Skip to main content

Senators Chastise Govt. For Making Money Off Struggling Student Loan Borrowers, Not Offering Enough Relief

By

For several years now the government has offered federal student loan forgiveness programs aimed at helping borrowers to avoid defaulting on their debts. While recent reports have shown that the popularity of the programs has exceeded expectations, a group of six senators say the Department of Education could do more given the billions of dollars in payments it receives from federal loans each year.

Six senators — Sen. Elizabeth Warren (MA), Sen. Sherrod Brown (OH), Sen. Jeff Merkley (OR), Sen. Richard Blumenthal (CT), Sen. Tammy Baldwin (WI), and Sen. Edward Markey (MA) — sent a letter [PDF] to Secretary of Education Arne Duncan scolding the Department for turning federal student loans into a source of revenue while students struggle to make ends meet.


The Department is “squeezing students who are struggling to get an education” in order to maximize profits, the senators say, pointing to the Congressional Budget Office’s most recent estimates indicating that the federal government is expected to produce $110 billion in profits from its student loans over the next decade.


“Congress did not create federal student loans to generate revenue for the federal government – to the contrary, it gave the Department of Education a host of tools to ensure that federal student loan borrowers are treated fairly and with dignity,” reads the letter.


Instead of using those tools and following Congress’ directives, the senators say the Department has continued to let student loan borrowers be buried in debt.


As an example, the letter cites the Department’s failure to give borrowers a clear idea of how to exercise an option under the Higher Education Act that allows for the cancellation of student loan borrowers’ debts the college acts in a way that hurt the quality of their education or their finances.


“Similarly, the Department of Education has broad authority to compromise, modify, discharge, and cancel student debts,” the letter states. “Instead, the Department continues to gouge borrowers who struggle to meet their payments, subjecting them to debt collection, wage and benefit withholding, and other harsh penalties even when it is clear that the debtors can not pay.”


The senators also pointedly accuse the Department of failing to protect students from collapsing for-profit college chain Corinthian Colleges Inc. last year.


“The Higher Education Act also requires the Department of Education to offer student loan discharges to students whose colleges close their doors,” the letter states. “Instead, last year the Department of Education undertook an elaborate plan to use federal funds to bail out …Corinthian Colleges, Inc. and deprive students of the ability to discharge their federal student loans.”


The senators say they aren’t asking the Department to stop making money off federal loans, they are asking that more steps be taken to ensure “vulnerable young people struggling with the burden of federal student debt have meaningful opportunity to build a sting future for themselves and their families.”


Senators to Education Department: Stop Profiting Off Student Loans and Fulfill Congressional Directives to Help Struggling Borrowers [Sen. Elizabeth Warren]




by Ashlee Kieler via Consumerist

Comments

Post a Comment

Popular posts from this blog

Chrysler Deletes Its Dating Apps, Decides To Remain Single For Now

By
They say you can’t have a healthy relationship until you’re happy with yourself. That appears to be the new mantra for Fiat Chrysler: After several attempts to woo General Motors and more recently Volkswagen , the carmaker’s top executive says he plans to ditch his lovelorn ways to concentrate on his company’s bottom line.  Bloomberg reports that CEO Sergio Marchionne has turned his focus to eliminating FCA’s debt rather than eliminating its single status. Marchionne has set a goal of erasing FCA’s debt by 2019, the same year he’s set to retire. To do that, he says the company needs to do a little work on itself. “We need to be very careful that we don’t start unrealistic dreams about consolidation as we are on our way to achieve historically important results and a debt-free position,” Marchionne told investors at the carmaker’s annual meeting in Amsterdam, as reported by Bloomberg. “We are not at a point of time to discuss any alliance.” Yes, you heard that right: The man w...
Post a Comment
Read more

Study Claims 43% Of “Wild” Salmon In Stores & Restaurants Isn’t Wild At All

By
That wild salmon entrée calling to you from the menu at dinner might not be all it’s advertised. In fact a new study released Wednesday found evidence of mislabeling in nearly half of all salmon sold in restaurants and grocery stores.  The study [ PDF ] from international environmental advocacy group, Oceana, analyzed 82 salmon samples from restaurants and grocery stores, finding that 43% of the products were mislabeled. DNA testing confirmed that 69% of the mislabeled product consisted of farmed Atlantic salmon being sold as wild-caught product. According to the report, consumers satisfying their salmon craving in restaurants are misled about 67% of the time, while those who buy their seafood in a grocery store are misled 20% of the time. “Americans might love salmon, but as our study reveals, they may be falling victim to a bait and switch,” Beth Lowell, senior campaign director at Oceana, said . “When consumers opt for wild-caught U.S. salmon, they don’t expect to get a far...
Post a Comment
Read more

Introduction to Biology (IX Biology Notes Chapter 01)

By
Science: Our universe operates under certain principles. For understanding of these principles, the experiments are done and observations are made; on the basis of which logical conclusions are drawn. Such a study is called "Science". In brief science is the knowledge based on experiments and observations. Biology: The Scientific study of living organisms is called Biology. The word biology is derived from two Greek words "bios" meaning life and "logos" meaning thought, discourse, reasoning or study. It means that all aspects of life and every type of living organism are discussed in biology. Branches of Biology: Biology is divided into following branches: Morphology The study of form and structure of living organisms is called morphology. It can be further divided into following two parts: 1. The study of external parts of living organism is called external morphology. 2. The study of internal parts of living organism is calle...
Post a Comment
Read more