How the student loan scam works

The Guardsman
by Becca Hoekstra
Normally, I’m a very forgiving and kind-hearted person. But I hope there is a special level in Hell for those in control of student debt.

The student loan industry was founded to provide average Americans with the ability to achieve a college education. It’s now a lucrative business. Albert Lord, CEO of Sallie Mae, the biggest name in student loans, has made over half a billion dollars. But really, he cares about getting you an education.

Student loans have next to no consumer protections. They are the only loans to be nondischargeable in bankruptcy. Debt collectors have the ability to garnish wages, Social Security and disability checks. Taxes can be seized, professional licenses suspended, and public employment terminated. This puts student loans on the same level as criminal debt, unpaid child support and delinquent taxes.

How is a doctor supposed to pay back their massive educational debt when you take away their ability to practice? How is garnishing the disability checks of a person unable to leave their house to work, making it harder for them to EAT or PAY RENT, not a gross violation of human decency?

Student loan companies WANT you to default. With the penalties, fees, collection charges and compounded interest from defaulted debt, we have students paying double or triple the original balance.

There are endless reports of loans being put into default without any warning. Employees of student loan companies are instructed to give callers the runaround, refuse to try and work out reasonable payment plans, and even threaten debtors and their families.

U.S. citizens annually borrow around $90 billion in order to attend college. The class of 2010 graduated with an average debt of more than $25,000. People owe much more in student debt than they do on credit cards.

Combine that with an 8.2% unemployment rate, and we have ourselves an economic disaster – one where young, bright students with new ideas won’t have the financial means to attempt any sort of entrepreneurship or risk-taking. They’ll be too preoccupied trying to pay back their loans to ever contribute to a failing economy.

The best way to avoid digging yourself too far into student debt would be, obviously, to avoid taking out student loans in the first place. Instead choose an affordable school and get some financial aid.
Sometimes you don’t have a choice. So, some quick advice – ALWAYS use federal (not private) loans first. They offer more flexible repayment plans, lower interest, and there are some circumstances in which those loans can be forgiven.

Learn about the impact of defaulting on loans before you obtain them. By the way, a loan cannot be put in default if you make ANY size payment at least every 269 days.

Know your rights under the Fair Debt Collection and Practices Act, which all collection agencies are legally bound by. They have no right to threaten you, mislead you, or abuse you. Support the Student Loan Forgiveness Act of 2012 by signing the internet petition.

Students are the victims of insatiable greed, and it needs to end.