Congress Proposes Relief for Student Loan Borrowers

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Ninety percent of graduating students are regretting ever going to college, instead of being proud of their set and accomplished goals. American private organizations for be ashamed. Students are more stressed and worried about how to place food on their table that they can not even look toward their future anymore!

April of PA 10:10PM May 01, 2012

The current lending system invites profiteering on behalf of the banks. And, because there are no consumer protections, a predatory lending system erupted. The default rate for private loans is so high because people simply can't afford to pay the inflated amount of the loan. Virtually every private loan is double what it originally was. If you miss three payments, due to illness, or unemployment, a private student loan will default automatically. If the loan defaults, it gains another 25%. We need consumer protections to be returned to the students who borrowed these predatory loans. It is also true that student debtors with private loans aren't 'feeding the machine'. They are not buying houses, cars, or contributing to a 401K, etc. Many student debtors are in their 50’s or 60’s.
Sallie Mae had private loans at an interest rate of 12% plus libor. Now, they just lowered it to 10% plus libor. The largest private student lender, Sallie Mae, relaxed their underwriting requirements to provide loans to students (against the SEC rules)- this is exactly what happened in the mortgage crisis. These PRIVATE LOANS HAVE NOW BALLOONED TO TWICE OR THREE TIMES THEIR ORIGINAL VALUE. Sallie Mae also pushed all delinquent private loans into forbearance to hide the delinquencies. This company is corrupt.
This is crippling the economy even further. And, Al Lord, CEO of Sallie Mae- is increasing his wealth from predatory loans.
There are several bills in congress that would correct this problem. They are HR 2028, S. 1102, and HR 4170. It is most crucial that HR 2028 passes.

L.Cav of NY 5:15PM March 26, 2012

Clinton put the student loan program on the books. Bush had nothing to do with it. What about all the kids that did get the loans, worked hard to repay them, and now we let everyone else off the hook. Big mistake. Provide some relief yes, but to wipe them out is simply not right, or fair to everyone that repaid their loans. Start looking at what is going on in Europe. Sooner or later, we all have to pay up.

Rick of TX 6:21PM March 24, 2012

Clinton put the student loan program on the books. Bush had nothing to do with it. What about all the kids that did get the loans, worked hard to repay them, and now we let everyone else off the hook. Big mistake. Provide some relief yes, but to wipe them out is simply not right, or fair to everyone that repaid their loans. Start looking at what is going on in Europe. Sooner or later, we all have to pay up.

Rick of TX 12:57AM March 23, 2012

Does anyone know whether this bill would also include the "private" student loans which are made from "quasi-governmental agencies" and "non-profit" student loan lenders.
The 2005 BAPCPA amendment to include private student loans as non-dischargeable if the loan meets the IRS test of "qualified education loan", would appear to apply only to totally private student loans.
But there's those "private" student loans that are in the grey area -- those issued from the likes of AES (American Education Services), an unincorporated division/dba of the Pennsylvania Higher Education Assistance Agency (PHEAA), which purports to be a government agency and also a non-profit division.
This is a most murky area and surprisingly little caselaw out there to interpret, but if Congress is going to pass this or similar legislation, they need to address this topic of which student loans are indeed "private" and can be dischargeable in bankruptcy.

Roger of IL 11:32AM March 07, 2012

This would really help me. I pay around $1000 a month in federal and private student loan debt a month. I work three jobs trying to keep my house butmy body is breaking down. I'm not sure how much longer I can keeptis up!!! I wanted to have the American dream... Higher education and a house...

Denise of GA 12:16AM March 06, 2012

First of all, if only certain loans fall into loan forgiveness or IBR repayment plans, hat needs o change giving ALL the same playing field. Secondly, if ALL students are aware of the pitfalls and the possibilty of ending up in the grips of Sallie Mae, then I should think that they would have selected any loan holder but Sallie Mae. This should not be a learn as you go. This is not a question of 'put your hand in the fire and get burned', but more a question of how students should be aware that their lives will be destroyed financially by LOAN SHARKS like SALLIE MAE. There are no guarantees that a student will find a suitable job, not here anyway since the job market has changed drastically over the past 20 years, and the GOVERNMENT who works with the likes of SALLIE MAE should step in and implement laws that cap loans, reduce interest rates and allow only so much interest to accrue. And last, thanks to that idiot BUSH who screwed up the country by deregulating banks and taking the rights from students. Thats what he'll be remembered for other that his inability to lead the puppet a--.

Robert Lynch of NY 10:14PM March 05, 2012

HELP ME PLEASE GOD HELP ME!
Never before I have ever been in such debt in my life! And it's all Sallie-Mae's fault!
My Deficit went from $18,500.00 to now $40,406.25!! How the HELL can I pay this back with a skill nobody uses anymore because of changing trends?? I shall and will never borrow anything again.

Worst Situation of MI 12:27PM March 05, 2012

This is a good article thanks for giving concise up to date information. In 2003 I took out a $13,000. private student loan. This same loan is now $20,000. I used it for a teacher certification college and I didn't even know it was a private loan until recently. I have lots of debt in Federal Loans that go back to 1986. My original debt on these is quadrupled from the original to about $60,000. now. For over fifteen years I worked in social services and then moved on to teaching in low income schools. I could have received a reprieve on student loan debt for working those jobs if I had been on top of it. Too late now. I have made enough $50.00 payments to get out of default on my federal loan. Last year they took my tax return including Child Tax Credit payment. It totaled about four thousand dollars. I make $11,675. a year as a substitute teacher. I spent allot of time on the phone trying to get that money back and they eventually agreed to return half. Finally, I contacted my state senator, one letter from him and they agreed to return the rest although it has been over the time they said it would take and I won't be surprised if I have to fight for it again. I think it should be illegal to take wages or tax returns from anyone below poverty level. It may be illegal. If I could afford a lawyer I might have a suit. Now I am battling the private loan which is being handled by a collection agency. He is refusing to tell me where the payment is being used... collection fees, lawyers for sure not towards the balance or principle. He has also taken payment from my checking account when I asked him not to. The bank says that they will be able to take payments even if I close the account. The bank (citizens bank) will pay them and forward the bill to me. If not paid they will add fees and use whatever means to collect. It is true they can do this. I made the mistake of giving the student loan collection agency my checking account number now for life they can continue to get money without my permission. Incredible.

sandra of VT 2:46PM March 04, 2012

I went to an out-of – state school. I am now over $120,000 dollars in private student loan debt. I am sure seeing that number is a shock to you, how can anyone accumulate so much debt for an education? I wonder the same thing each month when I am hit with the $850.00 bill every month. This accumulation of debt came quite quickly actually, they tripled tuition rates for out-of-state students at my school from my first year to my last year of attendance. I should have switched schools or dropped out but I was 20 years old and had never had any debts before so I really didn’t know the implications of student loans.
I should have never gone to college, I would be way better off financially. I went to college because it was supposed to help me get a better career and make more money, but it has prevented me from being able to start a life of my own. 70% of my paycheck every month goes to my student loan payment. I have to live with my parents because I can’t afford to move out and live on my own. I am 25, I won’t pay this loan off for 15 years. Am I supposed to live with my parents for the next 14 years?
I had never had a credit card and really didn’t understand debt. Everyone told me student loans were good debt that I can do income based payments, that the companies will work with me and that student loans were just part of going to college. I have found none of these statements to be true. Citibank has not worked with me at all, they don’t offer income based payments, they won’t lower my interest rate in fact they just keeps going up along with my monthly payments, which I already can’t afford. They won’t extend they loan period, they no longer consolidate loans. I have looked into every option to get some relief from my loans and I have no options.
I want to pay back my loans I think it will be a real accomplishment to say that I paid for my college by myself. They should make it easier for us to do this. When I received my first bill, I called my student loan provider and explained that I could not make this high payment and still be able to live comfortably with the amount I am making at my current job and the only option they gave me was to defer payments for 6 months. This could only be done once during loan repayment and during this time interest would still accumulate. I asked her how that would help me when in 6 months the payments would be even higher than they are now with added interest and I can’t even make the payments now? She said there is nothing she can do.
They make it almost impossible for anyone to keep up with payments. The interest rate on my loans are 10.4% they started at 8.75% but private student loans are not on a fixed interest rate and fluctuate with the market’s performance and clearly the market isn’t doing well because my interest keeps going up and so do my monthly payments. This bill would give me some relief I pray that it goes through!

Bridget Barrow of CO 7:15AM March 03, 2012