¶ … Debt Got to Do with it?" By Brett Williams and "At the Elite Colleges" by Peter Schmidt. Though the articles appear to discuss different worlds, they are actually discussing two sides of the same social coin: classicism, which favors the privileged over the underprivileged. The individuals suffer, of course, but society also pays a greater price: mediocrity in leadership and despair in the underprivileged. "What's Debt Got to Do with It?" By Brett Williams

What are the main issues and ideas contained in the reading?

"What's Debt Got to Do with It?" By Brett Williams discusses fringe financial "services" located in poor neighborhoods and offered to low income or credit risk people at an enormous cost. The author discusses American's Cash Express (ACE) "welfare banking" services, such as check cashing for 2% or higher of the check value, payday loans for 20 -- 35% interest on the loan amount, prepaid debit cards for $35 annual fee and 19.8% annual interest, tax preparation for $30 and bill payments for a fee. Williams also discusses giant pawn companies, such as Cash America, swallowing up local mom-and-pop stores and pawn shops in poor neighborhoods to loan small amounts on expensive items, charge 10% interest per month to either retrieve the items or keep the items on hold, and reap retail profits when abandoned items are sold to third parties. Rent-to-own companies, such as RentAmerica and Rent-A-Center, are also discussed, particularly the outrageous prices poor customers ultimately spend through smaller monthly payments to eventually own TVs, refrigerators and other items. Finally, Williams speaks of the companies in poor neighborhoods offering "debt consolidation" and "home repair" loans to low income people, particularly if they have equity in their homes, at 36 -- 50% interest and with tacked on fees for insurances, loan closing and so forth. These companies are backed by Citicorp, Ford Motors and other wealthy financial institutions that package the loans and sell them on Wall Street, in large part to remedy their own fiscal responsibility by siphoning off as much money as possible from low income people.

ii. Can you identify the author's point-of-view?

The author does not give personal data; however, Brett Williams is obviously opposed to these fringe financial services provided for gouging fees to low income people. The author obviously sees these "services" as vultures preying on people whose low income, ignorance or high credit risk make regular bank use difficult or impossible.

iii. How did the reading broaden your knowledge?

Though I already knew about all the discussed services, I was previously unaware of the specifically high interest rates charged by some of them and the variety of so-called services enabling them to gouge low-income people this way and that in order to suck as much money as possible from them.

iv. Personal reactions to the reading?

The practices of these businesses are sometimes appalling. The charge of $35 -- 50% on a consolidation or home improvement loan, for example, sounds downright criminal to me. Simultaneously, I understand why regular banks will not deal with high credit risks: in order to deal with a bank regarding any sort of loan -- mortgage, personal, whatever -- one has to demonstrate that he/she is a good credit risk. Consequently, I understand the need for fringe banking services for low income and high credit risk people; however, I believe there should be tougher regulation of these services so they cannot charge such ridiculously high rates.

b. "At the Elite Colleges" by Peter Schmidt

i. What are the main issues and ideas contained in the reading?

"At the Elite Colleges" by Peter Schmidt indicates that, contrary to their publicity, many of the top universities cater to the white, privileged people who do not meet stated academic standards. Though Universities publicize their minority and lower income admissions, well-qualified low income and minority students are often squeezed out of admission by the universities' acceptance of privileged white youth with cash and connections. According to the article, people from the wealthiest 1/4 of the population are 25 times as likely as the bottom 1/4 to enroll in elite colleges such as Notre Dame, Harvard and the University of Virginia. These universities defend their acceptance of the elite, claiming that their donations to university endowments allow the universities to help less privileged students; in realty, less and less of the money is used to help the less privileged and is instead used for merit-based scholarships and tuition discounts to students who are likelier to enhance the universities' reputations and/or become large donors to the universities. This practice is killing the social mobility that is supposedly a hallmark of America, possibly...

Can you identify the author's point-of-view?
The author gives no personal information; however, he clearly opposes the current hypocritical practices of elite universities, who claim high standards and ideals but cater to privileged, unqualified people with cash and connections who can ultimately donate large sums to the universities. The author also believes that these practices have far-reaching effects on society, resulting little-to-no true social mobility, mediocre leadership and disheartened qualified-but-underprivileged people.

iii. How did the reading broaden your knowledge?

This article was full of revelations for me. I believed elite universities meant what they said about high standards and ideals. In retrospect, that was naive of me. Basically every fact given in this article was news to me: in order to show all the ways the article broadened my knowledge, I'd have to retype the article.

iv. Personal reactions to the reading?

My first reaction is consternation at my own naivete in believing the publicity of elite universities about their high ideals and standards. My second reaction is anger at a system that gives more privilege to the privileged in yet another way, to the obvious detriment of gifted people who are not privileged. My third reaction is disappointment in this undermining of social mobility because I can see how catering to spoiled, rich, underqualified kids lead to mediocrity in leadership and despair in the qualified, less privileged person who is rejected for lack of cash and connections. In sum, the article was a valuable "downer."

c. Comparison of the two articles

"What's Debt Got to Do with It?" By Brett Williams deals with multiple ways in which low income and high-credit-risk people are preyed upon by various "services" that gouge them for high interest rates and fees. "At the Elite Colleges" by Peter Schmidt discusses the hypocritical admissions practices of elite universities that publicize their high ideals and standards while actually catering to spoiled, underqualified candidates with cash and connections. At first blush, the articles appear to be discussing two different worlds. However, they are really discussing two sides of the same coin: the classism that gives the privileged even more privilege while preying upon the underprivileged, all to the advantage of wealthier people at the expense of poorer people. Williams speaks of the financial consequences, aiding the rich while victimizing the underprivileged; however, Schmidt takes it even farther, showing the damage to social mobility and the resulting mediocrity of leadership and despair of the underprivileged. Neither author gives personal details, so their perspectives are taken purely from their observations but it is obvious that Williams deplores the advantages taken of the underprivileged while Schmidt criticizes the undue advantages given to the advantaged by elite universities.

3. Conclusion

"What's Debt Got to Do with It?" By Brett Williams discussed the myriad ways in which low income and credit-challenged people are preyed upon by various services. Due to the difficulty or impossibility of using regular banks, people are forced to use services such as America's Cash Express, Rent-A-Center and companies offering "debt consolidation" or home repair loans, all at gouging prices to the people forced to use them. The winners in this scenario are, once again, wealthier individuals and companies who can skim unconscionably large sums from lower "classes" of people in poorer neighborhoods. The author gives no personal details but is justifiably highly critical of those services and the mindset backing them. Though I was previously aware of these services, I did not know the specific interest rates and fees, which are outrageous. I believe the businesses serve a purpose but should be regulated to charge more reasonable rates and fees.

"At the Elite Colleges" by Peter Schmidt deals with the hypocrisy of big-name universities in their admissions practices. Though they publicize their high standards and ideals, they actually cater to the privileged class over the underprivileged class, accepting underqualified people with cash and connections over qualified people with little-to-no cash or connections. This practice mouths the American ideal of social mobility while killing it, ultimately resulting in mediocre leadership and a despairing disadvantaged class. The author gives no personal details, though he is obviously critical of the true admissions practices. Virtually all the facts cited in the article were news to me. I am concerned by my own naivete, angered…