Sunday, February 17, 2008

The Dire Necessity of Student Loan Reform: A True Story

To:

Chuck Schumer, online comment link: http://schumer. senate.gov/ SchumerWebsite/ contact/contact. html

Dear Judicial Committee Member Schumer:

The good, recent work of our NYS Attorney General, Andrew Cuomo, investigating the student loan business, deserves to to be taken several steps further: I can not urge you too strongly to establish broad and possible-to-meet disability and poverty discharge standards for student loans legislatively.

Furthermore to preserve equal access to due process for people in bad financial straights, I feel there should be a 20 year term standard after which student loans are discharged in bankruptcy. After 30 years in default, student debt should be able to be discharged without even filing for bankruptcy.

Here is an example in the form of an absolutely plausible case study,which demonstrates the injustice of the current discharge standards for student loans: Imagine that a person you know came from below the poverty line and persisted there their entire life, dropping out of college because s/he could neither afford to continue nor was s/he likely to benefit from higher education. Suppose this person has a significant impediment to employment. Imagine that these troubles have contributed to his or her default on a federal student loan.

That person is likely to have had their meager bank account emptied, every low wage garnished at a rate of 15%, been blocked from any form of public employment and entitlement grants to complete education.

Imagine that the person became further disabled by one accident in middle age, and in quick succession another, incurring massive medical debt that s/he could not pay. Then s/he was fired from his or her entry-level job (s/he did not graduate from college- remember?). Bankruptcy was the only option, but, of course, even after 32 years in default and 38 years after the initiation date of the first loan when the student debtor was 17, since 1977 student loans have been excluded from discharge in bankruptcy.

Even though this debt is over 3 times older than the statute of limitations for any other type of debt on the books, it is being collected by a private, for-profit business. The original loan was sold off by the government at a profit to a guarantor 32 years before and then sold and resold, with 20% penalties tacked on each time the loan was flipped between collection agencies unilaterally for the companys' profit.

Imagine how this unfortunate friend feels to be staring down retirement age with the prospect of SSI or SSD being offset 15% for the an ancient student debt receivable which at this point has exploded 400% of the original and realistically will never be paid off.

Picture this person to have married late and badly and that s/he is the single parent of a talented child who luckily has no impediments to learning who just entered college and just signed up for the same amount of loans in one year that the undischarged debtor, now a senior citizen, borrowed in his or her entire college "career".

I am that 57 year old single mother with a disability, poor all mylife- and the above is MY story.

I feel that because of poor judgement when I was a hopeful 17-year-old that I am now a slave to student loans. The worst mistake I ever made was borrowing money to go to college. I never should have attended. Almost 40 years of harassment for such an old debt has ruined my prospects and my life. Sometimes I wish I were dead.

I thought our country was founded partly to provide a refuge from debtors' prison and indentured servitude. The laws as they stand on student debt collection are un-American, in my opinion.

Please initiate change in the law to allow discharge of student loans for disability and poverty and in bankruptcy after a setterm in default. Bring back standard consumer protections back to student loans in my daughter's lifetime!

Yours truly,

Heather Dunbar

22 Langford Street

Van Etten NY

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