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July 24, 2003  1:00 pm Pacific Time

SOURCE:  Parish & Company.

PORTLAND, Ore., July 24 /PRNewswire/ -- Today Parish & Company,, discusses the importance of linking student loan and public pension reforms.

Many students now find themselves in a "debtor's prison" due to an inability to refinance student loans at lower rates. Such loans, which can no longer be discharged in bankruptcy, can only be consolidated at the weighted average of the existing rates because lenders will rarely "release" the loans.

What makes this situation most remarkable is that Oregon's school districts are now issuing billions of dollars in new bonds to finance an actuarial shortfall in the public pension system, using the rationale of locking in this debt at historically low interest rates, not unlike home owner refinancings.  The proceeds from these school bonds are then managed by the Oregon Investment Council, whose current chair is Gerard Drummond, with the hope that returns will exceed the 5.5 percent rate paid on the bonds.  There is no discussion of these bonds on the Portland Public Schools web site.

Thus while teachers and administrators are bailing out their own retirements, they have done little to remedy a growing national tragedy regarding the very students they serve. A strong economy and the related funding of public pensions requires confidence and risk taking, which includes students incurring debt in order to complete higher education programs.

Companies and individuals making large donations gain praise from being prominently displayed on the facade of structures, yet the reality for students is often higher tuition and student loans due to the unanticipated annual operating costs of such donations.  Clearly, more emphasis must be placed upon reducing annual operating costs.  Two foundations that should be commended for providing more aid directly to students, rather than focusing on erecting buildings with their names displayed, are the Walter Hewlett and Gates Foundations.

Simply allowing students to consolidate existing loans and rates is not adequate.  The essential reform regarding student loans is to require lenders to "release" student loans so that they can be refinanced if another organization is willing to write a check to the original lender.

Since some leading companies in the student loan industry have issued large stock option grants to top executives, employees, and consultants, equivalent to more than 40 percent of all shares outstanding in one case, there is enormous pressure to create short-term results.  Perhaps this is one more example of the corrosive impact of excessive stock option grants and why companies ceasing this practice should be commended, see for an expanded analysis of this area.

In Oregon, the two most successful lobbyists are former Governor Neil Goldschmidt, a Democrat and principal of Imeson & Goldschmidt, and former House Speaker Larry Campbell, a Republican.  Parish & Company encourages both to lead a non-partisan effort, engaging both Senator Ron Wyden and Senator Gordon Smith along with State Treasurer Randall Edwards and the incoming Chair of the Portland Public Schools, Julia Brim Edwards, in order to effect this important student loan reform.

Parish & Company is an independent Registered Investment Advisor based in Portland, Oregon. Please do visit to see other examples of Bill Parish work, including a full page op-ed feature that appeared in Barrons in April 2003.


This press release can be found in the PR Newswire archive at

Bill Parish
Parish & Company
10260 SW Greenburg Rd., Suite 400
Portland, OR  97223
Tel:  503-643-6999  Fax: 503-221-3161

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