The Student Loan ScamTHE GOVERNMENT WANTS YOU STUPID, JOBLESS AND DEAD. But only after you wear out your body SLAVING for them 50 yrs in low-paid jobs that educated rich kids cannot or would not DO.
A Friend wrote me today. "I truly believe that the Gov wants more us dead. First of all, GMO foods are flooding the marketplace yet when cows eat GMO grass they die poisoned. Second, every pharmaceutical for common maladies warns this pill or the other'can cause suicide, liver cancer,' just a string of horrible things worse than what they're supposedly fixing.. Then, on top of it, I get the feeling that we students with STUDENT DEBT are better off DEAD. JOHN GRISHAM wrote a fabulous NOVEL ABOUT THAT, The ROOSTER BAR. Did you know that everyone who ever got a STUDENT LOAN has to sign a LIFE INSURANCE policy in order to get the money? If the student dies, the GOV gets paid in full " Today in 2018, a bankrupt MOTHER stuck with kid's debt DID GET OFF, again by claiming to be bankrupt. LEGALLY. If your parents co-sign your debt, they CAN go bankrupt which was part of Grisham's plot.
So, intrigued, I wanted to google around on that theme and found this:https://www.theatlantic.com/magazine/archive/2014/09/the-law-school-scam/375069/
AND THIS:
A Review of a book "The Student Loan Scam: The Most Oppressive Debt
in U.S. History and How We Can Fight Back" by Alan Collinge(by Alan Michael Collinge Carolyn Betts and Catherine Austin Fittsm found at Solari.com)
The truth is that I never considered student loans to be an especially
interesting topic. College debt, I believed, was a necessary evil to be
repaid expeditiously and then forgotten even more quickly. However, what
I once thought of as an uninteresting issue has come to dominate my life.This highly informative book was written by a 1998 graduate of Cal Tech
with three degrees in aerospace engineering who, after a student loan
nightmare that took him from an original relatively modest $38,000
Sallie Mae loan to an obligation of $80,000 by 2002 and $103,000 by mid
2005. At that point he started the website www.studentloanjustice.org in
an effort to hook up with others in similar straits, share stories and
become politically active in restoring consumer protections for student
loans.
In The Student Loan Scam, we read blood-curdling personal stories from
Collinge’s website that should make any parent of a college-bound
student re-think any plans to saddle a loved-one with student loan
obligations under current law. In the event the typical graduate with
student loans does not get a $100,000 a year job right out of school and
remain gainfully employed at an increasing salary for the next decade or
more, student loan debts could result in financial ruin, loss of
professional credentials and security clearances and, in some cases,
suicide and debilitating depression.We find out that the current student loan system is nothing like the one
in place when the baby boomers were in college, when Sallie Mae was a
quasi-governmental entity with its activities limited by its federal
statutory charter. Those loans were made at favorable interest rates and
had interest that started accruing only after graduation.
Post-graduation, they were serviced in accordance with consumer-friendly
servicing standards.In 1972, the Student Loan Marketing Association (“Sallie Mae) was
formed, with a government charter, as a government sponsored entity
(commonly known as aGSE). Its purpose, under its federal charter, was to
enhance public access to higher education by serving as a secondary
market maker, and warehousing entity, for student loans made by private
lenders.Starting in 1996 with the adoption by Congress of the SLMA Privatization
Act, Sallie Mae re-organized under a holding company charter with a GSE
and non-GSE subsidiaries. The GSE activities were limited and terminated
on December 29, 2004. Although, Sallie Mae had been publically traded as
a GSE since 1983, subject to the same short-term pressures as any other
publicly-traded private company, particularly ones with large trading
and derivative operations, privatization released the company from
strategic responsibility for the best interests of the students and
public good that was implicit in the GSE status. It also started making
direct private student loans and acquiring loan servicing companies.Over the years, the original student loan product gradually morphed into
something worse than the worst kind of credit card debt, except that it
was even worse than that as the result of the following developments:(1) Starting in 1978, government-issued or -guaranteed loans and some
private student loans became exempt from bankruptcy protection. Later
legislation gradually whittled away the types of educational loans that
could be discharged in bankruptcy and lengthened the minimum age of
student loan that could be discharged. Ultimately, the death knoll for
student loan dischargeability occurred in 1998, when virtually all
education loans, both federal and private, became exempt from discharge.
Incredibly, under the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005, Congress expanded the types of loans that are
exempt from bankruptcy protection to include not only what we generally
think of as student loans, but also virtually any loans a family might
use for educational purpose, and derive tax benefits from, under the
Internal Revenue Code, termedqualified education loans.(2) Truth in Lending Act (15 USC §1601), state usury laws (now
overridden by federal legislation), statutes of limitations and other
standard borrower protections were removed from student loans during the
1990s under various the Higher Education Act amendments and other
legislation, and default penalties of up to 25% became legal for student
loans. Effective in early 2011,private education loans became subject to
somewhat-abbreviated Truth in Lending Act disclosure requirements, but
borrowers who did not receive such disclosures before the regulations
went into effect are stuck with the loans they took out.(3) Beginning at least as early as 1996, the Department of Education
entered into contracts with private collection agencies for the
collection of federal student loans. Current Department of Education
collection contracts provide for collection incentives of 25% of the
amount collected on defaulted loans. Although these agencies are subject
to the provisions of the Fair Debt Collection Practices Act, sometimes
such agencies misrepresent the borrowers’ federally-protected rights and
steer delinquent borrowers into collection options that are more
profitable to collectors, at the expense of borrowers.(4) Delinquent student loan payments for federally guaranteed or issued
education loans in default (defined for most loans as failure to make
payments for nine months) can be collected by the government (Department
of Education) through the following garnishments and offsets, without
any court order: a. from a borrower’s or co-signer’s tax refund (which
offset is appealable only to the Department of Education), b. by
garnishment of up to 15% of wages, c. by offset of social security and
certain other federal benefits.(5) Some 19 states enacted statutes that permit licensing authorities to
suspend the licenses of defaulted student loan borrowers, making it even
more difficult for borrowers, who often have had employment problems, to
earn their way out of debt in their chosen professions (for which they
usually had taken out the student loans in the first place!).
Reportedly, in some states, public employment may be terminated as the
result of student loan delinquencies.(6) A given student’s federal education loans can be consolidated
through refinancing only once (unless additional education loans are
taken out, e.g.,for graduate school expenses), so there is no way to
lower the interest rate through refinancing in the competitive markets.Making matters worse, Sallie Mae was allowed to acquire some of the
largest student loan collection businesses in the country, making a
student loan more profitable in default than when it was paid off
according to its terms. As explained by Collinge:By 1998, there was a perverse financial incentive for the student loan
servicing companies to do a horrible job of loan administration. The
more ineffective the companies’ customer service was, the more likely it
became that students would default and thus, the more money the student
loan companies would ultimately make.By the end of this distressing and enraging exposé, we hope, at least,
that Michael Collinge made enough profit from the book to get Sallie Mae
and the other student loan industry thieves out of his life forever.
Unfortunately, even after his and others’ appearances on 60 Minutes and
attention to the rapidly deepening student loan scam by the likes of
Ralph Nader, Michael Moore, The Washington Post, New York Times, NPR and
Fox TV, investigations by New York Attorney General and the US Senate
Committee on Health, Education, Welfare, Labor and Pensions and a series
of unsuccessful legislative proposals (referred to as theStudent Loan
Borrower Bill of Rights) to restore standard protections to student loan
borrowers, the public outcry has been insufficient to rescue the
thousands of victims who are living lives of quiet desperation as
virtual indentured servants to the student loan industry.Why is that? It would appear that it is the result of:
• lobbying activities by lenders, insurers and executives of Sallie Mae,
whose personal incomes and corporate profits have increased by leaps and
bounds to unconscionable levels since the pre-privatization good old days
when student loans actually served some educational purpose;• Congressional representatives willing to sell their constituents down
the river in exchange for campaign contributions by the student loan
lobby;• personal aggrandizement and institutional kickbacks received by
educators at even the most prestigious of public and private
institutions of higher education (e.g., Georgetown, Johns Hopkins,
Rutgers, Wake Forest, University of Washington, University of Nebraska,
University of Texas and Florida State); and• graft on the part of high-level Department of Education employees who
have been unwisely entrusted with the job of supporting educational
opportunities of our most precious of assets, our children.This is an all-too-common story of foxes guarding the henhouse at the
Department of Education, with political appointees in high-level
decision-making, oversight and enforcement positions having incurable
conflicts of interest as they pass through the government/private
financial industry revolving door. It is the tale of media complicity in
the perpetuation of urban legends about thousands of newly-minted
doctors who, we are told, promptly upon acquiring their much-coveted
medical degrees, skipped out on their moral obligations to repay their
student loans by declaring bankruptcy. It is a repetition of the
securitization evils wrought by Wall Street whiz kids that brought about
the housing crisis, with passive investors owning financial assets that
have spun out of control. It is a warning signal about how a government
program seeking to expand the unquestionable benefits brought about by
the most economically productive and job-stimulating program of all time
in the U.S. (i.e. the GI Bill) can become the instrument of evil.Given what we have learned from this book, topics that deserve to be
examined more deeply include:• some of the history of the now-corrupt student loan industry, from its
roots in a government-sponsored entity established for noble purposes;• the little-understood legal traps that make participation in the
student loan program in its current form not only risky but outright
foolhardy for any but the most financially sophisticated of borrowers
(who probably don’t need this kind of financing anyway, because they
have made millions outsmarting the rest of the market);• specific products that fall under the student loan/assistance umbrella
(e.g., Pell grants, Stafford loans, Perkins loans, Direct Loan Program
loans, Federal Family Education Loan Program (“FFELP) loans, Parent
Loans for Undergraduate Students (“PLUS) and Health Education Assistance
Loans (“HEAL) and what to expect if you become subject to the terms of
these financing vehicles;• the market manipulation, crisis-level educational pricing escalation,
proliferation of for-profit colleges that prey on the poor and
disadvantaged and other adverse results that occur when government
guaranties, insider deals and corporate welfare laws come into conflict
with free market forces; and• the backgrounds, personal networks and business interests of industry
players, the extent of their unconscionable profiteering at the expense
of our nation’s youth, their conflicts of interest and some of the other
business ventures they are involved in.This book inspired us to look more closely at a subject we had taken for
granted. We hope that you will vote with your money and feet, protect
your loved ones from decision-making based on inaccurate information
about the trade-offs in the educational and job markets and have
compassion and generosity towards the many people who already have
fallen into the student loan and servicing trap.
^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^^~
READ UP "HUGE JOBLESSNESS for GRADS IMPELS THEM TO ACTIVISM" at OCCUPY on Wall St was at ALTERNET. Got taken down.
LESS than 5% of COLLEGE GRADS ARE JOBLESS but what kind of JOBS?
Higher Education Act Wikipedia entry:
Chart SLM Corporation of common stock prices: solari.com/blog/?p=11649
Purchase book on Amazon:
www.amazon.com/Student-Loan-Scam-Oppressive-History/dp/0807042293Deane Loonin, Alys Cohen, National Consumer Law Center,Paying the Price:
The High Cost of Private Student Loans and the Dangers for Student
Borrowers (March 2008):www.studentloanborrowerassistance.org/blogs/wp-content/www.studentloanborrowerassistance.org/uploads/File/Report_PrivateLoans.pdf
Example of a private student loan promissory note (courtesy of National
Consumer Loan Center website):www.studentloanborrowerassistance.org/blogs/wp-content/www.studentloanborrowerassistance.org/uploads/File/Doc4_KeybankPromNote.pdf
Collection agencies under contract to the Department of Education for
federal education loan collection(courtesy of the National Consumer Law
Center website): www2.ed.gov/offices/OSFAP/DCS/collection.agencies.htmlRECENT DEVELOPMENTS POST-DATING PUBLISHING ON BOOK:
Institutions and Lender Requirements Relating to Education Loans, Student
Assistance General Provisions, Federal Perkins Loan Program, Federal
Family Education Loan Program, and William D. Ford Federal Direct Loan Program;
Final Rule (published in Federal Register October 28, 2009, effective July 1, 2010):www.nacua.org/documents/HEOA_DOEProposedRegsRePreferredLenderArrangements_110309.pdfProposed legislation, introduced by U.S. Senators Dick Durbin (D-IL),
Sheldon Whitehouse (D-RI) and Al Franken (D-MN) today joined U.S.
Representatives Steve Cohen (D-TN), Danny Davis (D-IL), George Miller
(D-CA) and John Conyers (D-MI). that would restore bankruptcy protections for
private education loans:durbin.senate.gov/public/index.cfm/pressreleases?ID=f7c84e6c-f2ac-4ee5-b466-f461b0f0de8a
Written Testimony of Deanne Loonin, Director of National Consumer Law
Center’s Student Loan Borrower Assistance Project in Response to the May 5, 2011
U.S.Department of Education Notice of Establishment of Negotiated Rulemaking
Committees and Notice of Public Hearings
submitted: May 20, 2011:www.studentloanborrowerassistance.org/blogs/wp-content/www.studentloanborrowerassistance.org/uploads/2007/03/neg-rulemaking-may2011.pdf
May 20, 2011 Federal Register notice of proposed rulemaking to form
negotiated rulemaking committees to propose regulations under the Higher
Education Act of 1965:
www.ifap.ed.gov/fregisters/FR050511LoanProgramRulemaking.html
by Catherine Austin Fitts who served as a member of the board of directors of
Sallie Mae before its privatization from November 1991 to March 1994.
ii 2008, Boston:Beacon Press.
iii Sallie Mae’s original legal name was Student Loan Marketing
Association.
Now, the name of the public holding company is SLM Corporation. According
to MoneyZine.com [Link: http://www.money-zine.com/Financial-Planning/College-Loan/Sallie-Mae-Student-Loan/SLM Corporation’s subsidiary companies are Academic Management Services
Corp., Arrow Financial Services, First Trust Financial, General Revenue
Corporation, GRP Financial Services, Nellie Mae, Noel-Levitz [Link:
http://www.noellevitz.com], Pioneer Credit Recovery Inc., Sallie Mae Bank,
Sallie Mae Home Loans, Sallie Mae Inc., SLM Financial Corporation,
Southwest Student Services Corporation, Student Assistance Corporation, Student Loan
Finance Association, Student Loan Funding and Upromise.
iv See, Michael J. Lee,Privatizing a Government Sponsored Enterprise:
Lessons from the Sallie Mae Experience available at
fic.wharton.upenn.edu/fic/papers/05/0534.pdf. Note that the conclusions of
this paper, written by a consultant involved in the Sallie Mae
privatization who, naturally, reports history from the client’s perspective, do not
reflect more recent market developments and the authors of this Solari
Report do not necessarily agree with his views.
v Sallie Mae now also issues credit cards.
vi Thedischarge of a debt in bankruptcy wipes out the borrower’s
obligation and, thus, exemption of a debt (like a student loan) from
discharge means that the borrower will continue to be obligated even if he
or she is adjudiated a bankrupt.
vii An undue hardship exception exists, but undue hardship is almost
impossible to establish in the absence of a physical disability. The
exemption from bankruptcy protection is found in the US Code at 11 USC
523(a)(8).Under Internal Revenue Code §221(d)(1), a qualified education loan is
defined as:any indebtedness incurred by the taxpayer solely to pay qualified higher
education expenses -(A) which are incurred on behalf of the taxpayer, the taxpayer’s spouse,
or any dependent of the taxpayer as of the time the indebtedness was
incurred,(B) which are paid or incurred within a reasonable period of time before
or after the indebtedness is incurred, and(C) which are attributable to education furnished during a period during
which the recipient was an eligible student.Such term includes indebtedness used to refinance indebtedness which
qualifies as a qualified education loan. The term qualified education
loan shall not include any indebtedness owed to a person who is related …. to
the taxpayer or to any person by reason of a loan under any qualified employer
plan …. or under any contract [purchased under a qualified employer
plan].ix Defined asA loan that is not made, insured, or guaranteed under the
title IV of the HEA of 1965 and is extended expressly, in whole or in
part, for postsecondary educational expenses to a consumer regardless of whether
the loan is provided through the educational institution that the student
attends. Private education loans do not include education loans made,
insured, or guaranteed by the federal government, which are subject to
disclosure rules issued by the Department of Education.x See the Federal Reserve release at
www.federalreserve.gov/newsevents/press/bcreg/20090730a.htm and a summary
by
the Association of Corporate Counsel atwww.lexology.com/library/detail.aspx?g=a6840a23-35e2-468e-a8b8-774533354bff
xi See, Don Peterson,U.S. Department of Education Is Not a Debt
Collector, .
xii Click here for federal benefits excepted from such collection.xiii See fms.treas.gov/debt/dmexmpt.pdf for a list compiled by the
Consumer Law Center list of states that have enacted some type of such legislation.
Some of the professions whose licenses may be suspended include attorneys,
health care professionals, teachers, insurance professionals, state
officers, and commercial fishermen.
xiv Page 38
xv Note that effective July 1, 2010 the Health Care and Education
Reconciliation Act of 2010 eliminated new originations of privately
issued, federally guaranteed student loans under the Federal Financial Education
Loan Program (FFELP); however, the terms of existing FFELP loans are not
materially affected by that legislation. This legislation also reduced the
percentage of monthly discretionary income that can be collected on
student loans from 15% to 10% for qualified borrowers and reduces the period of
time after which timely-paid student loans may be forgiven (from 25 years to 20
years), but these provisions apply only for new borrowers starting in
2014.xvi It is important to note that before July 1, 2010, Stafford, PLUS, and
Consolidation Loans were also made by private lenders under the Federal
Family Education Loan (FFELSM) Program. Effective July 1, 2010, no further
loans will be made under the FFEL Program. All new Stafford, PLUS, and
Consolidation Loans will come directly from the U.S. Department of
Education under the Direct Loan Program. (Source: Department of Education website. .
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Again don't miss the delight of Grisham novel: http://www.masterjules.net/roosterbar.html
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