Ombudsman position can be another step in supporting options for Iowa students

Iowa public and non-public schools, along with Iowa parents, are partners in offering an education system for all of our state’s children.

President Obama signed the Every Student Succeeds Act, or ESSA, into law last year, replacing the No Child Left Behind Act of 2001. ESSA recognizes the need for representation of non-public school interests at the state level to insure their access to the share of federal program funding to which their students are entitled.

Non-public school enrollment numbers are used in the calculation of federal funding made available to the state, which means it is a matter of fairness that nonpublic school students receive their percentage share in a timely manner. This has not always been the case.

In the spirit of addressing the issue, the ESSA directs the creation of a public ombudsman position at the state level to consult, monitor and mediate to insure non-public school students receive equitable treatment under the terms of the new law.

One of the most important features of the new proposal is recognizing financial reality. Public and non-public schools share many of the same costs and regulations in infrastructure, overhead and the provision of services. As those costs have escalated dramatically over time, non-public school students do not have the same access to the tax dollars directed to public school students, placing them at a serious financial disadvantage.

Experience shows that students, families and communities thrive when the best education options are available to Iowa parents. The ombudsman position can be another step in supporting options for Iowa students.

Reforming the payday loan industry

In early June the federal Consumer Financial Protection Bureau (CFPB) proposed new rules regulating lenders in the payday loan industry. Although the bureau is more limited than state legislatures when imposing rules on lenders, the latest regulations may limit the pool of borrowers by requiring them to prove their ability to repay the loan without defaulting on other financial commitments or incurring expensive penalties.

Consumers seeking payday loans typically need quick access to small loans to cover unexpected expenses or a budget shortfall. In exchange for the loan the borrower gives access to a checking account to recover the loan and fees. If the loan and fees aren’t paid back within the designated time period—usually the next pay day—the initial amount can quickly escalate as high interest rates and fees are charged to the ever-accumulating debt. It is common for rates higher than 300% to be imposed on an initial small loan of a few hundred dollars, ultimately generating hundreds of dollars in fees and penalties.

Advocates for reforming abuses within the payday industry are asking the public to monitor and comment on the rulemaking process, which continues through September. The concern is potential changes and revisions to the new rule will create loopholes that undermine the efforts of the CFPB to protect consumers. Another concern is the payday industry will expand services into other areas to compensate for the loss of revenue if the new rules are upheld.

While Iowa prohibits car title loans, further action is needed to help borrowers avoid the payday loan debt trap. This week’s CFPB action is important, but only a start.