Return Bankruptcy Protections to All Student Loans
- Posted to StudentLoanJustice.Org
To: Senator Richard Durbin
Over the past thirty years, Congress has been catering to the interests of large financial institutions - like Sallie Mae, the Consumer Banker's Association, and others – by removing standard consumer protections from student loans. Without these critical protections (bankruptcy protections in...…
Over the past thirty years, Congress has been catering to the interests of large financial institutions - like Sallie Mae, the Consumer Banker's Association, and others – by removing standard consumer protections from student loans. Without these critical protections (bankruptcy protections in particular), students who default on their loans (often despite their best efforts to maintain their loans in good stead) have no recourse but to submit to a hugely expensive "loan rehabilitation" process whereby they are forced to make extended payments, and then sign for a much larger "rehabilitated" loan that defaults again 60% of the time. As a result, students across the country are facing devastating levels of debt - often double, triple, or even far more than the amount of the original loan.
Last year, graduating college seniors who took out loans to fund their college education owed well over $25,250. Crippling debts limit the professional potential of countless young Americans and hamper their opportunities to meaningfully contribute to society post-graduation. As an elected official who has supported bankruptcy protection in the past, we urge you now to take action on behalf of our nation’s students.
Please draft and submit a bill that would extend the return of bankruptcy protections to all student loans, both private and federal.
This petition closed on December 31, 2012.
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---------------This video was produced in 2008, some statistics have since changed.---------------
-The cost of College has increased at double, or triple the rate of inflation for decades. Today, the average undergraduate borrower will leave school with about $30,000 in debt.
-National debt has eclipsed $1 Trillion
-Where all other types of lending have decreased in the current economy, student loan borrowing is accelerating.
-It is more lucrative for the lending system- likely including the federal government- for loans to default rather than remain in good stead
-Citizens are being forced "off the grid" by this predatory debt instrument. Many are fleeing the country, several suicides have been documented.
-In the absence of bankruptcy protections, statutes of limitations, refinancing rights, and other bedrock consumer protections, the threat this debt poses, and the harm it inflicts in so many ways upon the citizenry will only increase. So, too, will the price of college, which harms borrowers, and non-borrowers alike.
-Congress created this problem by removing bankruptcy protections, statutes of limitations, refinancing rights, and other standard consumer protections. Congress can, therefore, easily fix this problem by, at a minimum, returning the standard bankruptcy protections that should never have been taken away.
If you are concerned about the high price of college, if you are saddled with unmanageable, predatory student loan debt. If you have cosigned for student loans, or if you just care about the nation's ability to educate it's citizens, you should sign this petition.
Please see http://www.studentloanjustice.org for more information.
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