INFLATIONUS CREATED THE ABOVE VIDEO TO SHOW WHAT A FUCKING SCAM STUDENT LOAN DEBT IS! A UNIVERSITY EDUCATION SHOULD BE FREE TO ANYONE WHO CAN HANDLE THE ACADEMICS AND THE SAME HOLDS TRUE FOR ANYONE WHO WANTS TO LEARN A TRADE TO BECOME AN HVAC EXPERT, A BEAUTICIAN, AN AUTO MECHANIC OR ANY OTHER TRADE ONE CHOOSES!
THE GODDAMN POLITICIANS HAVE NO PROBLEM SPENDING OVER A TRILLION DOLLARS FOR A COUPLE OF FUCKED UP WARS THAT IN THE CASE OF AFGHANISTAN HAS FAILED TO ERADICATE OPIUM POPPIES AND IN THE CASE OF IRAQ KILLED OVER 1 MILLION IRAQI'S.
THE GODDAMN POLITICIANS HAVE NO PROBLEMS SPENDING TRILLIONS TO BAIL OUT THE BROKERAGE HOUSES ON WALL STREET, THE INSOLVENT BANKS AND AND GENERAL MOTORS AND GIVING TAX CUTS TO MILLIONAIRES AND BILLIONAIRES! LOOK AT GENERAL ELECTRIC, THEY PAID ZERO FEDERAL TAXES IN 2009 + 2010!
LAST NIGHT IAN PUNNETT INTERVIEWED ALAN COLLINGE ON C2C.
| Date: | 05-27-11 |
| Host: | Ian Punnett |
| Guests: | Alan Collinge |
In the first hour, Ian Punnett welcomed the founder of StudentLoanJustice.org, Alan Collinge, who discussed how federal student loans have become predatory, turning a generation into debtor slaves. "It's a socially horrible epidemic," he declared, noting that America's total student loan debt now surpasses the nation's credit card debt. He explained that student loans are particularly pernicious because they contain no consumer safeguards such as bankruptcy protection, statute of limitations, or the ability to re-finance the debt in an open market. As a result of these factors, Collinge said, when a loan is defaulted, it can double or even triple due to penalties and fees.
In looking at the source of the problem, Collinge pointed to student loan advocates and the Department of Education as the key entities that "failed to play their part" in overseeing lending practices. According to him, the DOE has been using a faulty metric to determine the default rate on student loans, thus misleading Congress into increasing the allowable limits on colleges for lending. Additionally, Collinge said, the DOE actually makes "about 22% versus what they pay out" for defaulted student loans. In order to fix the student loan epidemic, Collinge endorsed restoring bankruptcy protections for these loans. Should that happen, he said, "a multitude of problems" will resolve themselves, including an "almost overnight" drop in college tuitions.
The Student Loan Scam
The federal college loan program that pays private lenders a generous subsidy to make loans that are guaranteed by the government is an enormous waste of money that has long served more to enrich lenders than to help students.
Nevertheless, the Republican leadership in Congress is opposing a House bill that would save the country nearly $90 billion in the next decade by ending this program and allowing students to borrow directly from the government through colleges.
The subsidy program was created when lenders were showing little interest in the college loan program and was intended to make sure that young people could get loans when times were tough. This expensive strategy failed outright during the credit crunch when the federal government had to buy outstanding loans to keep new loans available to students. The direct lending system, which was already known to be cheaper, needed no such rescue.
A bill introduced by Representative George Miller, a Democrat of California, would end the unnecessary private lending subsidies and plow the savings into important education programs. The bill, for example, devotes $40 billion to the all-important Pell grant program, which has allowed millions of poor and working-class students to attend college.
It would spend $8 billion on early-education programs and $10 billion on an initiative aimed at strengthening community colleges. It sets aside $4 billion for a school modernization and improvement program.
The consolidated program proposed in the bill would in no way expand government. The loans would be handled through colleges. They would be serviced and collected by private companies and nonprofits that are already lining up to get the work. By forcing the companies to compete, and to undergo periodic re-evaluations, Congress could get a good deal for taxpayers and better service for borrowers.
The arguments for passing this bill and ending the subsidy program are powerful. But the Republican leadership has distorted the debate by describing the bill as a plan for pushing private capital out of student lending. It would be more accurate to describe it as a plan for pushing corporate welfare out of student lending.
I'LL HAVE MORE INFO ON HOW YOU CAN FIGHT BACK AGAINST THE STUDENT LOAN FRAUDSTERS IN THE NEAR FUTURE. WARRIOR.
This point was expected to be reached years from now, but a modest curtailment in credit card borrowing, combined with a massive jump in student loan borrowing greatly accelerated the schedule. Each of these categories comprise approximately one-third of total consumer debt, which stands at $2.4 trillion.
It is important to note that while these two types of debt weigh roughly equally upon the citizenry, media coverage of credit cards exceeds coverage of student loans by a factor of approximately 15-to-1 based on unscientific news surveys conducted since 2007.
While credit card borrowers enjoy the fundamental consumer protections afforded all other borrowers with all other types of debt, federal student loan borrowers enjoy almost none of these protections. Not bankruptcy protections, not statutes of limitations, not truth in lending laws, not state usury laws...non-profit guarantors are even exempt from fair debt collection statutes. In additions, the lending system enjoys collection powers that no no equal. There is no appeals process for defaults. About 20 cents of every dollar repaid by borrowers whose loans were defaulted are taken by these guarantors (or the federal government) before anything is applied to principal, interest, etc. Borrowers wages, Income tax returns, and even Social Security and disablility income are routinely garnished without a court order, and regardless of any legitimate claims they may have about the propriety of the default. Borrower's ability to work in their field can be taken away through state professional license suspension, and other related state and federal policies regarding defaulted borrowers...In a very real sense, defaulted borrowers are given the choice of either finding a way to repay a vastly inflated debt, or face the rest of their lives as indentured, marginalized, second class citizens.
And make no mistake: Just as the American Public was misled into believing that student loan defaults were low, and getting lower (when in fact, the default rate for student loans is at least 1 in 4), the oft-repeated propoganda about defaulted borrowers being a burden on the taxpayers is equally if not more incredulous. Please note: where the recovery rate for defaulted credit cards, for example, is about 25 cents on the dollar, the recovery rate for defaulted student loans is a whopping 123% The system is MAKING, not LOSING money on defaulted loans.!!Taken together, this revocation of consumer rights has produced an inherently predatory lending system that succeeds when the students fail, one that wields powers over the citizenry the likes of which have never been seen in this country, one that causes administrative and bureaucratic malaise, poor federal oversight, and other systemic failures at the highest levels. More importantly, this perversely incented system offers no real defense against inflation, a
nd we have seen the results on that front over the past couple of decades. Most importantly, this lending system is literally destroying lives, families, and communities....It is our hope that this issue will be exposed to the same level of media scrutiny as is given to credit card debt, and even subprime home loan debt. It is only under the light of serious investigative journalism that this problem will be identified correctly, and solved appropriately.
SOURCE
SEE THESE ARTICLES HERE + HERE
STUDENT LOAN DEFAULT RATES GROSSLY UNDER REPORTED BY ED SEE THIS PR PIECE
FROM NYT:
Student Loan Default Rates Come Under Scrutiny
By RACHEL GROSSDefaulting on student loans is a serious matter, and The Chronicle of Higher Education has recently unearthed data finding that students are defaulting at rates far higher than previously thought. In an article on Sunday entitled “Government Vastly Undercounts Defaults,” The Chronicle studied numbers on the repayment of student loans going back 15 years, finding that defaults only increased over time.
Especially alarming were the numbers for two-year and for-profit colleges, with 40 percent of students who borrowed loans to attend for-profit institutions defaulting since 1995. This data comes just when for-profit colleges are being subjected to federal scrutiny in part because of the amount of federal financial aid they draw and the amount they spend on expenses other than teaching. “While for-profits educate less than 10 percent of students, those colleges’ students received close to a quarter of Pell Grant and federal-student-loan dollars in 2008,” according to the Chronicle article.
In 2009-10, the average for-profit charged about $14,000 in tuition and fees while the average community college charged about $2,500. In total, $50.8 billion worth of loans were in default by the end of the 2009 fiscal year, compared with $39.1 billion at the end of the 2008 fiscal year.
As the article points out, defaulting on student loans can create a variety of difficulties for borrowers, including making them unable to receive further federal aid and less likely to get loans, credit cards and jobs. They also face higher interest rates, and the government may take repayment money from their paychecks and taxes.
The Chronicle has also taken a look at how colleges are working to keep their default rates down, as well as how for-profit institutions could violate new federal regulations on default rates.
http://www.forgivestudentloandebt.com/
Default More Profitable Than Recovery…Like The Foreclosure Fiasco
Mark Kantrowitz, the publisher of FinAid.org, provided the Wall Street Journal with an example of how the government profits from defaults, which we will also publish here. It says that “The government stands to earn $2,010.44 more in interest from a $10,000 loan that defaulted than if it had been paid in full over a 20-year term, and $6,522.00 more than if it had been paid back in 10 years.” Also in this report was the fact that “According to White House budget figures for fiscal 2011 ending in September, the federal government expects gross recovery of between $1.10 and $1.22 for every dollar of defaulted student loans.”
Once You Have It, It’s There For Life
Even though students default on their loans, it is impossible to get rid of student loan debt, bankruptcy being useless, also. The government can however, garnish a borrower’s wages, withhold taxes, and recover via Social Security and even disability payments in order to recover the funds. This allows the government to tack on extra interest and penalties.
New Regulations Won’t Help Much, Either
Instituting regulations on for-profit colleges, The government argues that the schools’ graduates weigh on the taxpayers too much, because they learn nothing in class and will ultimately end up defaulting on loans, and at high rates. According to the Education Department, 46% of dollars lent to for-profit college students will eventually default.
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In light of all this, Sen. Tom Harkin (D., Iowa), chairman of the Senate HELP Committee, says that it’s not enough that the government recoups almost all of its money, he said, “Default should not be considered success, for either taxpayers or students who end up in debt.” But according to Kantrowitz, he estimates the recovery rate would have to go below 50% in for default prevention efforts to become more lucrative than defaults themselves.
SEE THIS ARTICLE HERE
