Sunday, September 05, 2010

Student Loan Crisis

Kudos to my colleague, Marc Greenbaum, who alerted me to this fabulous graphic describing the terrible state of student loans, which he first saw at Above the Law, but which actually originates at courtesy of I wanted to include the image here, but it does not display well at OOTJ, because our window is too narrow and cuts off part. I highly recommend a visit, because it illustrates, not just how students are falling into debt, but how a series of changes to the law over decades has stripped them of the protections offered to borrowers in nearly every other situation. Now, student loan defaulters are no longer protected by

* Bankruptcy

* Statute of limitations

* Truth in Lending regulations

* Fair Debt Collection Practices Act

* Right to refinance

* State usury laws

* No protections from garnishment of
- Social Security income
- Disability income
- Wages without court order
- Tax refunds withholding

* Suspension of state professional license

I had not realized that students were being harassed and pressured so fiercely. There is a movement building and perhaps lobbying on behalf of the growing number of families affected by unbearable student loan payments will begin to move Congress to make changes in the laws. The problem is how much money the private lenders will be able to pour into lobbying to keep their profitable schemes in place.

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