Support HR 532. It is the 5th time this legislative bill has been proposed and has been languishing for the past 11 months. Please see: http://www.opencongress.org/bill/113-h532/show.
Private Loans should never have been removed from bankruptcy protection in the first place. Why are these private student loans protected by the government. and fully paid and guaranteed by the government if the student cannot pay them, then (the notes) sold to collection companies (often collection companies that the lenders themselves own)? These collection firms add on additional penalties and fees. How could this happen? The possible reason is that this legislation was written by the lending industry! We need our congressmen to represent people! If the government guarantees these loans, and the lender is fully paid, why does the student end up owing double on what they originally borrowed?
Letting these predatory loans be discharged would be the LEAST the government should do. Ideally, the government would force the lenders to zero out the balance of these loans. After all, the lenders were already paid when they went into default with your tax dollars!
I am personally among the 15 percent of all student borrowers who is crushed by this debt. The original amount of my private student debt has doubled according to my December, 2013 credit report. When I tried to work out terms several times, the private loan lenders offered no income based repayment, no forgiveness for public service, and limited payment options--none of them could I afford. When I was recovering from my accident and out of work, one lender wanted me to pay $150 every three months (for the privilege of deferring my payment. By the way, this fee did not apply to interest, which was greater than that anyway. This was another revenue stream for the lender). They wanted me to pay over $1100 a month and were willing to lower my payment to $965 each month. Keep in mind, this does not include my federal student loan payments or the fact that I need money to live.
This arrangement is iron- clad protection for lender banks.
They can't lose. The private loan lender collects big when a student borrow defaults! Is this the kind of country we want to live in?
There are issues with the federal loans too, such as being hit with a looming tax bill after decades of public service (for example, if I choose to pay my federal portion through public service and the government pays the balance at the end of term, that counts as income--and I get hit with a very large tax bill), but let's tackle the most egregious private student loans first.