Like home loans, student loans have become predatory because borrowers have no consumer protection from unethical lenders and/or schools that do not live up to their promises.
Furthermore, students who have endured tragedies in their lives have no options except default, which does more than just ruin credit: it ruins career choices and income potential because wages are attached.
I would appreciate if you would forward this to any consumer protection groups you might know of. We are looking for reform that will give students a chance to better themselves without risking their financial and personal futures.
We are also looking for attorneys who can help students (like yours truly) who have struggled through this system, one of the many broken ones in our nation.
Katherine Mercurio Gotthardt
----- Original Message -----
From: Student Loan Justice
To: Student Loan Justice
Sent: Saturday, May 03, 2008 1:49 PM
Subject: Checking in: May 1st, 2008
Hope all is well out there. Welcome to the new members. We have noticed an uptick in submissions over the past several weeks(particularly from people planing on leaving the country for some reason), and I expect this trend to continue for the foreseeable future. The downturn in the economy guarantees that student loan defaults will be increasing...possibly at an alarming rate depending on how bad it gets. Those of you who follow these updates will know that despite the rhetoric from the student loan industry that default rates for student loans are at historic lows, the opposite is true. Recent data suggests that about 20% of all student loans will end up in default, and this is probably closer to 25%.
Moreover, the amount of student loan debt out there is massive...about $500 billion. Compare this with the total amount of credit card debt ($900 billion), and you should agree that this problem is very large.
Now is the time for you all to take personal leadership for getting the word out about the uniquely predatory nature of student loan debt. The pressure that the industry is under due to recent legislation and the credit crunch have all but swept this under the rug, and Congress is cow-towing to the banks, predictably. The suffering that the astonishing absence of consumer protections for student loans is causing has been drown out by the cries (and lobbying) by the banks. This should concern you, and concern you greatly.
I do know of a few media pieces in the works that address this issue, but I have to say that with the exception of a few folks in California, I am not seeing much tangible evidence of action out there in the country to bring attention to this issue. Its not hard to pick up the phone and call a reporter. It's not hard print up some flyers and post them around the colleges. There are a million things that you could do. Just pick one.
Also, I want to make it clear that this site is not for the purpose of giving out personal advice to borrowers. This site is for galvanizing grassroots action to convince Congress to return the standard consumer protections to student loans. I would like, at some point, to be able to offer counseling services to individual borrowers, but we are not there yet.
Thanks, and please take some action.
Keep us posted-
Alan Collinge, StudentLoanJustice.Org
Please support the StudentLoanJustice.Org PAC
email to Lou Dobbs
Dear Mr. Dobbs:
I am writing because I am one of too many who have been injured in the student loan system. An "A" student who put herself through college, I wanted to pursue a Ph.D.
In the year 2000, I entered Union Institute and University’s Doctoral program, based in Cincinnati. UIU was running without licensure in Washington, D.C. UIU had unlicensed, Federally funded sites throughout the country. The school knew this for some time but never addressed it.When I brought up the licensure issue, I was involuntarily removed from my program. The Department of Education, the accreditation agency, and other agencies investigated the school and temporarily froze the school's funding. The school was made to make significant changes in their program, their administration, and in their delivery, including changing the way they structured their “semesters.”
The school no longer claims to have a D.C. "site." They got their money. But I was left with no credits to transfer, no degree, and now, after interest, more than $50,000.00 in debt.One attorney attempted to negotiate with the school so I could at least complete my program. The school responded that I would have to begin all over again and pay all over again. It was a clear case of retaliation.
I tried everything to resolve this issue at the school, agency, lender, and national levels. As a final attempt, I visited a bankruptcy lawyer who of course, wanted to be paid to bring the case to court. But really, he didn't think I would "win" and discouraged me from pursuing the case. I am thankful he was honest. Rather than put myself further in debt by trying to fight a case I could not win, I did not pursue bankruptcy. I am currently in forbearance, and the debt continues to grow.
Mr. Dobbs, I have disabilities and so do my two children. I work contract and have no way to afford an attorney to help. Mine is only one story.
Mr. Dobbs, the student loan industry has become as predatory as the mortgage industry. We have no consumer protection from unethical schools or lenders.
Please help. Do a story, contact the right people, whatever it is you can do.
We would appreciate your assistance as a highly recognized member of the media.
Katherine Mercurio Gotthardt