Archive for category Schools
Francisco Reynoso, a gardener from California, is struggling to deal with his dead son’s education fees
A few months after he buried his son, Francisco Reynoso began getting notices in the mail. Then the debt collectors came calling.
“They would say, ‘We don’t care what happened with your son, you have to pay us,’” recalled Reynoso, a gardener from Palmdale, Calif.
Reynoso’s son, Freddy, had been the pride of his family and the first to go to college. In 2005, after Freddy was accepted to Boston’s Berklee College of Music, his father co-signed on his hefty private student loans, making him fully liable should Freddy be unwilling or unable to repay them. It was no small decision for a man who made just over $21,000 in 2011, according to his tax returns.
“As a father, you’ll do anything for your child,” Reynoso, an American citizen originally from Mexico, said through a translator.
Now, he’s suffering a Kafkaesque ordeal in which he’s hounded to repay loans that funded an education his son will never get to use — loans that he has little hope of ever paying off. While Reynoso’s wife, Sylvia, is studying to be a beautician, his gardening is currently the sole source of income for the family, which includes his 18-year-old daughter Evelyn.
And the loans are maddeningly opaque. Despite the help of a lawyer, Reynoso has not been able to determine exactly how much he owes, or even what company holds his loans. Just as happened with home mortgages in the boom years before the 2008 financial crash, his son’s student loans have been sold and resold, and at least one was likely bundled into a complex Wall Street security. But the trail of those transactions ends at a wall of corporate silence from companies that include two household names: banking giant UBS and Xerox, which owns the loan servicer handling the bulk of his loans. Left without answers is a bereaved father.
The risk of cosigning on Freddy’s loans seemed to have been worth it when he graduated in May 2008 and began looking for a job in the music industry. He was on the way back from a job interview on the evening of Sept. 4 when he lost control of his car and it rolled over. Freddy’s family learned of his death the next morning.
The grief was relentless; the debt collectors, ruthless. , debt collectors must go through a debtor’s attorney if one has been hired, but even after Reynoso hired an attorney, he said they continued to call him every day, several times a day, for about a year and a half: “I would tell them to call the lawyer. And they would still say, ‘The lawyer doesn’t owe us. You’re the one who owes us. You’re the one who has to pay us.’”
Meanwhile, Reynoso was still reeling: “I was crying for him every day,” he said.
The question of to whom Reynoso’s debts are actually owed — and who has the authority to forgive them — is a mystery that thus far neither Reynoso nor his lawyer has been able to solve.
But the bulk of Freddy’s loans were private student loans, which typically offer less favorable interest rates and fewer consumer protections. Only offer debt discharges in the event of the borrower’s death, though public outcry over specific cases has swayed lenders to grant occasional death discharges.
But for the Reynosos, just figuring out whom to appeal to has been an exercise in futility. Working with a law firm, Francisco Reynoso sent copies of Freddy’s death certificate to any company that sent paperwork about the loans. He remembers being told by at least one company that they’d call him to work out a solution. But no one ever did, he said, and the bills kept coming — each time larger than the last with more interest, more late fees.
“We sent out death certificates to all of them,” said Dolores Orozco-Serrano, a legal administrator with Borowitz & Clark, the bankruptcy law firm handling the Reynosos’ case. Only the federal loan was discharged. “Everyone else was not cooperative at all.”
Freddy Reynoso’s private loans were originated by two companies — Bank of America and Education Finance Partners. Neither company still holds onto them. ProPublica tried to find out who did.
First, the Bank of America loan: Almost as soon as Bank of America originated it, the loan was sold to a Boston-based company called , once one of the biggest securitizers of student loans. But nowhere in the paperwork sent to the Reynosos and reviewed by ProPublica does the name First Marblehead appear. Instead, the Reynosos have received paperwork emblazoned with the logo of . That’s the name First Marblehead gave to bundles of loans that it turned into Wall Street securities and sold to investors. Was Freddy’s loan bundled into a security? And if so, who owns it now? First Marblehead has not returned repeated requests for comment.
Freddy Reynoso’s other loans followed an even more complicated path — and one tainted by scandal. Education Finance Partners, the private student loan company that originated the largest portion of Freddy’s student debts, reached a with the New York Attorney General’s Office in 2007 to settle charges that it had paid colleges across the country to steer students toward its high-interest loans. And Berklee College of Music, Freddy’s alma mater, in that investigation for accepting the improper payments. Berklee College of Music spokesman Allen Bush acknowledged in a statement to ProPublica that the school accepted a total of $23,000 from Education Finance Partners between 2005 and 2007, but said that “all of these funds were deposited into a financial aid account and disbursed through a need-based grant system to current Berklee students.”
Education Finance Partners, Freddy’s lender, never admitted any wrongdoing. A year after the settlement, the company declared bankruptcy.
But who holds Freddy’s loans now remains a mystery. The company’s archives — now kept by a company called Loan Science — show that his loans were scooped up by the Swiss bank UBS in October 2008. But the entire portfolio changed hands again in 2009. “That 2009 sale was private, it was bound by a confidentiality agreement and, therefore, we’re not in a position to disclose the identity of the purchaser,” wrote a UBS spokesman in an email.
Reynoso and his lawyer don’t even know exactly how much he now owes, but it appears to be well into the six figures. The loan that Bank of America originated is clear: At the end of March, the balance was around $7,400, according to Mike Reiber, a spokesman for PHEAA, a company that once serviced that loan. (With the loan in default, it now resides with First Marblehead, Reiber said.) But the other, much larger portion of Reynoso’s debt remains murky. A 2009 lending disclosure document indicates that through Education Finance Partners, UBS extended nearly $160,000 in credit to Freddy Reynoso, and projected that if he made all payments as scheduled, the loan for his music education would end up costing him $279,000.
Seemingly the only party who knows — and is obligated to tell Reynoso — about this debt is the servicer, ACS Education Services.
Citing privacy reasons, ACS declined to disclose any specifics about the loans to ProPublica, even with Reynoso’s full consent. Three weeks ago, Francisco Reynoso himself sent a letter to ACS asking who currently holds the loans, but he has received no response.
ACS is a subsidiary of Xerox, so ProPublica put in several calls there. Given more than a full week to respond, Xerox’s corporate communications team has yet to provide a response to queries about when Reynoso can expect basic information about his son’s loans, including the amount he owes and the name of the company that now owns the debt.
Even with the help of a lawyer, Reynoso’s options are limited. Unlike most kinds of debt, private student loans are not dischargeable through bankruptcy, though Sen. Dick Durbin, D-Ill., is leading an . So for the time being, Reynoso’s hope hinges on a narrow provision in the bankruptcy code called a . The bar for proving “undue hardship” is high, but Reynoso still hopes for the best as he waits for a ruling from the bankruptcy judge. As he puts it: “I’m in the hands of God.”
- Grieving Father Struggles to Pay Dead Son’s Student Loans (propublica.org)
- How Microsoft and Yahoo Are Selling Politicians Access to You (blacklistednews.com)
- In Praise of ProPublica (theatlantic.com)
- ProPublica Adds Two Reporters and a Blogger to its Investigative Newsroom (prweb.com)
- Super PACs Are Super-Fly! ProPublica Rocks an Explanation of Unrestricted Cash (dailyfinance.com)
- Steiger to Step Down as ProPublica’s Editor (mediadecoder.blogs.nytimes.com)
- Got Student Loans? Share Your Documents With Us (propublica.org)
- Why is Sarah Jessica Parker getting deleted from fundraising emails? (observer.com)
- ProPublica Seeks Two More Reporters and a Blogger (prweb.com)
- Find Out How The Obama and Romney Campaigns Are Using Your Data (forbes.com)
Mitt’s for-profit school mess
Romney’s plan to fix higher education is a handout to shoddy career schools and a giant step backward
Sometimes it is almost too insultingly easy to connect the dots.
Last week, Mitt Romney blasted Barack Obama’s record on education in a high profile and white paper. The critique ranged from kindergarten to grad school, but let’s pick out one issue that we’ve been following at Salon for some time. On the specific topic of for-profit schools of higher education — both for saddling students with high levels of debt and for their abysmal graduation rates — Romney promised to repeal Obama’s “ill-advised” regulations targeting the sector.
The for-profit school industry a lot of One of Mitt Romney’s top education advisors is William D. Hansen, who has lobbied extensively for for-profit schools. As deputy secretary of education under George W. Bush, Hansen is well known in the higher education community s for promising that the Bush administration would relax enforcement of rules meant to crack down on student enrollment recruiting abuses at for-profit schools.
That’s right: A man directly responsible for unleashing a decade of egregious misbehavior at for profit colleges is now advising Mitt Romney on his plans to repeal new rules intended to clean up the mess.
The biggest for-profit schools generate 80 to 90 percent of their revenue from federally guaranteed student loans. Only one in ten American college students attend for-profit institutions but they account for a quarter of all student debt and almost half of all student loan dollars in default. There’s no sugar-coating it: The booming for-profit industry is one of the worst possible examples of the “free market” in action that one can find in the entire U.S. educational sector. For-profits charge higher tuition rates than their public school competitors, graduation rates are lower, and the entire business would not exist without massive government subsidization in the form of cheap student loans.
Last June, in an effort to address this clear market failure, the Obama administration released designed to tighten eligibility for student aid. Going forward, the new rules will require that most for profit programs prove that they preparing “students for gainful employment in a recognized occupation.”
The “gainful employment” rules have three parts: At least 35 percent of former students must be actively repaying their loans, and their loan payments must not exceed 30 percent of their discretionary income or 12 percent of total earnings. Schools will also be required to make public information on program costs, debt-to-earnings ratios, and loan repayment rates, so prospective students will be able to properly judge the quality of the programs so desperate to enroll them. If a school failed to meet these criteria three times in a period of four years, they would no longer be eligible for federal student aid programs.
But according to Mitt Romney’s newly released the “gainful employment” rules are “confusing and unnecessary regulations that primarily serve to drive costs higher” and have “made it even harder for some providers to operate while distorting their incentives.” So he is pledging to get rid of them.
Yes, it will cost more money to document just how well a “career school” is doing in preparing students to actually embark on a career that pays well enough to pay down the debt accumulated while attending that school. But when your entire business model is based on signing up as many students as possible, nearly all of whom pay their tuition with government loans, some might argue that perhaps a little more attention paid to whether those students are actually getting educations would be a worthy goal. And to argue that the new rules distort incentives is baffling. The current incentive structure encourages schools to emphasize high enrollment and profit. That’s what Obama is trying to fix.
Neither Mitt Romney’s speech nor his white paper mention any of the problems exhibited by the for-profit sector. Maybe that’s to be expected when your top advisor has worked as a lobbyist for the Apollo Group, which owns the University of Phoenix, and whose main claim to fame during his stint in the Bush administration was letting for-profit schools know that the government would look the other way as And of course, philosophically speaking, it’s not surprising that a firm believer in private enterprise would have a vision of a higher education future in which competition in the for-profit sector would deliver innovative new models that offer high quality instruction for low cost.
Except, that’s not the way it works The for-profit college sector delivers low quality education at a high cost, precisely because it is unregulated, unaccountable, and assured an unlimited supply of student loan dollars. Repealing rules aimed at addressing that disaster won’t fix the problem — it will just make it worse.
- Tory MP: profit-run schools would take money out of education (liberalconspiracy.org)
- What to make of Gove’s remark about for-profit free schools? (spectator.co.uk)
- Romney Attacks Student Loan Reform, Touts For-Profit Colleges (alternet.org)
- Romney’s Higher Education Plan: A Giveaway To The Wall Street Banks And Predatory Schools That Fund His Campaign (thinkprogress.org)
- Mitt Romney: Politics “like a sport” – Mitt Romney – Salon.com (mbcalyn.com)
- For-profit schools jump to enroll military spouses (sfgate.com)
- Mitt Romney’s goal for Donald Trump fundraiser: Raise $2 million (dailykos.com)
- Will Tagg Romney Reap the Benefits of His Father’s Endorsement of For-Profit Schools? (alternet.org)
- Proposed Government Regulations on For-Profit Schools to Benefit Students (prweb.com)
- “Romney’s Higher Education Plan”: A Giveaway To Wall Street Banks And Predatory Schools That Fund His Campaign (mykeystrokes.com)
U. of C. MBA grad spurns job market for alternative energy startup
BY SHARON COHEN May 27, 2012 11:16PM
This May 2, 2012 photo shows Daniel Shani on the University of Chicago campus. In June 2012, at 25, Shani graduates with an MBA from the university’s Booth School of Business. Up next: a job heading his own company, Energy Intelligence LLC, an alternative energy startup based in Massachusetts. Many of his classmates will join high-powered financial, consulting and marketing firms. But he’ll be his own boss, trying to convert a bold idea into a successful venture. (AP Photo/M. Spencer Green)
Updated: May 28, 2012 2:13AM
It’s a time when hope collides with economic reality, when the relief of that last class and the thrill of holding that diploma give way to the next big step — finding a job.
For the Class of 2012, the optimism of graduation is clouded by the uncertain aftermath of the worst economic slide since the Depression.
Last year, graduates 24 and younger posted a 9.3 percent jobless rate; since then, there have been signs of progress. Unemployment averaged 7.2 percent during the first third of this year, compared with 9.1 percent in the same period in 2011. And one survey estimates that about 7 percent more new college grads will find work this year than a year ago.
But the job market is still tight and graduates — whether they’re embarking on a career from high school, college or in mid-life — are entering a work world where salaries have not rebounded since falling during the recession.
For thousands of new graduates making the big transition this spring, there are pressures to find jobs quickly, pay off loans and, in some cases, start a second career, all against the backdrop of the slow-healing economy.
A degree and debt
Now that Chad Larsen-Stauber has a teaching degree, the inevitable question races through his mind: What will come first — a job or the bill for the first installment on his hefty loans?
The 26-year-old who just received his master’s degree in education from the University of Illinois-Chicago knows that in three months, he’ll have to start paying off debt of about $100,000.
“This is going to be looming over my head the next 20 years,” Larsen-Stauber says. “You’ve borrowed all of this money and it just comes due all of a sudden. When you’re already going into a low-wage job and you know that a third of your salary is immediately going to be eaten up … that’s really frightening.”
But not unexpected.
Larsen-Stauber is working with loan companies on payment plans; about 75 percent of his debts are from grad school. It seems overwhelming, but he says, “there never has been a regret in my mind. I knew when I started this program, I was 100 percent sure. … If there was one job that I ever wanted, it was to be a teacher.”
Larsen-Stauber realized that three years ago when he received a bachelor’s degree in communication. On graduation day, his parents posed a question: “’If you had to work the rest of your life and you never had to worry about money, what would you do?’”
Larsen-Stauber moved back in with his parents in the western suburbs, became a teacher’s assistant for a year, working with autistic and Down syndrome students in a middle school. Then he enrolled at UIC for a graduate degree.
As a teacher, Larsen-Stauber expects his salary will put a crimp in his lifestyle. It’ll affect everything, from where he lives to his dreams of global travel. “The possibilities that seemed limitless at one point are very downsized,” he says. “In the end, it’s a small price to pay for what you want to do.”
He’s now finishing his student teaching, working with kids with learning and behavioral disabilities. By fall, he hopes to be a Chicago public school teacher.
“A lot of people are saying, ‘Take whatever job you can get. You can do anything for a year.’ …I’m going into this with an open mind. What I love to do is teach, and I will teach anywhere at this point.”
Taking a gamble
At 23, Daniel Shani launched his first business — an online professional networking site.
At 24, while in school, he was working on his second venture — an alternative outdoor advertising company.
In June, at 25, Shani graduates with an MBA from the University of Chicago Booth School of Business. Up next: a job heading his own company, Energy Intelligence LLC, an alternative energy startup based in Massachusetts.
Many of Shani’s classmates will join high-powered financial, consulting and marketing firms (93 percent of last year’s graduates had job offers within three months; the median starting salary was $107,000). But he’ll be his own boss, trying to convert a bold idea into a successful venture.
It’s a gamble, but he’s game.
“There’s probably a fine line between anxiety, confidence and craziness,” Shani says. “You absolutely need a very high tolerance for risk. I have given up amazing opportunities in terms of recruitment on campus. … [But] I’m more excited about building something from nothing.”
Shani already is talking with venture capitalists and corporations about financing and collaboration and has applied for two federal grants. Though the fragile economy could squeeze potential investors, he isn’t discouraged.
“I think now is a great time to start a business,” he says. “It’s so cheap today relative to any time in history to test an idea and put together a product.”
Energy Intelligence wants to embed devices in road surfaces, mostly busy streets and highways, that would capture some of the energy vehicles lose (through heat, friction and pressure on the pavement) when they slow down — for example, when they approach toll booths. That energy would be transformed into electricity and sent to the national power grid or directly to street lamps, toll booths, or illuminated signs, for example.
Shani has consulted with engineers and researchers on the technology and sought advice from the Argonne National Laboratory, which uses supercomputers to analyze traffic patterns and can test how the devices perform.
“I feel like I’m a problem solver,” he says. “Entrepreneurs first and foremost are looking to solve a problem. They’re much less drawn to the dream of glory and fame. It’s really not about the money. … I really would like to make a difference in the world.”
If he fails? There are many possibilities, he says.
But, he adds: “I can tell you where I won’t be — at a desk job following the same routine every day.”
Leaving the assembly line
In 15 years on a Chrysler line in Belvidere, near Rockford, Mike Szlamczynski never had reason to ponder a future with succotash, lobster bisque and fava beans.
Autos were his career, autos paid his bills. Then came the near collapse of Chrysler, the looming bankruptcy and a veteran assembly line worker facing middle age, anxiety and unnerving questions: “What happens if they close the doors? What will I do?”
Szlamczynski didn’t wait for an answer. He took a buyout, returned to college at age 41 and studied to be a chef. He wanted financial security, no more layoffs, no more fears of losing it all
“I was tired of worrying,” he says. “I had nothing to fall back on. If you have an education, that’s something they can’t take away from you. You have options. Before, I didn’t have any options.”
On May 12, Szlamczynski officially changed that. The man who dropped out of school 20 years ago after concentrating on fun more than work graduated from Blackhawk Technical College in Janesville, Wis., with an associate’s degree in culinary arts and a 3.8 average — “a huge accomplishment,” he says.
Most importantly, he left with a coveted commodity: a job as a cook at a casino-resort in New York state.
He had reservations about returning to the classroom.
“It was probably the scariest thing I ever had to do — to drive to the school the first day,” he says. “I’d been out of school for 20-something years. I didn’t know if I could do it. I thought there were going to be a lot of younger people out there, I’m going to feel way out of place. … But I said, ‘This is my last chance. This is my one shot. It’s do or die.’”
Szlamczynski found school transforming. “I talk more intelligently,” he says. “I think more intelligently. You just look at things differently. You just really appreciate things you didn’t know about before.”
Still, at 43, he’s naturally apprehensive.
“Can I do this? Am I cut out for this? … I’m really happy I do have a job and I don’t have to go searching. That’s a huge relief. It’s a whole new life,” he said. “And I’m following my dream.”
- U. of C. MBA grad spurns job market for alternative energy startup (suntimes.com)
- New College Graduates Fare Better In Job Market As Earlier Classes Struggle (mbcalyn.com)
- College Grads Shun Startup Jobs – and How to Hire Them Anyway (readwriteweb.com)
- Uptick in Job Market for New MBAs (insidehighered.com)
- Opinion: Congratulations, grad, you’re unemployed – Karin Agness – POLITICO.com (mbcalyn.com)
- 8 Ideal Jobs for M.B.A. Grads (usnews.com)
- Define Your MBA Goals Before Applying to Grad School (usnews.com)
- College Grads’ Jobs Expected to Improve (miami.cbslocal.com)
- 2012 college grads enter improving job market (bizjournals.com)
- Experience Rules in Today’s Job Market (danerwin.typepad.com)
Meet the tireless entrepreneur who squatted at AOL
For two months last fall, Eric Simons secretly took up residence inside the Internet giant’s Palo Alto, Calif., campus, eating free food, enjoying gym access, and building a startup in the process.
by Daniel Terdiman May 24, 2012 4:00 AM PDT
19-year-old entrepreneur Eric Simons spent two months secretly living at AOL’s Palo Alto, Calif. campus, sleeping each night on a couch like this one.
(Credit: Eric Simons)
It was 6 a.m. when Eric Simons was jolted awake by the yelling.
After working until 4 a.m, the 19-year-old entrepreneur had finally passed out. A few hours of sleep would help with the day ahead.
But unlike most people working at AOL’s Palo Alto, Calif., campus who were surely still hours from showing up at the sprawling complex, Simons was already there. He’d been living there for two months, hiding out at night on couches, eating the company’s food, and exercising and showering in its gym. And now, with an angry security guard bellowing at him, it was all over.
(Credit: Eric Simons)
The story of how Simons, just two years removed from a Chicago high school, came to be living in AOL’s Palo Alto campus could well become part of Silicon Valley lore, especially because it highlights the lengths some entrepreneurs will go to make their dreams a reality. And though stories abound these days of startup founders barely old enough to drink swimming in venture capital, far more have to get by on packaged noodles and the good will of friends with extra couches.
You hear it all the time, but Simons, now 20, was a mediocre student with little interest in school. That changed one day when his high school chemistry teacher confronted him and demanded to know what she could do to get him interested.
“I was stumped,” Simons writes on the About Us page of his startup, ClassConnect. “She didn’t ask me to try harder, she didn’t ask me to stay after for help or study more — she asked me to figure out how she could grab my interest. No one had ever bothered to ask me that before. A few moments later I replied, ‘let’s get everyone working together on computers — I’ll even build the software for us to use.’” His life as an entrepreneur had begun.
He wanted to get straight into the thick of it, so after high school, and a short period crashing on couches with friends at the University of Illinois, Simons accepted a slot in the inaugural class ofImagine K12, a new Silicon Valley incubator focused entirely on education. His plan? Start a company that builds tools allowing teachers to create and discover lesson plans, and share them with students and teachers.
“Teachers around the U.S. and the world are asked to teach from a checklist,” Simons said. “They’re asked to teach the exact same thing…and they’re all going and creating their own lessons. What we’ve built is almost a GitHub for teacher lessons. They can fork someone else’s lesson plan and use that as a springboard.”
Is it ironic that a bad student ended up launching a company that aims to revolutionize education? Simons doesn’t think so. “It wasn’t that I didn’t like school,” he said. “I didn’t like [the way it was done]. I said, I’m going to take a crack at this. I’m young enough that I can take a crack at some crazy stuff. Ten years from now, maybe I can’t be sleeping on people’s couches.”
For Simons, “crazy stuff” meant moving to Silicon Valley and trying to get his fledgling company off the ground. But his initial idea wasn’t quite working. Imagine K12 was a great place to get mentorship and learn how startups are built, but he and his ClassConnect partners had been given just $20,000 by the incubator, and after the four-month program ended, the money was gone. When his friends left to go back to college, Simons needed another solution.
AOL’s Palo Alto campus, as seen using Google Maps.
(Credit: Screenshot by CNET)
Imagine K12 is hosted at AOL’s Palo Alto campus, and everyone involved gets a building badge. As it turns out, Simons told CNET, the badges kept working, even after the program ended, giving him ongoing access, along with a face that had become familiar to others who worked there.
“I couldn’t afford to live anywhere,” Simons recalled. “I started living out of AOL’s headquarters.”
Contacted for comment, David Temkin, senior vice president of Mail and Mobile for AOL, told CNET, “It was always our intention to facilitate entrepreneurialism in the Palo Alto office — we just didn’t expect it to work so well.”
For someone with neither money nor an aversion to sleeping on others’ couches, the AOL building had plenty of allure. “They had a gym there with showers,” Simons said. “I’d take a shower after work. I was like, ‘I could totally work here…They have food upstairs, they have every drink on tap. This would be a sweet place to live.’”
Note that Simons said he would work there. After his four months in the incubator, he was used to toiling away at ClassConnect inside the building, and with other programs, from the Stanford-focused incubator StartX to AOL’s own First Floor Labs also taking up space there, there was no shortage of non-AOL employees shuffling in and out all the time. But Simons was intent on launching his startup, so why not find a desk and pound away for 12 to 16 hours a day?
“There were so many people going in and out each day,” he said. “They’d say, ‘Oh, he just works, here, he’s working late every night. Wow, what a hard worker.’”
Having spent several months legitimately working in the building, often quite late, Simons had noticed that although there were security guards with nightly rounds, there were at least three couches that seemed outside those patrols. Plus, they looked fairly comfortable. He claimed them.
This was his routine: He’d work until midnight or later, and then fall asleep around 2 a.m. on one of the couches. At 7 a.m. — and no later than 8 a.m. so he’d be safely out of his field bed before anyone else arrived — he’d wake up, go down to the gym for a workout and a shower, and then go back upstairs and scarf a breakfast of cereal and water or Coke. Then he’d work all day, finally waiting until everyone else in the building had gone home before returning to one of his three favored couches.
“I got a really good work ethic,” he said, “and I got in shape, since I had to work out every morning.”
But the real point was that he was spending next to nothing. The first month, he spent just $30, mainly on the occasional trip to McDonald’s or for “random food expenditures when I got sick of eating ramen and cereal. I could have not spent a dollar, but I was going crazy.”
Then, of course, there was Thanksgiving. That Thursday, to splurge, he grabbed dinner at a local Boston Market.
“It was a game I was playing,” he said. “What is the minimum amount of money I can spend each day to stay alive. You do some crazy things.”
Some of those crazy things included getting by with the barest of wardrobes. But because he had access to the building gym, he kept everything other than the clothes on his back and his computer there. “I only had maybe five to ten T-shirts, a pair of jeans, and a pair of shorts,” he said, “so it all fit in one locker. [Plus] they had their own laundromat there, so I’d wash my clothes there.”
Simons could probably have crashed elsewhere, but he wanted to see how long he could make the AOL squatting work. Some friends knew what he was doing, and they thought it was funny. But no one helped him, other than a couple buddies who discussed strategies with him on how to evade security.
“Honestly (though), I didn’t think they were going to catch on,” Simons said. “I had no indicators that they even cared about that…After the first month, I was like, ‘This has worked so far, but this probably isn’t sustainable,’ so I made sure my friends were OK with” me eventually crashing on their couches.
And then came that fateful morning with the 6 a.m. yelling. “One of the guys who manages the building came in at like 5 or 6 in the morning,” Simons lamented, “and he scoured the entire place to find me. And he ripped me a new one. He was pissed that I was treating it like a dorm. Which was reasonable.”
Though the security guard was angry, he knew that Simons was part of Imagine K12. So no one called the police. He lost his badge, but he still had access to the incubator, and continues to go to the AOL building for meetings to this day. But he treads carefully. “When I’m there, I beeline for the Imagine K12 office,” he said, “and when I’m done, I beeline straight for the door.”
After moving out of the AOL building, things began looking up financially. Based on the strength of what he’d built for ClassConnect, especially after pivoting and focusing solely on letting teachers share lesson plans, Simons said he was able to score $50,000 in seed funding fromUlu Ventures and Silicon Valley VC Paul Sherer.
“I was aware” of Simons living at AOL, Clint Korver of Ulu Ventures told CNET. “Tenacity and commitment are key attributes of a great entrepreneur. Eric has these in spades as demonstrated by his willingness to do whatever it takes to get his company off the ground.”
Now, Simons said, he’s looking to raise an additional $500,000.
But one thing the initial $50,000 got for him is a rental house in Palo Alto. It’s also made it possible for him to hire an engineer and a couple of interns for ClassConnect, all of whom will share the new pad.
But being the consummate entrepreneur, he decided to use the house to raise extra cash. One of the bedrooms has two bunk beds, so Simons turned the place into a hacker house by renting them out on Airbnb, and trying to make a couple grand a month to help with the rent.
So is Simons just a kid with a particularly honed entrepreneurial spirit?
“Yeah, save money whenever possible, and use all the resources you can,” he said. “And don’t die. That’s basically my motto.”
- His address: AOL campus (jimromenesko.com)
- 19-Year-Old Squatted At AOL For 2 Months (idle.slashdot.org)
- Teen secretly lived in AOL’s HQ for 2 months, eating free food, using gym & showers (refreshingnews99.blogspot.com)
- The AOL hotel (kottke.org)
- Tech entrepreneur secretly lives at AOL HQ for two months (boingboing.net)
- This Kid Spent Two Months Secretly Living in AOL’s Offices [AOL] (gizmodo.com)
- The Phantom of AOL: From squatter to Internet entrepreneur (mercurynews.com)
- AOL campus squatter scores seed funding (theglobeandmail.com)
- Nation’s Best Beach: Coronado (newser.com)
- Aspiring Start-up Dude Spent Two Months Secretly Living on AOL’s Amenities (nymag.com)
Barter-Based School Goes Global [INTERVIEW]
By Tal Beery
Trade School New York. Credit: Tal Beery.
In 2010, three people had the crazy idea to start a school where the teachers teach whatever they want and the students pay for classes with whatever teachers need—cutlery, art, advice—but never with money. A barter-based learning space, they called their project Trade School, and ran it for the first time out of a tiny store front on New York City’s Lower East Side. It was a huge hit. In just two years, Trade Schools have been popping up around the world and are now active in 15 cities and 10 countries, with almost no prodding from its founders. Caroline Woolard, a co-founder of Trade School, sat with me recently to discuss their growth and the challenges and opportunities they face when adapting their idea to an international audience.
TB: So, what makes people want to start all these Trade Schools?
CW: We actually ask people to make videos answering exactly that question. People do it for all kinds of reasons. In Oakland they are explicit about this being a project for educational justice because it is too expensive to get access to information. And in other places they want to do it to meet people who are really interested in sharing ideas—I call it “rigorous generous” people—who work really hard but also want to be in a community that is generous and vulnerable.
TB: Do you identify as a “rigorous generous” person?
CW: Yes, I do!
TB: How does someone start a Trade School?
CW: First, you go on the website and there is a PDF that you have to read about how we organize. We have principles, which you have to accept or alter them in a way that we accept, and then you have a lot of conversations with me! In the future, you will have conversations with organizers from other Trade Schools as well. Trade School London organizers, for example, are starting to help new Trade Schools open. I hope that one organizer from each Trade School joins the “Trade School Everywhere” organizing crew and helps new Trade Schools open.
You could also just go start a Trade School without talking to me. You wouldn’t get our software, which helps you organize, and you won’t be part of the network of Trade Schools. In Cologne and in Charlottesville, Virginia, they started a Trade School after emailing us once and just going for it. They did it way faster than we expected. We have talked with them since and feel that they are doing things that are aligned with our principles, so we link to them from our website. But if you want to start a Trade School and you want advice and you want our software you just talk to me and I have a lot of organizational documents that I share.
Caroline Woolard. Credit: Carolina Zerpa of Trade School Barcelona, © OurGoods.org.
TB: What’s so great about this software?
CW: If you are in a place where a lot of the people will use the internet it is a lot faster to use the software. It coordinates all the emails—reminder emails, sign up emails—and all the administrative stuff I used to do by hand. Or Zubalsky built the software and Rich Watts and Louise Ma did the design. We are going to have a huge upgraded version that will be open source that we are raising money for now.
TB: How do you ensure that Trade Schools abroad are run in the best way possible?
CW: I don’t monitor the other Trade Schools closely. The kind of people who volunteer to spend 10-40 hours a week organizing a space that runs on mutual respect are pretty incredible. I talk to most of the organizers on Skype on a weekly basis so I have a sense of who they are. I have had really good debates with organizers about their vision and what frameworks interest them because I want to make sure we are in the same mindset or at least understand why we aren’t and that the difference isn’t too great. Also having them make videos about why they wanted to start a Trade School gives me a good sense of who they are.
TB: In expanding internationally, are there cultural differences that are hard to overcome?
CW: In Italy, they told us they think it is weird to serve coffee or tea ahead of time before the class. I don’t know why, but they said that was weird. In Cologne, there was a time when they only wanted to just have classes that are totally free. Now I think it’s just some classes. In Guadalajara, they said that if you take a class as a student you have to commit to teaching a class, so that all students will become teachers. Also in Guadalajara, in the beginning, the organizer said that no one uses the internet, so he uses flyers and a lot of analog, face-to-face organizing techniques to get people to know about Trade School. But now he does also post the classes on the internet.
Trade School flyers in foreground, with a SolidarityNYC poster in the background. Credit: © OurGoods.org.
TB: Is there a reason Trade School is expanding so much right now?
CW: Maybe because the monetary system is failing people in a global way. Maybe because higher education is getting privatized all around us, and not only in this country. And lots of social services from health to education to arts are getting cut all over the world and people feel that some things just don’t work in a market economy. Some things are just about creativity and passion and people have a human right to them, so they want to make them happen whether or not their government is helping.
We also make it clear that we want you to organize a Trade School in your area. says at the top, “Do you want to start a Trade School?” By making this very obvious, by putting our desire to share it with other people out there, anyone who could read English and was interested knows straight away that it is open to them. So I think making our desire to share it available helps a lot, because something like 10,000 people look at our website every month even when we aren’t in session.
TB: Is there anything inherently political about Trade School?
CW: I feel that all projects are inherently political because for me, politics is about recognizing each person’s power or agency. Just in the very idea of mutual respect, or students becoming teachers, we are trying to make each person’s power more visible. Also, Trade School is a big volunteer project and can’t be done alone. We want all organizers to organize as a collective or cooperative, and that in itself is about horizontal power and allowing voices to be heard and opinions to be discussed to make consensus possible.
TB: Are there any limits to Trade School’s growth?
CW: If each Trade School that opens doesn’t follow the principles of cooperation, especially the last one about cooperation between cooperatives, and other Trade Schools don’t help new Trade Schools open, we’ll have a problem because I can get really burned out. Even if we don’t have money, if I do a good job of training the trainers, I think there is no limit to growth. Everyone can help another school start.
The other limit to growth will be if we don’t get help with the software, because if people want a website that functions really well, it will need to be continually maintained. We need to find more organizers on the tech end of things who want to work with Python and Django to make the Trade School software great. So that‘s another community—the online open software community—that we need to grow.
TB: And that might cost money.
CW: Maybe, it might not, we’ll see!
- Barter-Based School Catching On Globally (news.slashdot.org)
- Barter-Based School Goes Global (shareable.net)
- Money and barter (barefootbum.blogspot.com)
- Trade School: Pay Teachers with Groceries, Art & Advice (shareable.net)
- How can we practice sharing, organizing, and creating in ways that transform ourselves, our communities, and the world? (shareable.net)
- “College is not trade school. Who’s really complaining? The people really who are pissed off are the…” (caterpillarcowboy.com)
- Now Trending: Alternative Education (kickstarter.com)
- My Boys Bartering (trainingupmyboys.wordpress.com)
- High School…trade by Barter. (yawstories.wordpress.com)
- Trade your tea pot for some skills (dothegreenthing.com)
GOP looks to encourage prayer at school board meetings
By Pete Kasperowicz - 05/18/12
Rep. Tim Walberg (R-Mich.) and 33 other House Republicans are hoping to encourage school boards around the country to pray at their meetings, and are leaning on a 1983 Supreme Court case to argue that voluntary prayer at school boards and other deliberative public bodies “should be protected under law and encouraged in society.”
Walberg on Thursday introduced a nonbinding resolution, H.Res. 662, which notes that the Supreme Court in ruled that the practice of opening sessions of deliberative public bodies with prayer is embedded in U.S. tradition. It states that the court found that “invoking divine guidance on a public body entrusted with making the laws is not a violation of the Establishment Clause of the First Amendment, but rather is simply a tolerable acknowledgement of beliefs widely held among the people of the Nation.”
The resolution then reasons that voluntary prayer should not be limited under this ruling to prayer in the U.S. House and Senate, and finds that school boards are also deliberative public bodies because they are elected by the people and hold sessions in the public to make decisions.
The measure concludes by saying the House recognizes school boards as such, and that they should be “free to engage in prayer at the beginning of meetings consistent with the prayer practice upheld in Marsh v. Chambers.” It also “expresses support for the voluntary practice of prayer at the beginning of meetings of legislative bodies and other deliberative public bodies, including school board meetings.”
Among others, the resolution is co-sponsored by House Republican Conference Committee Chairman Jeb Hensarling (R-Texas).
- School board merger rushed, says board chair (cbc.ca)
- Appeals Court Rules on Prayer Before School-cnbnews.net (gloucestercitynews.net)
- Proposal results from school prayer sessions (news4jax.com)
- School board members will advise Oregon governor on higher education (oregonlive.com)
- School Boards, Corporate Boards, All Boards (drjosephwise.wordpress.com)
- Canadian School’s Solution to Daily Prayer: Just Put Non-Christians in a Separate Classroom (patheos.com)
- Rash of Reasonableness: R.I. School Board Ends Legal Fight over Prayer Banner (secularnewsdaily.com)
- District Policies to Comply With New State Law on Agenda for Raytown School Board Tonight (kceducationenterprise.org)
- No approval granted for North Bennington independent school (vttoday.com)
- Court Upholds Lakeland Commission Prayer Policy (secularnewsdaily.com)
University of Florida Eliminates Computer Science Department, Increases Athletic Budgets. Hmm. – Forbes
University of Florida Eliminates Computer Science Department, Increases Athletic Budgets. Hmm.
Wow, no one saw this coming. The University of Florida announced this past week that it was dropping its computer science department, which will allow it to save about $1.7 million. The school is eliminating all funding for teaching assistants in computer science, cutting the graduate and research programs entirely, and moving the tattered remnants into other departments.
Let’s get this straight: in the midst of a technology revolution, with a shortage of engineers and computer scientists, UF decides to cut computer science completely?
Math and computer science are hard. Why bother?
Students at UF have already organized protests, and have created a website dedicated to saving the CS department. Several distinguished computer scientists have written to the president of UF to express their concerns, in very blunt terms. Prof. Zvi Galil, Dean of Computing at Georgia Tech, is “amazed, shocked, and angered.” Prof. S.N. Maheshwari, former Dean of Engineering at IIT Delhi, calls this move “outrageously wrong.” Computer scientist Carl de Boor, a member of the National Academy of Sciences and winner of the 2003 National Medal of Science, asked the UF president “What were you thinking?”
(Note to the students, if you need more quotes for your site: I think this move is shockingly short-sighted. The University of Florida is moving backwards while the rest of the world moves ahead.)
Meanwhile, the athletic budget for the current year is $99 million, an increase of more than $2 million from last year. The increase alone would more than offset the savings supposedly gained by cutting computer science.
Now, I’m not saying that UF has chosen football over science. (Imagine the outcry, though, if UF cut a major sport instead of a major science department.) Actually, the real villains here are the Florida state legislators, who have cut the budget for their flagship university by 30% over the past 6 years.
Meanwhile, just two days ago, Florida governor Rick Scott approved the creation of a brand-new public university, Florida Polytechnic University, to be located near the city of Tampa. In an unintentionally ironic statement, Gov. Scott said
“At a time when the number of graduates of Florida’s universities in the STEM [science, technology, engineering, and mathematics] fields is not projected to meet workforce needs, the establishment of Florida Polytechnic University will help us move the needle in the right direction.”
Heads up, Gov. Scott: no one is going to believe that you’re supporting technical education when your flagship university is eliminating its Computer Science Department. Since cutting support for universities seems to be a major agenda item for you and the legislature, why stop at 30%? With just a bit more cutting, you could get rid of those annoying universities entirely. Let the rest of the country worry about higher education! Florida can focus on orange groves and golf courses. Oh, and football.
- University of Florida Eliminates Computer Science Department, Increases Athletic Budgets. Hmm. (forbes.com)
- University of Florida eliminates Computer Science Department. At least they still have football. (genome.fieldofscience.com)
- The Science of Solving Problems vs Football (computationallythinking.com)
- University of Florida to dismantle CISE department (computinged.wordpress.com)
- FL: Tuition hike means USF students paying for greater share of their education than state (tampabay.com)
- Majors: Computer Science (collegemindset.wordpress.com)
- Florida Council of 100 to Scott: veto Poly bill, sign tuition bill (tampabay.com)
- Scott boots UF Board of Trustees chair (tampabay.com)
- Gold medalist brings smiles to UF hospital (news4jax.com)
- Fuel Up Your Computer Science Knowledge with Coursera (mishidems.wordpress.com)