Private Student Loans | Private Student Loan Crisis Growing And Students Are Struggling
Students are struggling during this economy. Private Student loans are becoming a burden to them.
Fourth, Congress should strongly consider passing HR 5043 ” “Private Student Loan Bankruptcy Fairness Act of 2010 (D-Steve Cohen) and S.3219 ” “Fairness for Struggling Students Act of 2010″ (D-Richard Durbin) both of which will allow students presented with challenging circumstance with the option of discharging the debt in bankruptcy.
Private Student Loans are a growing crisis for many students. No one really hears about it, but many are struggling to make their payments. Private Student loans cannot be discharged in Bankruptcy. Yet, a loan on a Yacht and loans on expensive material items can be discharged.
Democrats: Protection for College Students Needed Before You Go
December 20,2010
In 2005, language was slipped into the Bankruptcy Abuse Prevention and Consumer Protection Act which effectively removed bankruptcy protections from private student loans. The brazenness of this action shocked even the most jaded experts on the Hill (when it was discovered). After all, this amounts to the same thing as stripping bankruptcy protections from credit cards, or any other type of unsecured, free-market debt. Make no mistake: there are large injustices with the student lending system generally, but this move set a new low.
The banking industry and their lobbyists promised increased loan availability to disadvantaged students in return for the wholesale removal of this critical, free-market mechanism, but never delivered, the record now clearly shows. What they did deliver were tens of billions of dollars in outrageous loans that would make a subprime mortgage broker blush, with APRs as high as 28%, dropped onto the backs of unsuspecting students through deceptive and corrupt marketing techniques for which there simply is no comparison (consider that often, students would call their school’s financial aid offices, and unbeknownst to them, at the other end of the line was a student loan marketer pretending to be a university employee, and this point is proven, but we could go on at length here).
It was assumed by all that at the first possibility (i.e. when the democrats recaptured one or both houses of Congress), this grave injustice would be quickly righted. So in 2007, when Democrats swept both Houses, this painful period for the citizens was clearly at an end. Or was it? The democrats, to their credit, did introduce legislation to reverse this robbery, but didn’t put their back into it, evidently. The first attempt the legislation was quietly killed. A second attempt was narrowly defeated in a House vote thanks to the Blue Dogs cooperation with republicans like Howard “Buck” McKeon, and others. The
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