Across the country, Wall Street is skimming profits from higher education through predatory loans to students and universities. The arrangement has been profitable for banks, but bad for higher education -- especially students, alumni, faculty, and staff.
Wall Street Higher Ed Watch, a partnership between LittleSis.org and the Higher Ed Not Debt campaign, is a campus-by-campus investigation of Wall Street's role in higher education. Using LittleSis.org, activists across the country are connecting the dots between their universities and Wall Street in order to understand and challenge the role finance is playing in higher ed.
An evolving LittleSis map of big bank execs and directors who currently sit on university boards of trustees.
Sign up for the investigation! We'll be in touch soon to help you get started.
The following are some questions that the investigation is tackling on campuses around the country. Dig into the research guide for more questions and the steps to answer them!
This research is all about tracking relationships between universities and Wall Street. LittleSis makes it easy to track relationships -- a trustee's relationship with a big bank, for instance, or an endowment manager's relationship with a hedge fund. This focus on the links that make up powerful networks distinguishes LittleSis from other types of wikis.
LittleSis allows you to build lists of who you are researching in connection to your universities, like trustees, administrators, banks, law firms, etc, and keep track of your sources as you do the research.You can use advanced tools like the bookmarklet and bulk adding function to import data into LittleSis quickly for further research and analysis.
Research groups will help you coordinate research with other activists and share your findings.
You will be part of a community of researchers and activists investigating – and challenging – the powers that be.
Since 2008, financial firms have absorbed nearly 1 in 10 dollars spent on higher education at degree granting institutions – over $44 billion annually!
Why? Over the last few decades, Wall Street banks have wielded their political power to reduce their tax burden and keep wages relatively stagnant. Revenue for important public services like infrastructure, public safety, health care and education is declining rapidly as a result. To replace lost revenue, colleges and universities are taking on more debt and increasing tuition. Students are taking out more loans of their own to afford rising tuition. Interest payments on loan increase costs for schools and students, while Wall Street rakes in huge profits. Most profits go right into the pockets of shareholders and executives, but the rest goes towards more lobbying, more campaign contributions, more astroturf groups--all the political influence money can buy.
You can expose this vicious cycle! Here’s what students, faculty and staff on campuses around the country are doing to challenge the Wall Street skim:
University of California, Berkeley, CA
Members of the UC community, worried that tuition was going up while services declined, decided to follow the money. They found their school had doubled its debt burden between 2007 and 2011 to finance UC enterprises like medical centers and was even losing money on interest rate swaps, about $750 thousand each month. What’s more, the swaps were signed with banks closely tied to UC Regents and executives.
UC students, faculty and staff formed a coalition called Take Back UC to hold the Regents accountable to the system’s original mission: providing accessible and high-quality education, research and medical care to Californians. Learn more...
Peralta Colleges, Oakland, CA
Students and faculty in the Peralta Community College District got together in 2011 to investigate their schools’ finances and learned they were losing $1.6 million each year on interest rate swaps signed with Morgan Stanley. They petitioned the bank and the Peralta Board to terminate the swap, as well as improve transparency around future deals. Learn more...
Macalester College, St. Paul, MN
Students at Macalester, concerned about the role of Wells Fargo in the housing crisis, investigated their school’s relationship with the bank. They learned that Macalester contracts with Wells Fargo for debit cards to make purchases off-campus from school accounts. Students found a community bank to provide the cards and asked the administration to end the school’s relationship with Well Fargo. The administration refused to do so, prompting a May 2013 sit-in that resulted in unprecedented probation for over a dozen student activists. Learn more...
This research guide explains methods, tips and tricks for investigating your university's relationships with Wall Street –- and who is behind them. LittleSis, the best online tool for power research, will help guide your investigation. You can add every relationship between your university and Wall St you dig up, analyze those relationships to find common connections, and share findings and research tricks with other students on your campus and around the country.
Sign up for help getting started, or read on...
You can start on the first question and work through them one by one, or jump in wherever you like! Some are pretty broad, so we broke them down into a series of more focused questions. Each question is the header to a section of the guide that includes:
You don't have to go it alone.
We <3 Google! You'll notice this guide includes many references to searching for something on Google. We use Google everyday hundreds of times for our own research and think you should use it too. Drop us a line to learn some tricks for getting the most out of Google when it comes to power research or play A Google A Day to improve your googling skills.
Start by finding the financial reports of your university and its non-profit foundations.
Find the pages of any offices/administrators/committees involved in financial management, using department directories or a Google site search. Usually these pages will include links to reports/statements/audits, though some reports are very shallow. Keep digging to find ones that offer the most details about the school's finances. Searching by file type can also be helpful, since these reports are often in .pdf or .doc format. Meeting minutes, agendas and presentations (.ppt format) may also include helpful details, especially those of board committees with a financial focus.
--> If your school doesn't appear to make these documents available online, contact the offices involved in financial management to ask for digital or hard copies. Public universities are subject to FOIA requests, so you might consider submitting one if you can't get the documents you need online or by asking.
Are Wall St. firms underwriting loans to my school?
Many universities borrow significantly, in the form of municipal bonds. Some schools issue bonds directly, while others work through government agencies. Bonds are prepared by law firms and backed by banks. Borrowing money to pay for things your school needs but can't afford in cash isn't necessarily a problem--enter the big banks! Big banks see these bonds as opportunities to squeeze out every penny of profit they can, by charging unusually high interest rates and fees or promoting toxic products like interest rate swaps and capital appreciation bonds. These deals are potentially the worst part of Wall Street's skim of your school. University of California is losing millions on interest rate swaps, for example. We'll start by finding your school's bonds, then look for any problematic products and practices.
Goals: Identify the banks and lawyers involved in loaning money to your school and add those "Service/Transaction" relationships to LittleSis. Add any potential problems with the bond to the relationship Notes.
Keywords: bond, municipal, muni, financing, real estate, debt, loan, issuer
Review financial reports and other documents for information about debt. Look for the keywords and try to identify names of projects, as well as names of banks, lawyers, and issuers (if not the school itself). Use the information you find in these documents to improve your searches in the next steps:
Once you've compiled documents containing the details of your school's bonds, you want to begin reviewing each bond and tracking the details (we recommend Google Spreadsheets for this), including:
Speaking of which: Have any of your school's trustees or administrators ever worked for the banks that underwrote these bonds? In 2010, The Chronicle of Higher Ed found that 1 in 4 private colleges were doing business with companies owned or managed by their trustees. Most schools had policies to manage conflicts of interest, but often lacked transparency around business transactions and their conflicted trustees. Your school's trustees may work at the banks underwriting your school's toxic loans. We explain how to look for potential conflicts of interest later in this guide!
Big banks are constantly inventing new ways to extract profit from municipal finance, beyond what we outlined here, and bond documents can be tricky to read even when you know what you're looking for. If you find warning signs like ballooning payments of interest and fees or conflicted trustees and administrators, call for back-up! Write a LittleSis note to ask research groups at other schools for help. Find your school's chapter of the National Lawyer's Guild to recruit like-minded law students to your investigation. Contact your TAs and professors with expertise in municipal finance.
Review financial reports for information about investments.
Keywords: investment, financial mangagement,
Do any lenders have special relationships with the financial aid office?
How are student payments and refunds managed?
Do any banks have student card agreements with the university?
Figure out which organizations--chambers of commerce, business groups, trade associations, PACs--are advocating for spending cuts on public higher education in your state. Try to find press releases or news articles stating each org's position. Sometimes a group may not be taking a particular stance on education, but recommending spending and tax cuts across the board.
Who makes decisions at your school?
Try to find an organizational chart or job descriptions for administrators to understand who's in charge. Usually the governance structure includes:
Do these decision-makers have ties to Wall Street?
'Wall Street' broadly includes banks, hedge funds, private equity and other investment firms, and debt collection companies, as well as law, lobby, or consulting firms and industry/trade associations representing any of the above. It may be helpful to know which banks have the largest presence in your school's area. The FDIC makes deposit market share reports available online and searchable by state, county, city or zip.
Are any university power players linked to Wall Street in the news?
Do any of your school's major donors have ties to Wall Street?
You can now do one of two things with these donors:
Are any high-profile faculty connected to Wall Street?
Investigating the ties between University of Oregon and Wall St.
Investigating the ties between Temple University and Wall St.
A research group investigating governance and policy at the University at Bufalo (SUNY-Buffalo).