The number of police interventions in New York City public schools has risen with Black students and students with severe disabilities disproportionally removed from classrooms, a new report has uncovered.
The report, which was published this week by Advocates for Children of New York (AFC), an education nonprofit organization, analyzed 12,000 incidents described by the NYPD as “child in crisis interventions” where a student is removed from a classroom or school to be transported to a hospital for a psychological evaluation between 2016 and 2020.
According to the data, the number of interventions increased by 24% in the first three quarters of the 2019-2020 school year.
Around 10 percent of these students in crisis were handcuffed, including numerous instances where children under the age of 13, including five, six, and seven-year-olds, were handcuffed before they were forcibly removed from a classroom for evaluation.
“Five-, six-, seven-year-olds getting handcuffed in school. Very, very troubling,” Dawn Yuster, director of the School Justice Project at Advocates for Children, told Spectrum News NY1. “I, personally, professionally have represented clients as young as eight years old, who has been handcuffed in school – and I will never forget the day that I got a call from a parent when his child was transported to the hospital.”
She added: “It only exacerbates the problems that already exist. It does absolutely nothing to change the behavior, improve the behavior, and it further alienates the family from the school.”
The data also revealed that Black students – particularly young Black boys – and students with disabilities attending District 75 school, which provides specialized support for students with disabilities, are over-represented in the population of students who police officers removed.
Between July 2018 and March 2020, 26.7% of all interventions involved Black boys, who were just 13% of the public school population. Similarly, Black girls comprised 20% of all interventions despite accounting for only 12% of enrollment.
In total, Black and Latinx students – who make up two-thirds of the student population-accounted for 92% of all interventions. And all 33 children between the ages of five and seven who were handcuffed were students of color, according to the report.
Campaigners are now calling on the city to implement a new strategy that can reduce school interventions. The AFC recommends that schools no longer call the police or emergency medical services to take students to the hospital when it is not medically necessary. The organization also called for the introduction of a new bill that would significantly limit the NYPD’s ability to handcuff students.
“Students in emotional crisis need emotional support; they don’t need to be criminalized and handcuffed,” Kim Sweet, AFC’s Executive Director, said. “As a city, we need to start treating all students as we want our own children to be treated.”
In response, a Department of Education spokesperson said: “Creating schools that are safe and welcoming for all students is at the core of this Administration’s work, and we have made important changes to drive record decreases in police interventions, arrests, suspensions, and the system-wide adoption of restorative justice practices.
“All students must return to healing-centered schools this fall, and we are hiring over 500 new social workers and adding over 100 more community schools to ensure every student has a caring adult to go to when in crisis.”
I knew New York City was back when I found myself dancing on top of a booth in an East Village bar last weekend.
The night began with dinner out and ended with another bargoer’s drink on my shoe, eating pizza on the street, and an invitation from a six-pack-wielding stranger for my friends and I to drink beer and play “Mario Kart” at his apartment.
That is all to say: It was a normal Saturday night in NYC, one event in a weekend that felt very much like the Before Times. I also worked in the Insider office for the first time that Friday and hit the gym on Sunday.
Pfizer made all these adventures possible, and it seems that the vaccines are having the same effect on New Yorkers across the city.
For the past month, I’ve noticed the magical – and exhausting – things that make New York New York coming to life again: a stalled 1 train, a crowded 6 train, getting turned down by a full cab, tourists getting in my way of shopping on Fifth Avenue, trying four newly opened restaurants, the throngs of sunbathers and picnickers in Central Park, and the familiar murmurs of gossip and chatter over wine glasses on a rooftop. It’s not just a feeling: New York City’s economy is genuinely healing.
It’s also a far cry from a year ago, when New York became the center of the coronavirus in the US and everything that once lit up New York – the distant squares of office windows, taxi-cab lights, and Times Square – dimmed.
Even today, traces of pandemic NYC remain. My Saturday bar closed at midnight, and it took about four attempts to grab a late-night bite to eat at a restaurant not closing by 11 p.m. on Friday night, an insult in the city that never sleeps.
But the return of New Yorkers, lockdown lifting, and a financial boost have revived the city’s energy. NYC as we once knew it is gone, but the big city is back.
The data agrees with Bella’s diagnosis. The supposed mass exodus out of the city wasn’t so massive, according to recent data from USPS. According to Bloomberg, more Manhattanites moved to Brooklyn than anywhere else between March 2020 and February – 20,000 of them, compared with 19,000 Manhattanites who moved to Florida, 10,000 of whom plan to stay permanently. They’ll probably be back.
NYC also remains home to 7,743 ultra-high-net-worth individuals – more than any other city in the world, according to a Knight Frank and Douglas Elliman report from March. Mansion Global said the number of outward migrants from the NYC metro area ticked upward from 2019 to 2020 – a loss of 6.6 per 1,000 residents grew to 10.9 – but those who left for the suburbs were already returning.
“Whoever wrote off New York was wrong,” Kenneth Horn, the founder of Alchemy Properties, told Mansion Global. “This, of course, has been horrible. We’ve lived through a lot different, right. But people want to live in New York. People love the vibrancy.”
Late-night bars and subways
NYC hasn’t even reached its peak return of residents, but it already feels alive. A recent Bank of America Research note, from a team led by Head of US Economics Michelle Meyer, said this month would spark a dominolike return to the city, ultimately proving the mass exodus narrative was more myth than reality.
By the end of May, restrictions lifted include: most industry capacity limits, the limit on residential outdoor gatherings, the mask mandate for vaccinated people, and the midnight outdoor- and indoor-dining-area curfew for bars and restaurants.
As Gov. Andrew Cuomo of New York wrote in a Tweet announcing some of these reopenings earlier this month, “NY is coming back!”
Now, while the state of New York officially reopened in May, Mayor Bill de Blasio has announced that he’s eyeing a full reopening for the city on July 1 and plans to eliminate remote learning come fall. But the Legislature unwinding many of the lifts has made it feel like city is already back in action.
“I haven’t had hope for any return to actual normalcy until now, seeing people both indoor and outdoors without masks, and it’s really starting to hit me that this wasn’t actually going to be forever,” Kelsey Peter, a 27-year-old nonprofit worker who stayed in NYC when the pandemic hit, told Insider.
Cash is flowing
The boomerang migration, uptick in real estate, and economic reopening are all helping cash flow again in a city made of money.
Card spending was up by 38% in the NYC metro area compared with the previous year and 17% compared with two years ago for the week ending May 22, according to BofA Research.
Spending on brick-and-mortar retail in NYC by local households hovered around 70% by the end of 2020, as compared to a 74% pre-pandemic trend, indicating a minimal drop from outmigration, BofA also found, while in-person spending on restaurants has improved. As of mid-April, it was still down 30% compared with two years ago but a major improvement from the 70% drop at the end of January.
NYC’s finances are also in better shape than expected. While the state’s tax revenue collected over the past fiscal year was $513.3 million lower than the previous year, the state was fearing a $3 billion bigger drop, New York Comptroller Thomas DiNapoli told Bloomberg, and a large chunk of that came from the city.
And President Joe Biden’s stimulus package included $5.6 billion for NYC, which Insider’s Juliana Kaplan reported likely saved catastrophic cuts to the city budget. This sentiment was largely confirmed at a City Council hearing in March, when Department of Finance Commissioner Sherif Soliman said this federal aid had given the city a “shot in the arm” financially and his office was optimistic for a “full recovery.”
At the end of April, de Blasio announced a $98.6 billion budget, $10 billion higher than previously planned, to help jump-start the city’s recovery. “These investments are about bringing the city back, and they just can’t wait,” he said in a press briefing, according to the New York Daily News. “Sometimes you have to spend money to make money.”
But NYC is also set to get another injection of money beginning next year, now that Cuomo has finalized a budget that would have millionaire New Yorkers pay 13.5% to 14.8% in local and state taxes – the highest taxes in the country.
NYC’s next chapter
To say NYC 2021 resembles NYC 2019 would be inaccurate. Several aspects of the city still aren’t quite “normal.”
The contagious coronavirus variant spreading throughout India and other parts of Asia may also bring with it a risk of some form of lockdown returning later this year. On Thursday, UK Prime Minister Boris Johnson said that the country’s full reopening could be delayed because of the variant, despite a successful vaccination campaign similar to America’s.
And while NYC is never going to return to its 2019 economy, just as America itself won’t, that doesn’t mean that the city has lost its luster. Much like it did after the Great Depression and 9/11, NYC is entering the next chapter of its life – and that’s starting now, in line with the race for a new mayor come November.
BofA noted potential for some recovery in the near term, as NYC remains a “premier city for young renters given status as economic, financial, and cultural centers.” The pullback in rents, it said, has also helped make NYC living more affordable and enticing for young professionals.
As the city was once America’s coronavirus center, NYC’s reopening serves as a metaphor for the country’s pandemic progress. It’s also revived the city’s intangible energy.
For some, this part of NYC never died. Even when the city felt empty, Peter said, there were so many people looking out for each other.
“You would get used to seeing the same vendor’s face at the wine store or at the coffee shop when you’re getting to-go,” she added. “That was all during the worst of it, and things only got better from there. It was always a community.”
As someone who also rode out the pandemic out in Manhattan, I agree with Peter. My local bodega owner, the friendly parking-garage attendant on my street, and a fellow parkgoer and his five poodles became the faces I’d typically see during my pandemic routine. With endless options to experience the city again, I’m back to encountering strangers and forgotten faces on the regular, from my waiter at Lil’ Frankie’s to my hairstylist and colorist, so much so that it’s getting somewhat exhausting.
“[The park is] really important for mental health purposes,” Celine Armstrong, the project executive for Little Island, told Insider. “You need green space, you need people to have a place to relax, and in order to do that, you need private dollars.”
The Diller-von Furstenberg Family Foundation, headed by power couple Barry Diller and Diane von Furstenberg, funded the majority of the public park.
Diller currently serves as the chairman of IAC and Expedia, but previously ran companies like QVC and Fox.
His wife, Diane von Fürstenberg, is a fashion powerhouse with an eponymous fashion line.
The couple’s foundation has previously poured millions of dollars into public parks, and its long list of grantees include the Central Park Conservancy and the High Line.
But the foundation’s latest push for Little Island may be the biggest yet: the park is the “largest private public donation to public open space in New York City’s history” …
… and the second largest private donation to a public open space in the country, according to Armstrong.
The foundation donated $260 million to Little Island, and will continue giving an additional $120 million through the next decade for upkeep and the park’s shows, Adrian Gaut reported for Wall Street Journal.
His wife, von Fürstenberg, was also involved by attending design meetings. Her attributions can be seen in the most minute of details on Little Island: she picked the bronze handrails, according to Armstrong.
Little Island’s history spans back to 2013 when Diller partnered with the Hudson River Park Trust to reimagine Pier 54 – which had been damaged by Hurricane Sandy – as a public space and subsequently, a park.
The starting team then tapped firms like Mathews Nielsen Landscape Architects’ Signe Nielsen and Heatherwick Studio – which previously designed NYC’s controversial but flashy Vessel – to design and plan the logistics of Little Island.
The park looks incredibly similar to its initial concepts, according to Armstrong.
She believes this was possible in part because Diller and his family were patient, flexible, and able to fund all of the research and development necessary for the Little Island’s unique design and appearance.
The majority of the park’s timeline was consumed by the design process, and not construction: “luckily if the design is good, you can efficiently build it because trades know what they’re doing,” Armstrong said.
And after a slew of lawsuits, subsequent intervention from both Mayor Bill de Blasio and Gov. Andrew Cuomo, and issues with rising cost – as reported by the New York Times – the park was finally completed and unveiled to the city’s residents on May 21.
“Given how many revolutions this went through, from starting to dying and starting again, I was actually awestruck when I could actually look up and see it,” Diller told the Wall Street Journal. “I walked on [the island] and felt pure, actual joy, which is not something I can say happens very often.”
Like most public parks in the city, Little Island is free for all visitors.
It’s open from 6 a.m. through 1 a.m., but for now, guests are required to make a reservation for visits after 12 p.m.
Luckily, I was able to visit the park a day before it’s grand opening. So let’s take a look inside.
New Yorkers driving by on the West Side Highway have been ogling at the park’s unique foundation for many months now.
And for a good reason: Little Island is visually unlike any other park in New York City.
“What I’ve heard Mr. Diller say often is that the park just transports you to Oz,” Armstrong said. “You are transported into a different place and you have time to just wander around and be amazed at every turn, each pathway.
The entire island sits on top of 280 concrete piles, the leftover structure from the pier, and 132 concrete “tulips,” according to a press release.
The concrete tulips, which are all different shapes, are arguably the most eye-catching feature of the park.
They tower above the Hudson River at varying cascading heights, mimicking the flow of the water beneath it.
“I love high design and innovation and just pushing the boundaries of what could be built, and this does that,” Armstrong said. “It allowed us to tinker and really collaborate with everyone, so your ego is checked at the door.”
From the outside looking in, the park looks like bundles of green foliage and bronze fences atop the concrete, tulip-shaped pillars.
And inside the park, it’s unusually peaceful and lush compared to the bustle of New York City.
Little Island also offers unique glimpses of the city through varying vantage points.
The views of New York City from inside Little Island are unlike any rooftop Manhattan has to offer.
Some parts of Little Island offer sweeping views of the Hudson River, while other sections provide a panoramic view of downtown Manhattan and One World Trade Center.
These different viewpoints can be accessed by following the winding pathways sprinkled throughout the park.
Seating benches and bunches of greenery and flowers also line every walkway.
The park has over 350 species of foliage and flowers amounting to 114 trees and over 66,000 bulbs, according to the press release.
And now that it’s springtime, the flowers are in full bloom, creating a colorful park that contrasts the city’s grey, sometimes drab skyscrapers.
Now, let’s take a closer look at the different sections of the park.
The “Play Ground” serves as Little Island’s central point.
This is where you’ll find your typical park amenities, such food and drink options and seating under the shade.
The amphitheater – known aptly as the “Amph” – is located just a short walk away from the Play Ground towards the northwest end of the park.
One of the biggest changes from the original design of the park was the addition of this 687-seat amphitheater …
… and subsequently, the dressing rooms, prop areas, toilet facilities, and general manager’s office, according to Armstrong.
But the amphitheater isn’t the only public stage on Little Island.
There’s also a conjoined stage and lawn area known as the “Glade” on the opposite end of the park.
Yes, Little Island has two different stages, but that’s because the arts will be a cornerstone aspect of the park.
Starting June, the island will have four resident artists and events like concerts, dance, and theater six days a week.
“Little Island is going to spark inspiration for designers, engineers, general dreamers, and artists,” Armstrong said. “You’re experiencing the environment while you’re experiencing art.”
All of this likely wouldn’t have happened without the Diller-von Furstenberg Family Foundation’s donation and work, according to Armstrong.
As a result, Armstrong hopes Little Island will encourage more private donations to public parks.
“We need private donations for public open space, and this just shows what you can do with private money, Armstrong said. “You can have a bit more control and flexibility to test methods, and that’s how you reach excellence.”
When Lesley Campbell sued Citibank in March 2015 to get a portion of her law school debt forgiven in bankruptcy, everyone told her she was wasting her time. Conventional wisdom held that student debt is impossible to get rid of, even in bankruptcy.
Then, she got a text from an unknown number advising her that there was a legal way to discharge her debt – along with an offer to help do just that.
Campbell thought it was a joke.
It was Austin Smith, a newly-minted lawyer who had previously worked as a headline writer at The Onion. Except he wasn’t joking. Smith believed courts had systematically misinterpreted the federal bankruptcy code in favor of lenders over student borrowers. He was on the hunt for a client to test his legal theory.
A year later, Smith succeeded in convincing a federal judge that the unpaid portion of Campbell’s $15,900 bar exam study loan from Citibank could be cancelled in bankruptcy.
The victory marked the starting point for what’s become Smith’s raison d’être to help as many student loan borrowers as possible. At 39, Smith estimates that he has prevailed in about 75 cases, leading to the canceling of some portion of his clients’ student debts. Bankruptcy judges have cited the Campbell case at least 20 times, court records show.
Smith has also resorted to unconventional methods that blend hard-knuckle lawyering with public pressure campaigns, advocacy and a relentless stream of YouTube broadcasts that document his quest to help student loan borrowers find a lifeline. In the process, he’s borrowed hundreds of thousands of dollars to keep their legal fights alive while pursuing his own life-or-death struggle with cancer.
“This is not exactly a normal law firm,” Smith wrote in an email to his team last October. “We do not charge our clients an hourly rate, nor do we seek out the most profitable types of lawsuits such as medical malpractice or securities fraud. We seek out groups of people who are being tormented and we make it stop.”
Seth Frotman, former student loan ombudsman for the Consumer Financial Protection Bureau, says that Smith’s battle makes clear that America’s student loan system, in which obtaining relief for borrowers is difficult even when the law is on their side, is broken. “When you talk to Austin, you see the culmination of hearing from these borrowers day-in and day-out and the predatory practices they’ve been forced to endure,” Frotman says.
Smith’s legal victories upended years of case law that had steadily built up in lenders’ favor; one lawyer who has worked with Smith credits him with providing the “intellectual genesis” behind a whole line of cases that are now undoing that case law.
Yet even after five years of non-stop litigation, Smith’s goal seems as distant as ever. The niche area of bankruptcy law that he’s identified can only help some borrowers who took out privately-issued student loans – a small chunk of the total $1.7 trillion owed by Americans. And even for them, getting relief can sometimes take years. That hasn’t deterred Smith, who was once called the “Don Quixote of student debt,” by a federal bankruptcy judge, according to an attorney who witnessed the exchange.
It’s a moniker Smith readily accepts; he bought a Don Quixote print to hang over his desk, which he calls a “good reminder that you never know if what you’re about to do it quite stupid.”
Lenders have had more choice words for him. Lawyers for Navient Corp., the giant student loan servicer, have accused Smith of running a “media crusade riddled with falsehoods” and recently sought about $600,000 in costs and attorneys’ fees, a figure that could have potentially crushed his fledgling legal practice. A federal judge awarded Navient about one-tenth of the sum after it successfully fought off a bold attempt by Smith to push its loan-servicing arm into bankruptcy through an involuntary bankruptcy petition.
In mid-March, after confessing to his YouTube followers that the gambit had amounted to an “epic failure,” Smith decided to change tack: He filed paperwork to run for Congress in New York’s first House district, which includes the posh Hamptons getaways of the rich and famous, where he moved during the pandemic.
“If we are unsuccessful in the judicial branch then maybe there is a solution in the legislative branch,” Smith said in an interview, adding a touch of bravado that colors much of his legal briefs: “I can get that done.”
In some ways, Austin Connell Smith was an unlikely candidate to champion the cause of America’s overly-indebted student borrowers. Smith grew up in an affluent Chicago suburb, where his father worked as a corporate lawyer for Brunswick Corp. and other large companies. A trust fund worth around $100,000 awaited him should he ever decide to go to law school.
When Smith first turned his attention to law school in 2006, he wondered if then-FBI director Robert Mueller might write a letter of recommendation for him, according to an email exchange with his father. Smith’s father had gone to law school with Mueller and Mueller’s wife is godmother to one of Smith’s sisters. His dad wrote back that Mueller was not the right person to ask for a recommendation. Mueller didn’t respond to a request for comment.
When Smith got passed up for a full-time job at The Onion, he finally turned to law school. He enrolled at the University of Maine Law School, where he often spent his mornings at a coffee shop near campus writing a satirical novel and searching for a topic to dig into for a law review article. A chance encounter with another regular at the coffee shop, Bill Wilson, provided the spark he was looking for.
Wilson was the byproduct of a different era. A retired litigator, he attended Maine Law some 35 years before Smith, when tuition was so cheap that he could easily pay for law school by working a union job at a paper mill during the summers. By the time they met in 2014, tuition was so high that Smith still owes about $170,000 for his law degree.
Wilson was in the midst of examining bankruptcy rules surrounding student loans. He was surprised to learn that educational debt was exempt from discharge unless it met certain exceptions. He encouraged Smith to research them and see if they were as ironclad as everyone believed they were.
“Austin took it and ran with it,” Wilson recalls.
Thicket of confusion
Each year, about a quarter million student loan debtors file for bankruptcy. Of those, fewer than three hundred get their educational debt discharged in bankruptcy. That’s a success rate of 0.1%, according to calculations by Jason Iuliano, law professor at Villanova University who specializes in bankruptcy and student loan issues.
But those figures don’t tell the whole story. In 2017, for instance, only 447 out of the 241,000 student loan borrowers who filed for bankruptcy actually sought to have their educational loans discharged. The remaining 99.8% didn’t bother trying. But of those who did, around 60% managed to get a discharge of some portion of their student debt, Iuliano found.
“When you look at the people who bring these cases, they’re by and large very successful,” Iuliano says. But few borrowers bother trying to cancel their student loans when they file for bankruptcy because doing so requires an extra step – a lawsuit petitioning a judge to discharge the loans. And thanks to a widely-held belief that student debt is categorically exempt from discharge, few are willing to take that chance.
Until recently, a presentation titled “Bankruptcy Mythbusters” posted on the website of one of the nation’s most prominent bankruptcy courts, the Southern District of New York, said that student loans are not dischargeable in bankruptcy along with the mea culpa, “yeah, sorry about that.” But in Jan. 2020, the court’s chief judge, Cecelia Morris, made headlines when she canceled about $220,000 of student loans owed by a U.S. Navy veteran named Kevin Rosenberg.
“Most people (bankruptcy professionals as well as lay individuals) believe it impossible to discharge student loans,” Judge Morris wrote in her decision. “This Court will not participate in perpetuating these myths.”
The court updated the incorrect language in its presentation after Business Insider asked Morris about it. The truth is that there are exceptions. Borrowers can have their student debts canceled in bankruptcy if they can show that paying them off would impose an “undue hardship,” which is what Rosenberg proved in his case. Typically, that requires a borrower to demonstrate that they cannot maintain a minimal living standard, that their circumstances are unlikely to change, and that they’ve made good-faith efforts to repay their loans.
Rosenberg had kept current on his undergrad and law school loans even as the balance swelled from less than $200,000 to nearly $400,000 over the course of 14 years. After his camping and hiking gear store collapsed in 2017, he researched bankruptcy rules and decided to seek discharge of his private and federal student debts. His lenders either settled or lost in court; when one of them appealed, Smith stepped in to handle the appeal for free. Meanwhile, Rosenberg, freed from his debts, is getting ready to start a new life in Norway as a tour guide for Arctic and sub-Arctic expeditions. “I want people to know that this is a viable option,” he says.
Iuliano estimates that, of the more than 2.6 million student loan debtors who filed for bankruptcy between 2011 and 2019, at least 29% would have been able to prove “undue hardship” if they sought to do so in court. It’s the only way for bankruptcy filers to get rid of any student loans owned or backed by the federal government, which are projected to nearly double to $3 trillion by 2030.
But borrowers who owe privately-issued loans have even more exceptions they can rely on. That’s because “private” student debt isn’t defined anywhere in the U.S. bankruptcy code. Instead, the law refers to “qualified education loans” – those made for direct education expenses like tuition, books, room and board at accredited colleges and universities. Private student loans meeting that definition – such as a $20,000 loan that’s used to pay tuition at a four-year state university – can’t be cancelled in bankruptcy, absent a showing of “undue hardship.”
Smith noticed that over the last 20 years, banks originated various loans which resembled student debt but didn’t fit the qualified loan definition – like Campbell’s Citibank loan, which she used to cover rent and groceries while studying for her bar exam in 2009 (A spokeswoman said Citi has since exited the student loan business and declined further comment).
Even after Smith succeeded in getting Campbell’s bar exam loan cancelled, she still owes about $360,000 in federal student debt for her Pace University law degree. The amount has more than doubled over the years even as she continued to make payments since the interest is accruing faster than the payments she’s making – a phenomenon known as negative amortization. Some 60% of student loans owed by millennials are experiencing negative amortization, according to a recent study.
Campbell didn’t seek to have her federal loans discharged when she filed for bankruptcy. “I did not know about this case!!!!!!!” she said in a text message when informed of Judge Morris’s ruling.
A life’s cause
Smith noticed these discrepancies when he dug into the bankruptcy code at Wilson’s behest. Once he graduated law school and joined a corporate law firm, he published his findings in an article, arguing that “the common belief that all student loans are protected from discharge in bankruptcy is based on a misunderstanding” of federal bankruptcy law. The article helped him convince his higher-ups to let him test his legal theory by litigating the issue pro-bono, at no cost to his clients.
The permission slip set Smith off on a search for the perfect plaintiff. Smith often worked late into the night, digging through internet chat forums and court records for several months before finally stumbling across Campbell in May 2015. After prevailing in her case in the spring of 2016, Smith left his corporate law job to start representing borrowers like Campbell full-time. The search began for others like her.
Instead, prospective clients were soon finding him. Smith’s inbox filled up with emails from borrowers whose lives had been crushed by student debt. “I was so despondent that I considered suicide as the only viable way of getting out from under these loans,” one email reads. “I have $50k student debt, no degree, was a victim of attempted murder, out of work, and homeless,” reads another. “I’m so desperate. Please help. I make $65K a year. I can’t even afford the monthly interest that accrues on my loans (all federal),” reads a third from a borrower who owed about $225,000. Another borrower who owed $598,000 wrote about seeing no viable future for herself.
Such emails hit a nerve with Smith. Despite his upper-class upbringing, he had grown up with a sense of empathy for those less fortunate than him. When he was in junior high school, his mom got a call from another parent thanking Smith for helping her son when he saw him being bullied by older kids after school. Without being prompted, Smith had intervened to help put an end to it, she recalls.
But helping student loan borrowers is tricky – and costly. The best plaintiffs are often the ones least able to pay legal fees. Class-action lawsuits, while often more lucrative for lawyers, are hard to organize due to the intricacies of bankruptcy courts and student loan plaintiffs’ unique circumstances.
To help run the firm, Smith borrowed $100,000 from a bank, and another $125,000 from his father. He turned to litigation finance firms – which specialize in funding cases that hold out the promise of large payouts – to cover the rest.
As his practice grew, Smith won acclaim for making novel legal arguments to help borrowers discharge their student debts. Meredith Jury, a former California bankruptcy judge who has provided pro bono assistance to Smith in one of his cases, said Smith began making legal arguments that judges hadn’t heard before. “Very few lawyers understand the loans well enough to even raise them,” she said.
Then, life took an unexpected turn: In Jan. 2017, Smith was diagnosed with stage two testicular cancer. One doctor said he might have six months to live, though others gave him better odds. “I felt so ashamed at that moment,” he recalls, “like I had an expiration date.” He signed up for chemotherapy and lost all his hair. As he laid in bed, he said that he would often occupy his mind thinking about what he would do if he had a chance to live longer.
Eventually, he says, he vowed to make it his life’s cause to help the student loan borrowers. “The calls, the emails, the stories. I felt so responsible for it,” he thought. “You have to finish this or at least die trying.”
Navient provided Smith the challenge he was looking for.
While he was receiving treatment for cancer in 2017, Smith and his co-counsel sought class-action certification in a lawsuit against Navient centered on a Texas borrower in similar circumstances to Campbell. The complaint alleged that Navient had sought to collect on the borrower’s bar exam study loan even though the debt had been discharged in bankruptcy and was no longer owed. Navient countered that the borrower hadn’t been harmed by its collection efforts and couldn’t pursue a nationwide class action.
The case wended its way through the legal system for years, until it finally landed in court-approved mediation in late 2020. By then, Smith had Boies Schiller Flexner LLP, the powerhouse law firm led by David Boies, at his side. Even so, Smith saw little possibility of a quick resolution.
“We’ve just been going and going and going and going,” he told his potential class action clients in a December Zoom call streamed from the garage of the home he was renting in East Hampton, N.Y.
In February, Smith filed a new petition to try to force Navient’s loan collection arm into bankruptcy. He alleged the company should be considered insolvent and placed in bankruptcy. That would protect the interests of three plaintiffs who alleged that Navient had wrongfully collected $45,684 in debt that had been discharged in bankruptcy. If Smith prevailed, the move would have flipped the calculus in his student loan litigation, turning his clients from borrowers who owed Navient money into creditors in a bankruptcy proceeding.
It was by far the biggest gamble of Smith’s career. It meant withdrawing as counsel from the Texas case since other attorneys in that litigation didn’t back the move. Within hours of filing the petition, Smith resigned from the case and six others, waiving all rights to compensation in legal battles that held out the promise of a big potential payday even as he racked up debts to run his law practice.
“Navient may well dismiss this as the desperate act of a small-time plaintiff’s lawyer. In that they would not be entirely wrong; but it is desperation born of years of battling an adversary who . . . refuses to acknowledge the psychological toll its actions are having on people,” Smith wrote in the bankruptcy petition against Navient.
Navient’s attorneys logged over 630 hours on the case, according to a court filing. Meanwhile, Smith didn’t file a response to their motion to dismiss. And when the hearing on the dismissal started-on Feb. 25, he was nowhere to be found.
A petitioner who joined the hearing on Smith’s behalf explained that Smith had experienced a recurrence of his cancer and had flown to Chicago for treatment.
About thirty minutes after that exchange, the boldest case Smith had ever filed collapsed.
U.S. Bankruptcy Judge Martin Glenn dismissed the case, which he called an “ill informed” attempt by Smith to jump the queue in his other litigation. He also ruled that Smith had acted in bad faith and awarded Navient a small share of its attorney’s fees and costs after determining that its defense was “overstaffed with too many lawyers and paralegals from two law firms.”
Smith disputes filing the petition out of dishonest motives. A Navient spokesman said Smith “brought baseless but extremely serious claims against our company, so we mounted a serious defense” and “will continue to defend ourselves against any bad faith and baseless accusations in the future.”
When Smith re-emerged from his treatment a few weeks later, he apologized to his clients for getting their hopes up of winning relief from their debts.
“I had heard increasing irritation, I believed, from a number of judges that led me to believe that this was potentially, or likely, a sort of novel way to approach this problem. And I got it wrong. I got it very wrong,” he said in a March 12 YouTube video he labeled as a “somewhat overly bleak explanation of the events.”
Smith vowed to fight on, but admitted that he wasn’t quite sure how. “I still am trying to figure out exactly how to get this done in a way that doesn’t leave three-fourths or half of you out in the cold,” he added.
The same day, he launched his bid to run for Congress in 2022. He’s seeking to represent Long Island’s Eastern half as a Democrat, running on a platform of reforming student loan bankruptcy rules, increasing judicial oversight and demanding accountability for the January 6 attack on the Capitol.
The district has been in Republican hands since 2014. But its current congressman, Lee Zeldin, who voted to overturn the results of the last presidential election, announced last month that he plans to challenge Gov. Andrew Cuomo in 2022, opening up the seat.
When members of a Long Island Democratic group asked during a recent Zoom call why Smith wanted to go to Washington, he said one thing which no one should doubt: “I just want to be a footsoldier. I want to work twenty hours a day.”
Cezary Podkul is an award-winning freelance journalist. He was previously a reporter at the Wall Street Journal, ProPublica, and Reuters.
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New York City restaurants are being crushed by the US’ current labor shortage – and it could take months for them to reach proper staffing levels, restaurateur Danny Meyer told CNBC’s “Closing Bell” Wednesday.
“Nobody can hire back all of their workers even if they wanted to because many of our workers have left the city,” Meyer said. He founded Shake Shack and is the CEO Union Square Hospitality Group, the parent company of New York City hotspots Union Square Cafe and Gramercy Tavern.
Many restaurant workers left NYC because they couldn’t afford to live there without their usual wages during the pandemic, Meyer said. He added that many laid-off staff got jobs in other industries “that were actually doing quite well during COVID,” and may not return to hospitality.
“Everybody is hiring at the exact same time,” Meyer, who also chairs the NYC Economic Development Corporation, said.
“It is going to take, in my judgement, at least two or three months for supply and demand to keep up with each other and to hit an equilibrium,” he added.
The scramble for workers comes after Union Square Hospitality Group laid off 2,000 workers – or four in five staff – last March when the pandemic hit and New York banned dine-in services.
Meyer told CNBC Wednesday that the group’s 18 restaurants across New York were mainly open, apart from some in hotels and art museums, as well as one in a skyscraper.
Because people were still working from home, the lunch business was “pretty much off the table,” meaning that workers often only have to staff one shift.
He said he expected this to pick up as Broadway and other concerts return and people continue to get vaccinated.
“Vaccination has probably been the greatest thing that has happened for our industry, both for the people who work for us and for our guests,” he said.
Meyer added that there’s “absolutely no shortage of demand for New Yorkers to go out.” The shift to outdoor dining, which he expects to become a “permanent part of the landscape,” means that restaurants can have more seats and so serve more customers, he added.
It’s a problem many companies, government officials, and experts blame on increased federal and state unemployment benefits, as well as the series of stimulus checks. The argument is that people simply no longer want to work while enjoying these benefits – or at least work for the wages they did before the pandemic.
“Now that businesses are beginning to open, the challenge employers are experiencing is finding people willing to return to a regular work schedule, contribute to society as a whole, and return to caring for our families,” Charles Jackson, president of the Association for Entrepreneurship USA, told Insider. “While [the] government continues to incentivize families to stay home, the small-business owner will be challenged again by not finding adequate labor to operate their business.”
According to Goldman Sachs, the amount low-income workers will accept for a new job has risen more than 20% since the fall, putting pressure on employers – like McDonald’s and Chipotle – to raise wages and increase benefits in order to attract job candidates. The bank anticipates these demands will push wage growth to 3.3% before the labor market ultimately finds a new balance.
Two professionals who found themselves raking in more money on unemployment than in their previous jobs shared with Insider their experience.
Unemployment helped NYC-based Emily McGill, 35, stay afloat and find clarity amidst career pivots
The contract Broadway publicist – who boasts past clients like Disney on Broadway and actor George Takei – turned communications consultant and part-time tarot card reader never stopped working during the pandemic. Instead, with one consistent client and unemployment insurance, she spent her time re-evaluating her situation.
“I think the biggest thing that happened was that I was really on this precipice of, ‘Am I even going to stay in theater?’ But the pandemic afforded me this opportunity to see there are so many other facets to me beyond theater kid, or Broadway girl, or Broadway publicist,” McGill told Insider.
In New York City where she lives, unemployment typically maxes out at $504 per week, but due to the pandemic she was able to receive an additional $600 per week from April 5 to July 26, 2020 – then an additional $300 from January 3 through early September 2021. After taxes, Emily was making an average of just over $500 per week, which she said was slightly more than she was making before but provided more consistency and stability than she’d experienced as an independent contractor.
“Pre-pandemic, I was scraping by with clients, and as a result, my credit-card debt grew,” she said. “Unemployment and the stimuli have allowed me to pay bills and not continue to rack up debt. I can’t wait to get back to work full time, but there are also a lot of systemic issues in my industry, so it is a nuanced and difficult conversation from both a moral and logistic point of view.”
“Fortunately, my next contract should come through and begin in September, so the timeline for me if that works out is going to be ideal,” she said. “If that doesn’t work out, then it’s back to the grind and the hustle and time to get creative.”
Abby Danis, 24, based in Arizona, wishes she’d taken advantage of unemployment for longer
At the beginning of the pandemic, Danis was laid off from her retail position, where she was making $15 an hour as an assistant manager. Her employer warned her that applying for unemployment insurance would mean she wouldn’t be offered her position back, but that the company would instead pay her a flat rate of a couple hundred dollars every two weeks.
“The majority of us had to file for unemployment because we were underpaid as it was and none of us could survive and get through that,” Danis told Insider. “They immediately sent us an email laying us all off and said, ‘You no longer work for this company. When we re-open we will consider inviting you back, but as of right now you are not employed by us.'”
She felt she had to collect the unemployment insurance in order to pay her bills, but due to difficulties in finding new staff members, she shared that she was still offered her prior position back despite receiving unemployment, and even offered a $2-an-hour raise.
Due to the uncertainty around the extension of unemployment benefits, she returned to her workplace in the summer of 2020, going from making approximately $24 an hour to stay at home to $17 an hour for her assistant-manager role.
She left the company in October 2020 and started working as a server, where she makes more than she did in her assistant-manager role. However, she’s now seeing firsthand the staffing shortages facing the hospitality industry.
“Let’s just talk about the empty nesters from New York, or the empty nesters from New Jersey,” Patronis said. “They then decide to leave the tax hell that those states are in and move to the state of Florida.”
He said that these people bring money into the state without increasing pressure on the school system.
“It provides more money to our schools, though they’re not using the services,” Patronis said.
“It’s a win-win,” he added.
Both people and businesses flocked to Florida during the pandemic
Florida’s population grew by 2.7 million, or 14.6%, between 2010 and 2020, according to US Census data. This is double the rate of overall US population growth.
As Patronis said, Florida is traditionally associated with retirees, but Troy McLellan, CEO of the Boca Raton Chamber, previously told Insider in May that more and more families and young high-flyers are moving to the area.
I am the Chief Marketing Officer for a global company. I have worked for elected officials in the UK and the US with their press corps and campaign operations. I own a home in Manhattan. And, by the way, I was incarcerated for a “crime”.
Incarceration has the most profound effect on the person who is serving time, but the consequences reach far beyond the prison walls. When I recently shared my story of being a formerly incarcerated person who made it to the C-Suite, I was again reminded of the destructive nature of our justice system. I heard from colleagues whose loved ones struggle to find work; of friends losing out on dream jobs because of background checks, and the emotional and psychological toll of experiencing these disappointments time and time again. The emotional strain on those individuals and their families was all too familiar. “What will become of me, of us?” is a question that never goes away.
My success has been nurtured by providence from people who understood that my mistake would doom me to a Sisyphean challenge, unable to reach the top of that proverbial hill, unless they became determined to help me. That challenge? A criminal justice system that extracts a pound of flesh and, like the vengeful Javert, routinely returns to perpetually punish people like me for a mistake.
My good fortune though, is incredibly rare. I am blessed to have had family members with the means to support me and a prospective employer willing to give me a chance. Many people don’t have this kind of support. For most incarcerated people, once they are out they fall back into cycles of deprivation that usually got them there in the first place, doomed to steal that proverbial loaf of bread again because their criminal records carry a scarlet letter that allows society to treat them as “less than.” We must create an environment where more people can tell a story like mine.
A conviction’s enduring collateral damage can be wide-ranging – permanently barring individuals from basic needs like employment and housing. Even though people who are released are said to be free, they’re not. They are over-supervised, over-policed, pushed out of employment, housing, and school, and often harassed back into incarceration.
We are not just causing further economic and emotional harm, we are also wasting potential that could be working to discover cures to deadly illnesses, designing cleaner and greener cities, or, like me, revitalizing Main Street brands. The economic benefits to both employers and the national economy are clear. It’s essential that our laws are changed because we can’t rely on individual acts of kindness or a company to do the right thing.
Wipe the Slate Clean
New York State has the chance to lead the way and give more than two million of its residents a second chance through “Clean Slate” legislation. Advocates and impacted people seek a new law that will automatically seal and expunge a resident’s conviction record once they are eligible.
Right now, the system we have for expungement in New York is broken. It is application-based, extraordinarily difficult to navigate and costly. In the three years since this system was created, less than 1% of eligible people have successfully had their records expunged.
The Clean Slate legislation proposed in Albany is designed as a two-step process to end the perpetual punishment of a conviction record. A conviction will be automatically sealed one year after sentencing on the individual’s last misdemeanor conviction and three years after sentencing on their last felony conviction, not including time incarcerated.
A conviction will be automatically expunged five years after sentencing on the individual’s last misdemeanor conviction and seven years after sentencing on their last felony conviction.
This is a common sense step that will make New York’s communities stronger. And we know that these types of systems work. A recent study found that within two years of clearing their records under Michigan law, individuals’ wages increased by an average of 25%. According to the same Michigan study, five years after benefitting from record clearance, individuals were less likely than members of the general public to commit crimes.
Our system punishes people unfairly. Millions of New Yorkers are needlessly unemployed or underemployed, homeless or without permanent housing, just because they have a conviction record.
Formerly incarcerated people are not a separate population; they are members of our society. They are our brothers, sisters, fathers, mothers and friends and must be treated as such. I may be the exception in this system, but I want my experience to become the rule. That’s why we need the Clean Slate NY Act.
If Giuliani prevails over Zeldin in the GOP primary – where a Trump endorsement could prove highly consequential given the former president’s standing among Upstate and Long Island Republicans, which has dropped since the January 6 insurrection – he would face steep odds against Cuomo or any other Democrat.