Student Loan Default Protection May be Near

    December 25, 2013
    Aleyia Dixon
    Comments are off for this post.

If your heart involuntarily jumps whenever you see “student loans” trending in the news with the hopes that well— maybe they’re finally ruling them away somehow…

Democratic senators Dick Durbin, Jack Reed, Elizabeth Warren and Barbara Boxer may soon become your new best friends.

By this time, everyone knows about America’s trouble with student loan debt. If you are not of the group of people who has that looming over your head, it is a high probability that your spouse or kids may be dealing with it.

Student loans also have one more darling characteristic: When they go bad, they Really Go Bad.

When a student loan enters default, your life becomes a virtual prison without bars. Issues such as collection fees, paycheck garnishment, the inability to open a checking account and more incredible hassles are now a part of your life– a defaulted student loan is one of the worse entries on a credit report.

USNews tells us that the earlier mentioned group of senators have introduced a daring Student Loan Borrower Bill of Rights to Washington D.C. on Thursday, which includes the Protect Student Borrowers Act that aims to hold institutions more accountable for student loan default.

Senator Reed on the subject:

“They will have to have skin in the game…They will have to make financial judgments based upon how well-informed and how reliable their graduates are in terms of paying back their student loans. It provides incentives for institutions to take proactive steps to ease student loan debt.”

Essentially, the senators believe that if colleges and universities are more affected by a loan going into default, they may begin to do some cost adjustments if they know that most of their students will only be able to meet the costs with heavy student loans. If the act is put in order, schools may also become a bit more generous with scholarships, grants, work study and other financial options instead of making a loan the go-to option if a student comes up short.

The act intends to be fair; Reed went on to state that institutions would have to pay 5 percent of its defaulted student loans only if their default rate is between 15 and 20 percent.

As with all politics–there is opposition concerning new ideas, but most are willing to wait though a few years months of blustering filibustering if it means a little relief from the high cost of education.

Image via Youtube

  • Richard Murray

    It’s about ****ing Time!!

    • Lilly

      It is an election year. Nothing will get done. Smoke and mirrors and after the election suddenly you will hear nothing.

  • J Buc

    So will all of us that worked our way through school and did not finance “spring breaks” and weekend pub outings get a refund? Libral mentality for “Pay me” because you can has got to stop.

    • Giselle

      How is this a “liberal mentality” – ? Student loan debt is a major financial issue that affects millions of Americans, regardless of political affiliation.

      • Lou

        Giselle, we don’t have to go to a pricey, private college, A student will receive a fine education at a state college at a fraction of the cost. Send private, overpriced schools a strong message.

    • David

      J Buc, I agree 100% with you. I had student loans and no one was there helping me out. I sacrificed to pay them. I think with this whole thing, those of us that have paid should be given some kind of “refund.”

    • Pat Rice

      I agreed with you until you brought up politics into that.

    • John

      Yep, we all took thousands of dollars to get drunk. It wasn’t the 12 grand in tuition a year or things like rent or food. We weren’t blessed with the same silver spoon that was shoved up your ass and had to find a way to get drunk a different way.

      – current software developer, not in default, making regular payments on my loans

      I love when people claim “whining liberals” every time this issue comes up. Most jobs require a college degree, most colleges grossly overcharge students, and most banks gladly offer 5-7% loans they know have federal protection from default risk. Unless you’re lucky enough to get out of high school with a family business or a ton of money at your disposal, your options are loans, or the military. So how about you think before you spout off you clown.

  • Chris

    Government is a business unto itself. If you will notice how the quasi-corporations are setup that way, you begin to understand the nature of the government we have now verses many years ago. We had constitutional offices like the term Bureau.

  • College Costs

    College costs have exploded. Everything has exploded. There hasn’t been a need for prices to increase as much as they have.

    The rich are just taking advantage of the poor and we are becoming a two class society.

    • common sense

      Yes and the rich will have to pay for the poor at some point or there will be riots in beverly hills

      • Don

        Let them Riot, that’s what the Lazy do when they want something.

        • Rae

          What you call lazy we call, RACIST. How could you say that a whole group of people just want a handout? Have you ever had to listen to your children cry because of hunger? Has your stomach ever been so empty you can’t even use the bathroom?? Sure, lazy for the part of America that always “has” … try walking in the shoes of someone less fortunate than you and lets see if you would still consider us “lazy”. The reason we went back to school is to get a job in an economy that has none, you can’t get blood out of a stone and maybe you would because with your brand of thinking, you squeeze it hard enough. You really ought to watch what you say before you think of putting it in print, and sir, please have a very Merry Christmas.

          • Don

            I was born poor, bathroom in a shack outside of the house poor. I know poor and you don’t have to stay that way in this country, you have choices.

  • Don

    I worked my way through College, with a little help from the GI bill (believe me I earned that part) I say if you signed your name on a loan for your education you pay it back every dime of it, no exceptions

    • @Don

      I have met many people like you. People who will not give another person a break just because they had it harder in life. The reality is that people need help. Life is not fair. It never will be, but just because you did it the hard way, that doesn’t mean every person who goes after you has to do it that same hard way.

      College Costs is right when he or she says that prices have exploded or no reason. The same school I went to in the 90s cost 4 times as much now. Heck, a pack of gum that cost me 59 cents four years ago costs 1.19 now —– nothing has happened in the past four years to warrant such an increase. But the wealthy are getting ever richer. Just look at the number of billionaires that have doubled there money in the past four years. It is obscene.

      • Don

        You are entitled to what you work for or for what someone is legally entitled to give you nothing more. There is nothing wrong with giving up three years to the armed forces to help pay your way and there is no harm done to anyone by hard work. If anything hard work will be advantageous to a person. As for Billionaires, that’s their money they are free to do with it as they please, I have never cared about what someone else has as long as they leave me alone to do with what I have as I please. That said I did put all six of my children through college and the reward I asked of my children was that they do the same for my grand children and they are doing that now.

        • @Don

          I understand. You need to care about what those billionaires are doing. They are impacting your children and grandchildren’s future. We are becoming a two class system. The haves and have nots.

          Heck, those same billionaires are screwing the veterans now. It will just be getting worse. Who do you think is paying all the lobbyists in Washington? Corporations and billionaires. You can’t honestly say you think America is getting better? Please. Have you been to the food shelters, the unemployment lines?

          • Don

            Most of the so called Rich got there on their own, I don’t begrudge them a dime of that. Some will say they had help and they did, they hired help, they paid what the job was worth and the individual agreed to work for that wage. If you want to be rich you will have to do it yourself and you will seldom get there working for someone else. Now the Rich didn’t steal it or exploit it they EARNED IT.

          • Don

            I get it you hate the Rich, sounds like personal envy to me. Have you ever checked out just how much the Rich give to charity, you should it is significant.

          • Don

            I get it you hate the Rich, sounds like personal envy to me. Have you ever checked out just how much the Rich give to charity, you should it is significant.

          • Don

            I get it you hate the Rich, sounds like personal envy to me. Have you ever checked out just how much the Rich give to charity, you should it is significant.

          • Mike

            @Don It’s not that the rich have made their money dishonestly, it’s that they go “buy” elected officials with campaign contributions so that the elected officials may pass laws that allow them to pay even less.

          • lrsen

            part of the reason things are bad is because of the oit of control spendng by both parties when they are in power. However the obama adminatraion has spent so recklessly and regulated so much that it has brought this country to collapse!! We need to stop this out of control spending

      • Kevin S.

        ..and according to your numbers that same billion dollars is now only worth half of what is was 4 years ago. That means that the wealth of the top end has grown ZERO percent. I do not fully agree with your math but you cannot have it both ways. If the value of a dollar is half what it was 4 years ago of course the number of billionaires has doubled!

  • http://yahoo.com harold j brown

    I have a son that half crazy over a student loan default. his life has become a nightmare. he is barely existing as they don’t reallygive a dam. my own personal belief is no one in this country should have to pay for any education from cradle to grave.liberal is a just way of life.enough!!!!!

    • Don

      What is just is paying your own way.

  • Funny America

    America get their panties in a wad over this issue, but they will not do a thing about the fact the Pentagon lost 2.3 TRILLION dollars and the FED lost 9 TRILLION dollars. A bunch of kids who are having problems make loan payments will get people mad, but when their government loses over half the national debt …. no one does a damn thing.

    By the way, that 2.3 TRILLION was reported by Donald Rumsfeld the day before 9/11 and the “plane” …. ahem …. missile …. that hit the Pentagon just happened to destroy the accounting records department. Go figure. But go ahead and believe a plane just randomly hit there even though not one picture has ever been released. Yeah, it is not suspicious for a building covered in cameras not to be able to at least capture one clear picture of a plane.

    Not suspicious at all.

    • @Funny America

      9/11 was an inside job. The world knows this. America is just brainwashed. Some people are waking up though, but it will take at least another 10 years before the majority does. As for the rest of us in the world, we know the truth. It is so obvious.

      I mean really. No buildings have ever fallen from fires the way building 7 did. Shanksville does not look like any plane crash ever and there were no bodies. No pictures from the pentagon —- the most secure building in the freaking world —- but no pictures? A plane hits the towers, 1400 cars melt, the building collapses but a paper passport survives and it just happens to be one of the terrorist’s passport — really, come on!! I could go on all day about how everything is bogus.

      But here is the biggest thing. The US spent more money investigating Monica Lewinsky sucking a dick than they did on 9/11. In fact, they spent twice as much on Monica sucking than they did on 9/11. That says a lot. Finding the truth about a blowjob is more important than finding the truth about 3,000 people dying. The only way that occurs is when you really don’t want to find out the truth.

  • emperor of wall street

    If you care about peace, you should be in debt for life. There is no financial aid for Graduate School. Contrast with Germany which pays for Graduate School education for all students as their base education. We have an “education for profit” model, run by the billionaires and criminal banksters. So Why are You surprised? Anyone who can’t pay cash for their education shouldn’t be allowed to go..so sayeth the Almighty Banks!!!

  • Kevin S.

    When younger votes are turned away from the Democratic party because of Obamacare they now want to have another means to buy those votes with federal tax dollars! Part of the reason that people with student loans cannot repay them is the absolutely horrible economic policies of the Democratic party. New graduates cannot get jobs or are under employed so they cannot make their required payments on their student loans. Democratic solution? Don’t fix the problem, band-aid a solution by paying off their debts, buying their support to your cause and further bankrupting America. What is so hard to accept about that Democratic solution?

  • Patty

    Yes, some of you may have worked your way through school back when school was affordable. When 3 books cost you 629.00 and the books are not even a inch wide and when you try to sell them back you are lucky to get 60.00. You have to take classes that have nothing to do with what you are getting a degree in but they want that money. Its impossible to work, pay high rents, electric, gas and have money left over for school. Something should be done about tuition price and how the schools are robbing without a gun.

    • JC

      Thank you Patty! I don’t understand why people don’t get it! The price of everything has gone up to the point that the only way to go to college is live with parents if you are lucky and work a part-time job until you graduate then work two jobs and still live with your parents to pay off your student loans! I work two jobs and I still find it very hard after paying rent,utilities,car payment, insurance, and other bills to make my minimum student loan payment every month which is $200! I would gladly pay it back if it were at a lower rate but this is all I can get and the price doubles every two years and I have nine more years of payments. I didn’t finish school and I cannot go back because I simply cannot afford it.

  • http://yahoo jeff

    it’s funny. you see so many posts here concerning this issue. and, of course I have my own. a 13 year military veteran, I decided to take some business courses “pre-desert shield/desert storm”. I went for about two years … did well in every class …. then got called away to the middle east. from that point, a number of “life issues” took place. When I left the military, I had a student loan debt of about $7500. I am now 50 y/o. I have worked full-time since the age of 17. I’ve been on my current job for almost 15 years. but, I’ve never been able to afford the payments ($250-$325 per month). shortly after leaving the military, I was given the chance to pay $68 a month for 12 months … this would take it off of my credit report. and, I did so. as soon as that period expired .. it went right back to over $300 a month. I’ve tried everything possible to get my payments to a reasonable amount. I WANT TO PAY IT BACK! But, it’s the same as trying to “negotiate” over medical bills/issues. $65-$100 is not acceptable. I don’t know how many times I have had “representatives” tell me … “I know .. I’m in the same situation”. Really. Don’t just assume that people want something for nothing. There are a lot of people out here trying to make payments. It’s just that they want 3/4 of your check each month to pay it back.

  • http://webpronews michael smith

    I am a full time student and will have more than $70K in loans when I graduate. I have no mommy or daddy to let me live with them for free. I do not even own a car; I bus it everywhere I go. The community colleges with low grad rates need to be scrutinized as well as the for-profit “colleges” that offer no more than a certificate. The vast majority of these credits do not even transfer to a 4 year college. Oh, by the way, I will be 60 years old when I graduate.

  • floridawendy54

    When I took out the student loans for my husband and kids I had a great job and income. I came down with cancer, lost my job as a direct result, and now the loans are so debilitating. The interest just kills us. We pay and pay and pay and they never come down. We are doing our best to pay them off and fulfill out obligations. But don’t assume entitled students with lots of fun spring break memories are the only ones having trouble with their loans. That’s a very arrogant assumption. P.S. I worked my way through college so I COULD help my family with college.

  • Jennifer

    “married couples” …. STOP DIVIDING PEOPLE. I’M 41 and single and in Student Loan Debt. Married people get the jobs SORRY!

  • Jack

    Mine are paid in full, can I get my money back?

    • Don

      Fair enough if they give in and bail out we should get our back as well.

  • Adam

    David some of us are red-blooded, Conservative Americans who would greatly benefit from this as well. I worked full-time all the way through state school in California and I still had to take out vast amounts of loans to pay for a 4 year education. I don’t know how any of you afforded it, but tuition for state schools is almost $10k a year for in-state residents. By working full time I was barely able to afford rent, books, groceries, etc. and now that I’m graduated and working full-time it would be nice to have some reassurance that if I ever default on a student loan because of my employment situation, I will still have the peace of mind to not have my assets seized and other sources of income garnished. Please think outside yourselves when you make such generic arguments as “liberal vs. conservative” and “lazy vs. responsible.” No sane student can work enough to pay $20k a year in college expense between cost of living and tuition and still have time to study and graduate on time.

  • josh

    I am a 26 year old single young man, i applied received student loans because MY parents made a high income, therefore i wasn’t able to receive any grants or free aid the GOV provides ect. I don’t make that kind of money never was giving a dime for college from My parents because after 18 i was a legal adult, but when applying for GOV aid i was denied stating that my parents have a high income to which i don’t receive a dime of, because my parents worked hard to get where they were at today. i suffer and still suffer to pay back loans on a entry lvl position which i have now at a Reputable computer company, anyway what they don’t tell you is it is near impossible to to Consolidate all the loans one acquires during college these days sure 80’s they did that alot better rather then now loan companies want 400 a month for this loan and same amount for 2 other loans 1200 dollars a month, on a 30k salary a year job if i don’t pay goes into default or i have to go on a hardship to wear they jack up interest prices making more money i cant even pay because the retirement age now is until you die i guess, i receive no GOV help why ……Because im whats left of the middle class i make just enough to not qualify for aid,, maybe a kid would help my food situation least i could have full cabinets off brand name food to which i see all the time at Walmart filling there carts to the brim to which i need and pay for everyone else and i can only afford spartan brand food that is enough for a week that i make last for two.

    sorry for the rant i know most of you are older and revived student loans when you actually could consolidate and get that 60k job right out of college we need to fight for fair rights of pricing for schools
    for education stop bring over doctors from other country’s and use the great minds we have right here who just need things to be affordable.

  • roth

    Here is my brief summary about myself:

    Graduated 2007 with a BS in Business Administration. Took out financial aid with a loan total of $25K. In 2012, out of my own pocket (cash) paid another $10k to get my accounting certificate. All this while I was working full time with not so great wages at a bank. Now I have less than $1K in student loans owed and I just landed an awesome job that is related to my educational field.

    Why choose a school when you have to owe a crap-load of money? Why not choose a school near you (in state public school)? It sure is a lot cheaper and you get the same type of education. And for those who complain about finding jobs. Don’t be picky and just get what you get. Be patient and you will find that “awesome job” you’ve always wanted. These days, employers prefer someone with work experience.

    Don’t blame others. You put yourself in this position.

    • @Roth

      Please. You got lucky. You could easily be in someone else’s shoes. One layoff and you would be in a completely opposite situation.

    • Don

      It’s all about being responsible and reasonable, I did it, you did it and I’m sure when you have kids you will help them as much as you can, and that you will ensure that they are also responsible and reasonable.