Talk:EduCap

Aiming to improve this article
I've just created this Talk page, so my guess is that no one (or almost no one) is watching it—not to mention the article it serves has only existed for a short time. So anyone who might see this immediately may already be aware I've been working on Talk pages to improve a related article, Academy of Achievement. With that nearly done, I've been hired by EduCap to see what can be done with this article. Because I have a conflict of interest here, it's my intention to refrain from editing the article directly. Instead, I'll present an alternate draft and explain why I think it's better.

First, here is the draft, currently in my userspace: User:WWB Too/EduCap

The current article is essentially one long controversies section, and while those topics are relevant, there's almost nothing here about the company's history or operations. So I'd like to expand this article, retain important details from the current version, and add more information based on reliable sources. The differences between the my draft and the current version:

With this draft, I've tried to provide some context for the information that is currently in the article, particularly with regard to background on how the company was founded and operates. I hope that I've succeed, although I'm certainly open to any constructive suggestions that others might have for the wording or details included. WWB Too (talk) 20:30, 12 March 2012 (UTC)
 * 1) The current first paragraph has been expanded to create an introduction to the article. Here I've included a summary of the criticisms leveled at EduCap and the company's response.
 * 2) Per the WikiProject Companies guidelines, I have added an infobox.
 * 3) I've added section headings to break the article down into three main sections:
 * 4) History and operations is an entirely new section based on new sources, as well as information from those already used in the article. I've aimed to include encyclopedic information about the background and foundation of the company, its development and its operations up to the present day. This section includes details such as the name of the founder (which was not previously in the article at all), the creation and later sale of a subsidiary company, Servus Financial (the sale of which funded EduCap's charitable foundation), and the company's role in the development of the alternative loans sector.
 * 5) Catherine B. Reynolds Foundation is an expansion of the second and third paragraphs of the current article. The information from these paragraphs has been reworded for clarity, and the mention of Catherine Reynolds' salary has been moved into the final section. This section also now includes details of its creation, the total amount the Foundation has donated since its launch, other beneficiaries of the fund, including recent beneficiaries based on reports by The Washington Post (2007) and CBS (2009). One thing I have removed here is the mention of support from Ralph Nader, which is more about the Smithsonian than Reynolds or EduCap.
 * 6) Criticism over use of funds expands on information from the second and last paragraphs of the current version. Since the original criticism came from the Post, I've focused on what their reports from 2002 and 2007 stated, the result of the 2007 article and the company's response. The CBS News report essentially restates the information from the 2007 "Post" article, so to avoid duplication I have merged the information from that source with that from the Post and kept the citation. The quote from Attkisson is not included in my draft.


 * For the benefit of anyone else who may come across this, I have been discussing the proposed draft and possible changes with the originator of this article (User:DGG) on his Talk page, here. Cheers, WWB Too (talk) 18:00, 14 March 2012 (UTC)

comments
I consider the draft to be making progress, but have some suggestions:
 * 1) The draft gives the impression that John Whalen continues to have a connection with the company. What actually is the connection? Did they just take over the brand name of his small operation, or has he some connection with the current model. Did he develop the financial model, and what is the evidence for this? On what basis did he have the market knowledge to do this?
 * 2) The financial model as presented is unclear. Do they purchase bonds and resell them, using the trading profit as the capital for loans? If not, what? How can the repayment of the loan "secure the bonds" ? Or does this mean they use their projected income from student loans as collateral for the credit to buy the bonds in the first place that they then proceed to sell?
 * 3) "the new private loan model developed by EduCap " -- does this mean the general idea of making private non-guaranteed loans -- which I believe was a practice  long before the federally guaranteed loan programs-- or the model of financing it from the trading profits in dealing with bonds? There's the statement that it's been widely copied. Private loans have certainly been widely copied, but has their model of raising money from them also been widely copied?
 * 4) The figure of 1% defaults is so highly unlikely that it needs extraordinary evidence . (all the more so because the federal guaranteed loans cannot normally be discharged by bankruptcy, whereas the ones from the company can be.) It derives from Papas, a company spokesman and must be assigned to him, preferably as a direct quotation in context from the Washington Post article, "The company declined to reveal its recent annual default rates but said the rate has generally been about 1 percent over the company's 20-year history"  the "generally been about" is essential, because it's a waffle.
 * 5) The company's statement that "fewer than four percent of EduCap's loans were subject to higher interest rates" is in ref2, & again should be given as a quotation in context, the company "offers private loans with variable effective rates as high as 18 percent. Pappas said most students, though, pay interest of 10 to 11 percent, with the highest rates going to students who are at the greatest risk of defaulting "  There are again some obvious imprecise wordings, , e.g. the word "variable" and   the absence of a statement of what   its average rate is.
 * 6) The most important problem is that almost all of the material is at least 4 years old; some of it considerably older. Considering the amount of debate over student loans policy in the past year, there should be more to find. Is there anything from from the regulatory agencies? from  Congress?      DGG ( talk ) 04:10, 21 March 2012 (UTC)

Replies

 * Hi DGG, thank you for the thorough response. I'll try to address each of your concerns in turn:


 * 1. According to the source material, Father Whalen was the original executive director of EduCap (when it was called University Support Services) but he reduced his role in the company over time. I don't believe he's with the company now, but one of the difficulties in writing this draft is that sources are (as I'll repeat below) fairly limited. I'll quote here the explanation given by the Washington Post in 1997 (alas, not available free online) for the company's financial model, whence I've derived my summary:
 * Then, in the mid-1980s, the Rev. John Whelan [sic], who headed the Washington area consortium of universities, hit on a novel concept for helping local students: have the District issue municipal bonds on behalf of area colleges and use the proceeds to make low-cost loans.
 * After winning D.C. Council approval, the initial $ 50 million bond offering provided low-interest loan money for several thousand students. Whelan soon created University Support Services, a nonprofit firm, to offer the concept nationally. USS sold bonds to Wall Street investors. The revenue was used to make student loans. Students repaid their loans with interest, which provided USS with enough money to pay off the bond buyers.


 * The article did get his name wrong, but I believe their account of the financial model is correct. None of the sources I found mention where his financial knowledge came from to develop this idea.


 * 2. I based the details of the financial model on the Post's account above, hopefully this clarifies.


 * 3. The statement "the new private loan model developed by EduCap" is meant to refer more generally to private non-guaranteed loans. This information is based on an article from the Washington Post in 2007, which described Catherine Reynolds as having "pioneered" the private loan industry and mentioned that EduCap's business model had been adopted by other companies.


 * 4. I understand what you're saying about the 1% default rate. It was mentioned in the earlier Washington Post article (from 1997), as well as the one quoting Pappas but since it is an unusual figure, I think it would be fine to quote directly from the article as you suggest. Please feel free to make the change in my draft.


 * 5. Similarly, if you would like to make a change regarding the 4% of loans subject to higher interest rates to make this a direct quote, please go ahead.


 * 6. Regarding the source material, the problem really is that the available sources are all from 2009 and earlier. I carried out a Google News search today and found only 3 more recent news mentions, none of which are helpful for adding content:


 * EduCap signed a new lease in October 2011


 * The company attended a student loans forum in May 2010


 * In January 2010, they're mentioned in an article about L.A. Mayor Antonio Villaraigosa
 * This article is almost exactly the same as an L.A. Times article from July 3, 2009 that I found on Nexis.com. Both NBC and L.A. Times repeated the claims about EduCap reported by the Washington Post in 2007 & CBS in 2009, but did not provide any new details.


 * Searching again on Nexis.com, there were similar results for sources after 2009. I found Catherine Reynolds being named a "Washingtonian of the Year", the new office location, attendances at loans forums and conferences, and an article from Business Wire about the changes in the credit rating given by Fitch to EduCap-Trust Indenture, but no new notable, encyclopedic details on the company.


 * I wish I'd been able to find more specific answers to some of these questions, but I have endeavored to write what I could, based on available sources. If you have any other questions, I'd be happy to field them. Otherwise, are you satisfied that the article is befitting replacement of the existing article? WWB Too (talk) 19:51, 21 March 2012 (UTC)

Post-edit reply
Hi DGG, following your latest reply I have gone back to my research and made some changes to the draft in order to answer some of your questions and address the issues you raised. I'll outline below the changes made:


 * Regarding your questions about Father Whalen's connection to EduCap and its business model, I have now expanded the explanation of each. It's now about as detailed as it reasonably can be, given the Washington Post source material:




 * You'd asked about whether the "new loan model" referred to in the draft meant the financial model Whalen developed; I've clarified that this refers to the provision of private non-guaranteed student loans:




 * The draft previously mentioned that EduCap had an average annual default rate of 1% and you stated that this statement should be attributed to the company and should quote the source. I have made both these changes:




 * Regarding your note on interest rates, when I went back to look at this I realized that the quote you mention was from the critical Washington Post article in 2007, rather than Pappas' reply. So that context is added, and the response from Pappas can still be included. Also, you mentioned that there is no average rate quoted, however this is currently mentioned in the History and operations section. I've made two edits: one adding a quote from the Post regarding the variable rate of up to 18 percent, the other adding direct quotes from Pappas' response:




 * I mentioned on your Talk page that I would ask about press releases or other primary sources and I have now heard back from the company, they do not have any more recent information that they think would be useful here. They did point me to the Washingtonian profile about Catherine Reynolds from January, but this is all it says about EduCap:


 * Reynolds made her fortune with EduCap, developing a private-education loan market to help students finance college, and Servus Financial.

Anyhow, I'm very interested to see what you think about the latest changes overall. Hope you agree this just about ready. Cheers, WWB Too (talk) 23:00, 2 April 2012 (UTC)


 * I said above that there must be additional sources;  I began looking myself--so far I have found , ,  and especially the very , particularly authoritative in this field. Unfortunately none of these are any more recent, but since they cover a wide political spectrum, they should be added.  I am looking for further. But that last ref, from Chronicle of Higher Education may give the answer why there isn't anything--it reports them dropping out of the student loan business in 07.  Again, perhaps your sources have later information.  DGG ( talk ) 05:38, 8 April 2012 (UTC)

Second round of edits
Hi DGG, thanks for these sources. I had reviewed but not included the HuffPo and National Review articles as both repeated information from and / or significantly quoted from sources used in my draft already. As to the Businessweek company overview, I'm concerned about including information from here since some details in the overview do not appear to be correct. For instance, it states that the company was renamed EduCap, Inc. in 2003, however multiple sources from prior to that year refer to the company as EduCap, Inc. Also, the company is not a subsidiary of Wells Fargo: it was Servus Financial, EduCap's loan servicing company, which was acquired by and became a subsidiary of Wells Fargo. I hadn't previously seen the 2007 Chronicle article, nor the TPM piece, but I've made the following changes to add information from these sources:



I've also been pointed to an additional source by the company (an article from NRTA Live & Learn, Spring 2006), and have made the following changes to add further details to History and operations:



With these changes in place, I believe article is reasonably complete, not promotional, and in line with WP:NPOV. It may not be WP:PERFECT, but of course that's unattainable, so if you agree that this represents a real improvement on the existing article and that it is neutral and reliably sourced, I'd really appreciate it if you would take it live. And since the article is WP:NOTFINISHED, certainly others could make changes later. Are you willing to do the merge at this point? WWB Too (talk) 21:42, 9 April 2012 (UTC)


 * If your information contradicts Businessweek, I think you need very strong sources to show that what you have is reliable, or you must give both sources. Looking further, and I want some confirmation from a neutral source about the NYU and NYT fellowships--at this point, we have only the donor's word. AndI;m not sure that the information about her minor charities is relevant here.
 * It's better, yes, but I would not feel comfortable taking responsibility for the article. If someone merges it, I shall make what I think the necessary edits. I think you did some good work here in any case, and what you did will help the eventual article.

 DGG ( talk ) 23:59, 10 April 2012 (UTC)

Third round
Hi DGG, the Businessweek link is a directory entry which seems to be provided by "Businessweek.com's data partners", not by the magazine's editorial staff. What's more, there are already good sources in the draft providing more detailed information. For instance, in the matter of what Wells Fargo now owns, the Businessweek.com listing provides scant information, whereas the source I had used is a bylined Star Tribune article published at the time Wells Fargo acquired Servus from EduCap.

As for the fellowships, I'm not sure why you don't consider the Washingtonian to be neutral, but there are indeed additional sources. For the NYU and Harvard fellowships, I've found this NYT article, this page on the NYU website, and this page on the Harvard website, all of which confirm that funds from the Catherine B. Reynolds Foundation established fellowships at the two universities. I've added each of these sources to the draft:



Per your suggestion, I have removed the mention of the recent (but arguably minor) donation to the respite care center, and have made a few more cosmetic changes:



Given these changes, are you any more comfortable making the merge? Also: I'm certainly not opposed to you making the merge and then making edits as you see fit. I just think what we have in this draft is far better than what's live now, and I'd like to see our hard work come to fruition. Let me know what you think. WWB Too (talk) 15:41, 11 April 2012 (UTC)
 * Since you've made all of the requested changes, it looks like any small issues have been taken care of. I do agree with WWB, DGG, that any further niggling issues can be fixed by you or someone else after you've brought them up after this draft has been merged. Considering that the draft is significantly better than the current article and there doesn't seem to be any major issues with it beyond some small reference concerns that you've brought up. Silver  seren C 03:42, 18 April 2012 (UTC)

Foundation section--undue?
I've completed the merger, but I do have one concern. As I read it, Educap has 3 companies; however, only the Foundation has a separate section in the article. I'm concerned that this gives WP:UNDUE prominence to the Foundation (i.e., places too much emphasis on their charitable works rather than their money-making work). For me, the easiest way to fix this seems to be to change "History and operations" into just "History"; create a new Level 2 heading on "Operations" or "Organization" or "Segments" (i'm pretty flexible on the name), and move the final paragraph on Loan to Learn Level 3 heading under that section, and place the Foundation as a second level 3 heading there. What do others think? Qwyrxian (talk) 12:59, 19 April 2012 (UTC)


 * Hi there, thanks very much for making the move. As to your suggestion for the slight re-organization, that makes a lot of sense. Client is OK with it, too. I say go for it. Cheers, WWB Too (talk) 17:46, 19 April 2012 (UTC)
 * Heh, finally remembered this a month later. Qwyrxian (talk) 23:16, 10 May 2012 (UTC)