Bait and Switch – Michigan Students First

I, like many others, recently received a letter about my participation in MHESLA’s MI Students First program.  The arrangement had been that, after I made 36 monthly on-time payments, my interest rate would be reduced to 0%.  The letter informed me that the new arrangement would be that my interest rate would not be reduced.  Assuming I don’t start making extra payments, this means I now owe an additional $10,000 in interest over the life of the loan.  This apparently does not affect borrowers whose repayment schedule started in June 2007 or earlier.  Unfortunately for me, my repayments started in December 2007.

Today I learned that a similar thing happened with NorthStar Education Finance: they offered a 0.75% rate reduction for on-time borrowers but then decided stopped paying it (to existing borrowers!) in February 2008.  This prompted a class-action lawsuit for breach of contract and unfair and deceptive trade practices.  NorthStar settled for $9.75M plus attorneys’ fees.  With 120,000 affected borrowers, that is an average of $81 each.

The webpage says “The webpage says “MHESLA reserves the right to revise or discontinue offering borrower benefit options at any time,” and the Wayback Machine shows that disclaimer has been there since at least 2006.  If I read that in the past, I would have assumed it only referred to new loans.  Also, the four letters I received in the mail describing the benefit had no such disclaimer.  Two of the letters present it as a 3-step process (receive loan, pay 36 months to get 0%, then stay current) and state “That’s it! As simple as 1-2-3!”  MHESLA’s ability to back out was also not mentioned when I called in 2007 to confirm the offer.

I believe MHESLA’s original plan was to stand by the offer, and the problems from the financial downturn were not expected.  However, I have a bad feeling that the recent action was calculated without regard to ethics, e.g. “Sure, we’re going to get sued for breach of contract, but the settlement will probably be pennies on the dollar compared to the additional revenue.”

Some Memorable People from San Francisco

Before the memories fade, I’d like to briefly record some memories of the new people I met over the past three weeks.  This is my best idea for preserving the moments; scenic vistas can be photographed, but social interactions cannot.

  • Dylan, who said, “There’s a severe earthquake forecast for next Monday.”
  • Rose, who a moment later asked, “Did you say the earthquake on Monday won’t be too severe?”
  • Lucy, who said “Sorry” when I told her I had been to Northampton.
  • The guy who sat next to me at a TL bus stop, rolled a joint, then called someone and said “Want to buy some drugs?  I need money for food.”
  • The guy at the hostel who explained he chooses his diet based on his blood type and is looking for work as a life coach and/or arranging furniture.
  • The Canadian girl at the CouchSurfing mixer who appeared amorous with multiple guys.
  • Emmanuel, the IT consultant and CouchSurfer who moved to Norway without mentioning it to his Pennsylvanian clients, whom he continued to work for.
  • Tony, the Japanese/Peruvian guy at the CouchSurfing mixer who knew the sheriff in my grandparent’s village in Michigan, population 534.
  • Jitka, the CouchSurfing nuclear physicist.
  • Lewis, who borrowed my computer for the longest 20 minutes ever.
  • Helen, who seems nearly perfect.
  • Aarani, who works in M&A but not M&A and lived in the same part of London I did.
  • Jo, who told the Ugandan police, “OK, I’ll pay the bribe.  Just wait here while I go get the money,” and got away with it.
  • Guy at the bike rental who told me to find the tall, bearded Jewish guy at Zingerman’s Deli and tell him, “Chicago Joe says Hi”.
  • Ross, who I think owes me for the bike rental and needs to e-mail me my photos from the ride
  • Gustavo, the Colombian who saved for three years to study briefly in America and dreams of organizing stevia production.
  • Ida, whose answer to “How do you know Hally?” was “Happy hour”.  Because I was surprised by her answer, she proceeded to explain that happy hour was a time in the evening with drink specials.
  • SF local eager to hang on the side of the cable car.  I said, “I hear it’s best on standing on the side,” and she responded, “It’s better on your back.”
  • The cable car driver who, based on appearance, probably arrived in San Francisco during the gold rush.
  • Girl with nosering, the abstract painter turned sculptor turned social practicer turned experimental documentary filmmaker who manages to find subjects weirder than herself: a couple that met when the girl called a suicide hotline, drove the first counselor to quit, and ended up in a relationship with the second counselor!
  • Gregory, new CouchSurfer, swim teacher to disabled children, concert poster collector, fascinated by the Golden Gate and its jumpers
  • Stephen, the nomad, whose friends have a pool going on how long he’ll last in his new job as tour guide.
  • John, day trader, former retail stockbroker, former operator of a methadone clinic, former drug dealer.
  • Corinna, the Jehovah’s Witness bartender from Mexico who is going to explain the blood transfusion doctrine without relying on the Old Testament.  (Unless she recants on her opposition to stoning adulterers.)

I am writing this mainly so I can jog my memory after the memories fade over time, but I hope others may find some amusement from reading the list.

Robotic sculptures

This evening I went to Carl Pisaturo’s Area 2281. It is in the Mission, and my morning tour guide’s description of it being a rough area that artists were moving into definitely fit my experience — I think every door and window between the BART and the gallery had bars. However, the gallery was quite neat, appearing like a mad scientist’s laboratory. There were humanoid robots dancing (at least from the waist up), the apparent offspring of a turntable and an octopus, and a variety of spinning, lighted contraptions. I especially liked the stereoscopic image of a welder working, causing a bloom of sparks to fly out and fall to the floor. I believe the new piece was something like a fish that had rippling legs like a centipede and was flying in circles overhead. The location and attendees also gave the place the atmosphere of a house party. That was probably nice for others, but my not knowing anybody or anything about “the scene” make it feel a bit like I had just crashed a party in someone’s basement. Still, it was neat to these pretty inventions that are essentially unlike anything else I’ve seen.

Who has all these credit cards?

It’s been corrected now, but Reuters had an amusing error in this article:

In 2007, Americans were using an estimated 694.4 billion credit cards with Visa, MasterCard, American Express and Discover logos, according to the Card Industry Directory.

Considering the population of 300 million, that would be more than 2,000 cards per person!


Today, after the Dow closed down 777 points, I faxed in the application to enable option trading on my brokerage account.  🙂  I’m not actually as speculative as that sounds, though.  My intended investment, LEAPS, is effectively less risky than plain stocks, even before you factor in Taleb’s criticisms of the Gaussian bell curve.  Since I’m not cocky enough to think I can reliably time the market, I plan to buy as soon as the feature is enabled.  Thus, I do appreciate all the selling that’s occurring in the meantime.  Thanks!

Depressing real estate values

For some odd reason, I ended up browsing through real estate listings tonight, and I saw that a 2-bedroom unit in my building is listed for $15,000.  Now, when I clicked for details, the description claimed the price was $25,000, so this is likely to be a typo.  For comparison, a studio unit is listed for $13k.  Regardless of typographical errors, this does not bode well for my 1-bedroom unit.  Despite having made a 20% down payment and being nearly four years into a ten-year mortgage, I’m probably still under water.

Making things worse, it’s not even clear that sales are even happening at these prices.  I don’t know how to directly access past sales data, but the $25k 2-bedroom unit appears to have been listed since April 25!

I can see how owning a home is a good investment; you needed a roof over your head anyway, why not get in on the appreciation of the asset?  I was going to mention the tax shield, but I think individuals enjoy the income tax benefits from a margin account with a brokerage as they do with mortgages.  If I understand homesteading correctly, homeowners pay less property tax than renters indirectly pay through their rent.

I have the impression that home values generally have low volatility relative to the stock market, but is that a fair comparison?  Owning a single home is an undiversified investment that is typically levered 5 to 1 or higher.  Making a similar commitment in the stock market — investing a multiple of your annual income in a single stock — is virtually unthinkable.  Houses never declare bankruptcy, but they do burn down.  Both events can be protected against with various forms of insurance.  The comparison really depends on specific numbers, but I don’t see home ownership as an investment panacea.  If I was on the upswing, I would probably feel like whistling a different tune, but it would be foolish to measure the reward without also considering the risk.  If owning vs. buying can be assumed a wash financially, then the real deciding factors should be non-financial.

Laziness Gene

Today I ran across this Time article that describes how researchers have bred mice to be jocks.  Heredity seems to explain 50% of the difference in the observed activity levels.  This suggests a similar genetic basis in humans.  I’d be curious to find out whether the less active mice also show increased interest in reading, math, and music.

The article naturally addresses the question of whether such genetic factors can be countered:

And maybe one day, [the researcher] speculates, there might even be a drug to compensate for what your genes won’t give you. A drug that makes you want to exercise? Now that’s a pill worth swallowing.

Don’t we already have several of these?  I think one is called ephedrine.

Patents are scary

I don’t have much to say about this myself, but this patent article linked from makes my head spin.  I found this sentence especially striking:

All these and many more fascinating questions will provide ample billable hours for patent attorneys even as inventors look on with utter horror and disbelief at the crucial importance the legal system is placing on distinctions that are technologically meaningless to the innovations sought to be patented.

Diverse readership

After I wrote Monday’s blog post, I linked to it from Twitter, which now also shows up in my Facebook status.  Surprisingly, a few people even clicked on it!

Via Google Analytics, I can pull up the cities (roughly) where the visitors came from:

  • Ankara
  • Big Rapids
  • Clawson
  • Jackson
  • Lansing
  • Munich
  • Oslo
  • Southfield
  • Boston

This seems both mundane and amazing.  The fact that people from all over the world visit one’s website used to be amazing, but I’ve gotten used to that over the past decade or so.  What I currently find amazing is that all those clicks came from friends and associates — these are people I know and who know me.  My post was just an anecdote, so it’s almost as if this were a globally distributed water cooler conversation.  (But, hey, nobody left a comment!)  Is this what the future looks like?

What to do with the comments

I started adding the ability to post comments to my website in 2004.  Since then, 919 comments have been posted.  Most of them are strange.  Many are disturbing and embarrassing to have on my website.  At one point, it appeared that two high schoolers appeared to being using my website comments as a chat room, probably because other methods of chatting were blocked by the school.  Surprising few comments are outright spam.  Finally, some comments are actually nice, thoughtful, and interesting to read, like this one: “I found your site over a year ago before we moved to Jackson.  It was so helpful then, and I just realized today that I still keep coming back.  Thanks for the time you put into it.  I really appreciate it!”

I’d like to keep getting the nice ones but discard all the crap.  I would also like to accomplish this with little upfront effort as well as little ongoing effort.  Comment quality is often enforced by CAPTCHAs and moderation.  However, CAPTCHAs protect against automated spam, which is not my problem.  They are also annoying to users.  Moderation would work to eliminate the chaff, except that means *I* would have to manually filter everything.  I’d also have to develop the moderation system or completely replace the homegrown commenting system.

While I do enjoy receiving the nice comments, I quickly forget about them.  I rarely visit my own site, so I rarely rediscover them either.  Maybe I should just remove the commenting system and instead let people send me an e-mail if they have something to say.  However, I think the threshold for deciding to leave a comment is lower than that for writing an e-mail, so I would be cutting down feedback.

Do you have any bright ideas?