning in mid-2011. It is estimated that in May or June, the total number of American troops in Afghanistan will surpass those in Iraq for the first time since 2003.

With 316 deaths, 2009 was the bloodiest year in the eight years of U.S. military involvement in Afghanistan.

Friday: 1200

The third-year cadets found themselves at the foot of obstacle 11, a bridge of two ascending ladders that met at a peak some 15 feet above the ground.

Decked in full Army combat uniforms with 3.5-pound Kevlar helmets and fake M-16s slung over their shoulders, cadets wove through the rungs.

They ambled over the first rung, swung back down under the second and pulled themselves back over the next.

Cadets were careful not to speak — a patrol of the “Chinese Hoard” was near.

According to their orders from “Operation Weaving Strength,” the ladder bridge crossed more than gravel and leaves; beneath it ran the “Killer Lava River.”

Any noise might jeopardize the mission, so the squad leader commanded his cadets with nothing more than hand signals and overt gestures.

Such exercises, according to cadre, aren’t about the enemy or even the setting; they’re about forcing the cadets to lead.

The goal: get cadets they don’t know to trust them and follow their command.

“There has to be a practical exercise where they can be put in charge of something and make mistakes,” Curl said.

All cadets attend the Field Training Exercises at Camp Ripley, but for juniors, FTX is an important proving ground before they spend a month at Joint Base Lewis-McChord, or simply Fort Lewis, in Washington state leading, being led by and being graded against more than 4,000 other cadets from across the nation.

For those juniors, the weekend at Camp Ripley is a three-day prologue to crucial simulations to come.

Prepping for Fort Lewis, juniors at FTX rotate into the squad leader role, commanding cadets from other schools to execute the missions.

“As a leader, you need to get people motivated to do something they don’t necessarily want to do,” said Holbrook, a journalism major who was previously deployed to Afghanistan and Iraq. “That’s the standard of a successful leader.”

The Army has standardized tests for skills such as marksmanship and even land navigation, but there are no metrics for leadership, Leonard said.

“We’ve got four years with them as a cadet to assess their honesty, integrity and whether they would make a good officer,” Leonard said. “Four years is plenty of time to decide if they’re the right type of person to be leading other soldiers.”

Even with solid leadership, soldiers make mistakes.

When junior Cadet Rebekah Rovik slipped off a rung and fell five feet into the “lava,” the squad got a chance it wouldn’t find on a battlefield: The cadets counted to 20 and started the operation over.

Friday: 1600

At FTX, cadets plan and execute missions, wielding fake M-16 rifles, AK-47s and AT-4 shoulder-fire missiles. Even while pointing their “rubber ducks” downrange and yelling “bang, bang, bang,” the cadets are told to “carry it like its real.”

Junior Cadet Jacob McLellan, a cultural studies major at Northwestern College in St. Paul, said he “played Army” with his siblings as a child. Now, with raised stakes, he’s doing it again.

“We’ll joke around once in a while and say, ‘Yeah, this weekend we’re going to play Army,’ or whatever, but there is structure to it.”

And consequence.

“These are other people’s lives, whether they’re the enemy or not,” he said. “[That] makes it real.”

Also real for the cadets at FTX were the wood ticks and the fear of Lyme disease-carrying deer ticks.

Two senior cadets spent the daylight hours stamping out dozens of the parasites that crawled at them from all directions over a gravel road.

When one senior cadet showed the cadre a strip of tape on which she had stuck 18 of the ticks she pulled off herself and others in only three hours, the commanders began to reconsider the decision to make the cadets unroll their sleeping bags outside for the night.

The ticks were just a “small example” of the unexpected situations officers are forced to address, Maj. Gary Mundfrom said.

“You’re trying to juggle in your mind two or three different alternatives,” he said. “You know that you’re not going to do all three of them; in fact, you may do none of them, you may do a hybrid.”

The cadre decided that busing the cadets and trucking their rucksacks and bags back to the post would be too time-consuming and laborious.

Instead, they settled for a group tick check and bivouacked under the stars, with the ticks, as planned.

Friday: 2100

After wolfing down a hot meal of shrimp spaghetti alfredo, broccoli stems, bread and milk — a welcome break from the vacuum-sealed rations they normally eat in the field — the cadets hunkered down to listen to seniors lecture on topics as diverse as field hygiene and making an impromptu “hooch,” or lean-to, out of an Army poncho.

With no clouds overhead, the daytime heat dissipated quickly.

As the seniors wound down, the cadets zipped up their mummy bags and tried to block out the sounds of the C-130s flying overhead from the runway only two miles away.

Saturday: 0400

The cadets woke three hours before sunrise to find the field and their sleeping bags dusted with frost.

“It’s easy to lay around, watch TV, hang out, eat chips, eat pizza, watch some more TV, take a nap, maybe take another nap,” Roberts said. “I enjoy those days, but I just don’t get the sense of fulfillment from that kind of stuff that I do when I come out here and I run around in the woods and I learn stuff and I’m up 18 hours in a day and I sleep six and I get back up and do it again.”

Saturday: 0900

At the far end of the live-fire range, green plastic life-size targets appeared little bigger than toy Army men.

As the targets popped up from behind mounds staggered as far away as 300 meters, first-year cadets such as Grant Imhoff leveled their rifles, found a bead and fired.

With each squeeze of the trigger, Imhoff sent a 5.56-mm “Penetrator” anti-personnel round downrange at close to 3,000 feet per second and a brass casing to his right.

On most of his shots, Imhoff also knocked the target back to the ground.

At FTX in the fall, Imhoff scored 17 out of 40. On Saturday he hit 28.

“It made me realize I need to get in and practice on the [simulator] and be a little more dedicated that way,” he said.

Outside, nerves and wind are a factor, Imhoff said, but after a winter of practicing, he found himself consistently scoring 37 and as high as 38 on the simulator.

“There are ways you can get through ROTC without making the extra effort,” he said. “But I think it makes a world of difference to do it. It shows in the people we have going the extra mile.”

Saturday: 1400

With an enemy patrol in the area and his soldiers waiting for orders, squad leader Jacob McLellan was deciding how to set up an ambush.

McLellan looked over a terrain model, laid out the operation and led his troops to set the trap.

The squad reached its objective, got in position and hunkered down to wait for the enemy.

The mission started “perfectly,” McLellan said.

When two figures in camouflage Army-issue pants carrying what looked like shoulder-fire missiles walked into the ambush, McLellan gave the command to open fire.

His squad fired for 10 seconds, then waited.

The two continued to advance, so McLellan ordered another volley.

Then, a squad leader’s worst nightmare: McLellan realized that the two were friendlies.

The two cadets who were playing reporters in the exercise screamed out that they were media, not combatants. McLellan ordered a ceasefire and led a team of cadets to aid the reporters.

McLellan ordered the wounded reporters to be carried away and resumed a watch for the enemies, trying to salvage the mission.

“If this was real, it would have been disastrous,” McLellan said later.

At times, it has been.

A video released in early April by investigative web site Wikileaks shows an Apache helicopter gunning down two Reuters reporters in a case of mistaken identity.

For McLellan, the mission was part of a training exercise, and within an hour the pretend reporters would recover from imagined wounds and would be preparing to rattle the next round of cadets.

Maj. David Boisen reflected on the incident in light of the video.

“I hope he learned his lesson,” he said. “It’s better to do it now when no one gets hurt.”

From students to officers

Upon graduation, Army ROTC cadets commission as second lieutenants and take command of a platoon with soldiers who may have as much as a decade of service.

“If you’re incompetent, it’s going to show right through,” said Cadet Battalion Cmdr. Chris Holbrook, who has been deployed to Afghanistan and Iraq. “That right there undermines the entire leadership of that unit.”

The commitment to service differs among cadets.

For many, that means at least four years of active duty service — or eight years as a reservist in the National Guard — the exchange some cadets make for full tuition, books and fees.

“The first question I ask when they come to my office is, ‘Why are you here?’ ” said Capt. Ryan Curl, Army ROTC enrollment officer. “The best answers are the ones that don’t involve scholarship money. The best answers are the ones talking about feeling a need to serve their country, feeling a need to challenge themselves, to be a part of something bigger than themselves.”

Curl has seen the “ebb and flow” of recruiting in times of war and peace. Today, 160 Army ROTC cadets wander the halls of the Armory building, but when Curl joined the cadre five years ago, that number was closer to 80.

The down economy and the Middle Eastern wars’ retreat from newspapers’ front pages have contributed to that growth, Curl said, adding that current cadets come from a generation whose lives “have been centered around giving back to the community.”

During World War II, the Armory was so overrun with cadets training to be officers in the Pacific and European theaters that some military science classes were moved to the basement rooms of Memorial Stadium. To meet its need for space during the period, the Navy ROTC program annexed Nicholson Hall, dubbing it the USS Nicholson.

The Army ROTC program is as old as the University itself, and for the first half of the University’s existence, enrollment in the program was mandatory.

Now, cadre say that not everyone is fit to be an Army officer.

“It’s not something that’s for everybody. It’s not supposed to be,” Curl said. “It’s very specific people who can handle the rigors, that kind of stress and the sacrifice.”

Many who join don’t see the Army as a career, and the Army is fine with that.

“We fully encourage people to plan on joining the Army just for a few years and get out and let them go with a résumé that’s going to look really good with four years of experience in the Army,” said Maj. Doug Leonard, a military science instructor who teaches first-year cadets.

“Just committing to do three or four years of service is a huge step for me,” junior Cadet Kate Roberts said.

Graduating cadets could end up anywhere the Army has a presence; the United States has tens of thousands of troops in Germany, Japan and South Korea. But the current class all joined with the knowledge that they will likely deploy to a war zone.

Curl said many of the cadets volunteered during an especially difficult time for the nation’s military.

“Look at where the Army was then,” Curl said. “We were in the middle of the surge, it was a tough time, and yet they still wanted to serve their country; they still want to join the Army. To walk into that environment and say, ‘Not only do I want to be a part of it, but I want to be a leader in that,’ I think is impressive.”

Cadets know they’ll be shouldering a burden, but most say they’re not afraid.

“I guess the excitement overshadows the fear,” first-year Cadet Grant Imhoff said. “It probably won’t set in directly. Right now I’m just on the high of being nervous and excited.”

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College loans remain a struggle

Jonny Choate, junior in political science, tried to follow the process his brother went through when his brother financed college at Upper Iowa U. His elder sibling went through Iowa Student Loan and came out with a total of $32,000 in debt. After going through Iowa Student Loan and Wells Fargo for private loans plus federal loans, Choate will have over $50,000 in debt by the time he graduates after nine semesters at Iowa State U.

“I didn’t really have much money coming in [to college],” Choate said. “I had an account saved up, but I ended up needing to purchase a car with it before college.”

Choate said he was set on attending Iowa State “off the bat,” and gave little thought to other choices for his education, although it wasn’t until his junior year when he actually found his major. When he started going to Iowa State, he first financed his education through Iowa Student Loan.

“My dad had taken care of my brother’s, so he’d gone through it before, so he planned to do the same thing for me through Iowa Student Loan,” Choate said.

Choate ran into an obstacle when he contacted Iowa Student Loan to reapply his sophomore year and was told to find another lender.

Iowa Student Loan did not go bankrupt nor did it close its doors; rather, the credit market crisis affected the availability of student loans.

“At its peak in 2008 and 2009, it caused a reduction in the private student loan options available to college students,” said Steve McCullough, chief executive officer of Iowa Student Loan Liquidity Corp. “Since then, Iowa Student Loan has been working with its partners to rebuild Iowa students’ supplemental funding options.”

Choate went to private lenders, but the situation was further complicated when he scrambled to find a co-signer for a Wells Fargo private student loan as his sophomore year approached. Five family members — two aunts, both parents and a grandfather — were rejected when Wells Fargo said they did not have adequate credit.

“My aunts had bad credit and my dad is a small business owner, which he filed bankruptcy for,” Choate said, adding his grandfather is retired.

Choate lives in Frederiksen Court with three roommates from his high school — each of whom is in a financial situation he’s jealous of. Choate said two have most of their expenses covered by parents, and the other has every dime covered by the federal government as a member of the Air Force.

Choate found slight relief his junior year after obtaining a Stafford Plus loan through the government, which he said was a much easier process.

“One thing that was beneficial to me was going through the university to get my private loans,” Choate said. “I think they should try to make that the main option instead of students going to Wells Fargo or a private bank.”

Rachel Curtis, graduate student in sociology, said her jaw dropped when she completed her undergraduate studies and got her first bill showing her $38,000 debt.

Curtis took out debt through various federal and private loans while at Iowa State or holding internships. She kept a part-time job at a restaurant throughout her career at Iowa State.

Curtis pointed out one area she attributes to her debt was living in dorms.

“The dorms are way more expensive,” Curtis stated. “The convenience is not worth it. And actually my academics got better when I moved off campus, there were fewer distractions.”

Curtis has also taken part in several on-campus groups and internships during her summers.

“I understand the increase in tuition because the university is losing money,” Curtis said. “But the debt makes me sick to my stomach.”

Iowa State sets aside tuition revenue each year to go back as financial aid in grants. Roberta Johnson, director of financial aid at Iowa State, said the university is required to use a minimum of 15 percent, but they currently take closer to 27 percent.

There is a limit Iowa State sets for student loan amounts, which Johnson said is a safeguard for both lenders and students not to compromise their financial futures.

State Rep. Peter Cownie of West Des Moines feels like there could be a direct relationship between the high levels of student debt and a lack of understanding about credit. He is the president of Junior Achievement of Central Iowa, a nonprofit group that teaches students K-12 about financial literacy, entrepreneurship and overall economics.

“When I was in college, I knew a lot of kids who didn’t know what a credit card was, didn’t know what a mortgage was and didn’t know what credit card debt was,” Cownie said. “Once people are out of college they really need to know what those things are.”

He suggested financial literacy is key to curbing the high level of debt in Iowa and said it would be a good thing for colleges to advocate.

Johnson similarly said there is a great need for financial education, considering student loans are often one of the first experiences young people have with credit. The federal loans require an online training session, but up until recently, nothing was required for private loans.

“Lenders who did anything different were doing it for one of two reasons: Either they had a good heart or they knew it would affect their bottom line,” Johnson said. “Because the more counseling they did up front, the less likely the students would default on the back end.”

Congress passed legislation in the Truth in Lending Act that now requires more disclosure for students getting private loans, but no mandatory financial counseling.

“It is mandatory the student get a form from their school showing what the total cost of attendance is and what their other financial aid is,” Johnson said. “There’s a requirement the student receive at least three disclosures from the lending institution.”

Those disclosures include total loan amount, expected interest to accrue over the life of the loan and possible repayment plans available. Additional regulations require the schools to let student know federal loans may be more advantageous than private loans, Johnson said.

Johnson said there have been discussions about a required financial literacy course similar to Library 160, and she points out that direct loans require an online training experience.

Choate wants to be better educated on what’s coming after graduation. Choate said when he applied for his private loans there was no counseling from either lender, and his father filled out all the paperwork.

“I never actually went in, all I had to do was electronically sign online,” Choate said. “I’ve never gotten any education at all. I think it’s something where you kind of dig yourself into a hole, and when you’re out you start getting payments thrown at you.”

Although Iowa State has a higher average student loan debt, ISU students have a lower default rate: 2 percent in fiscal year 2007 against a national average of 6.7 percent, according to the Department of Education.

Peter Orazem, economist and Ames City Council member, said the increase in availability of loans correlates with an increase in tuition.

“It’s clear that loans are easier to obtain now than they used to be,” Orazem said.

He cited the smaller family unit, which allows more money to be put behind each child, and the higher value placed on a college education.

He questioned whether Iowa State is atypical in creating debt for students, or if the school simply attracts more students who need loans to attend.

The new director of ISU Ambassadors, Jessica Bruning, sophomore in political science, had conversations with her parents over that subject.

“Iowa State is thought of as a largely agricultural school,” Bruning said. “So a lot of students are going home to be farmers, whereas the University of Iowa is turning out lawyers and doctors.”

Iowa’s median household income level in 2006 was the second-lowest among the 11 states where regent university institutions are located. A college degree, though, does increase earning potential.

Orazem said the basic principal that the richer one is, the more debt they can incur — suggesting perhaps that students take out greater debt, but also make more over their lifetime.

On July 31, 2008, ISU graduates have a median starting salary of $45,400 and a median mid-career salary of $84,600, according to data from the Wall Street Journal. Iowa State ranks above the national median starting salary for a state school of $44,126. However, the University of Utah has an identical median starting salary, but Utah also ranks as the state with the least average amount of student debt.

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For-profit education furthers student debt

When Katie Bushnell graduates with a bachelor’s degree in a little more than a year, she’ll be approaching $90,000 in debt from student loans without graduating from a four-year university. Her degree will be in entertainment business from Full Sail U., a private for-profit school based in Florida focused mainly on programs within the entertainment industry.

The two-year program Bushnell is halfway through has a cost of $52,000, which includes the Macbook Pro she uses in the coffee shop serving as her classroom for the day.

Right now she books concerts for Zeke’s, and interns at 105.1 FM Channel Q, but both of those positions are unpaid. She has a part-time job at George White Chevrolet as a cashier, but must rely on student loans to cover the cost of her education.

“I usually get my loans through Wells Fargo,” Bushnell said. “[Full Sail] suggested them. They gave me a list of five places to look into.”

Bushnell said her difficulties with financial aid have been a constant theme throughout her education.

“When I started out, I signed up for a loan to cover the whole cost and I thought that would cover everything, but they didn’t tell me I could only pay for one term at a time,” Bushnell said. Her program consists of four terms, meaning Bushnell must apply for a new loan every six to nine months.

The 22-year-old Ames resident started her education at Iowa State U. before transferring to Indian Hills College and Des Moines Area Community College.

Other than two credit cards with low limits, Bushnell has no other debt. She does not have to make car payments and said she rarely takes trips out of town for financial reasons.

Before heading off for college, Bushnell hoped her parents were saving money and that she might be able to obtain scholarships — neither happened.

“My grades have never been the greatest until the past few years, so that’s why I never got any scholarships or anything,” she said.

“It wasn’t until about two years ago, I was finally diagnosed with attention deficit hyperactive disorder and started taking medication — my grades have been a night and day difference,” Bushnell said.

“Switching to online [classes], I can learn at my own pace instead of sitting in a lecture — I can learn my own way.”

But thousands of students are proving you don’t have to obtain a bachelor’s degree to bury yourself in debt.

Sara McConkey spent 16 months at The Salon Professional Academy, racking up $22,830 in debt earning a cosmetology degree — adding on to a semester at DMACC to create a total debt of $25,000. Prior to getting back to school, McConkey worked for a year and a half at Jimmy John’s, but didn’t have any money saved.

“It was a matter of me trying to make up my mind,” McConkey said.

The Salon Professional Academy, formerly known as the Professional Cosmetology Institute, is accredited by the National Accrediting Commission of Cosmetology Arts and Sciences.

TSPA kept McConkey there about 34 hours a week taking classes, training sessions, working and gaining her 2,100 total instructional hours needed before she could take the national examination to become a licensed cosmetologist.

A beauty school typically opens its doors to the public for hair services at discounted prices, since the work is done by the students who are paying to be there rather than earning a paycheck.

Students pay tuition ranging from $10,000 to $25,000 at most institutions, while customers pay for services just like any other for-profit business.

One of the founders of TSPA, Angie Torgeson, is an owner of TSPA in Ames and New Hope, Minn., as well as an owner of Finesse Spa Salon in Ames where she is growing stockholders. Torgeson is listed as the president of TSPA. The Ames location was the mothership for all other TSPAs around the country.

McConkey struggled to find financial aid to cover that tuition. She was denied federal assistance because as a dependent, she was told her parents made too much with her mother’s salary at the post office combined with royalties from her books published by Harper-Collins and annuity payments for McConkey’s deceased father.

“I couldn’t find a loan anywhere,” McConkey said. “My mom had terrible credit and the more we tried, the more dings she took on her credit.”

Kasey Gaul couldn’t obtain a student loan for her for-profit college either. Gaul, a 21-year-old nursing student at Kaplan University, bounced between Graceland U. and Mercy College before settling on Kaplan.

Her first year at Graceland was covered by a Stafford loans, then a private student loan from Chase when she switched to Mercy.

She had to get a health care loan from Wells Fargo to cover the cost of tuition at Mercy after Chase denied her a student loan because she had purchased a car in her name.

Gaul said she didn’t receive much help in finding alternative funding from the financial aid offices at her schools.

“I wish they provided information on loans that didn’t require co-signers,” Gaul said. “There aren’t very many of them, so it took me quite a while to find the health care loan that Wells Fargo had.”

Then when she switched to Kaplan she was told they did not accept health care loans.

“I had to apply for a parent-plus loan, knowing my parents would be denied, so that I could use my last resort of using Kaplan’s loan for people in my situation with no other way to pay for school,” Gaul said.

“It came with an 18 percent interest rate, and I have to start paying on it two months after I graduate. I also pay $175 a month to pay the difference of what they couldn’t give me.”

To cover the Kaplan bill and her car payment, Gaul works two jobs in addition to her classes, all to achieve the goal she’s had since 10th grade to become a nurse.

Eventually McConkey borrowed money with some “unfortunate luck” when her brother wound up with extra money after getting into a car accident and smashing his leg.

McConkey said TSPA does offer scholarships, but the largest one she’s heard of was $800 — she obtained one for $600.

Lohman explained for students who qualify for financial aid the FAFSA is used for Pell grants and other student loans similar to the process at a traditional four-year college.

She explained TSPA is basically the same as state universities when it comes to financial aid — the same FAFSA process, Pell grants, loan availability and so on.

Lohman said because they are a clock-hour school, if students have attendance problems it can affect their financial aid.

The 16-month cosmetology program is $19,987, and they recommend students take at least two programs to make themselves more profitable. The cost includes textbooks and styling kits. The Academy also offers massage, esthetics and nail technology programs.

TSPA can have up to 120 total students enrolled but needs to stay at a ratio of one educator per 15 students by state regulations.

“TSPA has a mentoring program where you pick a salon to job shadow at,” McConkey said. “A lot of people get offers out of that. Most girls who wanted jobs have jobs.”

However, McConkey remains unemployed. In August she’ll follow the college ministry group, Salt Company, and move to Iowa City to start a similar church. McConkey has yet to find work as she prepares to make the move but she’s determined to secure a job by August.

Bushnell’s career goals remain uncertain.

However, the reality of repaying her debt has not escaped her mind.

“I’m not sure how much I’ll owe on a monthly basis, I’m kind of scared to look,” Bushnell said.

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Students experience poverty during challenge

Indiana U. sophomore Kylie Turk was surprised with rain Tuesday morning as she set up the blue tent that will be her home for the next two days. A man passing by suggested she grab a garbage bag, poke holes in it for her arms and then use it as a raincoat.

So began her experience as a person stricken by poverty.

The Trockman Microfinance Initiative members are participating in the Two Dollar Challenge to raise awareness for poverty.

According to sophomore Samantha Capshew, more than half of the world’s population lives on less than $2 a day. Microfinance works to help the poor gain access to credit and small loans to start businesses that will help their families survive.

The challenge, which occurs nationwide on different campuses and in cities, works to raise awareness of poverty and the importance of these loans.

“We are also hoping for the experience that will help us gain a better understanding of the depths of poverty,” said Capshew.

About seven students are participating in the two-day event, which continues until 8 p.m. today.

Turk, president of the Initiative, said the idea came last semester after the organization heard about it happening in other places. Because of the timing, she said they are only doing it for two days but other places have participated in the challenge as long as a month.

During the challenge, participants are only allowed to use up to $2 a day. They must use public facilities for showers and for computers to do schoolwork. They are not allowed to use their cell phones or laptops.

“I guess it’s very hard to be cut off from electronics,” said Capshew. “I don’t think I’ve realized how much time I spend on my phone.”

Sophomore Corey Bright, who coordinated the event, said she has enjoyed the bond the group has gained so far.

The first challenge was how they would use their money to buy food for the day. They realized that putting their $2 together would be the best way to afford more.

“It’s very difficult to eat healthy though,” said Turk.

The members are spending the days in Dunn Meadow and have enjoyed the visits from different people.

Capshew said a homeless man approached them and gave them ideas for providing local microfinance loan opportunities, which is currently only pursued internationally.

Rent is not covered in the $2 so the students in the challenge must find public places to sleep.

“Our advantage is that we are students, and we look like students,” said Capshew. “We can stay in 24-hour buildings on campus.”

And if they get kicked out, they said look forward to the challenge.

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Student Runs for Congress, Undergrads Join Campaign Trail

Most congressional candidates do not have to factor homework time into their campaign schedules, but Andrew Gall, the 27-year-old Georgetown U. graduate student running for Congress, does just that. With a staff consisting entirely of students, including two Georgetown undergraduates, Gall is looking to become the youngest member of Congress.

Gall is working toward his master’s degree in public policy at University of Maryland, College Park, while also campaigning against House Majority Leader Rep. Steny Hoyer (D-Md.) in Maryland’s 5th Congressional District.

Gall’s staffers are also much younger than their counterparts on Hoyer’s staff. Like Gall, a former intern and field organizer for the Obama campaign, every member of his staff is a student. “The largest problem is simply the logistics of balancing schoolwork with the campaign,” Gall said in an e-mail. “However, there’s no question that the energy and the ability to think about old problems in new ways as a result of an all-student staff outweigh any negatives.”

Georgetown students Kiran Gandhi and Alex Silberman both work on Gall’s campaign. Gandhi is a research intern, and Silberman is the chief speechwriter and deputy press secretary.

“This is a grassroots campaign with tons of opportunities for college students to get involved at very high levels of campaign strategy,” Silberman said. “I got involved in the Andrew for Congress campaign because I strongly support his passion for progressive, responsible and innovative solutions to America’s most pressing issues.”

Gall said that having a student-run staff enables him to campaign without relying on corporate backing. “I don’t simply talk about special interests as a way to gin up votes, but [I] actually and deeply believe that once we first address the role of special interest money in our legislative process, we will then be able to much more successfully address the other issues — from tax reform to climate change — facing America,” Gall said.

Gall’s platform is centered around transparency, more funding for education, the environment, and opposition to the Iraq war, which Hoyer supported. The two candidates platforms are similar on many counts, with the major difference coming in the area of national security. Gall’s belief in the importance of youth involvement in politics is evident in his campaign — not only does he have an exceptionally young staff, but if elected, Gall would also become the youngest member of Congress.

Gall said that the main problem in current political leadership is the lack of representation from the “Millennial Generation.” Due to this deficit, the government prioritizes funding programs like social security over education, according to Gall.

“This simply wouldn’t be the case if you had more young voters and young public officials,” Gall said.

“Rather, you would see a greater emphasis on issues that matter to us, like climate change, gay rights and the looming fiscal crisis.”

Gall aims to use his campaign to change what he sees as the status quo.

“I am running for Congress to hold Hoyer accountable for his disastrous and immoral support for invading Iraq, because I want to divorce special interest money from the policymaking process, and because I believe young people deserve a voice in shaping our futures,” Gall said.

“If students are interested in progressive politics, join my campaign — I still have openings I need to fill,” Gall said.

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Column: Fifty Years Later, There Is Still Much to Be Achieved

Fifty years ago, California’s vision for higher education was captured in the California Master Plan. The promise was bold and revolutionary and set California apart: there would be a place in college for all who wanted it.

California became a global model and economic powerhouse. We were transformed.

The promise also sparked the very words that we hear chanted time and again at protests and rallies across the state-accessibility, affordability, quality and diversity. These principles have become fundamental to the missions of  U. California, the California State U. and the California Community Colleges.

California families and students have come to expect education as a fundamental right. Today, this promise and rightful expectations are threatened.

Enrollment in all segments is being curtailed. Staff is being reduced and both staff and faculty are being furloughed. Our administrations are consolidating extensively running on barebones. We have seen unprecedented increases in tuition, increased class sizes, course reductions, and drastic cuts in student services.

The state has effectively abandoned the greatest public higher education systems in the world and lost sight of the vision and promise of the Master Plan.

In 2009-10 public higher education in California experienced funding cuts of $1.7 billion and 226,000 students are currently not funded by the state. Compared to 20 years ago, California’s public universities and colleges have roughly half as much state money to spend per student.

Our priorities are misaligned. California spends 45 percent more on prisons than universities. While providing for public safety is important, it is not our prisons that have made California what it is today. It is the knowledge, innovation, technology, and research produced by the greatest minds in the world fostered by California colleges and universities.

Our elected officials and voters must be reminded that education is an investment and an engine for economic and social mobility. Our schools have the capacity to foster scientific and humanitarian research as well as to promote service to the state and country. In order for the state to remain competitive, it must reinvest in education.

We must not abandon the promise of the Master Plan. It is time for the state to reaffirm its own role in the Master Plan by restoring state support. Public education demands a new approach to public investment and a drastic paradigm shift in government financing.

Although seemingly broken, the promise can and must be repaired but it must also be enhanced and realize the significant change California has seen since 1960.

Today, it is necessary to focus our efforts on an ever-changing and increasingly diverse state. We are no longer serving families from college-going legacies and mostly middle-class backgrounds. More and more first-generation and economically disadvantaged students are entering our universities and colleges.

The Master Plan must respond to this diversity and ensure that our schools resemble the demographics of our state and continue to commit to providing affordable higher education to all.

The plan must also affirm higher education’s role in ensuring that all students have the preparation necessary to succeed. We must alter the sharp distinction between higher education and K-12 as was assumed in the Master Plan of 1960. With drastic disparities in educational opportunities for our youth, colleges and universities must strengthen relationship with local school districts across the state and see their challenge as our own.

At this time in our history, it is critical to reaffirm our commitment to the promise that was made by our leaders 50 years ago-a promise that all Californians have come and should continue to expect.

On this, the 50th anniversary of the Master Plan for Higher Education, leaders and representatives from all three segments will be reaffirming our commitment to these promises by joining efforts in an advocacy day in Sacramento. We must ask our elected officials to do the same. As our systems will advocate, we must “put our money were our greatest minds will be-next year and the next 50 years.”

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Column: There is no music heard in Mogadishu after ban

On April 13, the music stopped. It disappeared. The airwaves were emptied of rhythm and beat, of singing and instrumentation. Somalian radios now only amplify the sounds of the natural environment: people speaking, animals crooning, gunfire, and explosions.

This change in programming was due not to a governmental edict but on the orders of an insurgent group, the Hizbul Islam. They declared that broadcasting music was against the principles of Islam (for a very strict definition), and the stations complied.

Of the 16 stations available in Mogadishu, Somalia’s capital city, 14 have removed all music — not just the playing of songs, traditional or contemporary, but also program introductions, jingles during the commercials, and anything else that might be considered music. Two have resisted thus far: Radio Mogadishu, which is government-controlled — just about the only thing left in Somalia where the government has control — and Radio Bar-Kulan, based in Nairobi.

In a quasi-rebellion, the music has been replaced with “natural” sounds, but this is likely just a temporary game, as a harsher decree will be next. First, remove all sounds that aren’t humans talking. Next, broadcast only the bulletins of our order, approved by the militant leaders (i.e. you can broadcast if you have more guns). Finally, just shut down the entire radio network.

This is Somalia.

Since 1991, the country has hardly been a country at all. With a civil war that became another conflict, followed by yet more war and more conflict, any sort of normalcy, unity, or government has been impossible to maintain. So the people are left in a decades-long battle since the conflict first began, one that no longer has a soundtrack. The Guardian, in its piece on the radio silencing, suggests, “The music ban is likely to be highly unpopular…” as if there is some chance that one more lost freedom is going to cause the Somali people to run into the street singing and dancing, which would, of course, be against the law.

Oh, and if you happen to believe music on the radio should be banned, you might also agree with a second Somali militant group’s decision to stop using bells to end classes. Bells: also too musical. Bells sound like bells in Christian churches. (Apparently Christians have a monopoly on the sound of bells.) Regarding bells: “Any school heard using bell sounds after now will be brought to Islamic justice.” Some 2 million people live in Mogadishu, and today they continue to have their rights further restricted, with no real end in sight.

As the groups exert further pressure on the remaining media that exists, journalism becomes even more difficult. Just last year nine journalists were killed in Somalia, more than any other African nation.

But maybe this decade will be better. With some hope, some luck, or an awful lot of concerted effort, maybe a government that can actually hold power will unite Somalia, help journalists freely report on their country, allow schools to signal the ends of their classes with a noise of their choosing, and allow radio stations to broadcast a bit of entertainment into Somali homes in the evening. Maybe that music won’t have to be turned up to drown out the explosions occurring across the city.

Or maybe Somalia will grow even more cut off from the rest of the world, the entire country silenced.

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PostSecret creator Frank Warren reveals own secrets

“I pee in the shower.”

“I flick boogers at my roommate’s stuff when she’s too loud and wakes me up in the morning.”

“When I’m in a crowded elevator I envision the porn scene that could ensue.”

“I tell people I’m an atheist, but I believe I’m going to hell.”

These are just a small sampling of the 500,000 secrets that people have written on postcards and sent to the home of Frank Warren, a man known as “the most trusted stranger in America.”

Warren, creator and curator of the PostSecret project, introduced himself to several hundred students and community members on Monday, April 26 at Carnegie Mellon U., saying: “Hi. My name is Frank, and I collect secrets.”

Warren began collecting secrets in 2004, when he handed out 3000 self-addressed postcards to strangers in Washington, D.C. and invited them to send him a secret: something that was true and they had never shared before. “Slowly, secrets began to find their way to my mailbox,” Warren told The Tartan. He claims that the idea of submitting to PostSecret “spread virally,” and within the first month of the project, he had received enough secrets to begin posting them on the Web. Since January 2005, Warren has shared the unvoiced secrets of people from around the world on his blog, postsecret.blogspot.com.

With postcards arriving at his mailbox at a rate of over 1000 per week, Warren has gotten to know his mail carrier, Kathy, pretty well. “She’s a supporter of the project,” he said. Warren recalled an occasion when a fan stopped Kathy in the middle of her delivery route and asked for her autograph. Throughout the years, Kathy has delivered people’s secrets scrawled on sonograms, death certificates, a fake banana, real potatoes, complimentary bags of coffee, and even a bag from the fast food chain In-N-Out Burger. “The real gifts for me are the secrets…. I still feel like a kid Christmas morning walking out to my mailbox everyday and finding these gifts,” Warren said.

During his lecture at Carnegie Mellon, Warren explained that there are two types of secrets: secrets we keep from others, and secrets we keep from ourselves. “When we think we’re keeping a secret, that secret is actually keeping us.” He urged the audience members to face their own secrets: the parts of their lives that they sometimes prefer to bury down deep inside. He also urged people to free their secrets and to share them with others. Warren confided that he is now thankful for his struggles when he was younger, because “each one of them allowed me to develop my character as an adult now.”

CMU junior Laura Alfonso, who has had one of her submissions posted on Warren’s blog, said she appreciates the authenticity of PostSecret: “I think it’s about how honest people are — funny, silly, embarrassing, heartbreaking. There is a level of transparency there and honesty that you don’t really get from people a lot of times. I think what I look for in writing and art is a level of connection to people when we realize that everyone is just a person; we all have a lot in common.”

While many secrets that people submit to PostSecret are humorous, others are personal and dark.

Warren cited “staggering statistics” about the secrets that are often overlooked by media and popular culture. He receives an overwhelming number of secrets on the topics of loneliness, depression, and suicide. Warren has volunteered for Hopeline, and the PostSecret website’s “Wellness Resources” page currently provides contact information for 10 different crisis counseling hotlines.

After telling the story of his own PostSecret start, Warren asked the audience in Wiegand Gym, “What’s your crazy idea?… My hope is that someone in this room will maybe make the world a little bit better.”

His advice to students: “If you’re thinking about creating a blog, it’s a fantastic way to exercise your writing ability, your communication techniques…. Do it to explore one of your passions and find that other community out there that shares your passion. That can lead to something a lot more magical than just making a good income from a blog.”

Warren said that he has never taken a single dollar for an advertisement. Although the PostSecret site has received over 300 million hits, it is still ad-free. In addition to his blog, Warren has compiled and published five books filled with unvoiced secrets that people have shared with him. His most recent book, Confessions on Life, Death, & God, was released on Oct. 6, 2009.

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Israeli Ambassador Michael Oren: Peace in Israel still possible

Israeli Ambassador to the United States Michael Oren said Israel is committed to peace talks and a two-state solution with Palestine during a speech Thursday at American U.

The speech was disrupted five times, as small groups of protesters stood up, turned around, displayed handwritten signs to the audience, then left.

Oren did not directly address the protesters until the third incident, at which point he said to the protesters exiting the Hall, “I wish you would stay and ask questions.”

The speech

Oren discussed the relationship between the United States and Israel, the possibility of peace agreements between Israel and Palestine and the logistics of a two-state solution.

He argued that the United States and Israel have always had a very close relationship, pointing out that America was the first nation to recognize Israel in 1948 under President Harry Truman.

On the issue of the land disputes between Jews and Palestinians in Israel, Oren said Jews want to be able to live in their homeland, but they are also more than willing to work out an agreement with Palestinians living in the same territory.

“[The nation of] Israel recognizes that this land is shared by another group of people,” Oren said. “We are willing to negotiate with the Palestinians so that one day we may live side by side in peace.”

However, Oren noted that this peace treaty must also come with the promise of secure borders for both nations and formal recognition of both states as sovereign nations.

Oren expanded on this during the question-and-answer portion of the event when asked if Israel was really committed to achieving peace.

“Israel is committed to the two-state formula,” he said. “Borders will have to be drawn [for Israel and Palestine], and not everyone is going to like it. It will be painful, but we’re committed to making this work.”

In response to a later question, Oren also said that Israel would have to demilitarize Palestine for the foreseeable future to “ensure stability and give us time to work things out.”

The protest

Michael Dranove, an American U. freshman in the College of Arts and Sciences, was one of the main organizers of the protest against Oren’s speech. Dranove said he and other students were speaking out against the Israeli military occupation of Palestine and against Oren himself for some of his past statements.

In October 2009, Oren wrote a controversial op-ed for the New Republic in which he rebuked the findings of the United Nations’ Fact Finding Mission on the Gaza Conflict, or the “Goldstone Report.” Oren took offense to Justice Richard Goldstone’s suggestion in the report that Israel may be guilty of war crimes.

“The Goldstone Report goes further than Ahmadinejad and the Holocaust deniers by stripping the Jews not only of the ability and the need but of the right to defend themselves,” Oren said in the op-ed.

Dranove and other protesters, including students from Howard University and Georgetown University, gathered in a crowd outside of Katzen before Oren’s speech.

The protesters chanted “This is what democracy looks like!” and “Free Palestine!” as they took turns addressing the crowd on a megaphone and holding up signs with slogans such as, “Occupation: wrong for Israel, wrong for Palestine.”

After Oren’s speech, the protesters started up again outside of Katzen with a much larger crowd than the pre-speech protest. A group of about 20 students banged on makeshift drums and waved a Palestinian flag chanting, “This apartheid bullshit’s gotta go!” and “Hey Obama, you will see, Palestine will be free!”

A group of about ten pro-Israel protesters set up a counter-protest against the pro-Palestinian protesters. Two students held up an Israeli flag while two other students held up a flag with the Star of David and an inscription in Hebrew. The group sang and chanted in Hebrew as the pro-Palestinian protesters continued their chants.

Numerous Public Safety officers were on the scene for both the pre- and post-speech protests, but they did not intervene at any point of the protests.

Reactions

Rachel Silvert, an American U. sophomore in the College of Arts and Sciences, said she was glad that Oren didn’t take an aggressive stance against Palestine in his speech.

“There were many opportunities for him to draw lines and be obstinate, but he didn’t [take those opportunities],” she said.

Silvert said the protesters who interrupted the speech could have found a better way to voice their opinions.

“If this is the way they’re going to present their voice, no one will hear it,” she said. “Stay and ask questions, don’t just hold up signs.”

Ayal Chen Zion, the president of AU Students for Israel, was overall pleased with Oren’s speech but was disappointed by the protesters’ interruptions.

However, he said he would not permanently rule out working with pro-Palestinian groups in the wake of this protest.

“They are entitled to their opinions and to their right to protest,” he said. “It’s unfortunate that they felt the best way [to voice their opinions] was to protest, but we would be willing to work with them in the future.”

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