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Who Got Rich Off the Student Debt Crisis


#1

Who Got Rich Off the Student Debt Crisis

James B. Steele & Lance Williams, Center for Investigative Reporting

A generation ago, Congress privatized a student loan program intended to give more Americans access to higher education.

In its place, lawmakers created another profit center for Wall Street and a system of college finance that has fed the nation’s cycle of inequality. Step by step, Congress has enacted one law after another to make student debt the worst kind of debt for Americans – and the best kind for banks and debt collectors.


#3

Brilliant, thank you!

When a nation allows its citizens - especially the vulnerable - to be victimized and their lives made into profits via usury for the richest and well-connected few, that nation has lost its "soul", and its "leadership" has lost all honor and integrity. Our politicians and so-called "leadership" are mostly complicit to the crime......in bed with the bankers and usurers.......may they wind up in the same prisons.........


#5

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#6

Hillary- I hope that you are elected. For you deserve what is coming.
It is not just that students are in great debt; Do not forget about their families too who are paying!!

This country needs a good collapse to rebalance itself.


#7

42 million is an enormous voting block. Add a few more groups of swindled and or disenfranchised and...Viola! Bernie. Alas.


#8

This government does not care about it's citizens. At all. Period. This is in part what we are all facing. I had no illusions about HRC and her support of neoliberalism, and this is a shining example of it. Make a profit off of people's suffering. It's the norm. It's the same thing with health care, with employment, with debt, with everything. Who cares about the suffering masses, when we can hold up shining examples of "successful" millionaires and billionaires like baubles, who were oh-so-clever at using others to make themselves rich? Don't dare help out anyone, don't regulate anything, because you, too, can become rich some day. And you wouldn't want someone telling you what to do if when you become rich, would you? All those people who are poor, they just don't want to work. They're lazy, they want free stuff, they want handouts, the nanny state, and to eliminate freedom by forcing the rich to pay higher taxes.

We the people deserve far better than this, and we're not going to get it as long as the rich control the media and congress.


#9


#10

The federal student loan program and the GI Bill were two of the prime targets (in addition to the dismantling of the EPA) of Raygun within six months of his first term. Bush, Sr. did nothing to address either nor did Clinton. Then along comes GWB who added his changes to the student loan program by changing the formulae for qualifying for student loans (students who were working and going to school had their loans reduced BECAUSE THEY WERE WORKING) in addition to implementing the "parental plus" loan scam program created by banks such as JPMorgan-Chase; and all but eliminating the Pell Grant program. Anything to make an eff- - - profit. Get 'em coming and get 'em going (at the outset and later when they cannot make payments). The student loan system is a macrocosm of what it would be like to privatize Social Security and/or Medicare. Privatization means anything goes to make a profit...the victims of the ruse be damned.


#11

This is an excellent article. It explains in detail how the student system is rigged for the banking industry. You can't be a CPA in Texas if you are behind on your student loans.


#12

I am not allowed to like this outstanding graphic for another 8 hrs per Common Dreams, who are asking me for a donation. See you all in the am. Stay strong!


#13

Many states are not allowing attainment or renewal of a professional license if you are in default which is becoming more common. Then there was the case of the man in Houston who had US Marshals show up at his house to arrest him because he had an unpaid outstanding student loan debt of $1,500 from 1987.


#15

Debtors prison! One of our founding issues.


#16

This was an absolutely quintessential and monumental article. Wow! It is ever so rare to read something that is largely fact-based and also extremely poignant and widely relevant.

That said, I full well realize that an article cannot be all things to all people. I do appreciate the use of sidebar passages to put the main article in better perspective. It is a given that the authors have to write under certain constraints: primarily the length of article. I do wish that a sidebar item might have concisely presented the manner in which many other counties deal with the cost of higher education, especially European provisions for free or extremely inexpensive, higher education.

Oh yeah, the comments relating to indentured servants and debtors' prison are quite on point.


#17

You got democrats and republicans who support this crooked student loan facade.....Hillary will do nothing about it neither will any republican....,,.The former supporters of Common Dreams(The big money baGS) have decided to not donate any more money to this news site because commmon dreamns does not kiss Hillarys ass and gives Bernie air time.......We need to donate at least A MINIMUM $10 to this news site OR more if you can afford it ..because all these crooked democrats and republicans are determined to screw the american public and stiffle free press because the the real free press does not kiss their(Hillarys) asses...Hillary is there corporate queen.....She will continue the screwing we are already getting from entrenched democrats as well as from Obama and it goes without saying that the republicans are butt fking us as we speak...Stand up to these assholes donate to comon dreams...and most important vote for Bernie if he is still running or Jill Stein.....Hillary ? Trump? either one will shove a big dildo up yer bung hole while smiling at ya...And telling yA GO AHEAD AND TAKE IT..ITS SO GOOD FOR YA.


#18

I hope Bernie splitts from the democrat regieme and starts an independent party...I would say HELL yea.....AND I would still vote for him over corporate loving Hillary the liar.


#19

But, privatization works so well, not.


#20

Read the original article at revealnews.org (linked to at the end). That is a great site which I had managed to miss until now.


#21

So true..


#23

Deferment was mentioned when discussing the soldier making sure he made his monthly payment. It is my understanding that the money makers love deferment. The interest keeps on piling up making your total debt even higher. You need a deferment? Why, sure! If you want to pay back even way, way more than you borrowed, go for it. They will take your money from your meager monthly Social Security payment when you are elderly. And it was those making all this money from student loans that convinced the soul sellers to disallow write-offs of student loan debt in bankruptcy since "one would benefit from enhanced money making ability over the course of a lifetime." That was part of the great student loan deception. Even though this is not true for far too many.
As Bernie stated, a college degree is now required where in the past, a high school diploma was required. I am 62 years old and work with people in their 20s and 30s. They are well educated, do a great job, many trying to establish families with less than adequate (two income) pay and are carrying a boatload of student debt. That is a heavy burden on our young people. And it shouldn't have to be this way. They earn no more in their jobs than those who worked the same job for the same pay just a few years ago. Granted, the job requirements were increased to include a college degree. The pay did not improve on parity with the requirement of a college degree.
Why this is tolerated for an instant goes directly back to the comment about being sold out by the soulless ( as well as self-serving, corrupt, greedy and spineless) in Washington. People my age did not have it easy when establishing families when interest rates were in the teens. I could not have imagined that it would be even more challenging for so many of our children.


#27

This is a good piece, but there are at least glaring omissions here, and also one MAJOR misrepresentation of fact.

The omissions:

  1. Bankruptcy protection isn't the only consumer protection that has been stripped away from student loans. Statutes of limitations have also been stripped from federal student loans, as well as Fair Debt Collection Practice laws, Truth in Lending laws, and refinancing rights. State usury laws are also not applicable to federal student loans.

  2. The federal government isn't just making money in interest on the student loan program. They are also PROFITING ON DEFAULTED STUDENT LOANS!!! This has been happening for many years, and is easily proven by simply examination of the White House Budget going back over a decade! THIS IS A DEFINING HALLMARK OF A PREDATORY LENDING SYSTEM. See the related article on the main page of the Student Loan Justice website.

  3. The University of Wisconsin, despite their tales of woe, was found to have stockpiled something like $600 million during the same time period that they were "crying poor", and jacking tuition through the roof. This is not an isolated instance. In fact, nearly ALL of the colleges and universities have been engaging in the same kind of cash hoarding, particularly since about 2008...and this is OVER AND ABOVE their endowments! By my best estimate, the colleges have, collectively managed to stockpile as much or more cash the the value of all college endowments combined ($430 billion). I urge the CIJ to look very closely at this phenomenon. It is a critically important phenomenon that cries out for much more investigation so that we can understand exactly how much cash the colleges are sitting on. Again, this is described at the Student Loan Justice website.

Misrepresentation of FACT:

The states funding of higher education has increased, year over year, roughly with the rate of inflation. But for a slight downturn during the financial crisis, state funding of higher education has INCREASED.
The colleges are citing the fact that the percentage share of state funding has decreased, and calling this a "cut". This is self-serving, ridiculous NONSENSE, and the colleges should be ASHAMED OF THEMSELVES for perpetuating it. But for the fact that the colleges are jacking their prices through the roof, the increasing money that the states are giving them every year would keep their percentage share of involvement the same. This is one of the biggest lies being perpetuated by the Academy, and journalists everywhere should not fall for it.

I hope that interested people everywhere, and particularly investigative journalists, will come to The Student Loan Justice website and see the research that we have done, and the stuff (much of it astonishing) that we have found.

ps. The removal of bankruptcy and other consumer protections lie at the core of this issue. Bankruptcy (at a minimum) absolutely must be restored immediately, or else the entire lending system will be rejected entirely by the citizenry, and student loans will evaporate into a mist of illegitimacy and be smashed by waves of largescale social unrest (likely).

Regards,

Alan