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Student Debt Strikers Call Fed's Loan Forgiveness Plan a Bureaucratic Sham

#1

Student Debt Strikers Call Fed's Loan Forgiveness Plan a Bureaucratic Sham

Jon Queally, staff writer

Despite a new announcement by the U.S. Department of Education that it will begin a process of debt-forgiveness for students cheated into high-priced loans by predatory for-profits colleges, one of the groups most responsible for lobbying to have the debts erased are reacting bitterly by saying the plan is more complicated than it needs to be and that those already victimized by one government-backed scheme should not be put through the ringer for a second time.

#2

Does one remember stories that the NY Times and other noted US newspapers and magazines spun regarding the sage and savvy Chicago gang that underpinned Obama's initial bid for the White House and that filled his privatization clown car, the vehicle from which the new president appointed his advisers and administration's department heads? Remember when those exalted institutions of the press wrote of the bond between Duncan and Obama, who discussed the remaking of education when they played basketball together. Duncan was the prime mover who created this fiasco. He's the one who talked through for Obama's enlightenment the potential of charter schools to fix the broken US educational system while they played basketball. Duncan is no fool. He knew exactly what he was doing from the start. He was and is a major promoter of charter schools.

All the federal loans to gullible students used for tuition payments to scam institutes of higher learning should be forgive outright, and the cost of doing so should be paid for by drawing from the coffers of the Democratic Party and not from the US Treasury. Queally is much to kind to Arne in this blog. I felt nothing but disgust and disdain for that man.

#3

Once again, CD, hopefully unwittingly, panders to corporate interests by distracting from the real issue.

For-profit colleges, while problematic, are not what underlies the massive student debt.

It is the fact that student lenders are guaranteed payment of the entire loan amount, plus interest, penalties, and late fees accrued--when a student defaults.

That money goes to jthem NOW, upon default--and the US treasury has to try and collect from the unemployed or underemployed student.

They literally have NO RISK in making student loans, so they continue to do so, while at the same time working very hard to force students into default.

Whenever risk-free (for the lender) money is available, a bubble is created.

While I at one time earned enough money to pay down my loans, buy a house and so on, loss of job and marriage have made any sort of normal existence impossible for me. But I can never start over, despite the fact I paid on my loans for over a decade and tried to do everything rtight.

Put another way, if i'd run up my credit cards and then lost my job, I could declare bankruptcy and start over.

But student debtors are the new sharecroppers, and if you don't like it, suicide is the only way out.

Check the leading rising cause of death among middle-aged people (hint: it's suicide)--and you may wonder how much of a role student loans play.

#4

Not only is a bubble created whenever risk-free money is made available the contract is repackaged and resold with a paper profit at every turn, or should I say, churn. The paper profit, like a tape worm, swells off the original loan and acts like the old junk bond markets. The student loan program then becomes a casino and the tax code, as written, becomes a series of write downs and write-offs for the risk free side, of which you speak. But since the gov't is picking sides, you get this mess. In some ways I see the housing bubble and the subprime auto loan bubble ( coming soon ) in this. And, don't expect the MSM to report the whole story because some of them are running degree mills like Corinthian. Privatization of everything formerly handled by the Federal gov't or state gov't, usually at a lower cost, is another nail in the coffin of the social contract. Again, there has got to be a better way. Universal free college sounds about right.

#5

True that. To state that these debts "cost the taxpayers" is deception at its basest. The taxpayers actually have very little to do with it, and Wall Street everything. But they are our masters now--we must pay the beast.

#6

Privatization, contrary to the public perception, is not at a lower cost than govt can provide. Example: I work for a state university and among the many duties I perform, trash removal is one. Every time we need to buy a new trash truck, the administration (usually a new group since the last truck wore out) decide its time to privatize trash pick-up and sub out the job to a contractor. I have gone through the motions four times over the past 25 years. I get a count of the dumpsters and put out for bids. The lowest bid I have ever gotten gives us 1/4th of the service we do ourselves at twice the price. Extras are charged extra. We still do it cheaper despite the added cost of the truck ($100,000) which pays for itself in one year. Private biz can never do it cheaper than govt...unless services are cut drastically. The lie is when the politicians pretend its a better deal despite the facts. They hide the extra charges in the fine print. How could the private sector do better when they have to add profit to the cost? Govt does not...or shouldn't. Follow the money. Especially the money that ends up in the politician pockets and campaign coffers. 95% of businesses FAIL. Privatization enables them to live off the public without competition and pesky failures. Same with charter schools. Once your child is the bottom line of a corporate profit sheet, see how messed up education will become.

#7

I wonder if we have not been brainwashed, and that the whole notion of higher education has also also a bit of a sham. One needs the credentials for those professions and enterprises where one must be fluent in the lingo that colleges and universities teach, and obviously technical knowledge- but what is often missing from a formal education is a healthy skepticism and ability to think on one's feet critically, and to evaluate the veracity of information and its myriad of creative possibilities- and ultimately to survive and function in the world, true to one's fulfill one's potential for the benefit of one's self, one's family, and one's community, while remaining true to one's values and a free and independent soul.

For someone in his late sixties from the Vietnam generation, I have been stunned by the collective failure of our schools to address- e.g., in the form of teach-ins- our nation's aggressive wars and the death and devastation they have caused. And I wonder why, when with perseverance one can develop one's own curriculum- for example in the social sciences - and learn much more- and at a fraction of the cost- one should commit to an education that may enslave the student and/or parent in a state of perpetual debt. Why hasn't our presumably 'exceptional' nation made a commitment to educate all of its people, and made their education through university free. It could easily do so and receive back a benefit far in excess of the cost to the State, e.g., if it were to require in exchange the performance of community service in our poorer communities- where, for example, for every year of service, a year of tuition would be forgiven.

And it is not merely a question of education, but of privatization of community assets generally, and equitable distribution of wealth, and the ability of a community, state and nation, with its governing authorities to protect the health, welfare, safety and other needs of its citizens in a myriad of ways. Right now all of this is being lost as the superrich and the multinationals they control are garnering for themselves more and more of the world's resources.

A year or two ago, it was reported in Forbes or Fortune magazine that 85 of the richest people had more wealth than the poorest 3.7 billion. More recently, the same has been reported except, now with respect to the richest 68 people. Why, if that is true, haven't governments expropriated their wealth- at the very least, on the pretext of protecting their national security and well being. Why not take it for the benefit of the community, but to be 'fair' leave something, say $ ten million, for every billionaire?

#9

This reply made me think of the trash issue issue back home when I was a kid. I havent thought about it until plantman13 said something about the hidden extra expensenses. Mayor Beard was a corrupt but thoughtful politician unlike most. She cancelled trash pick up with the whole city, except the street she lived on (seriously), because of the extras private companies were charging. Thanks plantman13 for the stroll down memory lane lol. I havent thought about that in years. smile

#10

I hear ya on this. I disagree about the role of CD, though. If you wouldnt have read this article, you would not have posted the incite that I also live, less the marriage/divorce part. These people are doing their part so others can do theirs. Im honestly glad you posted. I was forced out of my low and fixed interest loan through a bank and instead, sign a contract with the gov't. Where was my constitutional right of protection of contracts? Now i have quadruple the rate with the new capitalized interest rates. I feel your pain brother.

#11

You're so welcome. Any time I can be of service...

#12

I am a victim of Career education Corporations fraudulent tactics too and have 64,000.00 of debt. I have contacted the federal trade commission, the consumer protection burrow, private law offices, Texas work force commission, governor Greg abbot, theab, nelnet, Fedloanservicing, just to name a few with no help at all. Everyone is passing the buck per se. I hear about all this supposed help and guess what it is fictional. I am disabled but that means nothing to the department of education. Has anyone even thought that these predatory colleges have defrauded the disabled also??? Well they have! Has this been in the news? Has this been investigated? Well I can tell you NO! No one cares to even think or discuss this.

#13

94 college credit hours that will never transfer to any college other than a Career education corporations college. Yes you read this correctly. Not one credit will transfer to any other traditional community college or university.