The Subprime Student Loan Racket

[BREMPRO]

With help from Washington, the for-profit college industry is loading up millions of low-income students with debt they'll never pay off.

http://www.washingtonmonthly.com/features/2009/0911.burd.html


The other sub-prime loan crisis that needs to be addressed.

[KansDem]

1. "Leveque says. 'I made one mistake, and I will be paying for it for the rest of my life.'”

The banksters and Con Street made numerous "mistakes"...and they'll be walking away with billions.

The thing about this story is, neo-cons will claim the "colleges" and their recruiters/loan processors were the "victims" here.

[barbtries]

2. thank you for posting

i'm sending this on to my son who's getting ready to apply to law school, and will keep it in mind as my high school senior and i research the best college for him.

this is what scares me: endless debt for my children. it really interferes with living a full life imo.

[handmade34]

3. excellent asessment

"...interfers with living a full life..." all of my kids still have student loan debt and I will never be able to pay mine (suppose my SS will be garnished)

[bergie321]

4. This situation is absolutely rediculous

When I was 23 I decided I wanted to go back to school. I decided to go to a private "tech" school. They advertised that you could graduate in 2 years. They failed to mention that you had to attend 40 hours a week at odd hours that changed every month(some courses start at 6 am some courses end at 2 am) making any part time work all but impossible. Not to worry though, their "financial aid" office in conjunction with their "preferred lender" would help me out. Since my family had some credit problems in the past and I had almost no credit history, I was able to get private student loans at 14-16% interest that accrued while I was going to school.

I graduated with $105k in student loan debt and am currently paying over $700 per month and will do so for the next 30 years. Luckily, I was able to consolidate my loans at a much lower rate than when I was in school and I was able to find a decent job(despite the school's assurances, a degree from them doesn't really carry much weight in the real world).

I would love to see an end to these diploma mill schools. I would love to see a cap of 2% interest on all student loan debt considering the fact that the lenders have very little risk since the Republicans gave them huge protections in the bankruptcy "reform" bill. I would love to see some help for people like me who have huge burdens that will stay with us for the rest of our working lives. I know I am not alone in this situation. The school I graduated from graduates around 100 people a month with similar debt loads.

[handmade34]

5. good article

this passage is telling, "...executives expected a staggering 70 percent...to end in default. Investigators concluded that Sallie Mae viewed these loans as a “marketing expense”—a token sum to be paid in exchange for the chance to gorge on federal funds"

"A plan to make college affordable"
http://www.robertreich.org/reich/20090522.asp

"Student Loans are the New Indentured Servitude"
http://business.theatlantic.com/2009/10/student_loans_and_payback_time.php

"The beast that swallows its young"
http://www.youtube.com/watch?v=xtIM_TEQxwA

[BREMPRO]

6. thanks for the links

I like Reich's idea- he usually had very good ones.