Are We Raising Our Children to Be Slaves?

“You can’t make it without an education!" "Go to college!" "Graduate from high school, go to college, get a good job." How many of us heard these mantras while growing up? How many of us have said these mantras to our children? Other people's children? Despite the fact that getting a  college degree today paves the road to debt slavery  where the chains and fetters are invisible and the wealthy, powerful owners, anonymous.

“Slavery is likely to be abolished by the war power and chattel slavery destroyed. This, I and my European friends are glad of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led by England, is that capital shall control labor by controlling wages." -- Chas. Hazzard, The Hazzard Circular, 1862

As we start 2018, student loan debt is close to $1.5 trillion, where an estimated 44.2 million Americans have one or more student loans on file.  Student loan debt surpasses total U.S. credit card debt by approximately $659 billion. It is the second largest financial asset on the federal government's balance sheet, making up 51.8% of total assets. Only mortgage debt is higher. Not to mention, according to the Federal Reserve is the only form of consumer debt that continued to grow in the wake of the Great Recession.

Parents and students have little understanding of how this loan program operates.   They don't understand that there is an entire "ecosystem feeding on federal student loans."

“The companies making those calls are just one part of an ecosystem feeding on federal student loans. There are also debt servicers, refinance lenders, firms that help former students stay out of default and for-profit schools that make money as borrowers try to repay more than $1.2 trillion in government-backed education debt.

They don't understand that the cost of living is rising faster than income that make it increasingly difficult for people to keep up with the everyday expenses of life. They don't understand that a four-year degree is no longer the golden ticket to full time job with benefits and job security. They don't understand that the "four-year" degree actually takes five, six or even more years, which, of course, costs even more money.

When will we catch up with reality?  What was true 40 years ago doesn't make it true today.  What was true for baby boomers is not true for millennials and/or generations x,y,z, etc. 

“It’s not unusual for me to talk to a couple that between them has $200,000 in student loan debt now. It’s not unusual at all. I talk to them almost every day on this show. And they’re 32 years old, they’ve been out of school for four, five or six years and they’re just treading water. They’re stuck because no one in their life—no supposed high school counselor, no parent, no financial-aid officer—smack you silly. Financial aid is $200,000 in student loan debt. Give me a break. Nobody looked at you and said, “You know, when you bring that baby home from the hospital, there’s a possibility you may want to use your education to raise your children.” -- Dave Ramsey

Links:

Student Debt Crisis

Hazard Chronicle Documentary Evidence

Student Debt Relief

Student Debt Slavery: Bankrolling Financiers on the Backs of the Young

Narrow bankruptcy laws make it nearly impossible to discharge student debt: From the The Cost of Opportunity: A series chronicling the student loan debt crisis in Wisconsin series


Rising Tuition Costs and the History of Student Loans

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We the Toxic Assets?

The "middle class" is an historical anomaly and in my humble opinion, was artificially created to build the wealth of the ownership class until it was no longer needed. Well, this class is no longer needed, hence its current decline.

Today, as J.A. Myerson point out in the video below, "the middle class is the working class plus debt." We're now in the process of returning to the natural harmonious capitalist order which does not include a "middle class". Home ownership, college, medical insurance, etc. is a privilege of wealth

“In the digital age where American workers have increased their productivity hugely with no real increase to their wages, the middle class has only been able to keep up the incredible consumption schedule it is used to by taking on a ton of debt. We go into debt to buy the home, the health care, the education, the automobile, that working class people aren’t traditionally entitled."

Links:

Who's Profiting From $1.2 Trillion of Federal Student Loans?

No FAFSA, No Diploma in Louisiana

After Math Error, Fitch Doubles Student-Debt Downgrade Estimate

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Why Encourage Students to Take on Crippling Debt in Pursuit of Degrees That Don't Even Provide the Earning Potential to Pay it Off?

We're creating an uber-debt ridden population in order to support an uber-wealthy class and maintain the largest economic inequality in our nation's history, and we're doing it through our higher-educational system.  How? We're graduating students leveraged to the hilt, who either can't get a job, or if they're lucky enough to find employment, make just enough to pay off their debt. In other words, they are indentured servants, who can't save or build for their futures, who cannot become entrepreneurs, who, in a nutshell, cannot serve broader society because they must follow the almighty dollar first and foremost. Moreover, this albatross of debt impacts on the ability to start families, because, as we know, children are expensive!

This is not just a problem for young people. Many parents take out parent plus loans to support their kids. Some have to go back to college to change careers and take out loans when they're in their 40's and 50's, especially now when jobs are scarce. They can look forward to having their social security garnished.

“About twice as many Social Security recipients are not receiving all of their Social Security payments this year because they have unpaid federal student loans, according to a report by SmartMoney.com.

According to a 1996 law, the federal government has the authority to withhold portions of Social Security payments if defaulted debt is owed to the government, including federal student loans.

“It’s quite extraordinary because normally Social Security benefits can’t be touched by creditors,” said Deanne Loonin, a staff attorney with the National Consumer Law Center.

From January through August 6 of this year, the government reduced the size of about 115,000 retirees’ Social Security checks, almost double the department’s enforcement in 2011, according to data from the Treasury Department. In 2007, there were 60,000 cases and in 2000, there were only six cases.

Yet, not going to college is not an option for many young people. In fact, too many parents/teachers/friends insist that getting the "best education" at the "best schools" no matter what the cost, is absolutely necessary to that young person's future. The problem is most--parents/teachers/friends and students, alike-- do not consider the long-term consequences of accumulating life-long debt.. They do not consider that student loans cannot be discharged in bankruptcy. Instead, our young people are given a rosy prognosis when choosing schools and told not to worry about the future with easy to qualify for loans.

Universities are now corporatized. The parasitic corporate model of inflated infrastructure and bureaucracy that rewards elite executives with enormous salaries and squeezes everyone else, making them jump through endless bureaucratic hoops. Between the ever-increasing growth of administrative expenditures--huge amounts devoted to funding unnecessary administrative positions--and government subsidized institutions, colleges and universities have no incentive to reduce cost.

“U.S. universities employed more than 230,000 administrators in 2009, up 60 percent from 1993, or 10 times the rate of growth of the tenured faculty, those with permanent positions and job security, according to U.S. Education Department data.

Spending on administration has been rising faster than funds for instruction and research at 198 leading U.S. research universities, concluded a 2010 study by Jay Greene, an education professor at the University of Arkansas."

There is about $1.2 trillion in student loans outstanding with all but 15% of that owned or guaranteed by the government. The chart below shows the student loan amount held directly by the federal government., rising at about $110 billion per year.

“The Obama administration is forecast to turn a record $51 billion profit this year from student loan borrowers, a sum greater than the earnings of the nation’s most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets.”

Learning to live below one's means and gaining the ability to distinguish between "needs" and "wants" might be the only way out.

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Average Student Loan Debt Up 58% Since 2005!

The average student loan debt was $17,233 in 2005 and had risen by 58 percent to $27,253 by December 2012 and the federal government will take in $34 billion in profit! 

"With the current level of unemployment, American college graduates are finding it difficult to find jobs commensurate with their education. Without a steady income, many former students are unable to pay back their student loans.

America’s unemployment rate was as high as 13.8 percent at the end of March, according to the U.S. Bureau of Labor Statistics’ (BLS) alternative measures of labor underutilization. This number is far higher than the published official statistic of 7.6 percent because it includes those who would like to work but are not currently looking for a job—including so-called discouraged workers—as well as those who only work part-time because they cannot find a full-time job.

The Economic Collapse website said in April 2012 that in 2011 (the latest such statistics available) more than 50 percent of college graduates had not landed a job or had accepted a position that did not make use of their skills. Often, these individuals took a part-time position, leaving them at or below the poverty level.

The Debt.org website states that student debt is at $1 trillion and increases another $3,000 every second. The average student debt amounts to $26,000.

The Federal Reserve Bank of New York (Fed) provides statistics that correspond to the Debt.org information, published at the end of March using data from the last quarter of 2012.

“Student loan debt is the only form of consumer debt that has grown since the peak of consumer debt in 2008. Balances of student loans have eclipsed both auto loans and credit cards, making student loan debt the largest form of consumer debt outside of mortgages,” the Fed states.

Enriching the Federal Government

On April 9, the U.S. Public Interest Research Group (U.S. PIRG), an alliance of student groups and young people, released an Issue Brief accusing the U.S. federal government of making billions on the federal student loan program.

The brief states that the U.S. government earns 36 cents profit on each dollar loaned to students. With an estimated 21.8 million student loan recipients and approximately $108.9 billion in outstanding loans, the federal government will take in $34 billion.

On subsidized Stafford loans, which are federally guaranteed loans based on financial need, the federal government earns an estimated $3.5 billion, while on unsubsidized Stafford loans (also federally guaranteed loans, but anyone may apply for such loans), the federal government makes an estimated $20 billion.

With Grad PLUS and Parent PLUS loans, the federal government makes $5.1 billion and $5.3 billion respectively. Under the Parent PLUS student loan, parents may take out a loan on behalf of their children to cover any amount not covered by any other financial aid package.

“The federal student loan program as it currently operates is the opposite of a low cost program to student loan borrowers—it makes billions in revenue yearly. Meanwhile, student loan borrowers, continuing to face economic uncertainty, bear the brunt of continued high costs,” according to the U.S. PIRG brief.

Subsidized Stafford Loan Impasse

The interest rate on federally subsidized loans, which serve low- and moderate-income families, will increase from 3.4 percent to 6.8 percent on July 1.

The interest rate was lowered over time from 6.8 percent to 3.4 percent under the 2007 College Affordability Plan and was meant to return to 6.8 percent in 2012. The Obama administration and Congress extended the availability of the lower rate until July 2013.

The brief suggests that the increase in the interest rate will harm students and only add to the federal government’s profit.

“More than two-thirds of all subsidized student loan borrowers come from families with annual incomes of less than $50,000. These families have been hard hit in the recent recession and continue to face high unemployment and tight family finances,” the brief states.

Student Loan Debt and Defaults on the Rise

Research by credit-scoring company FICO stated on Jan. 30 that student loan defaults are rising at an accelerated rate. At the forefront are students who took out student loans more recently.

The percentage of student loan defaults by those who took out a loan during the last two months of 2005 and the first month of 2006 was 12.4 percent. But the default rate by students who took out loans during the last two months of 2010 and the first month of 2011 was 15.1 percent. That’s a 20 percent increase in the rate of defaults over a five-year period.

A FICO December 2012 survey of lending industry professionals indicates that close to 60 percent of respondents expect student debt delinquencies to rise by mid-2013. Yet these professionals are still providing ever-increasing loan amounts. The average student loan debt was $17,233 in 2005 and had risen by 58 percent to $27,253 by December 2012.

“The stakeholders in the student lending industry have to take a hard look at the terms and repayment rules for student loans, and the industry may have to develop a new lending model to prevent a bad situation from getting completely out of hand,” said Dr. Andrew Jennings, FICO chief analytics officer, in the FICO release.

Quoting a March 2012 Fed report, FICO said in January that outstanding student loan debt reached $870 billion, exceeding the $693 billion in credit card debt and $730 billion in auto loan debt.

In 2005, the credit reports of 12 million Americans showed two or more student loans, according to the FICO report. By 2012, that number had more than doubled to 26 million.

“The worsening state of the student loan industry should raise concerns. The combination of lower credit quality, increased debt loads and trying economic conditions will lead to even more distress in the industry,” the FICO report warns.

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The Next Bubble Burst: Student Debt?

Private lenders have preyed upon unsuspecting young people desiring to further their education for years. Of course, they have intentionally targeted those coming from poor socio-economic backgrounds. What else is new?

Well, now that the student debt bubble has accumulated over $1 trillion in student loan debt, starting July 1, Federal Pell Grants are set to be cut for hundreds of thousands of students across the US. Whats more, the Senate "blocked President Obama’s student loan interest-rate reduction plan and also shot down a GOP proposal, leaving the chamber without a solution and little more than a month to go before rates are scheduled to double".

The reforms will save $11 billion over 10 years, according to reports. Students will lose the $5,550-a-year grants in order to find the savings.

"The loss of Pell Grants could put college out of reach" for many students with fiscal hardships, the newspaper reported.

Under old rules, students who had taken at least six units of college courses but who did not have a diploma were eligible for the loans. The new rule eliminates the Pell Grants as well as other subsidized loans for the students, known as "ability-to-benefit" students.

Here's the thing. We're told the government can't find a way to pay for extending student loan rates, yet, we're not told that the government earns more money on these student loans than they pay out!  Meanwhile, half of all college graduates are either unemployed or underemployed.  And unlike a mortgage, one cannot walk away from one's student loan debt, even if one can't walk, can't talk...in other words,  in a coma, as student loan debt cannot be expunged, nor forgiven.

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The Diminishing Returns of a College Degree

Not all that long ago, a college education in America ensured not only a job, but elevated socio-economic status. In fact, just as recently as 2007, according to the National Association of Colleges and Employers, more than half of all  college graduates who had applied for a job received an offer by graduation day, albeit, without the elevated socio-economic status. In 2008, that percentage fell to 26%, and in 2009, less than 20%.  Moreover, not all that long ago, one person - usually, the father, even without a college degree - could provide for a family of six, eight, and even ten. Today, it takes two people, sometimes working two jobs, to support a family of four.

Meanwhile, student debt is the only sector growing at an ever-increasing rate since the 2008 financial crisis. The average annual tuition at a private nonprofit four-year college is about $35-40,000! So, now that student debt has reached the $1 trillion mark - the second biggest debt sector for US households - leaving college grads with unprecedented levels of college debt, not to mention, the youth unemployment rate in the US is rivaling many third-world countries, is a college education really worth it? Could it be that those who choose not to attend college may actually end up earning more than their college-degreed counterparts?

Over 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor’s degree according to the Bureau of Labor and Statistics. For instance, over 317,000 waiters and waitresses have college degrees (8,000 of those, doctoral or professional degrees), 80,000 bartenders, and over 18,000 parking lot attendants.

It should be more than obvious that public policy designed to create more college graduates isn't really concerned with sustainable jobs for future graduates. The purpose of the policies is to prop up the education bubble and the lending industry that supports it.

So, maybe it's time to reexamine our assumptions about the necessity of a college education, those ideological templates we use to understand the world, especially when, according to the Organization of Economic Cooperation and Development, the US has one of the highest number of employees working in low wage jobs of high paying industrialized nations. One out of every four Americans employed work in jobs that pay less than $10 per hour.

Between NAFTA, tougher bankruptcy laws, the repeal of Glass Steagall, bubbles galore, and and a financial system that might as well be a roulette wheel, the best we can hope for is a low-wage recovery. Newly added jobs are coming from lower paying sectors while productivity increases and profits filter to the top of the economic class. 3,500,000 high-wage jobs lost during recession and only 179,000 have been added so far. Therefore, a college degree that's risen anywhere from 500-1000% since 1970,  in inflation adjusted dollars, is sure to sap  future earnings with few exceptions.

Older Americans are 47 times richer than younger Americans.

In 1984, households headed by people age 65 and older were worth just 10 times the median net worth of households headed by people 35 and younger.

But now that gap has widened to 47-to-one, marking the largest wealth gap ever recorded between the two age groups.”

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SWAT Teams Taking on Student Loan Default?

It's bad enough that recent college graduates and the African-American population face an unemployment rate nearly double that of the rest of the population. It's bad enough that the cost of a college degree is at an all-time high, up 3,400% since 1972.   But, as Kenneth Wright, who woke up to hear SWAT team members kicking in his front door, can tell you, it's even worse than that.  Why was the elite of the municipal police force  kicking in his door?  To collect on his ex-wife's defaulted student loan, who didn't even live at the address. Who ordered the raid? The Department of Education, who ordered 27 shotguns, last year.

After the SWAT team broke down Wright's door, he was handcuffed and locked into a hot police car for over six hours. This terrorized his 3, 7, and 11-year-old children, of course, who were held at gunpoint, and then locked into the car with their father.

Wright is not alone. SWAT teams raid over 100 homes per day, many times, for non-violent crimes ranging from possession of marijuana, to student loan collections or fraud, depending on who you believe. There are over 150 cases of nightmarish SWAT teams waking innocent families, who then violently search them at gunpoint. There are other cases of SWAT teams apprehending the medical marijuana of patients, many of whom are bedridden.

Why is this happening? Two reasons:  One, the "War on Drugs" that started in the 1980s, in which, the U.S. has seen a 1,300% increase in the number of SWAT team deployments, from 3,000 per year in 1981, to more than 40,000 per year in 2001 (the number is likely even higher today). Two, the militarization of law enforcement by The Homeland Security Act of 2002 signed by President George W. Bush. This "SWAT team" finds its home at the federal Office of Inspector General, who was granted law enforcement powers.  And, let's not forget the draconian student loan laws* .

"The HSA of 2002 first authorized IG special agents in large offices to carry firearms, make arrests, and execute search warrants on their own. The Inspector General Reform Act of 2008 – enacted one month before the election – reaffirmed that IGs must be appointed based on competence and without regard to political affiliation. It established new pay levels, required the President to give Congress 30 days’ notice before trying to remove or transfer any IG, and created a new unified Council of the Inspectors General on Integrity and Efficiency. All IG offices now will get certain law enforcement powers."

Now, the DOE claims the raid was ordered due to an ongoing probe into alleged financial aid fraud, but then refused to discuss the case any further.  Let's just say that this is true. Does it call for a visit from the terror squad? It's a non-violent crime! It was the wrong address! If police state intimidation tactics are the new normal...please, let us start with the real criminals:  banksters, hedge fund managers...people who have plundered  billions, perhaps, trillions of dollars.

Overall, the substantial increase in SWAT raids on non-violent American citizens is alarming, to say the least. Testimony before the House Subcommittee on Crime on June 21, 2007 concerning militarized police forces (using military-style weapons, tactics, training, uniforms, and even heavy equipment by civilian police departments) claimed that the dramatic rise in paramilitary SWAT teams since the 1980s can largely be attributed to acts passed by the U.S. Congress, at the time...basically, thanks to the War on Drugs.

Links:

* Administrative Wage Garnishment

As the agency responsible for administering the programs that provide this Federal loan financing, the U. S. Department of Education (ED) pursues collection of student loans aggressively through debtor contact, credit reporting, litigation, collection agencies and offset against Federal payments, such as Federal income tax refunds. ED also uses another tool for collection of defaulted student loans— garnishment of wages of defaulted borrowers. Section 488A of the Higher Education Act authorizes ED and student loan guarantors to collect defaulted Federally-financed student loans by means of an administrative garnishment order to the employer, without the need for a court order. This order requires the employer to withhold and pay over to ED a portion of the debtor’s disposable pay. Federal law authorizing this action supersedes any state law that might limit or prohibit wage garnishment, or would require a creditor to obtain a judgment or use specific procedures for wage garnishment. Beginning in 2003, ED will issue garnishment orders to employers to withhold 15% of wages from student aid debtors, in reliance on a newer law, part of the Debt Collection Improvement Act of 1996.
[...]
34 CFR Part 34: These regulations implement for the Department of Education the provisions for administrative wage garnishment in the Debt Collection Improvement Act of 1996 (DCIA). The DCIA authorizes Federal agencies to garnish administratively, that is, without court order, the disposable pay of an individual who is not a Federal employee to collect a delinquent nontax debt owed to the United States. These regulations implement this authority for a debt owed to the United States under a program administered by the Department of Education.

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Student Loans Follow Up

New government sponsored programs help with student loans:

The Income-Based Repayment (IBR) plan was proposed as part of the College Cost Reduction and Access Act of 2007 and will become available on July 1, 2009.

Income-based repayment is intended as an alternative to income sensitive repayment (ISR) and income contingent repayment (ICR). (Both ISR and ICR plans will continue to exist.) It is designed to make repaying education loans easier for students who intend to pursue jobs with lower salaries, such as careers in public service. It does this by capping the monthly payments at a percentage of the borrower's discretionary income, which is based on the borrower's income, family size, and total amount borrowed. The monthly payment amount is adjusted annually, based on changes in annual income and family size.

Public Service Loan Forgiveness

The College Cost Reduction and Access Act of 2007 established a new public service loan forgiveness program. This program discharges any remaining debt after 10 years of full-time employment in public service. The borrower must have made 120 payments as part of the Direct Loan program in order to obtain this benefit. Only payments made on or after October 1, 2007 count toward the required 120 monthly payments. (Borrowers may consolidate into Direct Lending in order to qualify for this loan forgiveness program starting July 1, 2008.)

This contrasts with the loan forgiveness of the remaining balance after 25 years of repayment under the income-contingent and income-based repayment plans for borrowers who are not employed full time in public service jobs.

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Politics of Our Predatory Student Loan Shark System

What if every American high school student - no matter how intelligent, and/or talented and who couldn't afford to pay the astronomical cost of higher education - decides that the intractable, insurmountable and ever increasing debt that the student loan industry, by law, can impose upon them, is not worth the aggravation and risk? What would our society look like in ten years? Twenty years? One hundred years?

According to Alan Michael Collinge, author of The Student Loan Scam: The Most Oppressive Debt in U.S. History - and How We Can Fight Back.” and creator of the website Student Loan Justice, in the 1970’s, all the consumer protections were on the table for student loans. Then, gradually, stories about numerous individuals borrowing large amounts of money to finance their education, subsequently, declaring bankruptcy, started spreading.

Congress used these stories as an excuse, to first restrict, and then remove all bankruptcy protection, statute of limitations, and the right of students to refinance their debt at better terms for the life of the loan. Student lenders are exempt from Truth in Lending Laws and most Fair Debt Collection Practices. After all was said and done, it turned out that less than 1% of federally guaranteed loans were discharged through bankruptcy at the time these stories started to spread. The “student loan” crisis was "only in the imagination of the student loan industry."

Debt is extremely lucrative for this industry. It is reported that the default rate for student loans is approximately 5%, when in actuality, it is closer to 20-30%. What they don’t tell you is that the 5% rate of default is only calculated on the first two years after a student graduates. It’s far more profitable for some of the bigger lenders for students to default on their loans because (Sallie Mae, Nelnet) not only do these large entities own lending companies but they own collection companies in addition to serving as the guarantor function as well.

For example, in the case of Sallie Mae, they can default a loan and be paid near book value from the board of education and then come back for a much bigger chunk, considering the inflated amount after penalties, fees and outrageous default rates are applied. Some of these "sharks" are defaulting loans without even trying to collect on the debt. Even the federal government makes money from delinquent debt, recovering about $1.20 for every dollar it pays out in default claims.

Under President Reagan, grants were transformed into loans, which allowed banks to enter the mix in order to profit. This lending system enables universities and colleges to raise tuition at double the consumer index rather than plow through the laborious task of appealing to the state and federal government. This system not only shifts the burden of cost from the state to the students, but enables banks to profit enormously at the student’s expense. In addition our taxpayer dollars go toward paying subsidies to private lenders like Sallie Mae, public enemy #1, who started out as a government sponsored entity and then privatized in 1995, forming one of the most powerful lobbies on Capital Hill.

As federal grant aid has decreased over the last eight years, federal aid to providers of costlier and riskier private student loans increased. Fast forward to November 2008, and a "shark" bailout is on the table. The National Association of Student Financial Aid Administrators (NASFAA) expressed their "gratitude and support" for the proposed bailout to "aid banks and organizations that issue federal student loans," encouraging an extension of the financial backing to non-federal loans, as well.

Fortunately, President Obama, who experienced, first hand, the stranglehold of student loan debt, created the Access and Completion Incentive Fund, which will help low-income students graduate from college, and is part of a larger package of reforms including the elimination of the Federal Family Education Loan Program (FFEL)--that is, the program in which the federal government guarantees and subsidizes student loans made by banks and other for-profit companies.

Thomas Jefferson recognized the importance of an educated citizenry in a working democracy. He believed in a "natural aristocracy" of virtue, ability and talent over the "tinsel aristocracy" of inherited wealth and privilege. He believed the state should fund education in order to foster, encourage and stimulate the talent and intelligence across all socioeconomic lines. Jefferson would be appalled at the idea of our government allowing banks to exploit our young people - our nation's future - for profit.

“Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." -- Thomas Jefferson

If our usurious student loan shark system, and the massive wealth it generates at the expense of American students is exposed, the "tinsel aristocracy" will prevail at our colleges and universities, while much greater minds and talents abandon ideas of furthering their education, which in turn, will guarantee the fall of the American "empire".

A few victims tell their story:

My student loan was originally with Sallie Mae. In 2007 I supposedly went into default. Sallie Mae presented me with paperwork to sign and said my loand was in default. They garnished my wages for $340 a month about a year ago. It was not until I got my 1098 this year showing how much interest I paid and I began to dig deeply into my student loan that I saw that Sallie Mae turned the loan over to General Revenue Corp which is a collection agency OWNED BY SALLIE MAE. This is wrong.
Secondly, I determined they are charging me 26% interest!

I have written to the US dept of education and they tell me the loan must stay at the original interest rate unless a court changes the rate. There was never any court involved. They are also charging me close to $5,000 in collection fees! I understand from the Dept of Education they can charge fees BUT how can they justify that amount of fees when there was not attorney involved - nothing.

Basically Sallie Mae dumped me to General Credit (again Sallie mae owns them) and now I am paying HUGE interest AND my loans will never be paid off. When they tossed me into default my credit was DESTROYED. I also read you can rehabilitate but you have to pay 9 consecutive payments and you CANNOT include the wage attachment - how can I afford that? I am sending documentation to Sallie Mae, General Credit, my former senator (VP Joseph Biden, my Congressman Mike Castle and Senator Carper) What they have done to me is illegal.

John t
Bear, Delaware
U.S.A.

As a co-signer on a loan for my nephew, I believe that Sallie Mae has violated the terms of the loan by repeatedly issuing forebearances on the loan (which causes significant increases on the balance due to the additional interest) without seeking my consent, and without providing me with any proper notification at all.

[...]

Sallie Mae has boldly stated that they do not need my consent to alter the terms of the loan, and they keep trying to insist that they sent me notification of the forebearances, even though they have the correct address for me, and I have not moved since the loan has been in repayment.

They have managed to send me threating letters when my nephew has failed to make payments on the loan, but somehow the forebearance notices never did come.

Larry
Sherman Oaks, California
U.S.A.

[...] Now i'm being sued by sallie mae for not making my payments. i faxed a forbearance paper to stop my loans going into colllections but the collections company told me it was a third party loan sent out by sallie mae and that i couldn;t put it in forbearance.

i need help with advice before i go to court. i wish everyone else who has problems with both sallie mae and itt get together and get a class action law suit against them. or if anyone can help me i would greatly appreciate it. thanks

kristen
brightin, Michigan
U.S.A.

[...] It has been two years since I left Brooks. My loans are now deffered and already up to $41,000 because of interest. I feel that I was very misled and deceived by Brooks College and their sales staff. Now I have learned that the school is shut down because of all the lawsuits against it. I have many friends that I met through brooks that are suffering from the same situation with their student loans. We need justice with this non-accredited college!

Noel
Encinitas, California
U.S.A.

It has been two years since I left Brooks. My loans are now deffered and already up to $41,000 because of interest. I feel that I was very misled and deceived by Brooks College and their sales staff. Now I have learned that the school is shut down because of all the lawsuits against it. I have many friends that I met through brooks that are suffering from the same situation with their student loans. We need justice with this non-accredited college!

Noel
Encinitas, California
U.S.A.

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