Predatory student loans

All praise to the National Law Center for this timely report. The public has been sold a bills of goods regarding the deregulation of many aspects of our financial infrastructure. One would have thought we had enough with the stock market bubble, the corporate scams ala Enron, World.com, Adelphia, Tenet Healthcare, and now the sub-prime mortgage scams.

Not so.

Waiting in the wings was the student loan industry, the pay day advance companies, and soon we’ll see the financing sector of the auto industry blow up as people learn that their cars are worth far less than what they paid for them. Unfortunately, the political class that is supposed to be the public’s watchdog has been asleep at the wheel since the Reagan years. A cretain amount of firm regulation is absolutely necessary in a capitalist system such as ours. There are a LOT of hyenas out there and they’ll steal your eyeteeth if you let them.

Don’t let them. Fight predatory loans wherever they exist. Take back the economy.

feudi pandola, at 8:15 am EST on March 4, 2008

Not Surprised in the Least...

Gee, another unregulated area of “Business” that stuck one to the consumer, and ultimately, the tax payer. It is called Business because that is what they give you!

If profit is your motive than business is your model, because business managers will let nothing stand in the way of their profit. Why should this be a surprise to anyone. Business is nothing if not consistent. For the last hundred years plus, modern business has pursued the dollar with all the holy fanatacism that would make Al Quaida blush. Incident after incident of greed, excess and corruption. Pick up the newspaper on any given day and just scan the headlines. Their greed knows no bounds. When will people realize that this is the rule, not the exception.

An honest person sticks out like a sore thumb, because there are so few incidents to report. Go ahead scan the newspaper again. An honest person is treated like a leper, and is in need of tissue thin laws that are supposed to protect them, but mostly don’t. In my opinion any manager who tries to get payback on a whitleblower should lose their job.

A real hero today is one who can’t be bought, unfortunately all of the public figures that people look up to already have been bought.

Government was supposed to protect the people from these shysters, but all too often is in bed with them.

Our culture has losts it’s way, it is no wonder we are losing our preeminance. Private loans are just another symptom.

SalmonLeap, at 9:35 am EST on March 4, 2008

The real issues are

Let’s not forget that tuition increases are the driving factor behind the students’ need for additional funding. We need to keep an eye on college tuition.

Also, these loan fees would be much more manageable if salaries kept pace with inflation — or better yet — the rise in the cost of tuition. How do we get college graduates — or anyone for that matter — better paying jobs?

In short, has the cost of college (included private loan interest payments) exceeded the value of the degree for most students?

Joe Cronin, Online Education at Edvisors, at 12:05 pm EST on March 4, 2008

Burden’s on the Borrower

How can students and parents respond to the unavailability of comparable cost information on private education loans and the serious ramifications of uninformed borrowing for college? Unfortunately, they must assume the burden of researching and comparing multiple loans and lenders. Although this adds a layer of complexity to college access, at present it may be the only way to avoid overwhelming education debt.

Renee Boltri, at 4:25 pm EST on March 4, 2008

Private Loans

In response to Patrick Bott’s comments. It appears from his statement that he’s taking this article very personal, which makes me think why? Is there an avenue to the private loan sector he’s not telling us? Are we not in this for the present and future college students. At the present time son has loans totaling $148K and that’s just finishing his junior year. He still has his senior and graduate courses to take. I want to address any avenue we can to help these students receive an excellent education. We were going to look at Priviate Loans for additional funding but now we have reservations, and options when and if we pursue them. Looking at the fine print for these loans and making sure they are not being taken for. College students today will have a greater amount to repay for their education than any before let’s not have them drown in debt for the rest of there lives. One point that other parents found out with student lending is that Private Loans COUNT NOTE be consolidated with your Federal Loans, private loans were separate, now how will that help students. And why did the government change to fix rates on the loans to higher rates than before, how is that helping our students. If I can get a credit card with a 4.5% fixed interest rate why can’t student loans have that same rate? So, I ask who’s helping our presnt and future generation of students obtain an education.

Dolly Hall, at 4:15 pm EDT on March 11, 2008

I myself took out 3 private student loans 4 years ago. Two of the the loans were for 30k and one for 15k. They were deferred for 3 years while I was in school and I have had to defer them to their maximum of 1 more year for hardship. Originally totaling 75k , the balances are now 105k, just in 4 years. My husband lost his job before I completed school, and we had to file bankruptcy..of course we could not include student loans...I had a variable rate so now my loans are adding up at 15% each and may increase as the prime rate adjusts upward. My monthly payments are over 1k per month. If I die, I still owe..if I continue my education to get a higher paying job..there is no deferment for me. I am in a situation where I am paying more than a mortgage for loans. Why is it that I can include my home, all credit cards and lines of credit to be discharged in a bankruptcy, but not private student loans? They are not federal loans, they are private. If I enter public service employment, I can not have them forgiven or paid off (unlike the federal loans if I enter teaching/health field or law). I am in school now to get a JD (thankfully I received a full tuition scholarship)..but if I work as a public defender, I get no loan repayment benefits as I would with a federal student loan. Obviously I am upset that I could not include the private loans in a bankruptcy discharge. There seems to be no benefit to the private loans, and yes if you are an adult and have decent credit, they are VERY EASY to get online. They pretty much just have you fill out an online form,check your credit, sign electronically , and send you a 30k check. I had to do more through school for federal loans undoubtedly. I was under the impression that they were similar to Parent Plus loans, which offer some federal benefits..the biggest one being that if I die, they are canceled. If the student loan lenders want the luxury of being excluded from bankruptcy discharge like their federal counterparts, then they should offer more to their borrowers in terms of forbearance, in-school deferments, public service loan forgiveness, hardship deferment, and easy loan consolidation. If not, then let them be treated like every other debt...and if someone files bankruptcy to get rid of them with all their other debt...SO BE IT!

Jenny, at 2:50 pm EDT on July 2, 2008