Victims of Predatory Trade Schools Student Loan Farming and Student Loan Industry

Parents in Student Loan Default, More victims.

2012-02-07T12:42:00.000-08:00

"I took out a Direct PLUS loan for my daughter’s education, based on my good credit. Now she is graduating with no work prospects. I can’t afford to pay these loans. It was intended that she would be able to, and that I wouldn't have to sell my house to cover the loans. What do I do now? "

The number of Parents who did not attend school, find themselves in default for student loans is growing. People like Jeff above, are finding out that trying to help their child get ahead, is now going to cost them mega bucks in an economy that is hurting both old and young people.

Folks getting ready to retire, find themselves being on the hook as either a signer or co-signer for a student loan which they themselves never used nor benefited from.

So not only are we seeing Fresh graduating students going into default, (due to lack of jobs), but now their parents are also feeling the wrath of the student loan scam.

When do we get our bail out?

Sally Mae at it again

2012-01-27T18:53:00.000-08:00

WOW. The disdain of student loans is at it again, charging students a 50 or so dollar fee for ling for deferment. If the student cannot afford to pay it, they get put into default.

Once again, students are being put into default simply because they cannot complete the paperwork, or the paperwork is NOT being processed by the loan service company on time.

Why should these people have to pay a fee to get a deferment that will cost them more in the long run? Because of this new episode in the dismal performance of Sally Mae, a number of people are challenging the fee.

according to an article on the Huffington Post,Over 50,000 college grads across the country have joined a campaign on change.org urging student loan giant Sallie Mae to stop charging unemployed borrowers a $50 fee for forbearance on their loans, according to PRWeb.

The campaign was launched by Stef Gray, a recent college graduate who took out private loans through the company and was hit with the $50 fee when she requested a delay on the repayment of her loan due to unemployment. After graduating, Gray found herself without a fullt-time job and with no co-signers for her loan, since her parents had passed away. As a result she was forced to go into forbearance, or suspend the repayment of her loans.

Gray told PRWeb, “For Sallie Mae to tack on these extra fees just to pad their profits is to kick people like me when we’re already down. Charging a forbearance fee is wrong, and more than 50,000 people who agree are standing with me.”

The campaign is gaining strength as millions of student loan borrowers could be seeing the interest rates on their loans rise significantly unless Congress extends a rate reduction passed in 2007 and set to expire this July. While the current interest rate, based on the 2007 reduction, is 3.4 percent, the rate could double to 6.8 percent, adding more fuel to the fire of protests against student loans.

As of Friday afternoon, nearly 70,000 people had signed the petition.

AND because of the fact more and more people are going into default, I think its time for another blog dedicated to living in default, and how to handle it.. what do you folks think? DO we need such a blog?

Defaulters are starting to speak out - in large numbers.

2012-01-16T07:33:00.000-08:00

Student Loans and Bankruptcy - The Debate Continues, on Forbs Website. A number of comments are being posted because of the debate to restore bankruptcy protections on all student loans and because someone there bashed those of us in default.

One such comment is below:
" Tell ya what. If they return bankruptcy protections to me (I had them at one time for my loans, which are pre 1990), and allow me to discharge my loans, I will have the paperwork done in 25 min's. I have suffered over 30 years of being in default with no way to be able to obtain control over the loans I took out to attend what is now known as a predatory trade school of the 1980's. During this time I was forced into bankruptcy 2 times. Now I have nothing. In fact the stress of it, combined with our government selling out the manufacturing sector, nearly did me in, and I had to undergo open heart surgery to keep me alive. Bankruptcy would at least give me a chance to have some kind of retirement in 15 years or so. It won't be much, due to the fact that I was unable to earn top dollar being in default, but at least I wouldn't be on welfare. If not, I will continue as I am now, a disabled homeless veteran who just doesn't have what it takes anymore to try to get his loans under control. "

Well, this and other websites where people in default are being bashed and/or called deadbeats and what not, are starting to see a lot of postings from the folks in default.

Remember, According to the US Department of Education, out of the more than 3.6 million borrowers who entered repayment during fiscal year 2009, more than 320,000 defaulted on their loans. That's 1/3rd of a million people for ONE YEAR ALONE. If we presume that 250,000 default per year, since 1980 that means that 7,750,000 people are now in default.

That is a HECK of a lot of people, and the numbers are GROWING with this dismal economy. Will we get relief? I think so, and probably within the next 2 years. People are just fed up with government bailing out wall street, the big 3 auto makers and then helping the banksters steal everyone's homes. Now the students want some kind of relief and they are very vocal demanding it.

So when someone bashes those who are in default, people are finally starting to respond, because the effects of being in default are becoming clear.

So if you ever hear someone bash a defaulter, give 'em hell.

Student Loan Defaulters, Scourage of Society?!

2012-01-10T04:51:00.000-08:00

Vince Crew Writes that student loan defaulters are the scourage of society.
http://www.thestreet.com/story/11370091/1/student-loan-defaulter-scourge-of-society.html#addComments

He claims we WANT to be in default and that we are just trying to get something for free, and that its part of the entitlement mentality. Well here are some of the comments left by just a few visitors to this idiots rant.

Comment by Mac Wildstar:
Well, while this sucker (the writer of the article) feels guilty about not paying their loans, I do not. I was CHEATED by the trade school I went to in 1987. Congress knew this, and yet still took away my bankruptcy protections, which I had at the time. I am willing to pay the principal, but not the endless interest and penalties, for being cheated.

Congress knew via the hearings it held from 1990 to 1992, which resulted in the first reforms being imposed on the industry. Senator Ted Kennedy himself is quoted saying that "he was worried about the students who were given worthless educations and left with bills they could not pay". Yet congress did nothing.

No, Mr.Writer of this article, This is not about us refusing to pay our bills, it is about us refusing to be cheated by them AND the government. It is about us demanding equal consumer protections, the same as we would get if we bought a lemon car, or a bad bank loan or any other kind of thing.

We have suffered a LIFETIME of this crap. Now if government can bail out wallstreet and the big 3, they can help us too. Don't forget, some of these so called deadbeat defaulters are people who are Veterans, people who work every day but barly make it, and people who would love to get these loans paid off, if they could. But it is impossible when congress takes away your rights, which is what they have done.

Comment by OPUSTHEDOG
How I love these outraged, "better than thou" moralists claiming the high ground on the basis of "you made a contract, now honor it." Or, "you gave your word, to renege now is unacceptable." Tell me Vince, how is this any different than multi-billion dollar AMR filing bankruptcy to "break their contracts" (their words). They gave their word to their workers, their contractors, their vendors, and their customers. Or just about every other airline doing the same? GM and Chrysler? They gave their word, too. We all know how that worked out. How is that even remotely "acceptable."

I also find it interesting that various columnist in the past have written pieces extolling the virtues of companies walking away from their contracts, most recently the AMR move. Yet these same publications give over space to mindless writers like Vince to attack the individual for taking the same action. What doublespeak!

And they wonder how groups like OWS are formed.

Comment by Andrew:
Student loan defaulters are "Scourge[s] of society? That's rich, coming from a boomer. You conveniently ignore the fact that your generation paid significantly less for your educations, even adjusted for inflation. Not to mention the fact that your generation completely failed to for see peak oil and sold out America's manufacturing sector to the lowest bidder. Now I guess it's Gen Y that will pick up the tab, via SLABS sold to the Chinese. You're welcome, a**hole.

Ed note: I am Glad to see people finally speaking up and bashing those idiots who think we WANT to be in default, that we are refusing to pay our bills and that we just want a hand out.

Student Loan Reform > Lets get real about this.

2011-12-22T09:33:00.000-08:00

Ok folks. Enough of the pabulum puking from the politicians. It is time to get real and get dead serious about reforming the student loan fiasco in America.

Look at what is being talked about and what is not. They talk about how to PROVIDE the loans. Not one bit is being discussed about SERVICING the loans, or helping people in Default, and THAT is where the real reforms need to be, along with one other major reform.

First, the for profit trade schools approval to participate in Federal student loans has to be removed PERMANENTLY. We have 30 years of evidence that this part of the system has FAILED. It is a broken horse. Time to get rid of it and move on.

Second, we need to seriously look at colleges and the way they raise their rates. An independent oversight committee should be appointed, and its job should be to rate each college and university that particulates in federal student loans, as to their cost effectiveness and if their tuition increases are justifiable or not.

Third we need some serious oversight and control of the 3rd party service companies. Stop paying 3rd party parasites (collections agencies) billions of dollars to collect millions. Instead, make their pay based on what they actually collect, not what they are supposed to collect. Better yet, stop using them altogether.

Forth, overhaul the "default" system. Find ways to help people pay off the defaulted loans, and restore their credit histories, instead of giving the department of education more collections powers so that they rival those of the IRS.

Fifth, reform the way payments made by defaulters are applied to a loan.

Sixth, allow contracts to be re-opened, and re-negotiated.

Seventh and most important - Restore ALL consumer protections to student loans.

Anything less than this, is just more pabulum puking from the glorified morons in Washington DC.

Student Loan bailout? Depends on how you look at it.

2011-11-04T05:04:00.000-07:00

There is a lot of talk in the mainstream media, using catch phrases like "Student loan bail out" and "student loan bubble" and "high default rates. Pitooie! Horse Hockey, BULLSH*T!

There are those who are calling for some relief for students who are having trouble paying back their student loans. And the negativity from the peanut gallery is mind boggling, unless you understand that the student loan scam is really about making money, not helping students get an education.

Let us get real. I for one am tired of reading commentary from so called highly educated people with "good" college degrees, that still do not have a clue what it means to be in default. Nor that have any understanding of what default means, or how people get there.

All I hear from these highly educated idiots and morons is "we paid ours, now you have to pay yours", and "you signed on the dotted line", type comments.

Time for a reality check. Many people have documented "the student loan scam" as it is now called. People like Alan Collinge, founder of "Student loan Justice" has paper stacked 20 feet high of horror stories on how people were PUT into default by their loan processors. People like Mac Wildstar of the "victims of predatory trade schools" blog, has documented cases of wrong doing by service providers who have put people into default when they should not be.

Then there is life itself, which can cause a person to go into default. Jack writes to me that 3 days after he graduated from Penn State, a deer ran out in front of him and caused him to have a bad wreck which left him paralyzed in a wheel chair, unable to work. Now they take 15 percent of his disability payment and for the last 10 years, not one penny has gone to paying off his principal - yet he has already paid twice what he originally borrowed.

Then there are people like John who got screwed by the Predatory trade schools which lead to the 1992 reforms. John was victimized by the schools, AND by congress who kept changing the bankruptcy wait times. John's bankruptcy protection was removed permanently from him, in 1999, along with everyone else for that matter.

Also, it is well documented in congressional records, that one particular (cannot remember the name) loan servicer that went out of business, had a warehouse full of unopened mail. Mail which later was found out to have had numerous requests for deferments, and consolidations. These were never processed on time and the people put into default for no reason of their own doing.

And the congress has know about this since 1990. But what has it done? NOTHING to help the defaulted students. Instead it empowered itself even more so, than any other business.

We are now documenting people who have the 15 percent garnishments on their pay checks, disability checks, social security checks, and are now showing that over half, are paying NOTHING on their principal. About 40 percent of these have paid out 2 or 3 times what their original loan was. Yet their payment gets eaten up by huge collection fees, service fees, and interest. - and the congress knows this.

These people who are in default have a difficult time enough finding a job, but when employers also check credit histories and see student loan defaults, many former students find themselves discriminated against, and unable to obtain the job that would allow them to try to rehabilitate their loans and start paying them off. - A catch 22 situation because people in default are considered to be as bad as deadbeat parents.

As a result these people struggle from paycheck to paycheck and have no hope of being able to save for retirement because government comes in and takes everything in their bank accounts, and social security payments will be diminished even more so when they finally are able to get them.

These people have NOTHING to look forward to, because government created this situation. When government removed all consumer protections, it allowed this kind of thing to happen. As member of congress who were involved in the 1992 reforms stated, "Better oversight is needed". Well, here we are in 2011 and better oversight is STILL needed.

If Helping these people is a bail out, then I am all for it.
The people who are against such a bail out, are those parasites who are making a living off of other peoples misery.

School closed, Now what?!

2011-10-23T05:20:00.000-07:00

Brandie writes:
I am a student loan sufferer who is trying to get some info. A college professor of mine was telling me that if the school you went to has.permanently closed its doors with no intention of relocating then we are not responsible for the loan, and we can have it removed from our credit history. Is this true and how do I find out for sure if the school I went to is out of business for good?

Blog Writer answers:

IF you know where the school was located, you can obtain info about it from the local chamber of commerce. Or, you can try the government record office for that area. It all depends on where the records are kept, and who actually owns the school and where they were headquartered at. Then you can find out if they are out of business for good. Also check with the Better Business Bureau.

As for loan dismissal, to the best of my knowledge, ONLY if you are attending the school at the time it closes its doors, and goes out of business, can you file in court to have your loans dismissed. The courts may dismiss them all, or parts of them, leaving you with some to pay back.

But just because A school goes out of business say some 5 years after you left, does not mean that you can get your loans dismissed because they went out of business.

If you can show you were attending a school during a state or federal investigation of the school, which resulted in its eventually being shut down, then I would think you would be able to petition the courts to have your loans dismissed.

I am not a legal expert, so my advise to you is try to find a good Lawyer who specializes in higher education cases. Yes, I know they are rare, because there is no money in such cases; and most attorneys need to go where the money is to pay off their student loans or else they will find themselves in the same situation we are in!

Kind of ironic, isn't it?

Student loan scam

2011-10-20T04:36:00.000-07:00

The picture cutoff is due to the way blogger posts the picture. For a complete view of it, go here.

Via: HealthcareAdministration.com

Blog Ed's note:

Amazing we find this info at a HEALTHCARE website! But they did a great job.

This clearly explains how the student loan system is HARMING America, instead of making us better.

Higher education may be a WANT of many people, but the truth is, the mentality of "higher education at any cost", is costing us too many wasted lifetimes of people being in perpetual debt.
And the truth is GOVERNMENT has become one of the Predators.

30 year defaulted student loans - something to consider

2011-10-15T10:02:00.000-07:00

Lets talk about the pre 1992 reform student loans that are in default. The avarage loan for college, for a 2 year trade school back then was about 12 thousand dollars. Today due to default that amount is closer to 50k today. That means that over 2/3rds of the amount claimed owed, was created out of nothing but time.
15k borrowed, 9k in fees and penalties, and 22k in interest. Fees and interest amount to about 31k, just over doubled what was borrowed.

Now lets look at the schools today and the problems that are happening. Remember, back then in the pre-1992 reform era, we did not have any oversight imposed on the schools or the student loan providers or service companies. Nor did we have the internet. We did have bankruptcy protections, but as we all know, they were taken away from students for no real reasonable reason.

Today, we see the same things being claimed, that the students back then did. Schools recruitment practices, lying about job placement - which is a major recruitment tool, and lack of proper training so a person can go get that job after school.

BUT, unlike back then, today we have the internet and people who are more informed. And they are going after the schools for various reasons. Over 100 cases in the last decade alone, some in the millions of dollars range.

Back to the pre 1992 students. What recourse do they have now? Bankruptcy protections were taken away from them. Many of the schools went out of business, or were sold to another company. How can you sue a school that no longer exists?

And what of the governments roll in all of this? Has it changed much?I don't think it has. It is still encouraging people to go to school, to take out loans and to go into debt - debt they cannot get out of. The same government that took away standard consumer protections is pursuing those students who have defaulted, most of whom would not be in default by their own choice.

A significant number of students of the pre-1992 reform era, were PUT into default by their service companies, because the companies did not process forms and requests for deferment on a timely basis. One company that went bankrupt, had a warehouse full of boxes of unopened mail, some of which was request for deferments. Those students who filed timely request, were qualified for deferment, were put into default because the service company did not process their paperwork. This is in the congressional record as part of the 1990-1992 congressional investigation into the student loan industry that lead to the 1992 reforms. Yet these student have never been offered relief of any kind. They were victimized by the government itself.

Then there is this aittude people have that I just do not undersand. They have this idea of "Something for nothing", when it comes to education. They say if you buy a lemon car, you can return the car. But how do you return an education? Well, if the education was worthless to begin with, why should you have to pay for it, is my question response to that. They will claim the student had a duty to know that basket weaving 101 would not get them a job that pays 50k, yet when recruiting for the school, the school told students they could and with job placement, they could be working within 3 weeks after graduation.

The government claims the promises made by the schools and student loans contracts are separate issues. I disagree. Information the school puts out about its reputation and promises made by the school about job placement are what cause the students to apply for student loans.

This is a con artist game. The school wants the profits from the student loans. To get them they must have students. So they say and tell anything to get a student to apply to the school. The schools target low income people so that they can maximize student loans profits.

Only now is congress finally accepting the fact that promises made by schools and information they put out to students about the schools success rates, and job placement rates, are a key factor in the number of future defaults.

Which school would you rather go to and have hanging on your wall? A degree from an ivy league school, or the local public college? I bet you want to go to Harvard, not the local community college. But the costs involved, do play a major factor in determining who can and will go to the better schools. The point is, the students listen to claims made by the trade schools, and choose one to go to, knowing they will need student loans to get thru it. Schools who have a good reputation and have a proven track record, end up with few defaults. Those who do not, end up with a lot of defaults. And historically the For profit trade schools have the highest default rates.

And this was proven in the 1992 Reforms when congress determined that 8 out of 10 of the defaulted loans in 1989 were from students who went to a For Profit trade school.

So why hasn't congress helped us? It is something to consider.

Parasites love student loans

2011-10-14T20:01:00.000-07:00

I find it amazing that of the last 14 comments left for this blog, only 1 did not contain some kind of link to another page whose theme was about servicing student loans in one form or another. Either consolidation, servicing, helping rehabilitate loans, something that requires the student to pay them a FEE.

And I really enjoy these 3rd party collections parasites that tell me that they consolidated my loans. I ask them for a copy of the contract with my signature allowing it to happen. IF not, I accuse them of mail fraud, constructive fraud, and contract fraud. It shuts them up every time. I also love it when they tell me they have a contract with the department of Education. So I tell them to talk with their business partner not me. And that since I have no contract with them, and since I do not wish to contract with them, that they should never contact me again. You know, the same stuff I have been reporting that I do to all of them.

Then I really like the commentary on various websites reporting news today about the default rates starting to climb into the double digits, people calling for loan reform, or loan forgiveness, or people wanting to restore bankruptcy protections. The vultures just wait for someone to admit they are in default, or want to restore bankruptcy, or get their loan forgiven, then they pounce.

Yes these highly educated idiots, some with masters degrees still do not comprehend that just because a person is in default, does not mean they are deadbeats, as many of the vultures believe. So they write in comments like "I had to pay mine, you have to pay yours", and they love writing attacks on the person who is in default.

Amazing that of the student loan related yahoo groups, only 3 are not commercialized groups. That is all the others are being sponsored by a commercial bank or one of their employees who is looking to make a commission.

Even the congress, as slow as it is, still amazes me. Look at the latest push by wall street to keep student loans going. They are offering a plan to help stabilize the student loan industry, with a savings cost, they claim. But when you really look at it, you find it increases the costs and taxpayers get stuck with the bills, with wall street getting a bigger cut of the action.

And congress itself keeps saying it has a problem with defaulted student loans. Well, by the nations charter, (the Constitution) the US congress is NOT supposed to enter into commerce to compete with other commercial entities, and when it does, it is supposed to take the same risks as the others do. Yet this is not the case in reality.

The US congress has used its law making powers to give itself advantages over every other commercial business, at the cost of taxpayers and students, when it comes to the student loan industry. The result is the congress has created a second class of citizens, who are unequal in terms of financial standing. First congress is NOT taking the same risks as other commercial entities, and second, it has created a class of perpetual in debt people who have no hope of ever getting out of debt. And Third, the US congress has in effect, committed fraud with the way it has handled student loans and the industry.

Look at the industry history. Since 1970 congress has played with various laws which are of concern to students and people who get student loans. In 1992, the US congress imposed the very first "student loan reform" laws, due to the industry experiencing high default rates of nearly 1 in 4, (23 percent). Congress blamed the US department of education for failing to impose oversight on the schools at that time. Identified as a key reason for the high default rates, for profit schools (trade schools) finally had some level of oversight imposed on them. But it was too little too late.

Now with a bad economy, people are looking at not only the high default rates for the for profit (predatory trade schools) schools, but also at the higher cost of education in general.

In an article on kansaswatchdog.com, Mentions an article by the Center for College Affordability and Productivity (CCAP). The article called its findings the, “single most scandalous statistic in higher education” and said it, “Reveals many current problems and ones that will grow enormously as policymakers mindlessly push enrollment expansion amidst what must become greater public-sector resource limits.”

Here’s the kick in the pants from the report:

Approximately 60 percent of the increase in the number of college graduates from 1992 to 2008 worked in jobs that the BLS considers relatively low skilled—occupations where many participants have only high school diplomas and often even less. Only a minority of the increment in our nation’s stock of college graduates is filling jobs historically considered as requiring a bachelor’s degree or more.

So there you go.. we don't all need to be ging to college after all.

Various news, and 3rd party parasites in the news (collection agencies).

2011-10-10T17:50:00.000-07:00

Wow. Lots of stuff to report. Seems the US government paid the parasites 2 billion dollars last year to collect 1 billion in defaulted student loans according to one website.
http://government.brevardtimes.com/2011/10/us-taxpayers-give-billions-to-student.html
Wow, talk about wasted money and somewhat of a lie. That Billion dollars the parasites got, came either from the students or from taxpayers - and yes students ARE taxpayers too.

Another website is reporting that the O'bummer administration wants to allow the parasites to use Robo callers to call the cell phones of people in default - a clear violation of the 5th Amendment. For the readers info, I call 3rd party collections agencies or companies, Parasites.

Also in the news, "Occupy America", a group of people who are protesting the bail outs of wall street, the banks and major corporations but NOT the American people. They are holding "occupying" vigils in most major cities thru out the USA.

There is also a growing discussion on forgiving student loans due to the bad economy. Hey, I have an idea. How about forgiving them for the reason of the government removing all consumer protections on them? Or How about restoring our protections? Then you will see some change.

Also, I am thinking of starting a yahoo group dedicated to restoring bankruptcy protections or getting loan forgiveness for student loans, or for discussing how to survive with defaulted student loans.. anyone interested?

Default rates on the rise again, nearly half the record high.

2011-09-13T18:53:00.002-07:00

http://www.huffingtonpost.com/2011/09/12/for-profit-colleges-student-loan-_n_959058.html

Student Loan Defaults Reach Highest Level In More Than A Decade

Students at for-profit colleges are more than twice as likely to default on federal loans as their peers at public institutions, according to new data released Monday by the Department of Education that also shows the highest percentage of students defaulting on loans in more than a decade.

The overall student loan default rate increased from 7 percent last year to 8.8 percent -- the highest rate since the government released similar data in 1999. An outsized share of that increase came from the for-profit college sector, which had both the highest percentage of defaults and the greatest increase in defaults, compared to public universities and private nonprofit schools.

Defaults at for-profit schools jumped from 11.6 percent to 15 percent this year, as opposed to an increase of 6 percent to 7.2 percent at public institutions and 4 percent to 4.6 percent at private nonprofit schools, raising questions about the degree to which for-profit schools are preparing students for careers that will allow them to pay off debts.

Because the government must track loan repayment over two years, Monday's data represents the first full assessment of students' ability to repay college loans in the Great Recession. And the numbers were bleak: the overall student loan default rate increased at the highest rate in two decades.

= = =

Folks, go to the article to read more about the default rates.
Know this: The current rates are closing on nearly 10 percent. That is just under the half way mark of the record high of 23 percent set in 1989 to 1990.

Maybe now we will get some real relief for those who are in default.

Victims of Trade school, sue the school over recruitment promises about job placement.

2011-09-13T18:53:00.001-07:00

http://studentloansblog.nextstudent.com/2011/09/12/recruiting-for-student-loans-leads-to-40-million-settlement-with-cooking-school/

Thousands of students who took out tens of thousands of dollars in student loans to attended San Francisco’s California Culinary Academy, one of 18 cooking schools in the Le Cordon Bleu for-profit college chain, may be getting some of their money back.

Under a pending $40 million settlement in state court, Career Education Corp., Le Cordon Bleu’s parent company, has agreed to offer rebates of up to $20,000 to approximately 8,500 students who attended the academy between 2003 and 2008.

In a class-action lawsuit, former students of the cooking school accused it of misleading them about the value of a culinary education and their job prospects after graduation. The students alleged the for-profit school defrauded them with promises of high-paying jobs and encouraged them to take on crushing debt from student loans for expensive programs but provided them with no more chance of finding a high-paying culinary job than someone who didn’t go to culinary school at all.

= = =

Folks, this is EXACTLY what I have been saying all along about these schools.
This is a MAJOR recruiting tactic. Using Job placement promises, and future earning potential is a major tool to get students to sign up for these high priced trade schools.

It is high time SOMEONE hold them accountable. Too bad it had to be the students here, because I think it was the GOVERNMENTS job, to provide oversight on the schools to ensure this did not happen.

What the schools did, is commit FRAUD.
At least these kids got some relief. But notice the article does not say if they got complete relief.
If not, many may still find themselves in default and then they will suffer heavily as those who are in default, do.

NYTimes Editorial doesn't have a clue about Federal Student Loans.

2011-08-28T11:18:00.000-07:00

http://www.nytimes.com/2011/08/27/opinion/relief-for-student-debtors.html?_r=1

Reprinted in whole, WITHOUT permission.

Editorial

Relief for Student Debtors

Published: August 26, 2011

Since the start of the recession, record numbers of Americans have enrolled in college in search of new skills that would improve their employment prospects. Unfortunately, far too many students enrolled in expensive for-profit schools end up dogged by ruinous debts, with little in the way of skills or credentials to show for their efforts.

The schools sometimes push these students into high-cost private loans that they can never hope to repay, even when they are eligible for affordable federal loans. Because the private loans have fewer consumer accommodations like hardship deferments, the borrowers often have little choice but to default.

Worse yet, these loans and the bad credit history follow the debtors for the rest of their lives. Even filing for bankruptcy doesn’t clean the slate.

Legislation is pending in both houses of Congress that would make private school loans dischargeable through bankruptcy, as most of them were before Congress changed the law in 2005. It had long been the case that federally backed student loans were protected during bankruptcy proceedings. That is reasonable, since those loans were backed by taxpayer dollars and flexibly structured so that borrowers could receive deferment in tough times and resume payments when their finances improved.

The country has a compelling interest in making it as difficult as possible for student borrowers to elude payment for federal loans. There was no reason for extending that protection to private lenders of student loans.

For starters, that gives these lenders, who often turn a huge profit, an undeserved advantage over credit card issuers, gambling casinos and other issuers of unsecured credit whose debts are still subject to discharge in bankruptcy. The change also encouraged reckless underwriting by lenders, who no longer felt compelled to determine the borrower’s ability to pay. And it led to financial catastrophe for students who were duped into signing up for pricey private loans.

Bills sponsored by Senator Dick Durbin, Democrat of Illinois, and Representative Steve Cohen, Democrat of Tennessee, would eliminate the unfair protections for private student lenders and give struggling borrowers a chance at a fresh start.

A version of this editorial appeared in print on August 27, 2011, on page A18 of the New York edition with the headline: Relief for Student Debtors.

VOPS BLOG:
Man, those idiots at NYTimes don't have a clue. The US government has a vested interest in keeping defaults, and bankruptcy's to a minimum, however, they also have a responsibility the same as any private lender, in lending money for student loans.

As for a compelling reason to extend the Non dischargeabilty clause to private student loans, of course the country had an interest.. To help the banks. They did, and the banks started making those private student loans more easily available to students, once the banks no longer had to take the big risk which was non payment due to bankruptcy court orders.

Without those NON-dischargeability clauses on private student loans, do you really think the banks would have given them? HECK NO! If congress passes a law removing the Non dischargeability on those loans, I bet you next weeks paycheck, the banks will start reducing the number of them that they give out, if not outright stop making student loans altogether.

And Notice the NYTimes does not allow comment on its articles. Too bad.. Guess it is afraid of the real truth. Maybe that is why some people call it the NYSlime.

GSL Default, Another parasite told to F-Off.

2011-08-23T07:40:00.000-07:00

Yes, CTI Inc out of California is the latest parasite the Dept of Education has sent after me.
Talk about a bunch of unprofessional retarded morons.

I have 2 standard letters I send out, and I turned them into form letters. They basically assert my rights as a citizen not to be compelled to deal with 3rd party parasites for whom no contract exists between us.

The letters contain a compelled performance clause and claim for damages, and reservation of rights.

Well, CTI not only missed it, but the idiots couldn't even read a printed out return address label that we have to put on all outgoing mail here. So instead of coming here, at 3000, their letters went to the people at address 300, which is our local post office!

Talk about confusion! LOL.. the local post master called me up and told me about the mistake, and that they had accidentally opened my mail - not that I cared about it..

Well CTI finally sent a letter saying they would not be contacting me again, as I was now claiming over 4,000 dollars in compelled performance damages. IF I were to take that to court and press the issue, I could possibly walk out of court with 20 thousand dollars, (triple damages) plus court costs.. on the other hand, I could also be fined by the courts for a frivolous lawsuit. Either way it would cost CTI more money than it wanted to spend on trying to get money from someone who is a victim of Student loan farming by the predatory Proprietary trade schools and their partners in crime, the US Congress.

Where are the Lawyers with defaulted student loans?

2011-08-20T18:07:00.000-07:00

Ya know what really gets me thinking? When I read so much about law schools, and how so many of them are producing lawyers who cannot get a job practicing law, and so many of the students going into default, I wonder why aren't these students getting together to find a way to restore consumer protections on student loans?

These are LAWYERS, remember? Specialists in LAW. They are to the courts, what a Tool and Die maker is to the Automotive industry, or what a precision machinist is to the aircraft industry.

With all the information available, both here and on my timeline blog, I am surprised no lawyer in default, has decided to take the lead and start researching for a way to file a major suit in court, to get some kind of relief for students.

I don't even see lawyers asking questions, legal ones, that deal with the situation. Is there some kind of legal forum where such a discussion is currently on going? If so, I have not been able to find one, and I have looked for the last 7 months.

The American people do not see victims of student loan farming by the for profit trade schools, (including law schools), equally as they do victims of other kinds of financial fraud. Lemon Laws protect used car buyers. Home title insurance, or other kinds of mandatory insurance protects new home buyers.

But no law protects the Educational buyer, whose purchase will effect them for the rest of their lives, in either a positive or negative way. Why is this? And doesn't congress have a responsiblity to create an equal playing field in this regard? Don't we have anti-trust, and anti-monopoly laws to help protect people? Why not some kind of law regarding trade school educations?

I think that is where we are now headed, due to the once again, high default rates and the fact that a student loan bubble is about to burst, due to the extremely high number of people now in default due to the economy.

Seems to me, based on the fact that we have congressional evidence that bankruptcy laws were changed for no reason, that lawyers could find some way to restore those bankruptcy rights, via a suit in equity, claiming something like, the lack of consumer protections which include bankruptcy, creates a state of inequity amongst the people of similar economic circumstances.

So come on all you lawyers in default. Lets create a think tank and start litigating to get all students in default, some kind of relief.

Student Loans: It is really about Farming for Student Loans.

2011-08-14T04:40:00.001-07:00

"Student Loans, Another trade school sued for false job placement reports."

This one is closer to home. Clips from the article, used without permission.

http://www.mlive.com/news/grand-rapids/index.ssf/2011/08/cooley_law_school_target_of_fe.html

Cooley Law School target of federal lawsuit claiming it cooks its books when it comes to employment claims

GRAND RAPIDS – Either law school students are the victims of an elaborate scheme to bilk them out of $100,000 for tuition and leave them with dim job prospects or they are self-entitled elitists who think they are guaranteed a job because they have a juris doctorate.

Four graduates of Thomas M. Cooley Law School have brought a federal lawsuit against their alma mater, claiming the school misrepresented its post-graduation employment statistics to attract students.

New York law firm Kurzon Strauss filed the suit this week in U.S. District Court for the Western District of Michigan in Grand Rapids, claiming Cooley counts part-time jobs -- or employment other than working full-time as lawyer -- in its job statistics.

The suit accuses Cooley of using “Enron-style” accounting techniques that would “leave most for-profit companies facing the long barrel of a government investigation.”

Kurzon Strauss attorney and University of Michigan Law School graduate David Anziska said while Cooley claims that 75 to 80 percent of graduates get jobs within nine months of graduation, his firm believes that number is less than 30 percent.

“The dirty little secret is that this is a common practice among law schools,” said Anziska, who adds that a nearly identical suit has been filed against the New York Law School.

Anziska describes Cooley and NY Law School as law degree factories and the real problem is with the way that law schools report their employment and salary information as a matter of course.

Ed note: no, its not just law schools, who have this problem, MOST if not ALL the trade schools do. It is their biggest recruitment tool.

The federal suit asks for $250 million in damages including the reimbursement of students' tuition and other damages and it also demands that the named schools have their employment data checked by independent audit.

Cooley has about 1,000 graduates a year and about 4,000 students enrolled, with campuses in Lansing, Ann Arbor, Auburn Hills and Grand Rapids and plans to open a fifth in Tampa Bay, Florida.

END article. Begin editors commentary.

This article is also posted on the time line page.
I brought it here because I wanted to point out to you folks that this article is not really about just a lawsuit. It is about the fact that the school is farming student loans. Just like ALL the trade schools do, and to get those crops of loans in, they have to recruit people. And to get people to sign up, they use job placement as a major tool to convince students.

Why Trade schools? Well, if Jonny wants to learn how to build tools, I.E. Stamping dies for the automotive industry, why would he want to take English Literature, and study things like Shakespeare? What does that have to do with bending, or shaping metal? NOTHING!

Jonny considered going to the big university, but found out that in his 4 year quest for a degree, he would waste 1.5 years on classes that have NOTHING to do with his trade of choice.

Trade school, on the other hand, concentrates on the things you need to know FOR that trade. In the case of Jonny, Math, advanced Math, Algebra, Geometry and Trigonometry, as well as Metallurgy, and terminology related to the Tool and Die industry. He might also study CAD CAM systems, and Advanced drawing and illustrating, or Drafting. All things he needs, and nothing he does not.
Time to get degree: 2 years.

So which one will attract people like Jonny who want to get into their field and start working?
Both Colleges offer a degree in the same field - Tool and Die. One costs 22k the other 28K, but the more expensive one only takes 2 years verses 4. Humm..

So these trade schools use this as an example to recruit, and then use job placement. "look we can get you into the field faster quicker, and our job placement is 87 percent", not telling you that they count part time work as job placement, or minimum wage work as full time employment, (Not enough to pay off your loan). THAT is the dirty little secret of For Profit Trade schools. That is the reason so many people default when they go to these schools.

And as you can clearly see, the schools are not in it to ensure their students are successful in their field, and/or get a job in their field, only that their students successfully pass the schools curriculum with a passing grade, so that they can keep the loan money, which is the crop they are really after. And this is why it really is about Student Loan farming.

Student Loans How does principal Grow?

2011-08-13T04:39:00.000-07:00

Ya know, I need to use a photo editor or Paint shop pro to insert the date of the day I do captures of data from the internet, so the data is on the actual picture. Why is this important you ask?

Well I was going thru some of my older student loan documentation here, where that idiot parasite group NCO Financial services tried to send me verification of my loans. (And they did a very poor job, which is yet still not completed). and that was back in 07, I think.

Well I did a screen capture from the US governments website, www.nslds.ed.gov and it shows 5 loans, all with the principal borrowed. That was the first time since 1988 I had seen all 5 together in a column, where I could actually see the whole package. Well, it showed the loan amount, and a few other things and "outstanding principal" which was GREATER than the original loan amount.

Tell me something, HOW does principal grow, if no payments have been made???
4 out 5 loans had outstanding principals that were LARGER than the original loans. Only one of them had an outstanding principal that was LOWER than the original loan and I never made any payments, nor were any of my taxes garnished or taken for student loans prior to that.

IS it no wonder students cannot make heads or tails of their loans when our own government cannot? LMAO. I saved the page so that I could use it for court to prove the congressional incompetence.

Student loans: Student Loan Farming by Trade schools -is- consumer fraud.

2011-07-30T02:40:00.000-07:00

I don't care what congress refuses to call it, or what politically correct term they assign to it. Fraud is fraud, and these for profit, proprietary trade schools are engaged in consumer fraud.

It is fraud when they promise Job placement and you get sent to only 1 interview.
It is fraud when they consider you placed if you are working part time.
It is fraud when they consider you placed if you are working at any job in any field OTHER than the one you just trained for.
It is fraud when they do not have enough openings at local businesses for you to get your hands on requirements, as some state licensed jobs require.
It is fraud when they do not have proper equipment for you to learn with.
It is fraud when they tell you your education is worth something, yet local employers tell you your education is not worth the paper it is written on.
It is fraud when the schools accreditation is not accepted by local employers, and they know about it but still continue to recruit.
It is fraud when they test you, and find out that although you will probably graduate, due to your circumstances, you will most likely never be able to get a job in that field. (I.E. Truck driver with an artificial left leg.)

It is HIGH time, we the victims of perpetual consumer fraud, sue the US government and FORCE it to give us some relief.

30 years of historical evidence. What more do we need?

Student Loans: Call for consumer fraud lawsuit against US Government

2011-07-27T10:29:00.000-07:00

I am currently looking for a good law firm to represent not only myself, but the possibility of up to 2 million students in a consumer fraud lawsuit against the US Government.

I believe the US government had a duty to fulfill as part of its duties as a party to the student loan contract.

Part of that duty was consumer protection against fraud on behalf of the schools.

Part of that duty was consumer protections in a grand father clause when they changed the bankruptcy rules. If Many of us had known they could have changed the laws without our consent, and that the law changes would have a drastic effect on us, we would have never applied for the loans in the first place.

The government has known for 30 years about student loan farming, and has done nothing, thus creating a 2nd class of citizens who live in inequity among their fellow Americans.

The government has 30 years of evidence of the schools using "job placement" as a major recruiting tool, even though they were able to place less than half of their classes. The government has 30 years of evidence of schools recruiting at any cost, by using incentives for their recruiters, or other such tactics, instead of relying on the alleged quality of the educations that they were marketing.

We seek the following:
Grand father clause for bankruptcy for those of us with pre-1992 loans.
The recognition that the for profit trade schools are committing consumer fraud.

OR some kind of relief, for the victims of those frauds, in the form of having the bankruptcy laws or parts of them dealing with student loans, be declared unconstitutional.

Since the congress will not GIVE us some kind of relief, it is time we TAKE it ourselves, and force congress to act.

Student Loans: Conclusion - Get government out of the loan business.

2011-07-27T10:21:00.000-07:00

For 30 years the US government has known about the For profit trade schools, student loan farming operations.

Since the 1992 Reform hearings, each congress there after has known about the thousands of victims of these schools. Yet little if anything was done about it.

Congress does not see the victims of these schools as equal to any other victim of any other kind of consumer fraud. In deed, the government thinks the students themselves are out to defraud the government.

Student loans were not created to help students, nor to ensure America had qualified people for future jobs. Student loans were designed to fill the pockets of bankers and financiers at the cost of the future of the next generation. Well, those scammers won.

They are still winning because they own congress. And another generation will be victimized.

It is time to get congress, out of the student loan business, and to get relief for the victims of this kind of consumer fraud.

Dejavu 1992, 30 years of congress and For profit schools, victimizing Students.

2011-07-26T14:50:00.000-07:00

Title: Déjà Vu 1992

For-profit colleges are once again in the news. The Department of Education and at least some in Congress have been concerned about the high default rates of these schools and the large number of students who are leaving these institutions deeply indebted and without the training they need to get good jobs. In other words, history is repeating itself. Déjà vu 1992.

Just like today, the Senate at the time held high-profile hearings on for-profit schools that exposed many of the same issues that are once again coming to light now -- shady recruitment practices, false promises made to students about job placement, the targeting of the most disadvantaged students. In response to those hearings, Congress put in place a bunch of reforms aimed at stopping the worst practices. But even then, those of us who were victims of these schools knew that the reforms didn’t go far enough. Among other things, they did not address the needs of the students who had been scammed.

The Senate investigation had found that many of these schools left students with heavy loads of debt that they had little hope of repaying, given the inadequate training they had received.Yet lawmakers didn’t offer any real relief for those students. To the contrary, in the years since, they have given the government student loan collections powers that would make a mobster envious.

I should know. In the late 1980’s I attended the National Education Centers, which later became Olympia College and now is Everest, which is owned by the infamous Corinthian Colleges. One of the biggest selling points of the school for me was its high job placement rates. However, shortly before I graduated, I learned that the school considered you placed if you were flipping burgers part time at McDonald’s!

I went to school to learn electronics, to be able to become an electronics service technician; having had some previous electronics experience. I had been a Ham Radio operator, with an FCC license since I was 14. The school promised job placement, but only set me up with one interview. I didn’t hear anything from them after that. The hands on trouble shooting training was bare minimal, not really enough to go out and become a service technician without further specific training. Due to not being able to obtain a job as a Service Tech’, I stayed at the factory job that I had, because at least it paid my living expenses. The biggest difference was that I found myself $15,000 in debt with federal backed school loans and no way to repay them. I now owe somewhere between $45,000 and $60,000 depending on which collections agency is trying to collect.

I’ve always hoped to pay off my loans but have just never had enough money to do so. During the recession in 1994, I lost my job. Unemployment paid half of what I normally took home, leaving nothing extra for anything other than bare survival necessities. I was soon forced to go into bankruptcy. But I couldn’t discharge my federal student loans because it had been only four years since I had graduated. At the time, student loan borrowers were forbidden from trying to discharge their debt through bankruptcy in the first five years after entering repayment.

Congress then changed the wait time to seven years, and soon afterwards, made federal loans non-dischargeable under any time frame, except in cases of “undue hardship.” Lawmakers, however, failed to define what “undue hardship” meant. As a result, we have people being spoon-fed in wheel chairs who are 100 percent disabled by Social Security standards, that are still being told they do not have a hardship.

Over the last twenty years, Congress has also provided the government with other collection powers that normal creditors don’t have. Students who default on their federal loans are also subject to wage garnishment, tax refund garnishment, Social Security garnishment (including disability payments), all without a court order (which is your chance to challenge the claims). Child support garnishments require a court order. Why not student loans?

Many of us have suffered a life time of not getting jobs because of credit checks that revealed that we had defaulted student loans. So we never could get the best higher paying jobs, which would have allowed us to try to get our loans out of default status. Add to that wage garnishment without a court order and it is no wonder so many of us have simply given up. We struggle to get by with lower paying jobs, only to have an additional 15 percent of our paychecks taken. After taxes, that can mean 40 to 50 percent of your check gets eaten up. No one wants to work 40 hours for 20 hours pay. Why even try? This is why so many give up. And why some have committed suicide and others have committed crimes to obtain money to pay their loans off, thinking 3 to 7 years in prison is better than a life time of indentured servitude. Shame on us for allowing that to happen.

My loans are growing at 8 percent per year, and I have no hope of ever getting them out of default. I asked for a deferment on loans at first, but the lender didn’t send me the paperwork in time. At one time I made 3 of 6 payments to try to get them out of default, so that I could consolidate them at a cheaper interest rate. But economic conditions ruined that attempt. I even tried the (then) new student loan ombudsman but that ended up being a complete waste of time.

Now I am medically unable to work, will soon be on disability, and I fully expect the disability payments to be cut in half due to wage garnishment. As an honorably discharged veteran, I will be forced to live as a third-class citizen in a country I put my life on the line for, because of a shady education system that Congress knew all about.

Those of us who were victims of the last for-profit college scandal are not at all surprised that the sector is under scrutiny again. The Education Department and Congress will undoubtedly put in place more reforms. But if history is a guide, they will not go far enough and will leave those who suffer at the hands of these schools in the dust. Déjà vu 1992, indeed.

Post op note:
Congress has again Screwed the students. They failed to impose the gainful employment rules immediately, and instead have given the trade schools 3 years to comply. That means 3 more years of victimizing students. SHAME on the congress.
And yes, the did not offer any of us any relief.

US Congress is SCREWING American Students.

2011-07-26T12:55:00.000-07:00

I have had enough.
30 damm years of the US Congress passing the buck is enough.
Being cheated by For profit trade schools is no different than being cheated by shady used car salesmen, who sell you what you think is a good car, but one that got flooded out by the Katrina flood.

Consumer fraud is consumer fraud, and students are just as likely to be a victime of it, as anyone. Be it a school, an bank, a credit card company, a car dealership, people who are victims of financial consumer fraud deserve some kind of remedy under the law, and students current have NONE.

I blame the congress. I name them Accessory to the crimes of those who perpetuate it.

Guest Editorial, Rejection part 3

2011-07-26T12:52:00.000-07:00

One more re-write

Title: Déjà Vu 1992

For-profit colleges are once again in the news. The Department of Education and at least some in Congress have been concerned about the high default rates of these schools and the large number of students who are leaving these institutions deeply indebted and without the training they need to get good jobs. In other words, history is repeating itself. Déjà vu 1992.

Just like today, the Senate at the time held high-profile hearings on for-profit schools that exposed many of the same issues that are once again coming to light now -- shady recruitment practices, false promises made to students about job placement, the targeting of the most disadvantaged students. In response to those hearings, Congress put in place a bunch of reforms aimed at stopping the worst practices. But even then, those of us who were victims of these schools knew that the reforms didn’t go far enough. Among other things, they did not address the needs of the students who had been scammed.

The Senate investigation had found that many of these schools left students with heavy loads of debt that they had little hope of repaying, given the inadequate training they had received.Yet lawmakers didn’t offer any real relief for those students. To the contrary, in the years since, they have given the government student loan collections powers that would make a mobster envious.

I should know. In the late 1980’s I attended the National Education Centers, which later became Olympia College and now is Everest, which is owned by the infamous Corinthian Colleges. One of the biggest selling points of the school for me was its high job placement rates. However, shortly before I graduated, I learned that the school considered you placed if you were flipping burgers part time at McDonald’s!

I went to school to learn electronics, to be able to become an electronics service technician; having had some previous electronics experience. I had been a Ham Radio operator, with an FCC license since I was 14. The school promised job placement, but only set me up with one interview. I didn’t hear anything from them after that. The hands on trouble shooting training was bare minimal, not really enough to go out and become a service technician without further specific training. Due to not being able to obtain a job as a Service Tech’, I stayed at the factory job that I had, because at least it paid my living expenses. The biggest difference was that I found myself $15,000 in debt with federal backed school loans and no way to repay them. I now owe somewhere between $45,000 and $60,000 depending on which collections agency is trying to collect.

I’ve always hoped to pay off my loans but have just never had enough money to do so. During the recession in 1994, I lost my job. Unemployment paid half of what I normally took home, leaving nothing extra for anything other than bare survival necessities. I was soon forced to go into bankruptcy. But I couldn’t discharge my federal student loans because it had been only four years since I had graduated. At the time, student loan borrowers were forbidden from trying to discharge their debt through bankruptcy in the first five years after entering repayment.

Congress then changed the wait time to seven years, and soon afterwards, made federal loans non-dischargeable under any time frame, except in cases of “undue hardship.” Lawmakers, however, failed to define what “undue hardship” meant. As a result, we have people being spoon-fed in wheel chairs who are 100 percent disabled by Social Security standards, that are still being told they do not have a hardship.

Over the last twenty years, Congress has also provided the government with other collection powers that normal creditors don’t have. Students who default on their federal loans are also subject to wage garnishment, tax refund garnishment, Social Security garnishment (including disability payments), all without a court order (which is your chance to challenge the claims). Child support garnishments require a court order. Why not student loans?

Many of us have suffered a life time of not getting jobs because of credit checks that revealed that we had defaulted student loans. So we never could get the best higher paying jobs, which would have allowed us to try to get our loans out of default status. Add to that wage garnishment without a court order and it is no wonder so many of us have simply given up. We struggle to get by with lower paying jobs, only to have an additional 15 percent of our paychecks taken. After taxes, that can mean 40 to 50 percent of your check gets eaten up. No one wants to work 40 hours for 20 hours pay. Why even try? This is why so many give up. And why some have committed suicide and others have committed crimes to obtain money to pay their loans off, thinking 3 to 7 years in prison is better than a life time of indentured servitude. Shame on us for allowing that to happen.

My loans are growing at 8 percent per year, and I have no hope of ever getting them out of default. I asked for a deferment on loans at first, but the lender didn’t send me the paperwork in time. At one time I made 3 of 6 payments to try to get them out of default, so that I could consolidate them at a cheaper interest rate. But economic conditions ruined that attempt. I even tried the (then) new student loan ombudsman but that ended up being a complete waste of time.

Now I am medically unable to work, will soon be on disability, and I fully expect the disability payments to be cut in half due to wage garnishment. As an honorably discharged veteran, I will be forced to live as a third-class citizen in a country I put my life on the line for, because of a shady education system that Congress knew all about.

Those of us who were victims of the last for-profit college scandal are not at all surprised that the sector is under scrutiny again. The Education Department and Congress will undoubtedly put in place more reforms. But if history is a guide, they will not go far enough and will leave those who suffer at the hands of these schools in the dust. Déjà vu 1992, indeed.

Guest Editorial, Edit 2

2011-07-26T12:41:00.000-07:00

Well, this one didn't make it either.
So I thought I would share it with you now.

Title: Dejavu 1992 (re-write number 2).

We have seen Private for profit trade schools in the news lately, those of us watching the higher education industry, and particular, student loans. It seems the US Congress is concerned over the high default rates of these schools and the large number of students who are falling behind in the payments or dropping out of the schools. Recent hearings found may problems that existed before still exist today, long after they were supposedly fixed. Congress found that history is repeating itself. Dejavu 1992.

Congress found that many of the same claims filed against the Trade schools during the 1990-92 reform hearings, were once again, being voiced in 2010. Recruitment practices, promises made to students about placement, the targeting of specific classes of students, all were the same issues in 1990 that lead to the 1992 reforms. But even then, those of us who were victims of these schools, knew the reforms didn’t go far enough. The reforms did not address the needs of the students.

Congress also looked at placement claims. Job placement after the school is a top recruitment tool, and the congress found out that the claims made by the schools were in many cases, misleading and sometimes out right false.
Many students were betting that if they finished the school, the placement center would help them get a better paying job that would allow them to live a decent life, yet still have money to pay off their loans. Yet this was not the case.

In 2007, I started 2 blog pages. One, Victims of predatory trade school student loan farming at http://voptsslf.blogspot.com and the US government Guaranteed student loan timeline. The US Government student loan time line blog at http://timeline-gls.blogspot.com/2009/07/time-line.html, clearly shows that between 2000 and 2010, numerous for profit schools were raided and sued, amongst them, Corinthian colleges who settled for billions. And it is not just the schools. During the time period of 1995 to 2000, several of the student loan service companies also were sued for various reasons, because their actions hurt the students. But nothing was done to help the students who suffered because of those actions.

In 2005, I found US Senate report 102-58, from the 1990’s reform hearings. This report is a must read. It clearly shows congress KNEW of the trade schools operating standards, and knew that students were being cheated. Yet nothing was done to help the students. Instead, congress started imposing new rules on the schools – rules which have been ignored, or circumvented. The same problems that cropped up then are now resurfacing. So is congress finally going to help the students, or are they going to empower themselves with even more Nazi like collections powers?

And what about the student victims of these schools? What are they to do? If you get cheated by a car dealer, you have recourse. If you get screwed by any other commercial entity, you have lots of options to pursue, and government usually helps. But not when it comes to student loans.

In 1992, congress admitted that the students were left with bills (loans) they could not pay. Yet Congress offered no relief for those students. On the contrary, congress instead continued with its march towards removing bankruptcy protections from ALL student loans and at the same time gave itself collections powers that would make a mobster envious. And it was all done legally, according to the law.

Many of us have been thru our own personal hell. One of the biggest selling points of the school was the Job Placement afterwards. In my case, it turned out to be a class in “butt kissing 101”. The school considered you placed if you had a job at McDonalds.

Remember, the Internet and all its valuable information either did not exist, or was not easily accessible to the public, prior to the early to mid 1990’s. Today people can look stuff up in an instant. Back before the 92 reforms, we had to rely on what was available – which was very little if any.

What is probably unknown to most students, is that the student loan nondischargeability provisions came up at the last minute over the opposition of key legislators. Both the primary co-sponsor of the 1978 Bankruptcy Code (Rep. Don Edwards) and the Chairman of the House Subcommittee on Post secondary Education who over saw the Education Amendments of 1976 (Rep. James O’Hara) objected to the introduction of a student loan nondischargeability rule. O’Hara protested bitterly that Congress was “fighting a ‘scandal’ which exists primarily in the imagination” and that the amendment “treats educational loans precisely as the law now treats loans incurred by fraud, felony, and alimony dodging”

The evidence of a lower than 1% discharge rate of federally insured student loans in bankruptcy did not block the nondischargeability provision from entering the Bankruptcy Code — this even so under a comparatively liberal Congress that passed the debtor-friendly 1978 overhaul of the Bankruptcy Code.

The first change to the bankruptcy rules, was a rule by the Department of Education, requiring a 3 year wait before you could file bankruptcy on your Government Guaranteed loans. Then congress changed the Bankruptcy code to make it 5 years, then 7, then for infinity. Then they added private student loans too. All because congress was chasing a scandal that did not exist.

So why are students still suffering? If it is clear that these for profit trade schools traditionally have a higher default rate, and it is due to their basic standards of operation, (which is historically established now), then Congress owes these students some kind of debt relief. The IBR (income based repayment) plan is NOT relief. It is a shell game which leaves the student owing the IRS instead of the US Department of Education – in other words perpetual debt.

Students are now subject to Wage garnishment, Tax refund garnishment, Social security garnishment (even disability payments), all without a court order. Folks, child support garnishments require a court order. Why not student loans? Because many of us would fight and argue the student loan contract was unenforceable due to the neglect of congress and the removal of all consumer protections, making us a class of debt slaves.

Many of us have suffered a life time of not getting jobs because of Credit checks that revealed that we had defaulted student loans. So we never could get the best higher paying jobs, which would have allowed us to try to get our loans out of default status. Add to that wage garnishment without a court order (which is your chance to challenge their claim) and it is no wonder so many of us have simply given up. We struggle to get by with lower paying jobs, only to have an additional 15 percent of our paychecks taken. After taxes, that can mean 40 to 50 percent of your check gets taken. No one wants to work 40 hours for 20 hours pay. Why even try? This is why so many give up. And why so many have committed suicide. Others have committed crimes to obtain money to pay their loans off, thinking 3 to 7 in prison is better than a life time of debt enslavement. Shame on us for allowing that to happen.

In 1994 I was forced into bankruptcy, 1 year before my 5 year wait was up. Then congress changed it to 7 years and again in 2002 I had to file bankruptcy. Both times I could not pay for a lawyer and had to do it myself. The loans still remain. No one would help me in the court system.

Then I did not hear from anyone for 7 years. And when I did it was a collections agency. I categorically refuse to deal with such parasites. I am not going to pay someone to take money from me, when not one penny goes to paying off principal. And for the government to force me to have to deal with such parasites, is another slap in my face by the government that supposedly set out to HELP students, not screw them over. Well, I found the information on my loans on the US government website (which now existed due to the internet, and which did not when I got the loans). The original lender also went bankrupt and the website showed Bank of America held the loans. So why didn’t BOA ever contact me? They never even tried.

When I was contacted, It was a 3rd party collections parasite, and after told them off, the US Department of Education contacted me, and they threatened with wage garnishment. Then to add salt to an already open wound, the department of education used my overtime pay that I was getting to set the monthly payment amount. They would have taken half of my take home pay, leaving me with below poverty levels of revenue to live on. I am constantly harassed by collections parasites, which I refuse to deal with. The US Department of Education refuses to reconsider anything. Their mindset is: “pay or else we will take”. So where were they when the original contract was created? Do you mean to tell me that they had no responsibility for the actions of the Schools financial aid people who were in reality, representing the Departments position in the loan process?

My loans are now growing at 8 percent per year, and I have no hope of ever getting them out of default. I asked for a deferment on loans at first, but the lender didn’t send me the paperwork in time. At one time I struggled for 3 months to 6 payments to try to get them out of default, so that I could consolidate them at a cheaper interest rate. But economic conditions ruined that attempt. I only managed to do 3 then I got laid off for half a year. I even tried the (then) new student loan ombudsman, which was a total waste of time for me.

Now I am medically unable to work, will soon be on disability, and I fully expect the disability payments to be cut in half due to wage garnishment. As an Honorably discharged veteran, I will be forced to live as a 3rd class citizen in a country I put my life on the line for, because of a shady education system that congress knew about, yet for 30 years has done nothing about. Nor have they helped the victims of those scammers. Isn’t that part of their responsibility as part of the commerce clause (of the Constitution)?

I went to National Education Centers, and took computer electronics class. I tested out of the first 3 quarters, due to the fact that I already had electronics experience. The School was later sold and renamed Olympia and was sold again and is now known as Everest – which is owned by Corinthian colleges in California; the same Corinthian colleges which was sued by the state of California and settled for millions of dollars in fines because of recruitment practices. These same practices still continue at their schools in other states. The fines for that California lawsuit, will be paid for with money obtained from student loans from their students so they need to recruit as many as possible.

Despite the fact that the Congress now has 40 years, (1970 to 2010,) that is 4 decades of historical evidence of these schools wrong doing, the Congress has done NOTHING to HELP the students of those schools who ended up in default because they could not get jobs in their fields, because of the schools standard operating practices that have changed little over the years, and the poor if not worthless educations they received.

On the contrary, some would argue that Congress’s empowering itself with collections powers that even normal creditors do not have, further victimized the students who were already struggling before they attended school.

Student loan service companies are also in the news. Sallie Mae, the corporation which the government itself created, and then became private, has been sued several times over the years for its actions. Suits included automated calls to cell phones, and participation in the 9.5 percent scam. Sallie Mae was also the leading entity pushing for bankruptcy protection removal. And Sallie Mae’s own bookkeeping practices are under scrutiny too. They have falsely charged millions of students late fees because Sallie Mae did not process payments on the same day they received them.

Most of the rest of the service agencies were found to have problems with processing claims, forbearance's, and payments in a timely manner, which cost the students thousands of dollars in late fees. One company was found to have over 100 boxes of unopened mail, which was later discovered to have caused over 30,000 students to go into default because their forbearance requests were never properly processed.

So why did congress create the student loan industry? Was it to fill their pockets with money, or to help this country? If it was to help the country then why hasn’t the congress helped the victims of these trade schools?

Many of us in default still work, still pay taxes, still pay the salary of the US congress, which now stands at over 130k per year while we struggle to make less than 30k.

Congress owes us some relief. When will it come? Many of us think only when we die. Because in this country it seems nothing is done until someone does, and we have already lost too many who were driven to suicide over this issue.

US Congress Is accessory to financial criminal acts of trade schools.

2011-07-24T05:04:00.000-07:00

Until the US Congress pulls its head out of its ass and starts looking at the victims of Predatory Student Loan Farming Proprietary Trade Schools the same way it looks at victims of any other kind of consumer fraud, then things will continue as they are, with students being victimized by the schools, and then by Congress and the Department of Education when the students end up in default.

And since congress has KNOWN about the Trade schools since before 1992, I now stand and give voice to my opinion that the US Congress is GUILTY, of being an accessory after the fact, to the frauds being imposed on students by the For profit, proprietary Trade schools, because the congress has FAILED to act in 30 years to grant the students some kind of financial or debt relief, or some kind of consumer protection.

Silence is default, where an obligation to speak (or act) exist. US V Twill. Congress HAS had, and STILL HAS an obligation to act. And until they do, they are GUILTY.

Student Loans: Collections company Has a DUTY.

2011-07-09T18:59:00.000-07:00

http://www.guardian.co.uk/money/2011/jul/09/student-loans-company-debt-collectors

Wow, what an article. The stupid British idiot Margret Dibben, didn't even read what the writer told her.

How she agreed to pay X amount of money, and thought the account settled. Then got a bill for more, contacted the service company and the service company agreed that THEY made the mistake, then it did not contact her for 4 years, DURING WHICH the writer thought their student loan was paid in full.

British idiot Margret Dibben, told the writer that she had a duty to tell the service company when she moved. WHY? If the debt was paid in full, she had no such duty. The service company for 4 years, let the writer believe their debt was paid in full.

Now the student has to pay more, and with interest because the service company let it go for 11 years?!! I would sue the service company for FRAUD, Misrepresentation and any other charge I could come up with. The service company had a DUTY to send the student a bill within 90 days after the student made the last payment, if anything else was due.

Folks, this is how service companies RAPE students financially. And this should never be tolerated by any one, either here in the USA or in the U.K.

Shame on Marget Dibben, for putting the blame on the student.

Student loans: Congress MUST change the 90-10 rule.

2011-07-03T19:01:00.000-07:00

For real reforms to happen in the for profit school industry, congress must change the 90-10 rule.

Under current law, a for profit college or trade school must get at least 10 percent of its education funding, from sources other than government student loans.

I believe if congress changed this law to 60-40, that you would see a lot of these "Student loan Farming," For Profit schools shut down.

Such a law would also benefit taxpayers who would not have to pay for so many defaulted student loans from students who were victimized by those schools.

Corinthian to Offer $450 Million Student Loan Program

2011-07-03T18:47:00.000-07:00

Corinthian colleges, which was sued by the State of California, for $6.5 million, including $5.8 million in consumer restitution, to settle a lawsuit alleging that the for-profit vocational operator engaged in false advertising and unlawful business practices by presenting inaccurate salary and employment information to students, is back in the news.

Now that the 2011 student loan reforms are going to require the schools guarantee a minimum wage and salary ability to its graduate students or risk loosing federal funding, Corinthian has decided to offer its own student loan program. Since it cannot feed of of federal dollars, it appears that it intends on continuing to at least parasite off of students, no matter how they get the funding, even if they have to fund it themselves.

I believe such is a dying effort on behalf of Corinthian. They probably know they are about to loose federal funding, yet they still want to continue to victimize students with their own version of the student loan program.

Congress will have to watch them closely and maybe even shut them down; hopefully before another few hundred thousand students get cheated.

Guest editorial, edit one

2011-06-21T19:40:00.000-07:00

I have been asked to write a guest editorial for a well known group.

Below is a rough draft which did not make it. I'm currently on the 3rd one and still working on it, and the 3rd one looks nothing like this one!.

Title: Dejavu 1992

We have seen Private for profit trade schools in the news lately, those of us watching the higher education industry, and particular, student loans. Seems the US congress is concerned over the high default rates of these schools and the large number of students who are falling behind in the payments or dropping out of the schools. The congress looked at the industry in general, and found history repeating itself. Dejavu 1992.

Congress found that many of the same claims filed against the Trade schools during the 1990-92 reform hearings, were once again, being voiced in 2010. And congress heard of, and knew of the thousands of students who attended these schools, “graduated” yet still ended up in default because their educations were worthless in the 1980’s, and 90’s. Now combined with nearly a decade of falling employment and near depression status in many states, students from trade schools are being hit particularly hard, and the default rates are soaring once again. Congress wanted to know why.

Prior to 1995, the internet as we knew it did not exist. So a potential student could not check out the claims made by these trade schools to see if anything negative might have been published about the schools claims. Today students can.
Prior to 1995, bankruptcy protection existed for students – after they waited a period of time as determined by law, ( first 2 years, then 5 then 7) but that consumer protection was eliminated entirely because fear a large number of students filing for bankruptcy protection, who attended the for profit trade schools. Later private student loans, not guaranteed (insured) by the US government were also added to the non bankruptcy rule. By the time this happened, students had access to many sources of information about schools and claims of non validity of the schools claims. Yet still the trade schools were allowed to continue.

Prior to 1992, little or no information about potential problems with any of the trade schools claims of high placement, or low drop out rates, or whatever, could be found. At that time, the US Dept of Education didn’t even require them to keep accurate records about these things. And as the 1992 hearings found out, many schools were in it for the money ONLY. Many did not care about the quality of their product they were selling (the education), nor about the students after they graduated. Many considered you placed if you worked part time doing the most menial jobs. – And the congress knew, and many spoke out about the students having worthless educations, and bills (loans) they could not pay back, because of those schools.

Add the fact that since 1990, most high school students are saturated with the idea that they need to go to college to be as successful as their parents, or to be more so, and that without a college education, they will end up as bad as their parents, or worse. With such pressure, most kids go right from high school to college, without being properly repaired for the responsibility and requirements. And another generation of students will be victimized by the trade school industry.

I see nothing changing. I run 2 blogs covering US government student loans. My personal blog that I call “victims of predatory trade schools student loan farming”, and the “Government student loan Time-line” blog, which shows an historical view of events in chronological order of when they happened. Both are good tools to see what has happened in the industry.

The Timeline is especially good, as it shows what the congress did for the industry, and what they did not do for the students. And the Timeline message is clear: Congress empowered itself, and did not help the students that they claim were victimized by the trade school industry. The historical time line screams the fact that congress gave itself collections powers beyond any other industry in America, when members of congress recognized the students as being victims of the schools, yet have NEVER offered any kind of relief to those students. The IBR program (income based repayment) does not lessen the suffering of those students who were cheated by those trade schools. And the IBR program makes the student deal with the Department of Education, THEN the IRS if the balance is not paid in full, as the IRS treats the amount forgiven to be income. So that is not a solution for these students.

Various other student loan “forgiveness” programs have been offered to people who specialize in particular skills, or who are willing to work in specific locations, and many of those require the student to be in good standing with their loans. These programs do not address the students who went to trade schools.

When will these students get some relief, and how many more decades of the same ole stuff, do we need to go thru before congress gets tuff on these schools? One of the claims the schools use to recruit students is how much money they will make, working in a particular field. Congress tried to link those claims to schools, to require the schools to ensure students would make that kind of money, or else loose the ability to participate in the Government student loan program. Due to heavy lobbying by the industry, congress did not impose such standards. This I believe, is a mistake.

Now the question of why the Government created the GSL (government guaranteed student loans) program in the first place. Why was the program started? If it was to help students, then one cannot help but question why the government has not yet HELPED the students that it says were victimized by these schools. Two different sets of congressional hearings, in 2 different decades, which told the congress basically the same things, should have resulted in the congress doing something to help those students.

Keep in mind that many of these students are not refusing to pay back what they borrowed, even though they were cheated by the schools, but rather are having a difficult time of it, due to the larger loans for attending those schools, and their not getting any higher paying jobs after wards. Many would pay the loans back if they could, but if you are one of those students in default from 1988 whose loans are at 8 percent or higher interest rate, because of the growth of those loans over the years, your chance of bringing them out of default are pretty slim due to the fact that the monthly payment is more than likely to be 3 quarters or equal to your take home pay. And that is just unrealistic for many, so they just give up trying.

And the fact is, the government itself helped create this mess by removing consumer protections from student loans. If they had not, the realities of the trade schools would have become apparent much sooner. The dismal economy of the country right now, (in many states) only serves to magnify the real and troubled system of trade schools, and is what has brought it to the attention of congress.

If congress wants to lower the default rate, it can do so easily by offering a special program for those who were victimized by these schools. And that is to allow the students to pay back the principal only and forgive (tax free) the accrued interest and penalties. And require that any payment made has to go to paying off the principal. Do that, and many would come out of default. The problem with this is the fact that it’s now know that government makes more off of a defaulted loan, than one paid on time. So it begs one to consider, did government create this situation so that it could get more money?

Many are now calling the student loan system the most predatory financial system in America, and that government should be held to the same standards as any other enterprise. And that the government should take the loss because of what it failed to do.

This is not about avoiding ones responsibilities. This is about equal treatment of a financial situation. If you buy a lemon car, you have consumer protections, options you can use to recover damages. If you buy a newly built home and the construction was shabby and unsafe, you have recourse's you can use to get your money back, or to get compensated for damages.

There are very few, if any recourse's for students who were cheated and/or mislead by trade Schools. Students who were cheated by these schools want to be treated like any other victim of commercial wrong doing. They want to be able to recover and get on with their lives. The current system prevents that from happening.

No matter what happens, one thing is clear, American taxpayers (students are taxpayers too) will eventually have to pay the cost of it all. And those in default in most cases, will pay for it being continual victims until they die.

Why bankrupcy laws for student loans were changed.

2011-06-11T18:02:00.000-07:00

While looking for data to use to write a guest editorial for Higher Education Watch, I found this paper that I downloaded. After reading it again, I found I had a jewel. Look at what people have said in the past about the changes to the bankruptcy laws - that they were unjustified, and that changing them was done because of a false perception of abuse. AND, that they were done at the last minute, over the objections of leading congressional representatives.

From The University of Michigan law school. PUBLIC LAW AND LEGAL THEORY WORKING PAPER SERIES WORKING PAPER NO. 72 MARCH 2007 JOHN M. OLIN CENTER FOR LAW & ECONOMICS WORKING PAPER NO. 07-005 THE NONDISCHARGEABILITY OF STUDENT LOANS IN PERSONAL BANKRUPTCY PROCEEDINGS

"After the Guaranteed Student Loan Program was established under the Higher Education Act of 1965, perceived over-use of bankruptcy to discharge government loans led to § 439A of the education Amendments of 1976.

"What is probably most important to glean is that these nondischargeability provisions
came up at the last minute over the opposition of key legislators. Both the primary co-sponsor of the 1978 Bankruptcy Code (Rep. Don Edwards) and the Chairman of the House Subcommittee on Post secondary Education who oversaw the Education Amendments of 1976 (Rep. James O’Hara) objected to the introduction of a student loan nondischargeability rule. O’Hara protested bitterly that Congress was “fighting a ‘scandal’ which exists primarily in the imagination” and that the amendment “treats educational loans precisely as the law now treats loans incurred by fraud, felony, and alimony dodging”

Ed note: LESS THAN 1 Percent !!!!!!! So why the changes? How is it justified?

"The evidence of a lower than 1% discharge rate of federally insured student loans in bankruptcy did not block the nondischargeability provision from entering the Bankruptcy Code — this even so under a comparatively liberal Congress that passed the debtor-friendly 1978 overhaul of
the Bankruptcy Code."

The article goes on to support income based repayment, but not the kind we have here in the USA where the burden is shifted to the IRS after the 20 year pay off, if the student is not able to meet minimum payment levels. In other words, based on income, if the individual is unable to make what would be normal payment amounts, the loan continues to grow, and at the end of the 20 year pay off the balance is taxed as income by the IRS. If that balance is over 100k, most people in default will not be able to pay the 32,000 dollars tax due on the 100k income balance. Thus the IRS will start imposing late fees, and interest and the student finds themselves in the exact same situation as before, except now instead of dealing with the Department of education, they deal with the IRS.

The bottom line is this: Congress took away bankruptcy protections for no good reason. And if they had not, the problems with the propitiatory schools would have surfaced a long time ago. The is an perfect example of congress passing the buck for a later generation to have to deal with the problem.

Guest Editorial

2011-06-11T17:53:00.000-07:00

After posting recently to another guest editorial in the Higher Education watch, I have been asked by someone to write one covering the continual victimization of student by the US government because of their failure to give some kind of relief to those students, while they empowered themselves with collections powers unheard of in the collections industry.

It is limited to about 1500 words, and so far I am on the 2nd draft. It is hard to tell what is truly needed in such limited space. 2500 maybe, but 1500 is a challenge.

It is VERY clear, and I think we are finally starting to see some good results, that these trade schools are harming students, and that the students need relief. In fact, I think the congress OWES US. Especially those of us with loans for those schools from before the 1992 reforms.

I recently quoted from a Michigan Law School, University of Michigan paper, in that same said article, about bankruptcy laws changing, and how they really were not needed.

I will publish that quote in the nest posting. But it serves us as more ammo to use to demand that our consumer protections be restored.

Student loans: America using SWAT to collect?

2011-06-08T18:11:00.000-07:00

http://www.deathandtaxesmag.com/100591/education-department-sends-swat-team-for-student-loan-payment/#2
Education Department Sends SWAT Team for Student Loan Payment

By Andrew Belonsky Wednesday, June 08, 2011

Anyone who has ever taken out a student loan knows that defaulting on payment can bring rude phone calls, harassing letters and a general state of anxiety. For one California man, however, his wife’s lack of payment sparked a SWAT team invasion, and it was the U.S. Department of Education giving the orders.

California citizen Kenneth Wright had quite a wake-up call Tuesday morning, when he says a 15-man SWAT team broke down his door, dragged him into the front yard wearing only his underwear, handcuffed him and then detained him, as well as his three children, for six hours while they searched his house. Why all the gun-toting hubbub? Because Wright’s estranged wife owes money on her student loan.

Seeking answers, Wright went to the local Stockton, CA, police and mayor and discovered the U.S. Department of Education’s Office of the Inspector General ordered the raid. The area’s Fox News affiliate contacted the office, which confirmed their orders, though wouldn’t say if such invasions of privacy and property are official policy.

It’s a pretty scary day when the federal government can bust into a private citizen’s home for something as frivolous as a student loan payment.

Nicely done, Department of Education, now you are part of the Police State.

What is next? Public flogging?

Student Loans: Restoring Bankruptcy equality.

2011-05-27T06:00:00.000-07:00

http://www.enewspf.com/latest-news/latest-local/24471-durbin-cohen-and-others-introduce-legislation-to-restore-fairness-in-student-lending.html

Article here shows SOME congressmen wanting to re-establish Bankruptcy rights for private loans.. but read what else they say.

"WASHINGTON, D.C.--(ENEWSPF)--May 26, 2011. 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) to introduce legislation in both the Senate and the House that will restore fairness in student lending by treating privately issued student loans in bankruptcy the same as other types of private debt.

Before changes were made to the bankruptcy code in 2005, only government issued or guaranteed student loans were protected during bankruptcy. This protection has been in place since 1978 and was intended to safeguard federal investments in higher education. Today’s bill would restore the bankruptcy law, as it pertains to private student loans, to the language that was in place before 2005, so that privately issued student loans will once again be dischargeable in bankruptcy. (see note 1)

“Students, especially those at for-profit schools, who find themselves unable to get enough government aid to pay their high tuition are turning to private loans to fill the gap,” said Durbin who first introduced this legislation in June 2007. “Unlike federal student loans, there are few consumer protections available for these private student loans leaving some students stuck with this debt for the rest of their lives. Today’s bill will restore some fairness in student lending, by allowing financially distressed borrowers of private student loans to discharge those loans in bankruptcy, just as other types of private debt can be discharged.”

WHAT?! Since when does a Federal student loan have any consumer protections on it?
Durbin, you have your head up your tail so deep, you won't see the sun for 8 days.

Note 1. Oh ok.. so lets let people file bankruptcy on the banks, but not the government who pisses away (wastes) well over 200 million dollars an hour. Who bails out wall street, but not the American taxpayer who pays all the frigging bills in this country and who cannot because government sold us out to foreign interests!

Either way, at least SOMEONE is trying to restore SOME kind of consumer protections on some student loans. Maybe if they are successful we can then use that as a spring board to get bankruptcy re-established for ALL student loans.

New Look at Pre Reform Federal Student Loans.

2011-05-21T18:20:00.000-07:00

This is about student loans made from 1970 to 1992, Before the first real reforms to the Federal Student loan program were imposed by the US Congress, as the result of 2 years of investigation of why high default rates existed during the later part of the 1980's.

If you are in default of a federal guaranteed student loan, a GSL loan, and the US Department of Education holds that loan, even if they have a 3rd party parasite harassing you, this article will apply to you.

My question is this: Does the US Department of Education hold an Enforceable contract?

To determine whether parties have an enforceable contract, you must be familiar with two basic concepts of contract law: the Statute of Frauds and the concept of acceptance.

The Statute of Frauds

Every state has a law known as the "Statute of Frauds," which requires certain contracts to be in writing in order to be enforceable. To be enforceable, these contracts must also be "signed by the party to be charged"; i.e., the person against whom you want to enforce the contract.

Ed note: There is no statute of limitations for fraud, even if it is discovered years later. THIS is how I think the US government thru the US Department of Education does not hold an enforceable GSL contract.

So, if one party has not signed a contract, and has only orally agreed to its terms, he or she may not be held to the agreement. This means that if a buyer makes a written, signed offer to which a seller has only orally agreed, the agreement is not enforceable. If the seller receives a second offer, he is free to accept it.

The Concept of Acceptance

The second important concept in determining whether you have an enforceable contract is that of "acceptance. " Along with "offer" and "consideration, " "acceptance" is required in every contract between two or more parties in order for the contract to be legally valid.

Likewise, "consideration" - something of value given to induce the other party to enter the contract - is usually not an issue in real estate contracts. Typically, the buyer promises to give money or property to induce a seller to convey real property. (This does not mean that earnest money is required to form an enforceable contract; the parties can form an enforceable contract without the buyer giving earnest money provided the other requirements are met.)

The remaining issue in real estate contracts, then, is the question of whether "acceptance" has occurred.

Only when a contract has been properly accepted does it become enforce able.

Even if a contract is properly accepted, it can later be determined that the contract was fraudulent in that it contained misrepresentations, or did not make full disclosure of all necessary facts concerning the contract, or its acceptance.

Ed note: Again here is where I think the US Department of Education does not hold an enforceable GSL contract.

The historical record is clear, that during the 1990s, from 1990 to 1995, massive reforms of the GSL (Government student loan) program, were enforced by the US congress, on participants of the program, including on the US Department of Education.

Included in these reforms, were requirements for participating education institutions. These requirements, were mainly about accurate reporting of the number of students who start a class, who finish a class, who are "placed" via job placement, and how many dropped out of the class entirely.

Few reforms were imposed which covered the student loan process. Nothing was done to help students whom the congress recognized as being victimized by predatory schools, many of whose owners or employees testimony to the congress, made it clear that the students were left with bills (student loans) they would not be able to pay, because they did not get the education promised by the schools. Instead, congress empowered itself with more bill collections powers, and continued its march towards removing all consumer protections from student loans, both Federal and Private.

Some say that by doing that, the US Congress created the US's first debtors prison; one without walls or bars on the windows, but a prison none the less because the student had no hope of escaping it unless they managed some how to pay off their loans. Many committed suicide. Others turned to crime to get money to pay them of. Most just gave up trying to pay them because none of their payment goes to paying off principal. Many are like myself. Struggling to pay our basic living expenses, never having any more money for extra things,let alone a student loan bill that is usually 1/3rd to 1/2 the size of your monthly take home pay.

I have a half readable copy of what I think is part of the paperwork for a student loan which appears to be a borrower disclosure and indebtedness information sheet, which clearly shows I paid a 78.75 "guarantee fee". Now isn't that like insurance? And if not, why were we not told what it was? What is a guarantee fee? Did I buy some kind of service with that? How come it is not explained on ANY of the paperwork?

Now let me ask you a question. What other financial loan situation do you know of that requires the loan be covered by insurance and Who pays for it? If I get a car loan, the bank requires me to carry car insurance. If I get a home loan, the bank requires me to have homeowners insurance. If the government is acting as an insurance agent for student loans, and I paid a fee, then why am I being haunted for the balance? Questions like this must be asked, because prior to the 1992 reforms, (and as far as I am aware of, still today) there is no requirement of financial aid people to explain all the aspects of a student loan contract to the student before he or she or the parents sign their names to the contract.

This is why I think the US Dept of Ed does not have an enforceable contract. No requirement that ITS' part of the student loan contract is properly represented and explained by financial aid officials who do the paperwork to get the student the loans they need to attend these predatory schools. To this day, there is little if any requirements imposed on any post High School financial worker, who helps students get Government backed student loans. So who is really representing the government's part in this contract? That is where I think the fraud comes in. That is where full disclosure is not made, although a token attempt is made by both the school and the financial officer. No one from government really talks to the borrower named in the loans.

I think that if anyone with half a brain knew that they were risking their entire future, with no chance of escape if the choice was wrong, then they would never have signed up for any kind of student loan, especially after congress removed all consumer protections from them.

So if the congress and Department of Education is an insurance company, then they should have to eat the loss of betting (insuring) something that was bound to fail.

Did law changes change student loan contract?

2011-05-21T15:23:00.000-07:00

If the banks are the lender, and the student the borrower, and the government the insurer, then didn't the bank change the contract, when it changed the bankruptcy laws?

According to the student loan time line at http://timeline-gls.blogspot.com/2009/07/time-line.html , the US congress changed Section 439A of the Higher Education act (not the bankruptcy laws) of 1965 is amended to impose a 5 year waiting period on defaulted student loans before a student can file for bankruptcy protection unless the student can claim "undue hardship". Undue hardship is never defined.

THEN, congress changed the bankruptcy laws in 1990. Section 439A of Higher Education Act of 1965 is Amended. The waiting period to file bankruptcy is extended to 7 years.

My question is this: are the people who got student loans prior to 1990, grandfathered? Seems to me that they should be, as the added time requirement does or did, have an effect on a persons decision making capacity, when it comes to student loans.

As such, changing the laws, changed the contract without approval of the parties involved, OR, people who got those loans, are grandfathered in and should now be able to file bankruptcy since more than 7 years have passed.

What do you think?

Student Loans, Did Government violate RICO laws?

2011-05-15T06:52:00.001-07:00

Government entered into commerce.
Made itself "risk free", beyond any other commercial enterprise.

It deliberately made changes to program that resulted in it creating a class of people who did not share same equity protections as others.
It deliberately removed all consumer protections from the student loans.
It gave itself powers beyond any other commercial collections entity.
It has endless resources to draw upon while its victims have few or none.

As an insurer, it created a system beyond mere insurance.
As such it did not represent itself properly during the contract process.

Its method of collecting if for any other commercial or private entity would be seen as criminal activity and investigated for such.

It ignored evidence of wrong doing to students, refused to help the victims of Predatory trade schools.

It takes the position that it is separate from the school contract; it is only an insurer of student loans, where the loans come from another source, and that the source too is a separate contract issue from that of the one the student and school has.

It is their position that the student has 2 contracts;, one with the school to pay them for services and/or education, and another for the financing which is between student and lender w/government being the insurer. This was NEVER explained to any of us in the 80's.

I say what it did, was create the most predatory lending scam in America, that should be declared unlawful and discontinued immediately.

US Goverment Guarenteed student loans: The nations largest Predatory lending scheme.

2011-04-10T15:16:00.000-07:00

9:41 AM 4/9/2011Student Loan Default: Government predatory lending.

Proposal: That the US govenrment created a predatory lending scheme, which benifited government and private corporations, more than those it was supposed to help. That they knowingly did this over a period of time and that they violated the rules of commerce while doing so. The results are that they created a 2nd class of citizenship whose right to life, liberty and the persuit of Happineess was diminished signficantly. They created a debtors prison without walls, but a prison none the less. And last, they created a class of Citizens who were not equal with the rest of sociciety.

Cheers to Alan Collinge of Student Loan Justice whose comments on a recent article at the Chronicals of Higher Education website, got me thinking that the government itslef is also a predator. It was Alan who accused the govenrment of creating a predatory lending scheme.
I agree with him. As this blog and its sister blog, the TimeLine of GLS loans shows, the US government willfully acted against the students every time it had the chance to help them. What little the government did, it did to protect its own intresets

Rule of law states that when government enters into commerce, it must abide by the laws and regulations of commerce, yet when it comes to student loans, we find that they did not.

Understand - the government is the insurance agency of the loans - they are not the originators of those loans. IF they are, then the orginal contracts should be challenged as fraudulent contracts. The Government never represented itself, nor did it require anyone to represent its interest in the contract making process. The government did not require any training or minimum requirements for a school aid, or financial aid person to be able to file or assist students in obtaining government backed student loans from where ever the loans originated from. Lending institutions like First Independant Trust of Sacramento, (now bankrupt and dis-incorperated), sold loans to students with government backing. Students defaulted, the government paid on the guarentee and now trys to collect from the defaulted students. The government is now using collections powers that no other entity in commerce has. No bank, no loan institution, no finance insititution, nor any State of the union, has the collection authority and powers that the US Federal government gave itself AFTER it started the Student Loan Program. I believe this is wrong. When government entered into this kind of commerce, they should have had to, and IMHO still should have to, carry the same risks as any other lender or fiancial institutiton.

The US government ONLY allows 3rd parties it contracts with, to steal or take your property from your bank account or your paycheck without a court order. Even friend of the court (family court) must issue a writ of garnishment before it can take your pay or bank account, for payment for child support.

The US government under its rules can force a citizen to pay for years on a defaulted loan without the principal ever dimishing, if the amounts taken from the defaulted student do not meet minimum payment levels. This is due to the way the government set up payment distribution. It is possible for a citizen to have half their pay taken each week, with not one penny paying off any principal or interest, and going only into the pockets of some 3rd party parasite (collections agency) whose montly fee is equal or more than the amount they steal (take) from the defaulted student. Case in point. Jefferys minimum payment for his defaulted studend loan is 700 a month and growing faster than he can pay it off. Right now he makes 300 a week. After taxes he takes home 255. From the 255 he gets garnished 15 percent (the supposed maximum allowed) or 38.25 a week. The cost of collecting the money from him is 250 of the 700 a month payment. The 153 dollars collected goes into the pockets of a 3rd party collection agency when then puts the remaining 97 dollars on to the balance of his bill. Thus his loan grows even though his paycheck has been garnished for the last 7 years. THAT my friends, is perpetual debt slavery, aka Debtors prison. Any money he puts into a savings account for retirement, gets taken. Any tax refunds taken. Jeffery is 55 years old and has NOTHING saved for retirement, and will have nothing but social security when he does retire. And that too will be garnished. He has been paying on his loans for over 25 years but because he can only get minimum wage jobs (in part due to the slander of defaulted student loans showing up on his credit history), he will never be able to pay them off, or see one penny of the last 25 years payments going to pay off the principal. IS that predatory lending or not?

Jeffery is not alone. The 1980's saw a group of students join him, when congress first found out about the predatory trade schools - then did nothing to help the students. Instead they wiped out bankruptcy protections and ordered the Dept of Education to impose a few regulations on all schools. In the 1990s, the trend continued. In 2010, only because of the extream dismal economy (caused by government overspending and poor trade agreements like NAFTA), even regular college students were going into default due to their not being able to find jobs. Again congress looked into the high defualt rates, saw that the Predatory Trade schools had the highest default rates, and targeted them as a scape goat instead of looking at ALL default rates to see that more students than was being reported were defaulting at some time in their life.

Today the Government is again strengthning its collections powers and doing NOTHING to help the students. So it begs the question to be asked, DID the government willfully create a predatory lending institution? I think the evidence clearly shows the answer is yes.

As the GLS Timeline blog shows, The government created the Student Loan Marketing corporation, also known as Sallie Mae. This quasi-government owned company while it was still partialy government owned, was instrumental in getting bankruptcy protections removed for student loans. Paying millions of dollars (which came from students who were paying off their loans or from payments from government for defaulted loans) SLM paid lobbyists to pressure congress to remove bankruptcy protections for student loans, even though the historical record at the time showed that less than 1 percent of defaulted students filed for bankruptcy. Those that did were people who suffered catastropic illness or disibilites. Also a few unscrupulous Doctors and Lawyers, also filed to avoid having to start their new carreers in total debtness. So to prevent a trend from starting, SLM pressured congress to change the bankruptcy rules for student loans.
At the same time, The Pell Grant program was being defunded and reduced, and the Student loan program being pushed and funding increased.

Then in the early 1990s when congress started looking at the high default rates, they found many problems with the GLS program, but offerd no relief to the students. They found learning institutions that were farming the student loans, and which did not care about the level of education they provided. The Congress found the US Dept of Education imposed little if no regulatory oversight on schools who were benifiting from the GLS program. So what did congress do? They made the US Dept of Education some oversight on the schools. But still the schools were allowed to continue at the peral of the students.

In 1999, the 7 year wait for bankruptcy was extended to for ever unless undue hardship was imposed. What the term "undue hardship" ment, has yet to be defined and so far, no one has had a case where the court has agreed that their loans are an undue hardship - even a quadraparapalgic in a wheel chair was fit enough to pay off her loans - even though she is being fed with a straw and has an IQ of a vegatable.

And thru the years, the entire sysem has been filled with Fraud, criminal acts, law violations and out right lies to the public by the institutions running and maintaining the student loans, in addition to the criminal acts, law violations etc by the schools.

1980-1992 Some for profit colleges abuse student aid programs by using high pressure sales tactics to enroll students under false pretenses, yielding no educational benefit to students, ad resulting in losses of hundreds of millions of dollars to students and taxpayers thru defaulted loans and wasted financial aid.

1987 United Education and Software, the service company for FITCO, (First Independent Trust Co.) was found to have hundreds of boxes of unopened returned mail in a warehouse, and also found thousands of unopened and unprocessed requests for forbearances. These thousands of requests for forbearance’s put the students in default because a loan service provider failed to do its job. No relief has EVER been offered to these Victims.

1998 New wage garnishment law, allowing wage garnishment without a court order is now put into effect by the Dept of Education, this is the first major attack on defaulted student victims by the government.

1990 In Feburary, the Inspector Generals office reports that 87 percent of student loan lenders have serious procedural violations and abuses of students

1991. The Emergency Unemployment compensation act of 1991, (P.L. 102-164), amended the Higher Education Act of 1965 to include section 448(a) which Now allows the U.S. Department of Education to require employers who employ an individual who is not repaying their defaulted student loans, to begin deducting 10 percent of the debtor's take-home pay in order to recover the entire balance due. Under this authority, no legal action is required to obtain administrative cooperation from the employer. This is the second major attack on Defaulted Student victims.

2003-2006 Various federal agencies including USDE, SEC, and FTC launch investigations into for profit colleges for violations of HEA and other federal laws. USDE announces 9.8 million settlement with Apollo Group citing multiple and flagrant violations of ban on incentive based recruiting and admission.

2003 Jan New York State Comptrollers office begins an audit of Devry New York’s compliance with the NY State tuition Assistance program Grant requirements for the 3 year period ending in June 2002. Devry ended up paying back an undisclosed amount.

2004 University of Phoenix paid 9.8 million to settle investigation by USDE into recruiting practices that violated the ban on commissioned sales.

2004 Nov. The California attorney generals office examines allegations of fraud against a number of for profit schools, including ITT and Corinthian.

2005. Private student loans are added to the list of non bankruptcy discharge able student loans.

2005 March US House of Representative from California, Representative Maxine Waters, gives testimony before the Committee on Education and the Workforce and Full Committee Hearing on “Enforcement of Federal Anti-Fraud Laws in For-Profit Education”, about the problem with proprietary trade schools. Again, showing the students to be victims of student loan abuse by the for profit schools.

2005 Nov New Jersey Dept of Labor and Workforce Development issued letter to Sanford Brown Institute-Iselin, owned by Career Education Corp, over allegations raised in 60 Minutes Television show report on for profit colleges.

2005 Nov Kentucky’s AG asked a court to strip Decker College, a for profit school, of its charter. Kentucky’s officials revealed widespread fraud and abuse.

2005 Aug Group of students have filed suit against ECPI college of Technology in Greenville, SC alleging that the school is a “Fraud and a Sham”.

2005 Aug Pennsylvania AG office has begun investigation of Lehigh Valley College owned by Career Education Corp, into business practices of the school.

2005 May Corinthian Colleges ordered to repay 776,241 to USDE for violations of Student aid procedures at Bryman college.

2006 Aug Securities and exchange commissioned launched an informal inquiry into stock option granting practices at Corinthian colleges,

2006 June Florida AG office widened its investigation of Florida Metropolitan University

2006 Aug Securities and exchange commissioned launched an informal inquiry into stock option granting practices at Corinthian colleges,

2007 July - LOS ANGELES — California Attorney General Edmund G. Brown Jr. today announced that Corinthian Schools, Inc. and Titan Schools, Inc. will pay $6.5 million, including $5.8 million in consumer restitution, to settle a lawsuit alleging that the for-profit vocational operator engaged in false advertising and unlawful business practices by presenting inaccurate salary and employment information to students.
Note, this is nothing new. ITS the same stuff that happened back in the mid to late 80's.. and its why the default rates were high back then.
20 years later, nothing has changed except the number of victims of these institutions grows larger and the government has more default'ers who will make them even more money.

Between 2000 and 2010, numerous schools and institutions were attacked by the State Attorney Generals offices, and by Federal oversight departments. Over 200 schools were penalized and/or forced to shut down. But not one finger was raised to help the student victims of those schools.

Instead of helping students, the government hired 23 of the top Collections Agencies in Ameirca to try to collect the money the students in default owed. They allowed these other companies to use the same powers the govenrment reserved or created for itself. That is it allows them to garnish pay and taxes, and benifit checks without a court order and to pocket the money. In other words the government is forcing a citizen to pay for something that he or she did not contract for. These 3rd party parasites constantly attack and file false claims of money owed to THEM. They misrepresent themselves as the US Dept of Education. There is something wrong with this system when a student is forced to pay a collections company without one penny being used to reduce the size of the debt itself. Such is a puntive punishment imposed on the student victim. Punishment created and approved of by the government.

It has been proven that when a student defaults, the government collects more money than when they do not. On avarage some 20-40 cents per dollar more. Therefore it is no wonder that congress has done NOTHING to help students who are in default, 90 percent of which are in default by no choice of their own, and because of circumstances beyond their control.

THUS, it is clear to this citizen, that the US government has intentionaly, and with knoweldge, created the worse predatory lending institution in the world.

What the government does not understand, but it will in the very neer future, is that theses students will retire as poor people, unable to provide for their own retirement, and thus will become a burden on taxpayers once again, because government refused to allow them to save any money for retirment and instead stole everything that the student had, after the govenrment helped the predatory schools victimize them.

So go to work pay your ever increasing tax rates people. I'm one of those people living off the government because I no longer have any choice. They will not let me save for retirement, nor will they give me any relief from being victimized by the predatory trade schools and now the predatory Government student loan scam.

Defaulted student loans: Government also a predator?

2011-04-08T05:11:00.000-07:00

Lets face it. When you add up all the facts of the Government student loan industry since 1970, your conclusion can only be one thing: that the government has been running a predatory lending scam on the population.

The evidence is incontrovertible. Government took away standard consumer protections on student loans, and failed to properly provide oversight of the institutions making profit off the student loans, as well as failed to ensure the governments position as part of the contract was properly represented to the student. And that the student was fully informed when they signed the contract for the loans.

Further more, proof shows that government makes more on defaulted student loans than non defaulted loans. What better way to ensure high profits, than to not provide regulations that would help students avoid default?

And when a student defaults for what ever reason that may be; medical, auto accident, disability, etc; the fact is the government has empowered itself with collections powers that make the Mafia envious. The government thinks they can, and now they do, just reach into your pocket and help themselves. Doesn't matter what anyone thinks, or how much you have left in your pocket to live on. Government makes itself the first one in line for your money and all without due process or a court order. The government makes you the slave and victim.

The fact is that students in default have no rights. If that is not predatory lending, then I don't know what is.

Where I live, the local tv stations go after predatory lending car dealerships all the time, but they won't go after predatory lending state or federal governments. After all, students are a seperat class by themselves.

Yes ladies and gentlemen, Student loans are Americas ONLY debtors prison. The price you pay is your life of missery. The only way to win this game, is not to play at all.

Then and Now, Predatory Trade Schools and Student Loans

2011-03-21T18:28:00.000-07:00

Good Intentions Gone bad.

There are 2 groups of Students with defaulted student loans. Those with loans from before 1990, and those after. The ones before 1990 had bankruptcy (consumer protections) and those after did NOT. Congress took the consumer protections away, in 3 decisive steps by changing the bankruptcy laws.

In the 1980's under Republican leadership, the Pell Grant system was eliminated, and Government Guaranteed Student loans was created to fill in the gap. This allowed unscrupulous operators to start up "training centers" or schools, to farm the student loans. This was discovered by the early 1990's Congressional hearings about the GSL program and why there were high default rates. Congress found out that there was little if any oversight imposed by the Dept of Education on the schools and passed laws to start imposing some kind of controls on the schools. And yet not only did they not go far enough, they recognized the class of students who were victimized by these predatory schools and still the congress failed to offer them any kind of relief from the crushing debt of being in default on student loans which they obtained to purchase what turned out to be useless educations that were not worth the graduation paper that they were written upon.

At the time of the 1994 congressional hearings into why the student loan default rate was so high, new high school students were beginning to feel the push towards going to college. I Graduated from High School in 1981, and only a few of the "smart" kids were steered by the school staff towards going to college. By the middle 1990's most of the kids were being told they needed to go to college. I saw this in my brothers class. My kid brother was 9 years behind me, and I saw the overall changes, and pressures put on his generation. They kept telling them things like, "if you don't want to end up like your parents, you need to go to college".

My Father was a heavy equipment operator at a General Motors Foundry. He drove a bulldozer and worked 12 hour shifts, 7 days a week for months on end. I did not want to end up like that, a slave to a job just to make a living.

My kid brothers dad, was a partly trained cop, who never finished his cop schooling, turned insurance adjuster. I went to trade school, got screwed, then got involved in Tool and Die, and became a Tool and Die Machinist, with a journeyman's card after putting in my time and earning the status. Then my health failed and I ended up in a state run nursing home for veterans; penny less, depressed and in failing health in part due to the stress of living with defaulted student loans.

My brother's Dad died early leaving him a large sum of money, so he decided to go to nursing school and earned a nurses degree, and then moved on to Anesthesiologist school and is now a "sandman" at a local hospital. Our sister went thru specialized training and is a nurses aid, and union representative for the local SEIU union at a county hospital. I never used the worthless education from the trade school, the very one that I tested out of the first 3 quarters and was able to skip them.

My kid brother will be paying off his student loans for the next 30 years, even though he is pulling in a 3 figure salary. Sis paid for her college with pell grants and a part time job before 1984, when you could still get them. I got stuck with student loans for a worthless education.

Many kids are still being pushed to go to college when there is no real reason to go, and cannot justify the cost of going. Not with this dismal economy. These kids are being coerced into gambling with their future. And too many are loosing the bet.

The Government made 2 devastating mistakes. One, it failed to provide proper oversight and limitations on the companies and universities that were benefiting from the new huge inflow of cash, (student loans) which were being made available to students for the first time. Second, the government removed consumer protections on those loans. Doing so, I believe, was intentional. They knew they were creating a class of people who would spend the rest of their lives in debt, either that or they should have known, as the data collected and investigated by congress by 1995, clearly showed this growing group of people. Yet no relief was ever offered, and congress's refusal or failure to act, further victimized the people.

Since 1990, Despite the limited oversight imposed on trade schools by the Dept of Education, we have seen a number of trade schools sued. Many for the same reasons. California, and New York for example have sued schools for enrollment practices, for falsifying graduation rates, and for not delivering promised training. Only when a school shuts down or is shut down by government, did you hear of the students suing the school. And 99.9 percent of these schools were trade schools. Only one was a regular 4 year college and they got a heavy fine.

With Pell Grants and limited student loans, the colleges were encouraged to keep costs under control. But many people now see and believe that with the flood of the new GSL loans, the schools attitude changed. Today they raise their tuition rates twice the rate of inflation every year, and that cost is passed on to students. Each new year, students go further into debt for an education that cost half as much just a decade ago.

Today we see the For Profit Trade schools under congressional scrutiny for their high default rates. So the answer from the trade schools is to spend hundreds of thousands of dollars (that they get from student loans, again leaving the student responsible and not them) to lobby congress to NOT put anymore restrictions on them.

Yet the record is clear, if we look at it truthfully. Trade schools have a higher default rate than traditional schools. Therefore they must be regulated more.

And the US congress MUST look at the way student loans are repaid both by those students in good standing and those in default. Congress must take into account the usual pitfalls of life itself, and this nations future and current economic conditions.

Congress also needs to stop punishing people in default and help them make it possible for them to pay off their debts. Sending 3rd party parasites (collections agencies) after them, is not the answer. Imposing massive fines and penalties which themselves start drawing interest, is not the answer. All that does is make the student give up trying, and start taking steps to avoid ever having to pay one dime.

Student loans: Another example of government good intention gone bad.

Trade School Defaults -New Data is the Same old Data.

2011-03-20T14:34:00.001-07:00

http://higheredwatch.newamerica.net/blogposts/2011/new_report_shows_the_damage_many_two_year_for_profit_colleges_are_causing_their_stude

From the New American Foundation, Higher Education blog.

" At two-year for-profit colleges, a whopping 76 percent who dropped out had trouble repaying their loans (with 50 percent defaulting), while 57 percent of those who graduated did so (with 30 percent defaulting).

As this data indicates, students who take out loans and successfully complete their programs of study at most schools are more likely than not to remain in good standing on their loans. But that is not true at two-year for-profit colleges, where nearly six out of every ten students who graduate with federal student loan debt face significant repayment problems.

While this data is not nearly complete, it certainly provides further proof that a large number of these two-year proprietary schools are leaving the low-income and working-class students they serve worse off than before they enrolled -- loaded down with unmanageable levels of debt and without the training they have been promised.

At Higher Ed Watch, we are sure that for-profit higher education lobbyists and their champions on Capitol Hill and Wall Street (as well as at some supposed government watchdog groups) will try to spin this data away, as they are so richly rewarded for doing. They will continue to do their best to distract and confuse policymakers by spinning tales about alleged ties between the Education Department, Senator Harkin, and short sellers."

Well True as that may be, it is still the fault of the US congress for FAILING to act back in 1992. They knew this stuff then. Now we have 2 decades more data to back up the old data. And its still singing the same old song.

When are we going to finally get some relief for the victims of these places?!!

Criminal Illegal immigrants demand rights to student loans.

2011-03-20T12:37:00.000-07:00

http://manhattan.ny1.com/content/top_stories/135879/undocumented-immigrant-youth-rally-for-rights

Undocumented immigrants rallied in Union Square on Friday to call for their right to be part of the American dream.

Dubbed "Undocumented, Unafraid, And Unapologetic" -- students across New York are asking lawmakers for help on the path to citizenship.

They want legislators to push for a state version of the DREAM Act -- which would guarantee them access to drivers licenses, work permits, student loans and other forms of financial aid.

They hope to breathe new life into the national debate by starting local.

"We tried nationally and it didn't work. So now we're going to use the strategy that the anti-immigrants are using of going state by state. And that's exactly what we're doing ; going state to state," said Maria Garcia Velez of the New York State Youth Leadership Council.

"They got their education here. To say that they are 'illegal' is a terrible thing to say to a child of God. And to talk about deporting them is just stupid," said Manhattan Congressman Charles Rangel.

Lawmakers in Washington debated on the national DREAM Act in December. It was passed in the House but quelled in the Senate.

Similar student rallies were held nationwide.""

HEY STUPID ARSES! CRIMINALS HAVE NO RIGHTS under our laws!
These ILLEGALS are CRIMINALS. They have NO RIGHTS. No right to drive, no right to an education, no right to work permits, or to obtain bank loans.

What Part of CRIMINAL, or ILLEGAL, or UNLAWFULL are these morons in Government Not understanding?!!!

Charles Rangle is a COMMUNIST and a TRAITOR to his oath of office if he refuses to uphold the laws of this nation, which make it a criminal act to enter into this country illegaly!

So, we get MORE people defaulting on student loans, because these illegals are undocumented, get their education and then leave without ever worrying about paying back the loans, while those of us who DO play the game by the rules and get defaulted, get SCREWED for the rest of our lives?!!! What is wrong with this picture?

Oh My Frigging Gowd. Now I have seen it all.

Changing of the rules DOES effect the contract.

2011-03-20T12:27:00.000-07:00

I'm sitting here, amazed at what is happening with student loans. Instead of helping students who need it, the government is treating them like criminals.

I cannot help but wonder if I should challenge the validity of any contract the USDept of Ed may have against me. Seems to me, every time they change the rules, it in effect, changes the contract.

Now I don't know how current students contracts read, but I do have an idea how mine read. I also know that NO GOVERNMENT AGENT, or TRAINED by government person to represent the government, helped me with my paperwork for my student loan. The Predatory Trade school person did.

No one told me that the government would be able to change the rules and force me to pay insane collections fees to a 3rd party collections agent, (PARASITE is the real term to use), to collect money the lender should be collecting. Nor did anyone tell me that if I refused to deal with the 3rd party parasite, and that I instead sent my payment to the original lender, that the lender would still pay the parasite and try to force me to pay the 3rd party parasite's collection fee.

Talk about Constructed Contract Fraud!!! WOW. This is why I say all student loans made before 1992 when congress removed most consumer protections, should be challenged as null and void for failure to make full disclosure of the terms, and effects of the contracts.

Changing the rules like this, DOES effect the contract, in that it effects the overall cost of closing, or ending the contract.

Sallie Mae target of yet another law suit.

2011-03-04T10:22:00.000-08:00

Once again, the whore of all financial institutions, Sallie Mae is at the center of yet another lawsuit over student loans.

I remind you all, that it was SLM Corp, (sally mae) that lead the charge to get bankruptcy protectios REMOVED from student loans, even though there was no real reason to do so.

Well now some defaulted students are fighting what they call unnessary charges to their debts.

Before sending these students' loans to a collection agency, Sallie Mae added a collection fee of 25 percent to their loan balances in a process known as capitalization. As a result, the total amount each of the plaintiffs owed ballooned -- growing, in one case, from approximately $48,000 to $60,000 and, in another, from about $73,000 to $103,000.The lawsuit contends that the 25 percent fee is "not reasonable" and has no relation to the true costs that Sallie Mae incurs when a borrower goes into default.

That is what happened to a lot of us. Not only is the balance of the original loan growing, but now they are being charged interest on a collection fee. Talk about loan sharks! WOW.. The MAFIA never had it so good.

I pray the Federal judge rules in favor of the students.

The High Price, of owing the government a debt.

2011-02-27T18:34:00.000-08:00

Since 1989, I have suffered as a victim of Trade schools predatory student loan farming. The culprit and its ally, the Federal government has cost me dearly in lost pay, lost opportunities, and in health due to the continual stress associated with this nightmare.

Now I have another one, this one by my states unemployment commission, and again, indirectly relating to the Federal government. Another debt that cannot be repaid. Nearly 15,000 due to a mistake by the state, and its total lack of cooperation, has resulted in my missing out on 44 weeks of Federal benefits which could have repaid the accidental overpayment, which was caused by a mistake in my states Unemployment department. The stress added to my already weakened condition and nearly gave me my 2nd heart attack. Now I have 2 debts hanging over me.

I am currently staying at the states home for veterans. I am considered to be a non-income person. I am, as it is, living off the taxpayers. This place charges the state an outrageous fee to have us here, we never see a bill, yet we are responsible for the monthly costs it cost to have us here. Go figure that one out, if you can.

Since I have no income, and have applied for disability, I am waiting the decision of the system. I've had 1 heart attack and nearly a 2nd one, twice in the last 6 months all due to stress and government owed debts. That Unemployment nightmare is triggering the 2nd one.

No one yet, has published an article on the real cost of being in Student loan default for 20+years, and being in debt to the government with no hope of repayment. I wonder what such a writer would find out if they did the research for such an article.

All I know is, that if this keeps up, I won't have to worry about paying off the student loans - they cannot squeeze revenue from a corpse. That my friends, is the only thing I have to look forward to right now.

And that is the high price of owing the government a debt.

Sold out again.

2011-02-27T18:26:00.000-08:00

I love that Higher Ed watch e-zine put out by the New American Foundation.

Recently they had a guest posting. I want to share some of it with you now.

http://higheredwatch.newamerica.net/blogposts/2011/guest_post_in_house_vote_did_politics_and_money_win_out_over_students_and_taxpayers-4

Guest Post: In House Vote on Gainful Employment, Did Politics and Money Win Out Over Students and Taxpayers?
Published: February 22, 2011
Issues: For-Profit Colleges

By Craig Smith

Last week, a majority of the members of the House of Representatives voted to block the Department of Education from issuing or implementing a regulation it has proposed on “gainful employment" or even enforcing the reporting and disclosure requirements that the agency included in the “program integrity” regulations it issued in November. This vote sent a clear message that a majority of House members, Republicans and many Democrats, are not interested in accountability for career education programs and don’t really care that one sector of our higher education system is responsible for nearly half of all student loan defaults.

WELL boys and girls, Here it is. Now the Democrats sold us out too. First it was the Republicans in the 70's and 80's as they eliminated or drasticaly reduced the pell grant system and moved us to a student loan (debtors prison) system.

It looks like the Victims of student loan farming, by predatory trade schools WILL NOT get any relief under the current administration. So we continue to suffer.

The Article says that nearly half of all student loan defaults are from such schools, without admitting what those schools are, and without admitting the high price those victims of those schools are paying.

Please congress, give us some relief befor it kills us.

Featured on Blog Awards.

2011-02-24T09:03:00.000-08:00

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P.S. If You Have More Quality Blog We Can Feature Those.

Well Shelia, check out the Time line blog, for USA student loan law history at www.timeline-gls.blogspot.com

30 Best Blogs for Recent Grads Saddled with Debt

2011-02-09T17:44:00.000-08:00

This was submitted by one of our readers, and I happily share it with you. Lots of good information for the newly graduated, and those about to graduate from school.

Remember, Defaulted student loans is the ONLY perpetual Debtors prison in America. Its like a roach motel, you go in, and NEVER get out.

Hi Mac,

We would love to share with you an article that we just posted on our own blog! “30 Best Blogs for Recent Grads Saddled With Debt” (http://oedb.org/library/beginning-online-learning/30-best-blogs-for-recent-grads-with-debt) would be an interesting story for your readers to check out and discuss on your blog, so we hope you will consider sharing it!

Thanks for sharing some great content through your blog. It has been a sincere pleasure to read.

Sincerely
J. W. (name withheld by blog author due to respect for privacy issues).

the student loan swindle blog

2011-02-08T16:47:00.000-08:00

http://dissidentvoice.org/2011/02/the-student-loan-swindle/

This blog is great. I realy like what they have to say, and its all true from what I have seen.

I suggest everyone read it, to find out what student loans are really like.

Report: Predatory loans to students By Carolyn Vaughn. This is new news?!

2011-02-02T17:02:00.000-08:00

Carolyn Vaughn writes an article in the "personal finance bulletin" at http://personalfinancebulletin.com/costly-student-loans-made-by-%E2%80%9Cfor-profit%E2%80%9D-colleges/6407/

Carolyn writes: "A report alleges that student loans are being made by “for profit” colleges with the knowledge that more than half the debt will not be repaid.

Companies, such as ITT Educational Services Inc. are making loans, with fixed interest rates as high as 12 percent. Other companies include DeVry Inc. and Career Education Corporation. The report goes on to say that, many of the loans include “high costs” and have “predatory terms”.

This is NOTHING NEW to us. In fact, I am finding it quite amazing that people are just now discovering how predatory these schools are. Now if only they would realize how predatory they have BEEN, then maybe some of us can get relief from the burden of defaulted student loans that paid for useless educations.

Still, I applaud Carolyn and others like her that are now writing about these schools. Thank you Carolyn.

Still no relief

2011-01-30T16:57:00.000-08:00

As we approach the 2nd month, of the 2nd year of the 2nd decade of the 2nd millennium, (2000 years) we find that no relief is being offered by the US Congress for students in default, despite the overwhelming and growing number of defaults due to the poor economy, AND the fact that congress is FINALLY taking a damm good close look at for profit trade schools and their worthless (and often more expensive) so called educations.

Congress is now seeing them almost the same way as the victims of these schools. True, some of the blame lies with the students who should have not chosen those schools. The "buyer beware" syndrome comes to mind. We should have been more careful in our choice of schools.

But in any other business, there are scam artists, especially in the automotive industry. Scam used car sales is a big one, and now the government has consumer protections laws to help the victims of those schemers.

But there are NO consumer protections for your post High School education. For some reason, educations were treated differently than any other kind of consumer debt. People used to be able to rack up tens of thousands of dollars on credit cards, file chapter 7 bankruptcy and not have to pay a penny. Not so with student loans.

Due to a few unscrupulous doctors and lawyers in the 60's, sallie mae Corporation lead the charge to get bankruptcy protection removed for student loans at a time when such bankruptcies were less than 1 percent.

Face it folks. They SCREWED us. And now they are doing to yet another generation.

I said it before, and I will say it again. This government has to get out of the student loan business. It has proven it is incapable of providing proper oversight and consumer protections on student loans.

Are we going to suffer yet another lost generation to these schemers? Or worse yet, another generation like the current one, many of whom have proper degrees from well known colleges, that cannot find work due to an economy in depression. These kids will be paying off their loans until they retire. Perpetual indebtedness.

We have enslaved an entire generation, with student loan debt. Only in America. We should all hang our heads in shame over this.

Student Loan Crisis - what they are ignoring.

2010-11-19T17:13:00.000-08:00

I see everyone is talking about the looming student loan crisis. A crisis similar to the one we saw at the end of the 1980's and early 90's.

Every one is talking about the predatory trade schools. NO ONE is talking about students who end up in default from those schools, and NO ONE is talking about those defaulted students ever paying back their loans.

In fact, when the student loan of a defaulted Predatory trade school victim is even mentioned, very little is mentioned except that the student usually fails to even try to make payments.

WHY? ANSWER: Because of the way the government has payments set up. It has been stated on this blog before, that if government changed the way a payment was applied, many defaulted students would try to pay off their loans. But under the current standards, they might as well not even bother. Again, this blog has stated before why this is.

Under the current standard, any money paid is first applied to the Collections fee for that month or pay period. If that gets paid off then any remainder gets applied to the interest for that month. Again if any amount of the received payment is left over, THEN and only then, does it get applied to the principal.

So if a defaulted students minimum payment is 600 dollars a month, (which would put 30 dollars on the principal) and the student makes only a 400 dollar payment, then none of that 200 gets applied to the principal. And the debt continues to grow, while the student is out 400 bucks. All this does is make collections agents employed and rich.

Congress MUST pass a law, and change the standard so that a specific percentage of any payment made, is applied to the principal. Other wise, those in default have no incentive to even bother trying to make their payments.

And the crisis continues to grow because the powers that be are willfully ignoring the real issues.

Plundering of the American dream

2010-11-09T20:13:00.000-08:00

http://www.wsws.org/articles/2010/nov2010/loan-n05.shtml

World socialist website has an interesting article on the Student loan Racket.
They quote several sources, including Alan Collinge Author of "the student loan scam". Also used as source is the Cronicle of Higher Education.

The article says in part, that the banksters have figured a way to plunder the American Dream from the working class.

Its a some what long article, but well worth the read.

For profit schools need to be shut DOWN NOW.

2010-10-10T15:58:00.000-07:00

www.higheredwatch.newamerica.net/blogposts/2010/durbin-38098

Some of the article appears below:

Congressional Record, September 28, 2010, pages S7587-90.

FOR-PROFIT COLLEGES

Senator Durbin: Mr. President, if you opened the newspaper over the last several weeks, you have probably noticed a large full-page advertisement that has appeared almost every day. It shows, usually, a young person, and it has a caption that reads: ``A hundred thousand working Americans don't count? Put the brakes on the Department of Education's gainful employment rule.''

There are a lot of photos of young people with that basic statement popping up in newspapers not only in Washington but across the United States. Others show photos of young people saying: ``I don't count? Some in Washington think I don't.''

These ads have been hard to miss. They have been running in more than 10 newspapers on a daily basis for several weeks, at a cost of millions of dollars. Most Americans, when they look at it, are puzzled and say: What is this debate and this battle all about?

Well, many of these ads are being paid for by Corinthian Colleges, Incorporated. This is a for-profit higher education company that provides training and education after high school for young people across America--and for those who are not so young anymore. Corinthian and other for-profit colleges are upset about a regulation that the Obama administration has proposed. Corinthian is spending millions of dollars on a barrage of ads across the United States, rather than basically taking the same money and offering it in scholarships to help their students. They want to stop the Obama administration from its proposed change in the rules. The proposed regulation could end Federal subsidies to some of the poorest performing for-profit colleges in America. That might hurt the profits of some very wealthy corporations, especially Corinthian.

How are the students doing at Everest College , for example? Recently, an undercover Government Accountability Office investigator went and took a look. That investigator posed as a potential student and found that the admissions representative at Everest College misrepresented the cost and length of the program and refused to disclose the graduation rate to this so-called potential student--not surprisingly. Do you know why? Only 15 percent of the student loans are being paid by the students who go to Everest; 85 percent of them are not paying on their loans. It shows they are getting into debt they cannot pay off.
(article continues)

EVEREST colleges??
For your information, Everest as it is now called, is mentioned in this blog several times.. Just go back and read what I have posted about it.

The school now known as Everest, was previously known in the 90's as Olympia Schools, and before that, was known as National Education Centers! (thats the one that screwed me).

And to find out only 15 percent of the grads are actually paying off their loans? My gowd. History is still repeating itself at the expense of taxpayers and students.

I find Senator Durbin's comments delightful, as they confirm that this blog has been worth doing. At last, someone in congress may offer us some relief.

Did Congress violate the equal lending laws?

2010-09-22T04:29:00.000-07:00

Since 1992, The Student loan situation in America had changed from its previous state. Students no longer had bankruptcy protection - or little if any consumer protections on their loans. But they did have an agency that was finally imposing oversight on the schools. Along with the newly created Internet, students since 1992 have had a bunch of resources available at their finger tips.

They could research a schools history, research student loan interest rates, and their reported success rates. And with new and improved regulations and oversight imposed by the US Department of Education, they could now initiate lawsuits against their school and recover from the loan debt if the school did not perform, or some how violated the recruitment regulations, and such.

Prior to 1992, students had no such resources. At the time congress was throwing out money to just about anyone who applied for a loan, little if any oversight was being applied, and at the same time, thru its semi private corporation Sallie Mae, the same government was systematically removing bankruptcy (consumer) protections from student loans.

I now wonder if doing so violated the equal lending laws? Did congress create a class of people who did not have the same equity protections as others? And did the congress have a duty to protect those people?

By removing the bankruptcy protections from student loans, did the government violate its own laws covering equal and fair lending practices? I think they did, but then again I do not know about these laws, as it is something I just thought about.

I think the government created a 2nd class of citizen, who could not enjoy the same rights and privileges as other citizens, because of the type of financial situation they were in.

And that the government is guilty of failure to make full disclosure, thus the contracts and claims by the government, are invalid, due to the failure to make full disclosure.

Some may argue that bankruptcy still exists- however, since the law changes to the bankruptcy laws were not made to specify what did and did not constitute a hardship discharge, the law itself remains vague, and perhaps should be challenged as unconstitutional on that basis.

As such the government did in fact, create a second class of citizens who under our laws should be entitled to the same treatment as any other kind of debtor.

This is for the courts to decide.

Collectors: who really OWNS the debt?

2010-09-22T04:08:00.000-07:00

I've taken the following text from another e-group that I belong to. It highlights a Very very critical point that those of us who are victims of student loan farming, MUST pay attention to, as it might help prevent us from being screwed yet again by unscrupulas collections agencies.

As I have said, NEVER NEVER deal with 3rd party collections agencies unless they can prove they have the right the ORIGINAL contract.

From a paralegal e-group:

For a bank to sue someone to collect a debt, the bank must own the debt. Similarly, if I was going to sue you for stealing my car, I would have to prove that I owned the car. I would have to produce a copy of the Title.

Seems like simple proposition. So simple, that it is often overlooked by debtors, their attorneys, and the Courts.

In the past decade, the credit markets have changed dramatically. Unlike in the past, most lenders immediately sell the accounts that they create. They bundle many accounts and then sell them to investors.

Though your statements may still contain the lenders name, the actual debt often is held by some other entity.

Recently, I defended a person who had defaulted on a Discover Card credit card account. Discover Bank sued to collect on the debt. I asked Discover Bank to supply copies of all of the records related to the account, including all documents related to the ownership of the debt, including all sales of the debt.

I suspected that Discover Bank did not own the debt. I knew that Discover Bank issued credit cards to consumers. Rather than retain the credit card account, Discover Bank sells the account – or all rights to the proceeds – to a trust. Discover Bank then no longer owns the debt.Discover Bank refused to provide the documents related to the sale of the credit card account. The Court eventually Ordered Discover Bank to produce the records. Sure enough, Discover Bank had sold the account to a trust. The trust agreement set forth the procedures for Discover Bank to reacquire defaulted accounts from the trust so that it could then sue the account holders.

Because most consumers, their attorneys, and the Courts, rarely challenge the banks, the banks often try to cut corners by skipping the step of reacquiring the accounts. By skipping that step, the banks or their collection agents – including collection attorneys – violate the Fair Debt Collection Practices Act.

I was able to win my client’s case. A panel of arbitrators found against Discover Bank, because the only evidence presented showed that Discover Bank had sold the account. The decision is final. Discover Bank can never again pursue my client for the debt.

My client now is pursuing a case against Discover Bank for the unfair collection practice of suing on a debt it did not own. Keep these issues in mind the next time you are contacted by a collection agent or attorney, especially one on behalf of a Discover Card.

Now what is the point of this? The point is WHO owns the debt. In our cases, it is usually the Department of Education. And the department of education is unwilling to deal with us other than collecting the full amount it claims is due.

NEVER NEVER NEVER send one dime to a collections agency. And if they get a garnishment on you, you can file in court against them for fraud, as they do not OWN THE DEBT, just like my para legal friend above sued the bank who did not hold the debt.

Yes, this is a technicality, but it is one that we need to take advantage of to prevent being screwed by big finance companies. Or in this case, our own government.

Call for Student Loan Forgivness, Amnesty.

2010-09-19T10:41:00.000-07:00

I demand this US congress offer loan forgiveness to those of us who are victims of Predatory trade schools student loan farming (SLF) prior to 1990.

The US government recognized this class of victims in US Senate Report 102-58, under section 3, item E, students as victims. (page 10 of this report). This at a time when there was No Internet to verify information on, no government oversight of the schools, or the student loan process in general.

This at a time when bankruptcy protection was being systematically removed from student loans, at the request of another created and semi-owned (at that time) Government Corporation called Student Loan Marketing Association, commonly now known as Sallie Mae corporation.

Many students waited the necessary time to be able to file bankruptcy only to have the government change the law at the last minute, and increase the waiting time.

WELL I have had enough being a victim. According to CNS News, on the Internet and in several other places, it is being reported our government spent 800 Thousand on teaching african men how to wash their genitals. And that the 800 Thousand was part of a 12 Million health and human services aid package

"The National Institute of Mental Health (NIMH), a division of the National Institutes of Health (NIH), spent $823,200 of economic stimulus funds in 2009 on a study by a UCLA research team to teach uncircumcised African men how to wash their genitals after having sex.

The genitalia-washing program is part of a larger $12-million UCLA study examining how to better encourage Africans to undergo voluntary HIV testing and counseling – however, only the penis-washing study received money from the 2009 economic stimulus law. The washing portion of the study is set to end in 2011.
www.cnsnews.com/news/article/75198

If our government can piss away 800 Thousand on that, while we got victimized by both the Predatory trade schools AND the actions of Sallie Mae, then I demand the government give us relief from these loans.

I demand Loan Forgiveness or restore our bankruptcy rights. Nothing else is acceptable.

Abandonment of claim,10 yr statute of limitations for collections?

2010-08-27T11:11:00.001-07:00

I've been wondering, if one could use the 10 year statute of limitations as a means to have the creditors claim declared invalid, if the creditor itself failed to make any direct attempts to collect the alleged debt? I mean, if the company who gave credit, fails itself to make a direct attempt to contact the debtor to collect the alleged debt, does that mean that the creditor has abandoned the claim?

In the case of student loans, some creditors never contact the debtor. And in my case, the original creditor no longer exits. Some other creditor bought up the alleged debts from the previous creditor, yet has not made any attempt to contact me about their claim. Instead, they send 3rd party collections agencies, after me, when they know I do not have to deal with the 3rd party parasites.

Indeed, one would think that after 14 years of telling 3rd party parasites to F__ off, that the original debtor could be sued and charged for the time, effort and materials the alleged debtor had to expend in compelled performance of answering and replying to the 3rd party parasites claims.

This is something to think about.

One thing is for sure.. ALL Students, regardless of where they are, should Categorically refuse to deal with 3rd party collections agencies. We must FORCE the original creditor to deal with us, or surrender their claims, one or the other.

US GAO Undercover: "fraudulent, deceptive, or otherwise questionable marketing practices"

2010-08-11T11:12:00.000-07:00

Higher ed watch, Aug 2nd thru the 6th.

Stephen Burd,an ally and pro activist for student loan reforms wrote:
At the moment this week when a packed Senate hearing room started watching video of career college recruiters lying to and badgering federal investigators posed as prospective students, the debate over for-profit higher education reached a turning point. For-profit college leaders and lobbyists can no longer simply deny that serious recruiting abuses have occurred at their schools, or claim that allegations of deceptive practices are the products of the imagination of "disgruntled" former employees and students, as they have done for years. A recently-completed undercover investigation by the Government Accountability Office -- which found (and secretly recorded) "fraudulent, deceptive, or otherwise questionable marketing practices" at every single one of the 15 for-profit schools it visited -- put those claims to rest. But that does not mean that the for-profit college companies implicated in the probe are ready to accept blame and change their ways. No, they have come up with a new tack -- scapegoating "rogue" employees.

In statements they put out this week, spokesmen for these corporations bent over backwards to make clear that the companies were taking the charges seriously and that heads would roll as a result. They were not, however, talking about the heads of the corporate bigwigs who have created a “recruit at any cost” culture at their schools, but those of the individual employees who were caught red-handed by the GAO’s hidden cameras.

As many current and former for-profit college recruiters have attested, they are under a tremendous amount of pressure to get students in the door and signed up for classes and financial aid, even if they know full well that many of these individuals have little chance of succeeding and don’t fully understand their student loan repayment obligations.

The fact that the GAO was able to so easily find these abuses at a time when the industry is coming under such withering scrutiny shows just how endemic these practices really are. That’s why quick fixes -- like firing a few misguided employees -- won’t make any difference at all.

The entire article can be read here: http://higheredwatch.newamerica.net/blogposts/2010/heads_will_roll_at_for_profit_colleges_but_not_the_right_ones-35249

What Stephen did not go on to say was that this is nothing new, and has been going on since the 70's. Nor did he mention congress ever offering relief for the victims of those schools..

What can they do?

2010-08-11T11:10:00.000-07:00

3rd party parasite CGS Services called my sisters house yesterday and talked to my brother in law.
He told them the truth about me - that I am an employed auto worker, haven't worked since 2008, ran out of unemployment benifits, and have no money.

They said they could help. He asked them HOW? How can a collections agency help someone who has no money? Talk about bullcrud. Who do those people think they are fooling?

9th Parasite since 2007, told to F.Off.

2010-08-05T19:23:00.000-07:00

Ya think they would learn? Heck no. They just keep sending stupid 3rd party parasites who are totally unprepared for who they were about to contact.

The latest Victim is GC Services, out of Gulfton Texas. On 2nd Aug 2010, they sent me the traditional first contact letter. Then today 5th Aug, they called my sisters house, which I have registered as my mailing address. I have my own cell phone. I am currently living in my car. A homeless vet, out of work for over 2 years. I am what the unemployed people call a "99'er", or someone who has ran out of unemployment benefits. I get free food from homeless shelters, I spend my days at friends houses who have not yet ran out of benefits. I go to my sisters house once a week to get my mail, and I scrounge enough money to pay my cell phone bill each month and put a tank of gas into my car.

Well, tomorrow I am sending out MY traditional, USDE F.U letter to the 3rd party parasite, along with a bill for compelled services rendered. Only one more letter to send 30 days later and this 3rd party parasite will be history. The 9th one since the USDep of Ed first contacted me after years of silence.

Ed still has yet to answer my questions sent to it in October of 2007. On Jan 4th 2010, I sent copy number 3 of those list of questions. And again, so far only silence has been the reply.

We must by law, deal with the original creditor. US Dep of Ed, is not that creditor. It does not hold the current loan paperwork according to its own website, so why are they harassing me?

I am tired of being harassed by them. Thinking of filing a class action suit against them for the damages both physical and mental anguish they are causing people like myself.

Still No Relief

2010-07-20T05:16:00.001-07:00

Now that the Economy has "officially" taken a dump, and students are again defaulting at astronomical rates, there is talk about helping them. But not the kind of talk we need to hear.

A student loan should be like any other kind of loan. And until government starts looking at them that way, things will not change.

I read an article today, that said that the best way to deal with defaulted loans is to rehabilitate them, which requires 6 to 9 months of payments, then apply for the income based repayment plan (which is worthless).

The problem with Rehabilitation is that the student must make 6 to 9 FULL payments. The fact that they are not financially able, is what put them in default in the first place, so making a full payment a requirement for rehabilitation is just another smoke screen of nothingness, designed to make people think congress is making headway when in fact its just doing nothing.

30 years of US Higher Education Assistance; a commentary.

2010-06-15T11:54:00.000-07:00

Beginning with the year 1980 to present, this is a commentary of the current and past US government student loan system.

By strict interpretation of the US Constitution, the US government has no business in Education what so ever. This is a fact. However, times change. And our government has taken the leadership roll of trying to ensure the citizens of this country would be able to meet the needs of future industry which would require higher learning. To accomplish this, they started the Higher Education Assistance program. The idea behind this was a good one, but as usuall with the ever changing US congress, changes to the program have resulted in what some call unacceptable results and others would call a dismal failure of the system.

Beginning in the 1980s, the system moved from a system where students with the ability to pay for their educations were expected to so so. Students who qualified and managed to get accepted into an institution of higher learning, but who were financially handicapped, were given grants to assist them, and loans were the last resort. It was expected that these students would work part time while in school, and during the summer break, work full time to pay for their education needs. This worked well for the first 20 years of the program.

In the beginning of the 1980's, the system moved to a model where student loans became the first option of student in need, and this opened a door to a multitude of problems that exist today, and that many would say are the reason they would claim that the system has failed.

As "easy money" became available through the Government Guaranteed loan programs, many schools increased the amount they charged for a given education. Speicality schools opened specificaly to benifit from the "easy mney" and were the schools that later were described as being involved in "Student loan farming". These schools were in it for the money, and didn't care about the level or the value of the so called education that they were "selling".

Since 1980, on average, the cost of an education has risen twice that of the rate of inflation each year. With the costs of a traditional 4 year college education growing, many students turned to the nontraditional trade schools that started popping up all over the country, because they appeared to be cheaper and would deliver the same results, in half the time.

Trade schools concentrated their education on the things the student would need to fulfill a particular job, and did away with mandatory classes that seemed frivolous, such as English, history, some math classes, geography, world history, literature, and the like that some colleges required a student to take to obtain a degree.

Trade schools would teach the math classes that were necessary for the job, not force a student to take 3 years of math, calculus, geometry, trigonometry, and other higher math classes.

However, during the 1980's, many of these so called trade schools were in business for one thing: The money. The quality of education held little or no value once the student left the school. THis problem still exists today.

At the same time, due to the "easy money" that came from Government Student Loans, schools saw an increase in enrollment. It can be said that while many of these students qualified for college, many did not need to go to college. Many would have been better off not going to college fresh out of high school. And due to the large influx of number of students, traditonal colleges and universities florished and expanded - at a cost. Still students applied for easy money loans and obtained them.

We now see that each year after 1980, the amount of debt a graduated student carried, increased. That debt is not good for struggling new workers who are just entering the work force for the first time. Not only do they have to pay their daily living expences, but are now saddled with a huge debt, some as much as what a home cost at the time, that needed to be paid off.

Any number of reasons could cause a student to default. Lack of knowedge about deferment, lack of loan service provider processing deferment paper work in time, so that a student could get a deferment without going into default, under employment, lack of any employment, devorce in the family, medical needs of family, medical condition of student changed after graduation, total destruction of home/life due to acts of God (hurricane katrina), and the limited window of 6 months for a loan to go from being late to being declared defaulted.

Also, it has now been proven, that some loan service companies intentionaly put students into default status before they were lawfuly allowed to, because a service company stands to earn more from a defaulted loan, than one that is paid on time.

Another reason for defaults is the processing procedures for a service company. In one case I have, when a student gets behind in their loan payments by one month, the only way they can catch up and avoid penalty fees, is to pay 3 months at the same time IF their contract allows such payments. One contract I saw said that double or tripple payments could only be made once a year at the beginning of the next payment year. So if the student fell behind during the 2nd month, they were forced to pay late fees for the remaining 10 months even if they made their payments 3 weeks in advance of the due date.

Other companies would sit for 3 to 5 days on a received payment before posting such payment to the students account. While the company may have received the payment by the due date, it would count the payment late if it was not posted by that date. And if the company sat on them for 1 to any number of days, the student was unfairly penalized.

Student loan service companies and their menthods and standard of operations are one of those problems that haunt todays student loan programs.

Another problem is accredation of the traditional schools verses the non traditional trade schools and what industry accepts.

Recruiting practices of both types of schools have constantly been under assult and many lawsuits during the 1990's and 2000's against schools were about recruiting practices of the institutions. Giving bonus's for directing students to a particular lender, for example, was one such problem which resulted in many lawsuits.

Consumer protections on student loans were systematicaly removed, in part because of lobbing efforts of the Stuent Loan Marketing Association, also known as Sallie Mae.
Bankruptcy protections were first restricted then outright removed for all but those who were declared to be either dead or drooling idiots that needed to be fed with a straw and be strapped to a wheel chair for their own safty.
Legal think tanks, and legal firms have made commentary on the removal of bankrutcy options and not one can justify it.

In fact, members of the US Senate committing whose laws stripped students of bankrupcy protection, objected to the changed wording of their bill, claiming that the congress was chasing ghosts by eliminating the bankruptcy option.

The result, combined with the fact that the real default rates are not being reported by the current system due to its lack of proper standars, means we have a large number of ex students whose lives have been destroyed by defaulted loans. Some have turned to crime to try to pay off their loans, others were driven to suicide, and yet some simply left America never to return, to escape the effects of having an uncontrolable debt dominate their lives.

And today, a larger percentage of the graduating class this year, are joining that group of defaulted students, due to the economic conditions facing this nation.

It is way beyond time for congress to take a deep look at defaulted loan situation.

My conclusion: the move away from Grant based help, to Guarenteed loans, was the wrong move and one which as had too much of a negative effect on students and the future of this country.

A commentary on US Senate report 101-951.

2010-06-15T05:50:00.000-07:00

I was recently asked for my thoughts of senate report 102-58, and decided to re-read and write commentaries to all 3 of the reports I have.

Thoughts on senate report 101-951, a hearing on problems confronting the Higher Education Assistance Foundation, and examining the financial difficulties confronting the HEAF, and the impact that the situation has on the GSLP (guaranteed student loan program).

Held on 3 Aug 1989, by the US Senate subcommittee on education, arts and humanities, of the committee on labor and human resources, US Senate, 101st congress 2nd session.

Amongst those present, are Senator Tom Harkin, D Iowa who is calling for hearings on the for profit trade schools which today again, have skyrocketing default rates.

The article explains how HEAF was supposed to work, and what safeguards it had in place.

Right at the start on page 13, is a key point that under the Reagan Administration the HEAF program shifted from a Grant program to a loan program.

Senator Ted Kennedy, (chairman) said that when they developed the HEAF programs in the early 1960's it was with the idea that any talented young person in America that had the intellectual skills and the ability and gained entrance into an institution of higher learning would have available to them, the matching of either loans or grants or work study or employment of the resources of their families and match them together in order to be able to obtain the best education that they desired and that they had a capability of achieving.

And that instead, the congress had put dollar signs on the doors of the higher institutions of learning, and denied millions of young people the opportunities to go to schools.

Prior to the 80's, it was possible for a student who was able to obtain entry into a higher institution to be able to pay for their education with a combination of low interest loans, Grants and part time work while in school, combined with full time work during summer break. Loans were the last option with many folks using grants first.

It is clear from this report and others, that the Republican political party, moved the system away from grants, to one of loans which set this country up for a major disaster.

It is also clear from this report that the highest default rates come from the private for profit trade schools.

It is also noted that in early 1988, HEAF moved to cancel its agreements with several major lenders whose loan portfolios consisted of 90 percent or more high risk loans; that is loans to trade schools and non traditional colleges.

So it is clear to me, the reader, that even in 1988, HEAF and the government knew of the high risk of giving loans to students who attended these schools. So why did they let the schools continue??

On page 118, it is said by Mrs Fholicher Executive director, National council of Higher education loan programs, Inc., that under the GSL program, a student can enroll in courses of less than 300 hours, while to qualify for a Pell Grant, the course must beat least 600 hours long.

Mr Blair, president of the National Association of Trade and Technical schools told the senate that there are no incentives, only penalties for dealing with high risk students.

Mr. Martin national association of student financial aid administrators, WDC said, that "if we have learned anything out of this, it is that it has been foolish and short sighted to have shifted from Grants to loans as the main source to fund our students, and to expect the very low income disadvantaged students who are poorly prepared to have the same primarily finance, post secondary education, at least starting off with high amounts of indebtedness.
We should be providing these students grants and work opportunities to give them a chance to be successful, and then give them loans to move on, That system has worked and it has proven it has worked before.
"I think it would better to change the policies have you have proposed, to use programs like Pell grants to give these student the opportunity for that, and use loans only as a last resort, and for people who maybe aren't as poor that have credit experiences.

On page 187 (of my pdf reader, page 182 of the actual report) Senator Pell (the government grants are named after him), asked Mr. Blair, "when we have kids who don't replay their loans, who default, doesn't that have a bad psychological effect on them for the rest of their lives?"

Mr Blair, President of National Association of trade and Technical schools.

Mr, Blair replies, "very much so Sir. We created a video that declares a very simple message: you default, you die."

The report goes on to talk about trade schools with high default rates and how they should be removed from the program. They do not discuss the victims of those schools.

Overall the report deals with how groups of students are defaulting. It is also clear although it is not mentioned directly, that one key factor is causing higher default rates: The burden of the cost of the education on the student. With fewer grants available, has resulted in a larger percentage of the cost of the education is being placed directly on the shoulders of the students. Students who just beginning in life, do not have the resources to properly deal with student loan issues if a future emergency or accident or something like that, intrudes on their lives.

A combination of minor factors then result in higher default rates for these students.

It is also clear, that by shifting the cost of higher education from one of which was paid by grant to loans, that the schools themselves, were able to go on a spending spree, and thus justify higher costs. Higher costs for a given education, results in default rates that are also higher because the amount of indebtedness also increases.

Federal oversight proposals target growing industry of for-profit colleges

2010-06-14T19:34:00.000-07:00

http://www.washingtonpost.com/wp-dyn/content/article/2010/06/14/AR2010061402985.html

Reprinted without prior permission.

By Elaine Korry and Liz Willen
Monday, June 14, 2010; 1:55 PM

SACRAMENTO -- A year ago, Joseph Carrillo Jr. had to fight to get into crowded classes here at the public American River College. He couldn't find a guidance counselor, and he felt lost. So he switched to the private University of Phoenix. There, everything fell into place -- at 17 times the cost.

Carrillo's move from the community college to the for-profit university shows the allure of a higher-education sector that is growing so fast the federal government wants to rein it in. The 24-year-old, who hopes to own a business someday, said he was impressed by the ease of course scheduling at his new school and unconcerned about future debt.

"What good is cheap tuition if classes are so packed you can't even get in?" he asked.

But Congress and the Obama administration are concerned.

For-profit schools might be offering an educational alternative, but that choice often comes with crushing student debt, some observers say.

New federal rules, expected to be formally proposed in coming days, would tighten oversight of the industry. One much-debated proposal would cut federal aid to for-profit schools in certain cases if graduates spend more than 8 percent of their starting salaries to repay loans. Sen. Tom Harkin (D-Iowa) also plans this month to begin hearings on the industry, examining recruiting practices and student loan default rates.

Supporters of the schools say the proposed rules could shut down hundreds of programs, undermining President Obama's goal of making the nation the world leader in college completion by 2020.

"It will have a horrendous effect on programs in California and nationally," said Harris N. Miller, president of the Career College Association, which represents more than 1,400 for-profit schools. The association, which wields some clout in Congress, is mobilizing to fight the proposal.

Nationwide, enrollment in for-profit colleges soared from 673,000 in 2000 to 1.8 million in 2008. The growth has been fueled in California and some other states by discounts and incentives the schools offer to help students apply credits earned online toward community college degrees.

For-profit schools such as the University of Phoenix, DeVry University and Kaplan University (owned by Kaplan, a subsidiary of The Washington Post) offer professional, vocational and technical training and serve a large number of minority, low-income and first-generation college students. But the industry faces federal scrutiny, and in some cases lawsuits, over issues related to debt and recruiting.

Miller has said repeatedly that the default rate on the loans of students at for-profit schools is about the same as it is for students who attend community colleges and nonprofit institutions that specialize in serving minority students. He denied that for-profit schools leave students with too much debt.

"The accusation is absurd," Miller said. "Career college is the fastest growing segment of postsecondary education because it provides value and employable skills. Students wind up with a mountain of debt when their journey through higher education is aimless and, economically, pointless."

Federal aid to for-profit colleges jumped to $26.5 billion in 2009, from $4.6 billion in 2000. Two-thirds of for-profit students receive federal Pell grants, which target low-income students and don't have to be repaid. Even so, more than half of bachelor's-degree recipients in 2007 at for-profit schools fell into a "high debt" range of at least $30,000 in loans, a recent College Board study found.

"These schools lay it all out for students with Pell grants and student loans," said Stan Jones, president of a nonprofit organization called Complete College America. Students, he said, "don't feel like they are paying for anything, but it's really just like a credit card for higher education."

For-profit colleges rely more on federal aid than many other higher-education institutions. The aid helps offset tuition at for-profit schools, which averaged $14,174 in 2009, according to the College Board. The average for two-year state schools was $2,544.

California is in the vanguard of a movement toward cooperation between overstretched community colleges and for-profit schools. Its community college system, with nearly 3 million students, has the nation's lowest tuition: $26 per credit. Carrillo's credits at an outlet of the University of Phoenix near here cost $450 apiece. But community colleges in this state are so crowded that officials don't discourage students from attending for-profit schools or enrolling in their online courses to satisfy degree requirements.

For-profit enrollment surged more than 20 percent in California last year, while the state's 112 cash-strapped community colleges were reducing course offerings, canceling summer school and turning away up to half of applicants. An estimated 8,800 students, including Carrillo, transferred from the state's two-year schools to the University of Phoenix.

While the Obama administration seeks to increase oversight of for-profit schools, it acknowledges their significant role. Education Secretary Arne Duncan last month urged the sector "to get rid of bad actors." But Duncan added: "Among the for-profits, phenomenal players are out there making a huge difference in helping people take the next step in the economic ladder."

Korry is a freelance writer based in the San Francisco Bay area. Willen is associate editor of the Hechinger Report, the nonprofit, nonpartisan education news outlet that produced this article. It is affiliated with the Hechinger Institute on Education and the Media, based at Teachers College, Columbia University.

END

Ok.. I have posted this entire article because I am so ANTI For profit trade schools. Since my own experiance with them in the 1980's I have seen too many cases where the schools turn out worthless educations and the kids are left with debts they cannot pay, and would have been better off if they had never gone to "college".

Remember folks, Senator Tom Harkin, D Iowa will be having hearings on this some time soon.. Contact his office and voice your support of ending government loans to For profit trade schools.

Student Loan Alert: Texas forcing students with loans to use loans to subsidise others education costs.

2010-06-14T19:21:00.001-07:00

Posted on the Galveston County Daily news website, http://galvestondailynews.com/story.lasso?ewcd=3efe00d198b1425a

Letters to the Editor
June 14, 2010

Student Loan Practices Should Be Abolished

I’m a recent graduate of Texas A&M University where I obtained a Bachelor of Business Administration in accounting and a Master in Science in management information systems. I recently received a “set aside notice” that a certain amount of my tuition for the spring 2010 term had been set aside for needs-based financial assistance programs for Texas residents as required by the Texas Education Code, Sections 56.011, 56.012, 56.095, and 56.465.

After looking into the law, I found that the policy of “set asides” has been in effect since 2003, but it’s only recently that the effects of section 56.011 have caused students to become aware of this practice.

I took out a loan to pay for my last two semesters of graduate school, and as required by law, a portion of my tuition was given to a “needs-based” student, when I was, in fact, a needs-based student. It appears that this policy has forced me into paying interest on student loans for a person to go to school when I had to take out the loan to get through school myself.

Additionally, when reading the Texas Education Code, I noticed the law states that the financial assistance programs are for Texas residents. As an informed Aggie, I’m aware that more than 12,000 Texas college students benefit from HB 1403, which allows college students, who’re in the country illegally, to qualify for in-state tuition and financial assistance.

The money already has been taken from me and I realize that there’s nothing I can do to recoup these losses; however, I can inform the public of this practice and hope that once the people are informed about this they will be interested in correction of this policy.

I recommend that all college students and parents contact their university and find out how much of their ever-increasing tuition has been set aside already and contact their state representatives and senators and ask that this practice be abolished.

Shawn A. Johnson
Friendswood

What the HECK IS GOING ON WITH TEXAS?!!!
A person who has to take out a loan to finish school, has to pay interest and PRINCIPAL on a loan that is not even being used for THEIR education?!! That is no different than the government coming in, taking out a car loan for someone else, and telling me I have to pay it off, without giving me the keys to the car. Bull crud!

That is nothing less than Economic slavery, and is a direct violation of the 14th Amendment to the US Constitution and to the Texas Constitution, Bill of rights Articles 3, 9, 16, 17, and 19.

I sincerely hope Shawn Johnson sues the government for this infringement. My God, how much more of this communistic socialism is this country going to tolerate?

Let me ask you a question about government misrepresenation.

2010-06-03T07:01:00.001-07:00

Lately I have been in email conversation with Chuck, a fellow who asked me for my thoughts on his case. Chuck went default in 1986, after attending ITT Tech and a series of personal tragedies which followed. Shortly after Chuck graduated, the death of his father put him on the fast track of learning about real finances, banks, and dealing with debt collectors. His fathers estate was in total chaos, and his mother was incapable of figuring it all out. After 2 years of struggling with his fathers estate problems he managed to get it settled, and started working on rehabilitating his student loans. Then a second tragedy struck, when he was hit by a drunk driver, illegal immigrant, and was left paralyzed from the waist down.

Chuck said he fended off the collections agencies, and tried to work with The Dept of Education to reach a settlement that he would be able to pay, based on his monthly resources of his Disability check from Social security. The Dept of Ed refused to deal with him and instead, kept sending 3rd party collections agencies. It got so bad, that Chuck started charging the 3rd party collections agencies 100 dollars for each reply he had to send, claiming that it was compelled performance, and that he was justified for demanding compensation for his time and materials.
He never collected a dime, but the agencies started leaving him alone.

But not the Fed. They kept sending him stuff. So asked around.. The Fed backed up the loan. When the loan defaulted, the feds paid off the original lender. Therefore the fed should hold the notes. When he went to the Federal student loan website, chuck was surprised to find Bank of America as listed as being the holder of his loans. (they were not the original lender).

If the Fed paid off the defaulted loans to the original lender (who later filed bankruptcy) then shouldn't the fed be the holder of the loans? Or can the feds then sell the loans (in default) to another party, in this case, Bank of America?

If the fed can sell the loan to a 3rd party, then the Fed is misrepresenting itself in its letters to Chuck claiming that he owes them money, when they do not hold the paperwork.

And Bank of America has never attempted to contact Chuck. Now what is going on here?

Misrepresentation on this scale, is FRAUD, and Fraud voids everything.

If Bank of America has held the loan then why hasn't it tried to contact Chuck? If the feds paid off the original loans, then why do they have BOA listed as the loan holder?

Something is not right there, and I believe that is how we will be able to force some relief for those of us who are in default with loans made prior to 1990.

wish they would stop

2010-06-02T05:18:00.000-07:00

FYI, all comments left here are moderated. Which means the 30+ chineese sex ads that are left as comments, are never published.

I just wish those dummies would stop leaving such comments. They will never be posted.

Misrepresenation by the Fed.

2010-05-31T14:45:00.000-07:00

Justup247 writes:

LOL, I agree with you and from what I've read on their site http://www.fsacollections.ed.gov/contractors/ga/stats/index.asp
in one of the file, 2009 PCA procedures I think, it said that if they could not produce the original that it would be returned to lender and they should write it off... not exact quote...very informative site...btw.
If my case should prevail it would reassert the NEED for very careful record keeping and storing of ALL documents concerning loans, just in case they should be called into court....Especially IF it is white out on the tops of those docs and it did say "VOID"... lol
They said they were going to send me ALL the info on the $4,000.00 check that was returned, but it has been over 3 weeks, so I guess another demand letter is in order... I'll give them until the 1st of June. My last was entitled "Asinine Absurdity", I'm just a grouchy ol woman and they really should not play "Texas Hold'em" with me, I don't bluff....
Good communicating with you, lets keep it up??? Higher education works, when we use it against them>>>>LOL. Judy Happy M.D...

Yep. They cannot produce the original documents. I think I found the way out. The US Government is guilty of misrepresentation. They are one of the 2 main parties, not a 3rd party as most of us believe.

The 2 parties are belived to be the lender and the student, when in fact, the 2 real main parties are the Student and the Federal government with the bank acting as its agent.

The US Government did not make full disclosure of all facts and such, therefore the contracts are null and void on their face.

same ole non solutions.

2010-05-10T07:00:00.000-07:00

http://online.wsj.com/article/SB10001424052748703686304575228350476040366.html?mod=WSJ_latestheadlines

Wall Street Journal. Story about income based repayment plans.. thats right, there are now 2 of them.

The current program, rolled out in July 2009, caps the amount of a borrower's discretionary income that goes to repaying a federal loan at 15%. Then, after 25 years, any remaining balance—both principal and interest—is forgiven. If the borrower works in public service, the balance is forgiven after 10 years.

Congress recently passed legislation that expands the program. For federal loans issued after 2014, the cap will be lowered to 10% of income, and the debt is forgiven after 20 years. (For public service, the period remains 10 years.)

How do you know if you qualify for the programs? If the total amount of student-loan debt you owe is equal to or more than your annual salary—based on your most recent tax return—it's likely that you are eligible. If you have had a dramatic change in income since then, you may also qualify.

The current 15% income cap may end up being even lower because of the program's sliding scale. If your income is under 150% of the poverty line for your family size, you pay nothing each month. If your salary increases, your payments are recalculated.

For example, a single person earning $60,000 a year owing $60,000 pays 10.9% of her income, or $545 a month, toward student loans under the program. A family of four with a household income of $60,000 a year and the same debt pays 6.7%, or $335 a month.

Borrowers who have defaulted on federal loans, often those most in trouble, aren't eligible, unless they make good on their defaulted loan by "rehabilitating" it.

The current income-based repayment program also has a marriage penalty that is scheduled to be repaired partially by July 2010. Currently, joint incomes are counted, but not joint payments toward student loans.

And once again, what they did not tell you in this article, is just as important. Again, what they call income, is very important. Income is not a defined word in any law book, so it will have to be defined in the NEW CONTRACT you will be signing when you sign up for this kind of repayment plan.

The new contract will be non negotiable, and will include many penalties and interests claims that the student my be contesting as invalid, at the time they sign up for the income based repayment option.

Default people? Rehabilitation? How? Most places want as much per month as the original payment was, and that's what got the students into trouble in the first place.

And it doesn't mention that the IRS is taking the amount that is forgiven and claiming it to be income for that year.

And last but not least, it still does not offer any consumer protections for future students.

Once again, same ole crap.. new reporter spewing it out.

No relief yet.

2010-05-02T18:23:00.000-07:00

Well, its been a while. I haven't heard squat from the latest parasite attempt.

And I see with all that is going on, nothing is being done to help those folks who are now falling into default, and nothing for those who are already in default.

Great to hear Sallie Mae is being forced to lay people off, along with many of the other service companies. Love to watch such parasites die.

One congressman is calling for reforms of the pell grant system - a good idea.

Im still getting emails from people with their horror stories..
Between the devistated economy and this, most people are just giving up.

Reform Student Loans Now

2010-04-19T04:40:00.000-07:00

November 2008, post
http://voptsslf.blogspot.com/2008/09/time-to-call-for-student-loan-reform.html contains the 27 item call for student loan reform.

If those reforms had been put in place, I would never have gotten a letter from a student like this one:

Dear Mr. Macwildstar
I do not even know where to turn to, I am seriously thinking of just sitting down and crying.

I am going to try to explain a little about this
I have been in disputes with the Student Loan people since 1993 to present.
I have been in disputes with the college that I did not attend since 2003. I attended Tidewater Tech in Norfolk for least than 2 months in 1991, and Tidewater Tech signed my signature to checks that the Dept of Education sent to them. Centura College (the college I never attended, went into a federal database, and wiped out Tidewater Tech name and address and put all their information in stating I signed for loan with them in 1991, 1993, 1995, 1998, 2005. Tidewater Tech forged my signature onto the application to join the techinal school in 1991-1992. The dates on the orignial loan to the Federal government is fudged or forged.

I have never seen a Federal Tax return since 1994. My federal tax returns are taking and I have to keep paying for something I did not even sign on for. I have asked the IRS where my returns go to, they don’t know, I have asked the Default Resolution Group, they don’t know. They only say I have taking out more loans when I dispute these. I have wrote the Treasury Department to ask where my federal tax money goes to. Ever year I work and I file my taxes and my money is giving to someone, and I never ever receive a letter stating where it goes to, how much is owed, or when this will be paid for.

In 2003, I wrote to the Dept of Education disputing Tidewater Tech. I won against Tidewater Tech. Tidewater Tech was to pay back the Dept of Education over $3500.00, I was to pay what was left. ITidewater Tech/Centura College, sold the remaining amount to a third party collection agency. Centura College sent a sentative document with my name and social security number in that email. That is against the law, they broke the law when they sent that document unsecured to me. What if a hacker had got their hands on that document?

In 2003 I was one of the citizens of United States that was affected by overseas trade. I lost a good paying job because of China robbing America of its jobs. In May of 2003, I went to the JTEC office here in Lexington, NC, and I signed up for the Jobs Training Partnership grant. I enrolled at the Davidson County Community College in Lexington. From June to August I was entered in the Placement classes to get me prepared for college. I passed the placement classes in August and I started attending college in September 2003. I was studying to become a Medical Coder. I was awarded a 2 year scholarship to be certified as a Medical Coder.

From August 2003 to December 2005, I attended Davidson County Community College in Lexington North Carolina, and Rowan County Community College in Salisbury North Carolina. My GPA was anywhere from a 3.50 average to 3.70, considering my age of 46 was very good. One of the rules to keep the scholarship was to maintain a GPA of 3.25.
I did not sign no new Federal Student Loan application, but it seem that someone used my name and my social security number to put me deeper in debt than I already was. I did not ask to have no loans consolidated or rearrange to stretch them out for 30 more years.

If I send you all my material I have gathered, and my tax papers from the IRS and the Treasury department will you look at them and give me your honest opinion.

I have wrote President Obama, Sen George Miller, Melvin Watts, The Irs, the Treasury Department, the Federal Trade Commission, The Congressional Oversight Panel, everyone of them got a package with all my information in it that I had.

My telephone number is 555-55-5555. Will you talk to me about this and look over my material and give me some sound advice.

Mrs. Girl Student.

Name and phone number changed in this post for privacy reasons.

But the fact is, I get a letter like this about every month or so. We are Not alone in this. Even the UK people are having problems with their Student Loan servicers.
And there is no reason for it to exist, other than congress wants it to and its purpose is to drain resources from the people and funnel those resources into someones pocket.

Read the archives folks. They are full of information.

Another fan!

2010-03-26T19:37:00.000-07:00

Mike H. writes:

I just stumbled upon your blog today and I wanted to say that I am in full support of your efforts. I as well was farmed into a for profit school (ITT Tech) and have regretted it ever since. I didn't even seek the school out. Basically my story is this - I was 18 at the time (now only 22) and I got a call from them roughly a month before graduation. Apparently one of my friends from high school that graduated before me obviously, went there and wrote down my name to get into contact with about going to school there. Well of course at 18 I didn't have any direction since neither of my parents went to college. But ITT Tech showed me all the successful grads from before and all their fancy salesman pitch and I fell for it. So now like a lot of other grads from for profit schools..I was able to get a job...but I'm not using my diploma from ITT Tech in any way or form. I am willing to say much to my dismay I have defaulted on my loans from them since the job I do have...is just enough to keep my head above water in the sense of a roof over my head and food on the table, nothing more, nothing less. Anyways, I am now following your blog since it is a good one, and it is a bit comforting to know that I am not the only one facing these problems and that it is starting to get out of hand. Maybe one day soon something will finally be done...all I can do is hope.

Thanks - A new fan,

Mike

Well Mike, I sincerly hope that this and the sister blog ( the time line) helps people. That is why they are here. Thanks for the note!

The end of Sallie Mae?

2010-03-26T19:34:00.000-07:00

Well, The government is claiming it lawfully passed healthcare reform, part of which was government take over of the student loan industry. This means Sallie Mae, which started out as a government corporation, will be eventually out of business.

Serves them right. Historicaly the record shows it was Sallie Mae that lead the charge on removing all Consumer protections on student loans, and the elimination of Bankruptcy protections.

I am Glad that Sallie Mae will be taken out of the Student Loan industry. Too many people have been screwed over by that company.

Radio show looking for callers! Thursday 25 March.

2010-03-24T15:59:00.000-07:00

Heidi Lang writes:

Hi VOPS,

I help produce a talk show on KUOW Radio, the NPR affiliate in Seattle, WA. We’re doing a story tomorrow about trade schools, inspired by the NY Times article two Sundays ago.

This segment is going to be mostly listener-focused. We are asking folks to call in with their experiences at local trade and vocational schools, but we always like to make sure we have some calls lined up ahead of time. The problem is so far I’ve only been able to find people saying positive things about vocational schools. I’m sure disappointed grads are out there but I am not finding them.

In my searching I came across your website and thought I’d ask for your help. Do you have any followers/contacts in the Seattle area? Or could you maybe post to your blog about the show? It’s called The Conversation and you can link to it at http://kuow.org/conversation.

Any thoughts or recommendations would be much appreciated!!

Thanks,

Heidi

Heidi Lang
KUOW Puget Sound Public Radio
The Conversation with Ross Reynolds
conversation1@kuow.org
206.909.0044

History repeating itself, yet again with Trade schools!

2010-03-15T11:20:00.000-07:00

http://www.timesargus.com/apps/pbcs.dll/article?AID=/20100314/NEWS01/3140328/1002/NEWS01&frompost=1

The new poor: Lured into trade school and debt.
One fast-growing American industry has become a conspicuous beneficiary of the recession: for-profit colleges and trade schools.

At institutions that train students for careers in areas like health care, computers and food service, enrollments are soaring as people anxious about weak job prospects borrow aggressively to pay tuition exceeding $30,000 a year.

But the profits have come at substantial taxpayer expense while often delivering dubious benefits to students, according to academics and advocates for greater oversight of financial aid. Critics say many schools exaggerate the value of their degree programs, selling young people on dreams of middle-class wages while setting them up for default on untenable debts, low-wage work and a struggle to avoid poverty. And the schools are harvesting growing federal student aid dollars, including Pell grants awarded to low-income students.

"If these programs keep growing, you're going to wind up with more and more students who are graduating and can't find meaningful employment," said Rafael I. Pardo, a professor at Seattle University School of Law and an expert on educational finance. "They can't generate income needed to pay back their loans, and they're going to end up in financial distress."

For-profit trade schools have long drawn accusations that they overpromise and underdeliver, but the woeful economy has added to the industry's opportunities along with the risks to students, according to education experts. They say these schools have exploited the recession as a lucrative recruiting device while tapping a larger pool of federal student aid.

"They tell people, 'If you don't have a college degree, you won't be able to get a job,'" said Amanda Wallace, who worked in the financial aid and admissions offices at the Knoxville, Tenn., branch of ITT Technical Institute, a chain of schools that charge roughly $40,000 for two-year associate degrees in computers and electronics. "They tell them, 'You'll be making beaucoup dollars afterward, and you'll get all your financial aid covered.'"

Wallace left her job at ITT in 2008 after five years because she was uncomfortable with what she considered deceptive recruiting, which she said masked the likelihood that graduates would earn too little to repay their loans.

As a financial aid officer, Wallace was supposed to counsel students. But candid talk about job prospects and debt obligations risked the wrath of management, she said.

Jeffrey West was working at a pet store near Philadelphia, earning about $8 an hour, when he saw advertisements for training programs offered by WyoTech, a chain of trade schools owned by Corinthian Colleges Inc., a publicly traded company that last year reported revenue of $1.3 billion.

After West called the school, an admissions representative drove to his house to sell him on classes in auto body refinishing and upholstering technology, a nine-month program that cost about $30,000.

West blanched at the tuition, he recalled, but the representative assured him the program amounted to an antidote to hard economic times.

"They said they had a very high placement rate, somewhere around 90 percent," he said. "That was one of the key factors that caused me to go there. They said I would be earning $50,000 to $70,000 a year."

Some 14 months after he completed the program, West, 21, has failed to find an automotive job. He is working for $12 an hour weatherizing foreclosed houses.

With loan payments reaching $600 a month, he is working six and seven days a week to keep up.

"I've got $30,000 in student loans, and I really don't have much to show for it," he said. "It's really frustrating when you're trying to better yourself and you wind up back at Square One."

Corinthian says it bars its recruiters from making promises about pay.

"The majority of our students graduate," said a spokeswoman, Anna Marie Dunlap, in a written statement. "Most see a significant earnings increase."

I guess thats why Corintinan colleges got sued by California for 8.2 million dollars for its deceptive recruiting practices.. and yet the student victims didn't get any relief.

For-profit schools have ramped up their own lending to students to replace loans formerly extended by Sallie Mae, the student lending giant.

These loans are risky: Career Education and Corinthian recently told investors they had set aside roughly half the money allocated this year for private lending to cover anticipated bad debts.

Financial aid experts say such high rates of expected default prove that graduates will not earn enough to make their payments, yet the loans make sense for the for-profit school industry by enabling the flow of taxpayer funds to their coffers: They satisfy federal requirements that at least 10 percent of tuition money come from students directly or from private sources.

"They're making so much money off their federal student loans and grants that they can afford to write off their own loans," said Asher of the Institute for College Access & Success.

Folks, this is a repeat of the 1980's. So congress did NOTHING, accomplished NOTHING and another generation of victims of Trade School Student Loan Farming is being exposed.. and another generation of victims is feeling the loss of the American Dream.

A reader disagrees with my statement.

2010-03-13T12:38:00.001-08:00

Paul writes:

"Needless to say, the fact is, that by adding this law AFTER the student has already signed for the student loans, the government in effect, changed the terms (and penalties) of the contract. Such is not allowed by law, and should be challenged.

Further more, administrative garnishment without a court order itself, flys in the face of our founding documents protection of the people. The law should be challenged as unconstitutional."

You do know I challenged this very issue in my pending case don't you? On the very grounds you have described.

BTW-One big mistake in your blog;

"The Federal wage garnishment law was written and went into effect in 1998, as the result of very high default rates of the 80's."

There were NO high default rates on student loans, in the 80's nor at any other time.

The default rate was under one half of 1% when the Congress changed the BK laws to eliminate discharge of student loans after the 7 year time persiod. See Michigan Law Professor John Pottow's authoritative research paper on this issue;

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=967379 "

First Paul is confused.

The fact is, the default rates during the last part of of the 80's, from 88 to 92, were very very high. And at trade schools, the proprietary schools, the rate could reach and in some cases did reach over 80 percent.

Paul needs to go to the timeline blog and read it. Bankruptcy was taken away systematically. With first a 3 year, then a 5 year, then a 7 year wait, before it was removed perminantly. And he is confusing 2 different issues.. Non court ordered garnishment and bankruptcy.

Then paul revers to a recently published paper..

My documents are stuff that was published during the times described, not 20 years later after the fact, as paul's reference is. Pauls reference was published in 2007, mine in 1992. And paul's referance is not the only legal firm to publish such a statment. MSFSFA's 2007 conferance in Grand Rapids, Michigan also wondered about student loans in bankruptcy.
Paul needs to read my entire blog for all that information, or the time line blog. Both will help him.

Again, see the time line blog for more specifics, and to see how both bankruptcy laws were changed just a little bit at a time, and how the Wage Garnishment law was snuck in with an unemployment benefits law.

Here is the time line blog page: www.timeline-gls.blogspot.com/2009/07/time-line.html

Daily doings

2010-03-11T17:13:00.000-08:00

One of the things I do every day, besides trying to think of something to help the Pre 1990 victims of predatory trade schools, I try to find a job in this dismal economy

However, my advice for the day, is try to find a way to poison the sharks that are feeding upon us.

Is there a valid contract?

2010-03-08T13:58:00.001-08:00

Is the US government guilty of unintentional or intentional neglect when it comes to the student loan industry? Using my timeline blog as a guide line, I find that the US government has, and is, still failing to uphold its required duties.

It is a general rule that when the government enters into commerce, it must play the game by the same rules as any other business entity. Therefore some questions come to mind.

Did the government have a duty to ensure its agents were properly representing the governments position in the student loan contract business? I think the answer is clearly no. To the best of my knowedge, the Government had no, and still may not have any requirements for a school (its agent) or the schools agent, (the finance office) to have any training requirements, or knowledge skills prior to being able to assist students with applying for Government guarenteed loans. Therefore in this case, I think the government is guilty of neglect. Espically after the early 1990's congressional hearings.

If, under contract law, one party did not represent all facts and disclosures, how can the contract be valid?

In 1972 Government created another buisness entity called the Sallie Mae Association which was going to be the governments own version of a student loan service company.

In 1979, the US Department of Education was created, in part to help with the student loans.

Throughout the 1970's, many students took advantage of the low interest loans offered by this program. However, the cost of college was so low, that a student could pay for college with little borrowing. Working part time through out the school year, and full time in the summer, with a few Grants, a student could effectivly work their way thru college and leave with a diploma, and without any debt. Even those who did need to borrow, for most it was a little amount easily paid back.

What was the norm, however, was that some students in studies that required more than 4 years of college, did borrow more than the avarage student. Students taking law, or medicine disiplines, would borrow more than the avarge 2 or 4 year degree student. And some of these students took advantage of the countries bankruptcy laws and upon graduation, declared bankruptcy and started their adult lives with a clean slate, the state having paid off the loans the students obtained. THat was wrong, and it lead to Sallie Mae Association leading the charge to get bankruptcy laws changed, which they managed to do.

However, they did not get congress to address the other part of the problem that was starting to show up: The cost of education starting to esculate at an enormous rate, and the then new trade schools that were poping up all over the place in the 1980's.

At this point in time the goverment was involved in 2 businesses. The first being the guarenteeor of the loans, and 2nd being the servicer of the loans thru Sallie Mae, or by giving contracts to other parties to service the loans.

During the 1980's many "trade schools" or for profit schools, commonly known as propritory schools sprang up. And many were involved with was is now termed "student loan farming". As indicated by US senate report 102-58, many schools victimized the students by selling them worthless educations, leaving them (the students) with bills they could not pay. The US congress knew this in 1991, when the report was written. During this time the US Congress also passed a number of laws, including a non court ordered garnishment clause, which was passed under the Ememrgancy unemployment comphensation act of 1991. No more would a garnishment for student loans require a court order. THIS IS WRONG, and never should have been allowed as it flys in the face of due process, and a number of Federal constitutionaly secured rights as described in the Bill of Rights.

At the same time that congress was dealing with high default rates of the trade schools, they discovered that their agent, the US Dept of Education failed time and time again to provide proper oversight of the schools who were getting the Student loan money from the students whom the schools assisted in getting Government Guarnenteed loans. This is kind of like the home burgler getting the home owner to assist them with the theift of the home owners own property.

We won't even go into the fact that over the last 3 decades, the student loan situation has gone from one of low interest rates, to one of mega profit making scam for the Loan service companies, all at the cost of the US citizens, (student and taxpayers alike).

The government was playing it 2 ways. As a loan guarenteor, it had a duty, which it failed to perform. As a service company, it also had a duty which it failed to perform. And the US congress failed miserably in is duty to provide fair and proper oversight of the whole situation.

When a person goes to a bank to obtain a loan for a home, or car, or something else, the bank will look at the request and determine if the loan process is valid. Is the amount being borrowed too much for the item? Can the borrower pay back the loan? If the borrower defaults, can the bank cover its loss with a reposssesion? Many such loans are refused, for one of those reasons.

Yet with student loans it was different. If a student breathed and could sign their name to a peice of paper, they could obtain a loan and be indebt for the rest of their lives. The government did not care. They saw this loan proccess as something different from any other kind of loan. And yet it was not.

Both kinds of loans require a contract. In one case the lender looks carefully at the request. In the other it just throws out money. Buyer beware should be stamped in big bold letters on ALL student loan applications.

The US government failed to provide proper oversight of the people representing the governments interest in the loan process. These people were usually financial aid people at the schools, who were taught by who knows who, how to file the paperwork necessary to obtain a Government Student loan.

Little if anything was told to the student about his/her responsiblities, who the contact people would be when they had to start paying off the loans, and how much the loans would cost them, both in the long run and the monthly payment amounts.

The US government failed to provide proper oversight and regulatory oversight to the service companies. No requirements for them to answer letters of inquires from students, no requirments that they make full disclosure of what was being paid and where the payments were going. Most students just got a monthly bill and they paid it, not knowing that 99 percent of their money was going into the pockets of the service companeis and not towards paying off their loans. THIS IS WRONG.

The governments failures have resulted in a damage to the student party of the contract.

Students in default thru no fault of their own, face a lifetime of living as 3rd class citizens in their own country. Their bank accounts, paychecks, social security payments, unemployment payments and disablity payments can all be taken from them without a court order, and without proper due process -because of a contract that should be challenged as invalid.

Windham Professionals in NY, 3rd party parasites with no brains.

2010-03-08T10:08:00.000-08:00

Gosh, how stupid can you get?
Don't these 3rd party parasites get it yet? We do not have to deal with them.
Espically when they cannot produce a contract that gives them the right to act.

They may contract with someone else, such as US dept of Education, or perhaps some bank, but that does not mean they have a contract with us, i.e. you or I, unless the original contract allows it. But then they would have to be able to produce said original contract. And when they cannot because the original lender no longer has a valid original complete copy of the contract, there is NO CONTRACT!

That's what it boils down to folks. CONTRACT contract, contract. NONE of this happens without a valid contract. And I am going to do an article on contracts next.

I now have standard forms I use to reply to these 3rd party parasites.

Windham contacted me in Jan of this year, and I sent the first form letter back. They responded by sending me the same ole incomplete and inaccurate photo copies of what looks like paperwork from 1987 and 1988. But Whindham professionals name is not on any of the photo copies, and if it is, it is hidden under what appears to be some kind of sticker. So the photo copies are unreadable, and thus incomplete and as far as I am concerned, invalid.

They did not send me a copy of any contract naming myself and Windham Professionals as parties. So I sent them my standard F you part 2 form letter. Along with a bill for compelled services rendered of 2,000.00 dollars.

1. No contract bearing my signature showing me being named as a party with Windham professionals was attached.
2. No copy of a Judgement bearing my name, was attached.
3. By law, I am required to deal with Original Creditors not 3rd party collections agents.
4. No copy of your authority to operate within the State of (my state) was attached.
5. No copy of any reciept, or other such transaction document showing Windham Professionals as the primary party was attached.
6. I have not opened an account with Windham Professionals. Valid proof of my opening an account with Windham Professionals was not attached.

A. Incomplete copies will not be acceptable;
B. Unreadable copies will not be acceptable;
C. Copies with more than 1/100th of the pages covered up or hidden behind objects will not be acceptable;
D. Copies without the name of Windham Professionals named directly as a first party, will not be acceptable;
E. Copies of contracts with any other person, agency, man or woman, will not be acceptable unless my name is also specifically listed as a primary party, and Windham Professionals is also specifically listed as a primary party.

That should be the last I hear from that stupid group of parasites.

Ya know I think I am going to have to sue one of these parasites, so I can start making money.

Students are still NOT being told what they need to know.

2010-02-28T17:29:00.000-08:00

Finally someone else under stands what is really going on.
Dr. Mark W. Hendrickson is an adjunct faculty member, economist, and contributing scholar with The Center for Vision & Values at Grove City College, wrote an article, found at http://kingsvillerecord.our-hometown.com/news/2010-02-28/Editorial/The_student_loan_problem.html

In this article, he says:
" Still, it is significant that almost all student loans are taken out by Americans too young to know what it takes to pay their bills and make a living on their own. Undoubtedly, some unscrupulous students will borrow money with every intention of avoiding repayment; however, I believe that most borrowers sincerely intend to fully repay their debt. The problem is—due to their lack of maturity and, yes, intellectual development— they literally have no idea how hard it can be to repay $50,000 or $100,000 of debt.
(not to mention the fact, that the schools make it so easy to get the loans) -ed

And again, it is safe to assume that some of them really did, just as some of them really did not alert starry-eyed, naïve youngsters to the pitfalls inherent in taking on large debts. Let’s face it, if loan officers profit from issuing loans, they have every incentive to write as many as they can.

Normally, I would say there is nothing objectionable about that, but in this case, I believe that public policy once again is guilty of having altered normal market incentives. I refer to laws that make it almost impossible for student loans to be erased through bankruptcy.

Now don’t get me wrong—I believe strongly that debts should be repaid. A society that makes it too easy for individuals to walk away from their financial obligations does not sufficiently uphold the foundation of economic progress—property rights— and consequently jeopardizes economic progress.

But in the student-loan market, government has created moral hazard: Knowing that government will take extraordinary measures (even garnishing unemployment checks) to see that student loans are repaid, issuers of student loans feel bulletproof, and proceed to crank out as many loans as they can.

If they knew that they might lose their loans through normal bankruptcy proceedings, they would do what prudent lenders always should do: Assess risk very carefully and issue fewer loans to starry-eyed kids who want to pay $30,000 per year for a degree with minimal market value.

I don’t pretend to know how to get out of the current mess. It would have been much preferable had we never gotten into it. I do believe, though, that it isn’t right for financially incompetent young Americans to be penalized for decades because no adult who knew better stopped them from making a foolish financial mistake. Let’s have some mercy here. End article.

Or better yet, Some ADULTS(?!!) took advantage of the young American students naivety, so that they could profit from their mistakes. Which is what the current system has done.

With NO bankrupcy protections allowed, ALL students should be warned, warned again, and yet warned a 3rd time about the possiblity of being in debt forever. In fact, I think these students should be advised to AVOID student loans.

But how can we expect the schools and loan institutions to do that, when its their goal to create as much profit as they can and they do so, by getting students to sign up for college and obtain student loans.

This is the same Student Loan farming that we saw in the 1980's. The only differance is that now ALL THE MAJOR School institutions are now involved in it. This is no longer about Higher Education. It is now all about the Money.

Shame on America for allowing this to happen.

Educator of 35 years, are you really this stupid?!!.

2010-02-23T06:43:00.000-08:00

On another website, in an article about the governments take over of the student loan industry, a 35 year vetran of the education industry wrote an article. Parts of it and the reply one student wrote are below.

"I have just retired after almost 35 years as Duke University's director of financial aid. I remain keenly interested in the landmark debate over college loans now making its way through Congress. The result of this debate could radically change the way students obtain loans for college.

The Obama administration has proposed to eliminate all private student lenders and make the federal government solely responsible for the management, processing and timely delivery of all student loans via the Federal Direct Loan Program. This would be a very serious mistake. "

A student replied:
"35 years at Duke University and you've failed to see that Student loans support an entire industry that really has nothing to do with maximizing access to education? Think. All those 6 and 7 figure bank salaries no longer being able to profit on our sons and daughters future earning potential at obscene interest rates. And to think that we as Americans might actually be laying the groundwork for our nation's future without the banking overlords dictating the terms.

As far as your argument that colleges would have to raise tuition in order to cover the administrative expense, I think that might just be in the details. By providing colleges with the same commissions currently offered the private sector, there would be no need to pass the expense on to the students. "

And another student responded to the first:
"Right on target Lindro!

Government created this mess, when they failed to fix the problem in the late 1980's early 1990's when they started imposing oversight on some of the schools back then. Go read US Senate Report 102-58 and you will see the same problems back then, that are happening today, with one exception - back then we had bankruptcy protections! They were systamaticaly removed from us due to the lobbying efforts of Sallie Mae corporation, but we had them at one time. And no one can tell us what proper or good reason why they bankruptcy protecton was removed. Even law groups have tried to explain it and cannot come up with any good reason.

Therefore since government removed all the checks and balances (which bankruptcy would have provided) they should be the ones responsible for the defaults, not the students who now suffer a life time of poverty. Heck, we treat murders with more kindness than we do defaulted students. What a shame."

555,000 life time debt - to get a start in life.

2010-02-12T18:37:00.000-08:00

Here are select snips from the indicated article. My comments, imposed within the article, (but do not appear in the actual article) are in Blue.

http://online.wsj.com/article/SB10001424052748703389004575033063806327030.html?mod=googlenews_wsj

When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.
It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.

How did she find out about the 53k charge? I've asked for an accounting of my loans and so far several requests have been answered with silence.

Emmanuel Tellez's mother is a laid-off factory worker, and $120 from her $300 unemployment checks is garnished to pay the federal PLUS student loan she took out for her son.

Wow, 120 of her 300 checks.. and she is supposed to live on that?!!

She makes monthly payments on those loans—now $209,399—for $990 a month, with only $100 of it going toward her original balance. The entire balance of her federal loans will be paid off in 351 months. Dr. Bisutti will be 70 years old. The debt load keeps her up at night. Her damaged credit has prevented her from buying a home or a new car. She says she and her boyfriend of three years have put off marriage and having children because of the debt.

900 bucks, only 100 is going to principal. That means 800 is going into the pockets of greedy corporations who are parasiting off the backs of students.

This is why so many students in default give up, or leave the country.

And it is also the reason why Sallie Mae corp is spending upwards of over 8 millon dollars (taken from students) to lobby congress to stop the Governments take over of student loans. These greedy bastards want to continue to parasite off of us, the students.
And now they (Sallie Mae) have the gall to claim there is a differance between government subsidies and Fees charged to the government.

I pray God will curse all who work for and at Sallie Mae corporation.

Yet another Sues Sallie Mae over phone calls.

2010-02-06T06:43:00.000-08:00

http://blogs.seattleweekly.com/dailyweekly/2010/02/seattle_attorney_takes_our_adv.php

Last week, Caleb Hannan brought to our attention, the story of Craig Cunningham, as reported by the Dallas Observer.

Cunningham is a part of a growing number of people using the intricacies of federal law to turn the tables on their creditors and the collection agencies they often use to recoup their money.
You can now add Seattle attorney Mark Arthur's name to that list. He's suing the 500-pound gorilla of the student loan industry, Sallie Mae Corp., for what he alleges were dozens of illegal phone calls.

The Telephone Consumer Protection Act of 1991 prohibits debt-collection services from using autodialers to contact you, the debtor, if you haven't already provided them your contact info. And, according to the lawsuit, in 2008 the Federal Communications Commission concluded that receiving automated calls is more annoying for customers than calls from actual humans. That's why they've prohibited debt-collection services from using them unless the debtor has given consent.

Arthur, a Seattle University School of Law alum, says he received around $25,000 in loans from Sallie Mae to help cover his school costs. He graduated in 2003, and afterward fell "slightly behind" on his student loan payments.

"Like a lot of lawyers, the economy hit me hard," he says. That's when his voice mail began filling up with messages from his creditors. Arthur says that he's never provided his cell-phone number to Sallie Mae. Nonetheless, he's received dozens of robo-calls from entities identifying themselves as Sallie Mae Corp. Now he's suing for $500 per every call received that violated the TCPA, plus another $1,500 per for damages.

But lest you think that Arthur's just out for himself, know that he's only the representative in a larger legal action against Sallie Mae. Filed earlier this week, the class action suit is being handled locally by Terrell Marshall & Daudt, along with firms in San Francisco and New York.

I hope they get enough money to pay off their loans. Unfortuinatly, that money will come from the sweat and tears of other students who have been victimized by Sallie Mae, who do not know how to fight back and just pay them off to get them to leave the students alone and in peace.

Sallie Mae Sued over calls to cell phones.

2010-02-02T16:57:00.000-08:00

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4Fay4js3I9M

Sallie Mae Sued Over Autodial Calls to Mobile Phones (Update2)
By Karen Gullo

Feb. 2 (Bloomberg) -- SLM Corp., the largest U.S. student- loan company, was sued by a borrower who said he got harassing autodialer calls made to his mobile phone in violation of a law designed to protect consumers from abusive practices by lenders.

Mark Arthur, who took out loans for law school starting in 2003, alleged today in a federal court complaint in Seattle that he received prerecorded calls at all hours that he never consented to receive, as required by the Telephone Consumer Protection Act, according to an e-mailed statement by the Seattle law firm Terrell Marshall & Daudt PLLC.

In the proposed class-action suit, Arthur, of Seattle, seeks to represent tens of thousands of borrowers who allegedly received such calls.

He asked for a court order halting SLM, known as Sallie Mae, from making the calls without consent and at least $1,500 for each violation of the consumer-protection law, according to an e-mailed copy of the complaint.

Sallie Mae is reviewing the complaint, said spokeswoman Martha Holler.

“It is our policy to comply with the TCPA,” Holler said in an e-mail.

The case is Arthur v. SLM Corp., U.S. District Court, Western District of Washington (Seattle).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net.

Last Updated: February 2, 2010 18:18 EST

Reprinted in whole, without permission. But if you are one of those folks getting those harrasing phone calls, contact the lawyers of this case!

Income Based Repayment Plan - The nasty truth strkes again!

2010-02-01T08:06:00.001-08:00

What have I been saying about this so called "fix" to the student loan problem, that the government calls "the income based repayment plan"?!!

I have been saying that after the 25 year payoff period, the IRS will consider the balance to be taxable income!

Others are saying, NO, the balance is forgiven.. Well, Forbs Online got it right again..

http://blogs.forbes.com/moneybuilder/2010/01/29/income-based-student-loan-repayment-what-you-need-to-know/

" Income-based repayment was passed by Congress in 2007, and allows borrowers to cap payments at 15% of their income above a poverty standard, defined as 150% of the poverty level for the borrower’s family. For a single person without children, the poverty standard is $16,245. (This link will take you to the 2009 federal poverty lines based on the number of people in a family.)

Any balance not paid off after 25 years is forgiven, though the IRS will consider this taxable income. If the borrower goes into the public sector, then his loans will be forgiven after 10 years and the IRS will not consider the forgiven balance taxable. "

So lets trade one nightmare, for another one.. Again, Income based Repayment is NOT AN OPTION, it is a continuation of the PROBLEM.

This is NOT what The Higher Education Act intended.

2010-01-20T22:13:00.000-08:00

http://online.wsj.com/article/BT-CO-20100120-715764.html?mod=WSJ_latestheadlines

Sallie Mae, the biggest Student Loan service company, and leading payer of knobbiest in WDC, posted a 309 million dollar profit report, according to the article.

"The company reported a profit of $309 million, or 52 cents a share, compared with a year-earlier loss of $216 million, or 52 cents a share."

This means Students who participated in the the governments Higher Education Assistance program, found themselves victimized by this corporation for yet another year.

When the Higher Education Assistance law first passed, its intentions were to help students obtain a college education to ensure America would have enough highly qualified people to fill positions as the generations moved on.

But greedy businessmen turned the program into a cash cow, and instead of helping students, they are victimized. Students now PAY for the "privilege" of trying to better themselves, AND for trying to ensure Americas' future will be secure with qualified applicants for the jobs that need higher levels of education beyond the basic High School minimums.

At a time when fresh graduates need to concentrate on entering new careers and getting settled down to long term employment, many are finding that the huge dept obtained while getting their needed skill training (their education) has become a roadblock to their futures. Many are now putting off starting families, or buying their first homes, in favor of paying off their student debt - debt which would be much lower if Profiteers were not parasiting off the students.

This is why I say Sallie Mae and companies like SLM, must be removed from the student loan industry or at least, be made Non-profit.

With no consumer protections available, no bankruptcy protections available, with the dismal economy in the US today, many recent graduates are facing Default situations on their student loans. This means even larger profits for the profiteers and banksters who prey on students.

And that is NOT what the Higher Education Assistance act intended to have happen.

Continual conversations with readers comments.

2010-01-20T03:55:00.000-08:00

ASVA writes:

" OH, BTW they have already "stolen" over $1,400.00 of my tax refund checks...LOL, I'm not in a real high tax return bracket nor income! That is when I finally started fighting back. I've tried to tell them for over 20 years that I do NOT owe them this money. I did NOT already pay them BACK $4,000.00 that they are claiming that I DID pay back>>>lol...Its so convoluted that I can't figure it out... IF I paid them back $4,000.00, when, how did I do it...WHOOPS no record of that, just a piece of paper saying I did!!! go figure... "

Seems to me that ASVA here, has 1 or more possible lawsuits.
The first lawsuit, would be to challenge the original debt. Especially since ASVA claims that they did not attended one of the schools this company is trying to collect for.

My first order of business would be to file in court to obtain discovery, to force the company to prove that ASVA actually went to the school, and signed the documents they claim he/she did.

The reasoning behind this, is it sounds like Theft of ID.

Second lawsuit would be to recover damages, if the collections company cannot validate its debt. Sue for treble damages as well.

But there is a possible twist. In my case, I went to a school called National Education centers, back in the late 1980s. Since then the school has been sold twice, and the paperwork I have received reflects that.. I too was confused when it said I went to Olympia schools - which I never attended. But at the time of that paperwork being issued (in 2007) Olympia owned it. Now it is called Everest, and Corinthian colleges, owns it.

If the same applies to ASVA's case, it is still a matter of validating the debt, especially when they claim that they did not pay off any part of the alleged bill. That is the 2nd part of ASVA's situation that does not make any sense, unless it is a case of theft of ID, or mixed up book keeping on behalf of the collections agency, or lending agency.

ASVA's case also demonstrates the frustration many of us have to deal with - the request for records to figure out whats going on, only to have those requests refused, or delayed for long periods of time.. The delays are because the other party does not keep accurate books or records. They just collect X amount per month or they take other actions.

Total lack of accountability of the service providers was a problem in the 80's and still is a problem today.

Reader Replies

2010-01-13T10:11:00.000-08:00

"LOL, imagine my surprise when after over 20 years of requesting a copy of my enrollment records, signed promissary agreement and any thing else that suggested I even attended MUIR Technical in San Marcos, CA., I received a signed (by me) application to attend and a UNSIGNED (nada, no signature nor dated) promissary agreement filled out with my information, but to a school in San Diego.. I also found out that I also had received and PAID back a loan for over $4,000.00....of which I have NO knowledge...How do I prove that I did NOT attend this school, when they can't even prove that I did?"

Well if they sent you unsigned promissary notes, I would start with that. No signature, no valid claim. I would now send a letter of inquirey, asking them why they are using the US mails to extort money from you when they do not have a valid signed promissary note? Go on the attack. Use what they sent you to cause them trouble.

Their poor book keeping can benift us. And may yet prove to be the door for our relief. If they take us to court, we can file for dismissal for lack to state a claim for which relief can be granted, due to the fact that they cannot show proof of liability. And if they do all of a sudden after that, produce the signed promissary note, you then have them for mail fraud - missrepresenation of the unsigned copy they sent you, which they claimed at the time was the copy of the original.

Fraud destroys all claims. And we have been defrauded, by both the Trade schools and The student Loan financial industry. Time to get some justice.

In my own case, the paperwork that was sent to me is a total joke. And I documented it all. If they ever try to garnish my pay check, I will file in federal court for fraud charges against them.
I don't have any other choice and Im tired of being hounded.

New York Times Article spells it out clearly.

2010-01-11T16:42:00.001-08:00

http://thechoice.blogs.nytimes.com/2010/01/11/bankruptcy/

In an article appearing in todays New York Times online, the author of the peice gets a 100 percent score, with a direct hit on the effects of student loans.

In 2003, the inspector general for the Department of Education released a study in which it estimated that the true, lifetime default rates for 4-year, 2-year, and for-profit colleges were about 25 percent, 35 percent, and 4 percent, respectively. Simple averaging suggests that overall, about 1 in 3 student borrowers are defaulting on their student loans.

One would think that at least the Department of Education would take this information seriously, and see to it that students and their families knew these facts before taking out loans. However, this information is never referenced by anyone in power, and getting Department of Education officials to comment on this study has proven to be impossible. This has not changed with the new presidential administration, since most of the “old guard” still hold their posts in the Office of Federal Student Aid.

So why the reluctance to address this evidence? In 2004, The Wall Street Journal reported that the Department of Education predicted that it would get back every dollar of principal, plus almost 20 percent in interest and fees for defaulted loans. Combined with the fact that the dominant lenders in the student loan market like Sallie Mae own collection companies that make tremendous amounts of money from the collection of defaulted loans, one can see why both wouldn’t be overly excited at the prospect of the public knowing that the student loan default rate was higher than that for credit cards, payday loans, sub-prime home mortgages, or any other type of loan in existence!

It is precisely this mindset that has led to horrible oversight of the student loan program. Instead of working hard to keep the default rates down by pressuring universities to provide a good product at a low price, exactly the opposite has occurred. The Department of Education has no interest in a low default rate, thus it looks on as Congress raises the loan limits, as the time to graduate increases, and as universities raise tuition at every possible opportunity.

How can the Department of Education be making money on defaulted loans instead of losing money? Simple. Congress removed nearly every consumer protection from these loan instruments, including standard bankruptcy protections, statutes of limitations, truth in lending requirements, and others. In addition, Congress gave the Department and its lenders draconian collection powers to, frankly, extort not just the original principal and interest from the borrowers, but also a massive amount in penalties fees, and collection costs.

Combined with how payments made are applied, and lack of cooperation by the collections companies, is why students in default simply give up trying to make payments after just a few years in default.

How much is due?

2010-01-04T12:42:00.000-08:00

OMFG, (yes that's cussing for those who know what it means). Can those idiots at Dept of Ed ever get things right?

Mind you I take the following issue with student loans in my case: They were discharged in bankruptcy in 1994, back when you COULD do so. I also stand on the issue that such contracts are invalid and unenforcable, if they exist.

But ED is still haunting me to this day. I have demanded complete and accurate, fully readable, non blocked out, copies of the original loan paper work several times over the last 5 years. Never has this request been fufilled.

Well, yesterday I was sent yet another parasite love letter. This one from Windham Professionals. This one claimed I owed $43,862.89 . Not bad considering that in June of 2008, Van Ru collections claimed that I owed $43,343.37, a differance of $524.52, which cannot be correct.

Now I know for a FACT, that out of 5 loans, at least 3, had interest rates of 10 percent or higher. I found incomplete paper work that suggests 12.25 percent for at least 2 of them. Now 2 loans are over 4k, 1 at 3k, and 1 at less than 1.5k, and another less than 800 dollars.

The point being, is that interest alone should make the amount due as claimed by windham
to be a lot more than they are claiming. A year and a half later, the interest has to be well over 2k. So the differance in amounts claimed by both parasite parties, makes me wonder how much is really owed, and how much is not interest, or penalties?

Some of my paperwork shows one of the principal amounts GROWING, instead of shrinking! How can that be? To me, that is evidence of Fraud, willfull or not by the parties involved.

This is why so many students who are in default, simply give up. We cannot get stright answers to our questions.

These parasites have no idea.. They are just hired thugs to collect money and make money off of us, while they do it. Screw them. I am not going to pay them to collect money from me. Not untill at least some percentage (at least 10 percent) of every payment I make, gets applied to the principal. Other wise, I might as well not even try. A 50K balance payment would equal my take home resources right now and government ain't going to get that. Since I would not be able to make full payment not one dime of my money would go on principal untill A) the collection fee for that month was paid in full and; B) the interest for that month was paid in full; C) only then if anything was left over, would some amount be put on the principal.

I'm not going to pay someone perpetually without seeing results of the principal being dimished.
PERIOD.

Again Students get victimized by the system that was supposed to be HELPING US!

Trade schools still victimizing students

2010-01-04T12:34:00.000-08:00

Thanks to Mike Kruger, Online Outreach Specialist, Committee on Education and Labor who recently contacted me about this blog.

Mike sent me to a web page with some interesting stuff, including a GAO report about Trade schools violating enrollment rules. This is nothing new. We have seen it before.

GAO report 20091014GeorgeScottTestimony.pdf, by George Scott, Director Education, Workforce and Income security before the sub committie on higher education. October 14, 2009.
Mr. Scott goes to tell members of congress how the GAO sent undercover operatives to apply to trade schools to intentionaly fail the adminissions test to see what would happen. In several cases these schools gave students answers to questions on tests. Some also helped students get fake High School diploma's to qualify for the school, and student loans.

Now if that is not student loan farming, I don't know what the heck is.

It happened to many of us in the 1980's.. And it is STILL HAPPENING..

Yet congress has NEVER NEVER NOT ONE TIME, offered us victims of these parasticial monstrosities, any kind of debt relief. Instead we are left to fend for ourselves in a system that is so screwed up, it can't even get its bookeeping correct.

Well Mike, let us hope congress finally does something about this, now that once again, this nation is going to face HIGH default rates due to the economy.. Either that, or we will see yet another generation forced to suffer what those of us who came befor, already have, and still are.

Email response

2009-12-30T11:42:00.001-08:00

One of our readers recently sent me this:

I read your blog on student loans. I just want to let you know that YOU ARE NOT ALONE! I got scammed into a proprietary school (Art Institute of CA-LA) to do animation. I was promised job placement and everything. $120,000 later nothing. I know a guy who got a Film degree at the school ($120,000) and do you know where the school placed him? Blockbuster! and for $8.00 an hour. Another guy was in the culinary program and racked up $80,000 and guess where the school placed him? Burger King! and once again for minimum wage. It's outragous! I'vebBeen unemployed for 18 months and getting threats. Anyways, the person we need to speak with is Rep. George Miller of California. He's the chairman of the Education & Labor Committee. We really need to bombard him our stories of how these proprietary schools are ripping of students. It may not go in vain. Take care.

P.S: Click this link, we may have some momentum.
http://edlabor.house.gov/newsroom/2009/09/changes-to-bankruptcy-laws-nee.shtml

Well, I did click that link. And at least one congressman is seeing the difficulty of people like us.

Even if I could file bankruptcy chapter 7 and removed the debt, for the next 7 years I would have difficulty getting credit - not that I can get it now. As it stands now, Every time I try Im told I have no history at all! And that is worse than having bad credit!

As to what this person is saying about placement. Yep. The private trade schools used placement as a big selling point to get us signed up (with loans) and when it turns out they have no REAL placement, its usually too late...

This person says they have over 120k in debt.. I hope thats the total due and not just the principal, other wise it makes me feel little, with only 12k principal, thats bloomed to over 60K.

But when you are unemployed, 5k seems like a lot let alone 60k.

Another year without relief

2009-12-29T22:04:00.000-08:00

Once again, the US government and US Department of Education has failed to provide debt relief for those students victimized by the predatory trade schools of the 1980's. But there is some good news on the horizon. In this total messed up economy, history is repeating itself with these trade schools. Default rates are starting to rise dramaticaly, and current congresspeople are starting to see history repeat itself. They are asking questions and I am asking them for some kind of debt relief.

Even this new congress recognizes the impact of those schools, and the economy and what its doing to this new generation of students. Perhaps 2010 will hold something good for us.

Untill then, keep up the pressure on congress to restore consumer protections on all student loans and keep up the pressure to find a way to use lawsuits to obtain relief.

Fed Reserve Board, Fed Trade commission issue new credit reporting requirements

2009-12-22T18:15:00.000-08:00

Dec. 22 (Bloomberg) -- The Federal Reserve Board and the Federal Trade Commission announced rules giving U.S. consumers more information when they’re lent money at higher rates because of their credit report.

Consumers given less-favorable terms will be given a notice and the opportunity to get a free report, the Fed and the FTC said in a statement today. Lenders can also comply by giving customers a free credit score, which is usually available for a fee from credit-reporting companies.

Currently, lenders don’t have to explain why a borrower is getting particular terms. The rules will apply to all forms of consumer credit, including credit cards, auto loans, mortgages and student loans. The rules apply to banks and lenders such as auto dealers and financing firms.

Notices will have to be sent when consumers are granted terms “materially less favorable” than “a substantial proportion” of the lenders’ other customers receive, according to the Federal Register.

The regulations were written to comply with a law passed by Congress in 2003 to increase the accuracy of consumer credit reports, give consumers more control over solicitations, and combat identity theft, according to the Federal Register. They take effect on Jan. 1, 2011.

Consumers can receive one free credit report a year from each of the three credit-reporting companies: Equifax Inc., Experian PLC and TransUnion LLC. Consumers can go to www.annualcreditreport.com to obtain a copy. Those are in addition to the new reports.

While this may not help those of us who have dealt with bad Credit since the 1970's and 80's when we were victimized by the private trade schools, it can help us in our fight for justice if we can use these new reports to show the continual punishment we endure due to our being victims of those sechools. The reports can be used to show that we are indeed being decriminated against becasue of the outstanding loans from that era, that we should have been able re-negotiate or obtained relief via bankruptcy.

And I hate to use the word victim, but that is what we are in this case. It is the one word that truly fits the situtation.

Trade Schools Admissions is about money not education.

2009-12-16T05:02:00.000-08:00

The University of Phoenix has reached a settlement in a False Claims Act lawsuit, in which it was charged with violating Federal law by paying admissions recruiters based on how many students they recruited. It had set aside slightly over $80 million for a settlement, and came in slightly below that. In the Chronicle piece about it, DeVry and Grand Canyon Education are alleged to have set aside about $5 million each to settle similar suits.

One Professional is claiming on a blog, that having worked at a proprietary, they can attest that the Admissions side was a sales force, and was unapologetic about it. Admissions reps did what they had to do to close the sale. On the bright side, that meant that students got terrific help in navigating the bureaucracy of financial aid and registration. On the dark side, and it was much more dark than bright, students frequently came in with wildly absurd expectations that they got from somewhere.

She has heard complaints at the cc level about a student sense of entitlement, but this was an order of magnitude beyond anything I've seen here. Upon the hand off from Admissions to Academics, students were often vocally disappointed to discover that what admissions told them was not necessarily what Academics was going to do, or not do. And that many students are shocked to find out that the two levels of administration are separate and have little to do with each other.

At the Proprietary trade school at which this person worked, the Admissions staff didn't report to the campus President. It reported to Home Office (in another state), which set its sales quotas. The Admissions staff responded to its incentives, and treated the academic side of the house as a faint embarrassment. Meanwhile, the academic sorts had the unenviable task of trying to talk reality to students who had been sold a bill of goods. The job of Admissions was to maximize revenues, and it was regarded as a profit center. The job of Academics was to minimize attrition, and it was regarded as a loss center. Salaries and internal power were allocated accordingly.

When your entire revenue stream is based on tuition, you either put asses in classes or you don't.

Well that is why the Trade schools have higher default rates, and why students are still being victimized. This is NOT about the students. These proprietary schools are there to farm the student loans. PERIOD. As such they inherently victimize students by recruiting those who should NOT be going to trade schools, or any schools, simply because they qualify to do so.

Well I qualify for a lot of things, but I don't necessarily do them.

I think this person's blog is proof yet once again, that the For profit proprietary trade school system must be shut down and removed from student loan participation.

Dejavu or History Repeating itself?

2009-12-15T04:21:00.000-08:00

Yesterday, The Chigago Tribune and USA Today on line editions, showed articles statting that there is new data coming out of the US Dept of Education about defaulting student loans.

Low and behold, those kids that went to for profit schools have higher default rates.. and that the 2 year tracking scheme by the Dept of education is not showing us the real numbers.

More than 1 in 5 borrowers of federal student loans who attend for-profit colleges default within three years of starting repayment, new figures made available by the U.S. Department of Education on Monday show.

Historically, the government has reported such figures in terms of how many students default within two years -- a figure that stands at 6.7 percent of student borrowers overall and about 11 percent at for-profit schools.

Nearly 12 percent of borrowers who began repayment in fiscal 2007 defaulted within three years -- up from 9.2 percent for 2006, the latest year for which figures are available. But at for-profit colleges, the rate was 21.2 percent within three years. That was up from 18.8 percent for fiscal 2006.

So what are the real default numbers? Now we see where sallie mae is getting its money.. its from the kids who after 4 years are in default. I wonder how many kids actually pay off their loans in FULL, without defaulting. I.E what the percentage is compared to how many actually end up in default at one time or another within the lifetime of their loans?

I bet the numbers are closer to 1 in 2 will default, overall, or maybe 1 in 2.5 will default. In other words somewhere between 40 and 50 percent.

Well, now that the current Dept of Ed is realizing the high default rates do exist, lets see what kind of relief congress will offer (if any) for this new generation of victims of trade schools.

Government ignoring plight of students with defaulted loans

2009-12-09T23:33:00.001-08:00

In the news today 2 articles of interest.
First, Sallie Mae Corp, which is spending thousands lobbing congress about job losses, when in fact, it is probably gaining them which will cost students even more.

Second is a student loan companies stock goes up 86 cents when it is reported that its student loan default rate would not be as high as expected. This is proof that students are being exploited, instead of being helped - unless you consider being put into debt a form of help.

Still NOTHING is being done or even mentioned about students who are in default, either recently or in the past.

For more on these two stories see the time line blog at www.timeline-gls.blogspot.com

"The government should crack down on misleading advertising and move more aggressively to cut colleges with high loan-default rates out of the federal financial-aid system. If students can't pay back their loans, then by definition they are not getting sufficient value for their money."
A Quote from a recent web page that I saw last week, dealing with trade schools. Again the proprietary schools are in the news. The For Profit schools like Corinthian colleges and Everest, DeVry, and ITT TECH. Apparently their default rates are starting to soar, which should not be surprising and should be expected, as this is what happened during the late 1980's when we went thru a mini recession.

Students In default: Why bother trying to pay?

2009-11-22T20:09:00.000-08:00

As I sit here unemployed yet again due to the Recession that is devastating our country, and especially Michigan, I read the latest news of student loans. I get a daily feed from google alerts on all sorts of student loan related topics.

I see the talk of the service companies like Sallie Mae that are trying to lobby congress so that people can keep their jobs - jobs that exploit students.

I see a few articles about the income based repayment plan, but not many. I wonder if people really understand why that option is no good for a number of people; especially those with older loans.

I see reports of default rates (based on 2 year tracking) starting to rise, mainly due to the economic conditions and the fact that current graduates are unable to find work.

And I see further discussions on the Government take over of the industry and its effects on current active students. Not much is mentioned about those students who are in default. Only a one liner here and there, mentioning how much the defaulted students are costing the government.

Nothing is being discussed about helping those students. Only recently did I hear about the court case that might be heard by the US Supreme court over bankruptcy and student loans. Also some local governments are calling for loan forgiveness to help with the economy. Yet still nothing about student with older defaulted loans.

Every once in a while I hear how another person in financial crisis is now facing wage garnishment, or worse. Most I hear about is students who have given up even trying.

Why is this? Why do they give up? Answer: Simply because to them, there is no sense filling the pockets of some collections agency, while seeing no change in their status. In other words, seeing all their payments being made, being used up by the collections agencies, and not one penny going to paying off the principal. They are in effect, being forced to pay someone to collect money from them for doing nothing other than taking money from them. And that is just plain stupid.

Congress needs to change the laws so that at least some percentage of every payment must be put on the principal, so that it can get paid down. If not, there is no sense in defaulted student loan borrowers with older loans, to even try to pay off their loans, as there is a huge chance that what little they can pay, will never cover the collections cost and the interest payment for that month, let alone have anything left to put on the principal.

If a defaulted student cannot make a big enough payment to get ensure some of the payment is used to pay off part of the principal, they might as well not even make the effort, as it will be a waste of resources. They would be better off putting that money in a jar buried in the back yard. At least that way the government won't be able to take it without some effort and it won't be wasted paying for someone to do nothing more than taking it from them.

WANTED: COPY of Non Court studentloan wage garnishment order.

2009-11-15T08:20:00.000-08:00

In preperation for a possible future lawsuit, and to possibly help those who are currently under non court ordered Student loan wage garnishmet, I need a copy of said garnishment.

If anyone reading this blog is under wage garnishment that was issued by the lender, servicer, US Dept of Education, and has a copy of that wage garnishment, please send me a copy of it.

Please send me a copy with your name, and personal information removed or covered up. I will need to see all pages, front and back, which are part of the garnishment.

Send your copy to maczeff at yahoo dot com and make the subject line read : Wage order copy.

Thank you.