Predatory Equity Leads to Subprime Schools

Why should we trust the same billionaires responsible for the largest wave of minority home foreclosures in U.S. history with boosting student achievement? The answer is, we shouldn't.
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New York Gov. Andrew Cuomo speaks at a rally in support of charter schools on the steps of the state Capitol in Albany, N.Y., on Tuesday, March 4, 2014. Thousands of charter school supporters from around New York state took part in the rally. (AP Photo/Tim Roske)
New York Gov. Andrew Cuomo speaks at a rally in support of charter schools on the steps of the state Capitol in Albany, N.Y., on Tuesday, March 4, 2014. Thousands of charter school supporters from around New York state took part in the rally. (AP Photo/Tim Roske)

Activists and lawmakers recovering from this year's Albany budget dance don't need to be reminded of what made this year different than the past six: the more than $5 billion dollar surplus powered by settlements with the financial industry.

But as the next phase of the 2015 legislative session is set to begin, and Governor Cuomo continues to lead New York towards an agenda crafted and funded by anti-union hedge fund tycoons, the political debate has glossed over the connection between this multi-billion dollar surplus and the interests behind the right-wing education push.

So I'll put it bluntly:

The same special interests that New York State collected over $4 billion dollars from in the last year alone for bad behavior like tax evasion, illegally trading with Iran, and delaying life insurance payments to grieving families now want to tell us how to run our school system. And they're on track to spend record-breaking amounts of money on lobbying and campaign contributions to do so.

But the similarities between Wall Street's ethical lapses and its approach to education don't end there:

Financial institutions used to "redline" communities of color, denying us access to credit for purchasing homes or starting businesses. Then they realized we were the perfect target for predatory lending that would eventually make the U.S. economy crash and burn.

Sound familiar to anyone following the education debate in Albany?

New York State government has "redlined" poor school districts for decades, shortchanging them billions even after New York State's highest court ordered it to make restitution. But instead of granting communities of color the "credit" needed to educate children in public school, the predatory equity crowd swooped in with a new option they said would work for us -- just like they did with subprime loans.

Why should we trust the same predatory equity crowd which steered Black and Latino families into subprime mortgages through redlining and deceptive marketing to have the best interests of communities of color at heart? Why should we trust the same billionaires responsible for the largest wave of minority home foreclosures in U.S. history with boosting student achievement?

The answer is, we shouldn't.

If we allow these same bad actors to continue down the path of expanding charter schools and privatizing public education, then we're placing the future of our children in the hands of predators who paid $4 billion last year to settle improper behavior.

Here's their game plan: engage in reckless behavior, pay a penalty but admit no wrongdoing. Then even before the state can spend the money, move on to seizing control of the school system by throwing more money at policy makers like Governor Cuomo. With enough money and influence, you can get what you want and never have to apologize.

Then there's the matter of what happens if the predatory equity crowd is successful. The last time this group made inroads into communities of color, generations of savings in Black and Latino households vanished amidst turmoil in the financial markets.

This time, there's money to be made too, since the predatory equity crowd sees education as big business. From testing preparation contracts, to access to all kinds of students' data, there's an unlimited number of ways for the financial class to cash in.

Except of course, by funding public schools instead of charters.

Led by Bertha Lewis, The Black Institute works to shape intellectual discourse and impact public policy uniquely from a Black perspective.

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