As the new school year approaches, it’s time to act on what so many of us already know:
Millions of students are getting screwed.
Not just by by predatory lenders, and not just by for-profit universities, but by the federal government and by the whole system of higher education in the US.
Matt Taibbi makes this all so clear in a brilliant piece in Rolling Stone: “Ripping Off Young Americans: The College Loan Scandal.” (16 August 13) The whole article is essential reading. Here are a few excerpts:
Lenders Are Happy!
“Not only has Congress almost completely stripped students of their right to disgorge their debts through bankruptcy (amazing, when one considers that even gamblers can declare bankruptcy!), it has also restricted the students’ ability to refinance loans. Even Truth in Lending Act requirements – which normally require lenders to fully disclose future costs to would-be customers – don’t cover certain student loans.”
The Federal Government Is Happy!
“While it’s not commonly discussed on the Hill, the government actually stands to make an enormous profit on the president’s new federal student-loan system, an estimated $184 billion over 10 years…”
Colleges and Universities Keep Hiking Tuition!
“Between 1950 and 1970, sending a kid to a public university cost about four percent of an American family’s annual income. Forty years later, in 2010, it accounted for 11 percent. Moody’s released statistics showing tuition and fees rising 300 percent versus the Consumer Price Index between 1990 and 2011.”
For-Profit Schools Are Thrilled!
“Fly-by-night, for-profit schools can be some of the most aggressive in
lobbying for the raising of federal-loan limits. The reason is simple
– some of them subsist almost entirely on federal loans. There’s
actually a law prohibiting these schools from having more than 90
percent of their tuition income come from federally backed loans.”
Students Are Paying the Price!
“Having passed credit cards to became the largest pile of owed money in America outside of the real-estate market, outstanding student debt topped $1 trillion by the end of 2011. Last November, the New York Fed reported an amazing statistic: During just the third quarter of 2012, non-real-estate household debt rose nationally by 2.3 percent, or a staggering $62 billion. And an equally staggering $42 billion of that was student-loan debt.”
What Can You Do?
Here’s what they are about:
“We are a grass roots group seeking the swift return of standard bankruptcy protections and other consumer protections to all student loans in the U.S. If you are a distressed borrower of any age, please use this site to tell your story, learn about the problem, meet others with similar situations, and above all, to take the actions necessary to compel Congress to serve the interests of the students and their families, at long last, and restore fairness to what has become a state-sponsored predatory, and inflationary lending system.”