Last week, Senators Dick Durbin (D-IL), Sheldon Whitehouse (D-RI), and Al Franken (D-MN) joined Representatives Steve Cohen (D-TN) and Danny Davis (D-IL) in introducing legislation that would permit private student loan debt to be dischargeable in bankruptcy court. The bills, S. 3219: The Fairness for Struggling Students Act in the Senate and H.R. 5043: The Private Student Loan Bankruptcy Fairness Act in the House, would restore fairness to laws governing student loan bankruptcy.
“This legislation ends the special treatment private student lenders have enjoyed for years at the financial and personal expense of debt-ridden college graduates,” said USSA President Gregory Cendana. “If a struggling individual can file for bankruptcy on their home, credit card, or even gambling debts, then why not student loans? This is an anomaly in bankruptcy law that arbitrarily treats student borrowers worse than other types of borrowers.”
Reforming student loan repayment laws is critical. Even with recent improvements to the federal Income-Based Repayment program, there is still an estimated 730 billion dollars in outstanding federal and private student loan debt in the United States, with only 40 percent being actively repaid. The rest is in default or deferment, resulting in plummeting credit and huge sums of interest for borrowers.
Private student loans have not been dischargeable in bankruptcy court since 2005, leading to a recent hike in student loan debt, which today averages nearly 25 thousand dollars. USSA will be advocating for this and other measures to make college more accessible and affordable for all.
I am a struggly PhD student in Literacy education. I re-entered school after a divorce, and I was forced to leave my job in the USPS because I was sexually harassed without the management stopping it. (my ex was the union president.)
ReplyDeleteThough enrolled as a student in the fall of '09, my wages began to be garnished by West Asset Management. Meanwhile, American Student Assistance began to plunder my retirement,(social security) at 1/4 of my "disposable income.)
It wasn't until I looked in my file at work that I understood that ASA and West Asset were really working for together. West Asset is a collection agency, and ASA is the "Guarantor."
I called Sallie Mae only to find out that JP MORGAN CHASE OWNS MY LOAN. I am part of the TOXIC Assets.... not that anyone needs intellectuatls anymore, or teachers. Let's just put the poor kids to work.
I am an adjunct professor, non union, and I am at the mercy of my Yes Man Boss... so he lied, aftert I worked 6 years teaching reading at low wages, and after writing a syllabus, and after working as a writing specialist. He doesn't like me.
I think that this is obscene. I teach students who are poor, can't read and they are taking out loans to get jobs as what??? They don't even know.
Socialism and facisim, well, Glenn Beck should come to college. He might not have any "Cultural Capital" like I have, but he sure has the other stuff. We intellectuals... Pshaw... who needs us. We are start ups.
I have been charged 18% interest. GET A LAwyer, and don't talk to the Collection agency.
I am being tossed out of my apartment, and I am a single mother with a child with aspergers syndrome.
Money is king. Tell me otherwise. The government sold me out to the rats on Wall street.
Perhaps we should all start a corporation as part of the Citizens United Supreme Court Ruling, and start our own hedge fund betting against these banks that sound like the old robber barrons... oh, I mean just THE robber barrons.... OUR REPRESENTATIVES.
Oh, yeah, I had to take this semister off, because I have no money. And, I have until 2011 to finish my PhD. Piled high and deep. Yessir.
And they will take you tax refund. They will lie to you.
I already had to lose my house because of my education. BUT I AM STILL IN SCHOOL.... I haven't defaulted!!!!! What the hell is going on. No one will be educated, except the rich folks...
My son says now he will have to become a corporate lawyer just for a few years so he can make some money. I think, in a way, it's kind of funny,,... and kind of sad because he sees me struggle. And, he is so smart and so sweet.
GET A LAWYER!
AND VOTE FOR A THIRD PARTY! ANYONE! NO MORE MONEY IN THE TEMPLE, those creeps.
I will be happy to sign whatever petition needed to stop Sallie Mae from raping me too...Those A-holes won't even let you pay the principle of the loan first. It's just not right!!!
ReplyDeleteI am in default, I think I am paying to the American Education Services. I graduated 14 years ago and continuously tried to consolidate with Wachovia, then AES and whomever else. I have had my wages garnished several times, presently 15% of my take home pay. That leaves me very little to assist in taking care of my elderly mother so life is hard. I am working as a Hospice social worker in WV mountains in a small impoverished town. I was once told that if I worked for 5 years in an economically oppressed region my loans would be forgiven. Then I was told no it is only for teachers, lawyers and doctors. Well teachers deserve it, they do not make enough but my gosh lawyers and doctors are the most high charging individuals. But nevertheless. I received one statment of activity on my loan(s) and the collection fees are $22,000. Can you imagine who is getting rich off of our student loans! When trying to make arrangements, AES wanted over $600 a month...great when I take home a little under $1800 a month taking care of the household and my mother single handed where medicare does not assist. I went to school when I was in my late 30s lower 40s after a divorce left me nothing but my clothes on my back. Now I am licensed in the state of WV and still cannot make enough to take care of my ailing mother and myself. And I have issues with my health going through remission with cancer, had a septic infection in my rt knee which has destroyed the knee, and chemo and radiation damaging nerves, muscles and internal organs. I am hoping they pass this bill not just for for profit but non profit as well. Do some math US Governement, you have spent billions and billions of dollars bailing out these big corporations but you cannot bail out the every day common hardworking men and women who try but just has to pick food, mortgage over student loans. It is what it is but the government got it to this point.
ReplyDeleteNon-profit lenders should NOT be exempt from these bills, and there should NOT be a repayment period requirement!
ReplyDeleteMost private student loans are through non-profit! They figured out this little loophole a long time ago!
Contact your representatives and demand these changes be made to these bills! These bill will not do us any good if these changes are not made!
I am willing to sign any petition there is. I am all for offering more relief for these private student loans. Much like everyone else Sallie Mae is backing me into a wall not offering any options at all. I am almost forced to go into default due to not being able to pay the large amount they are asking from me. My loans total $50K and have an interest rate of 13.25%. My loans of course did not start off at $50K. It is that interest rate that has made that amount so high. When you attempt to contact Sallie Mae directly to work something out they offer NOTHING!! Its like they dont care to see people struggling. I want to be able to provide for my three children seeing as I am a single mom, but with all the student loan debt they are making it immpossible to get anywhere in life. I am almost sad to say that I am scared to encourage my children to go to college because of the financial difficulties that follow. It is a nightmare!! We NEED more relief!!!
ReplyDeleteI took out a total of 29k in private student loans. I had many medical issues and surgeries while attending college worked part to full-time, and needless to say, did not complete my degree. Four years after taking out my fist private loan, it was time to begin paying them all back. I defaulted the first year because I could not afford the $400 and some odd dollar payments making only $11/hour at the time... At five years post receipt of my private student loan(s), my balance due was approximately $55,000.00.... My debt owed had increased by almost 40%. Last year, my father took out money from his 401k to help me pay down on the loan since he co-signed and the payments were too much to afford. We paid down 20,000 and I've paid additional as well. My balance today stands at 29,000.00 Which, excluding taxes, fees, and interest is the amount I borrowed in the first place.... My loan is throught AES. They will not consolidate my private student loans together, and each has a varible interest between 4.4% - 8% at this time. $29,000 would be feasable, except I have no idea how to get through it with out paying another 20-40 thousand in interest! I did the math... if I make the minimum payments for the next 15 years, I will end up paying back over 120,000 on 29,000.... I don't know what to do. I have a better paying job now, but I also have a family. I would like to go back to school part-time and just pay for it out of pocket, but having a family, daycare, house payment, and medical bills in conjuction with my student loan payments make it nearly possible. Something has to be done about this. I am okay with paying the $$ back that I borrowed and some interest is to be expected, but I've already paid 20k on 29k and still owe 29k... A. Hubbs
ReplyDeleteOur leaders have sold out our children and have allowed them to be forced into bondage and slavery. It's real name is debtor's prison resurrected. The sad part is that they knew exactly what they were doing. Our financial system is based on debt. When there is debt, loans can be made off of that debt. That is basically where our money comes from. When debt is created, that debt because the resource for new loans. The problem is the US money system is severely broken and the only way to keep it running is to create ever increasingly debt which can not be sustained forever and will eventually collapse. Selling our children or anyone that takes out student loans buys the US time. A kind of insurance policy just in case people figure it out and stop going into debt for material things. However, it is only extending the inevitable collapse. But that is another story in itself.
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ReplyDeleteEduction is the most important power that you can use in your life. That is why I think education should accessible for everybody. Most of all education shouldn't be based on the wealth of a family rather be controlled by the government in order to achieve equality between people.
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ReplyDeleteIf this bills eventually becomes a law, thats great! But, there is one more option available for those that carry delinquent private student loans.
ReplyDeletePrivate Student Loans are considered an unsecured debt, therefore, its is not tied any asset nor is guaranteed by the government. Folks, Private student loans can be settled for 40-60% less than the balance owed. Settlement does not look nearly as bad on your credit report, nor it stays on your record for 10 years, unlike bankruptcy.
http://signon.org/sign/reinstate-bankruptcy
ReplyDeleteSign this, it's a petition bolstering the bill!
The private student loans are preditory and their terms are unfair. Especially to those starting out after graduation and are unable to find gainful employment that will allow repayment. Even for credit based loans;they lack consumer protections and they are very toxic. A consumer has little to no protection if they were to fall on hard times, illness, unemployment, underemployment, and economic hardship. *Please support the 2011 Durbin-Cohen-Franken-Whitehouse-Davis-Miller initiative to restore fairness in private lending and introduce regulation for private student lending.*
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ReplyDeleteThis is an anomaly in bankruptcy law that arbitrarily treats student borrowers worse than other types of borrowers.”
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