3rd generation
First Time Poster
Cash: $ 0.25
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Joined: 31 Dec 2012
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| Credit &Loans |
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The horrifying reality for most students is, by the time they graduate, they will be thousands of dollars in debt. ….debt with creeping interest rates…debt that cannot be bankrupted and….as a practical matter, debt they can never repay.
Total student loan debt in this country will exceed $1 trillion dollars; this money essentially cannot be repaid, thanks to compounding interest (and a declining economy). . College tuition has increased more than 5% each year over the last 5 years, with other costs (like textbooks) continuing to increasing exponentially.
Since 1978, the price of tuition at US colleges has increased over 900 percent, 650 points above inflation. To put that number in perspective, housing prices, the bubble that nearly burst the US economy, then the global one, increased only fifty points above the Consumer Price Index during those years. But while college applicants’ faith in the value of higher education has only increased, employers’ has declined. Wages for college-educated workers outside of the inflated finance industry have stagnated or diminished. Unemployment has hit recent graduates especially hard, nearly doubling in the post-2007 recession. The result is that the most indebted generation in history is without the dependable jobs it needs to escape debt.
This is the part most of us now, but what many are completely unaware of is just like the subprime loan boom, the same players exist in student loan…..Fannie Mae, meet your cousin Sallie Mae! And then lurking right below the surface are all the banking players who are siphoning off the interest and fees….for the rest of the student’s life!
The SEC (Securities Exchange Commission) is currently investigating several Student Loan companies, including Sallie Mae, for fraud. Specifically, it is alleged that during the Class Period, the Defendants made false and misleading statements about the Company’s operations and business products. Did you know your student loan was being traded on Wall Street?
The Student Loan Asset-Backed Security (or, as they’re known in the industry, SLABS),were invented by Sallie Mae in the early ’90s, and their trading grew as part of the larger asset-backed security wave that peaked in 2007.
The Department of Education will calculate default rates based on numbers three years after the beginning of repayment rather than two. The projected results are staggering: recorded defaults for the class of 2008 will nearly double, from 7 to 13.8 percent. With fewer and fewer students having the income necessary to pay back loans (except by taking on more consumer debt), a massive default looks closer to inevitable.
Ok so what’s the solution? First it is important to understand the nature of debt in the US, as well as what laws govern it. The Fair Debt Collections Practices Act governs the collection of Debt by third party debt collectors, it prohibits Collectors from practices such as making false threats to coerce payment (such as false threats of suit), using deceptive collection notices that falsely appear to be from an attorney or court; and engaging in any sort of harassment, such as threatening violence, using profanity and obscenities, or making continuous phone calls. Under the FDCPA, if a consumer disputes the debt in writing, the collector is required to stop all collection efforts until the debt is verified. The FDCPA also states that if the consumer demands in writing that the debt collector cease all further collection efforts, the debt collector must comply even if the debt is valid.
Here’s the trick, do you remember how earlier we discussed student loans being traded on Wall Street? Well did you know that once these loans are “securitized” it becomes impossible to actually verify them? Because many Americans are trained to believe that these financial products and services are in fact loans, which they most certainly are not, the bankers are able to siphon off millions of dollars from the American people, keeping them for most of the lives in a kind of modern day indentured servitude.
solicitation removed
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Wed Jan 02, 2013 3:24 pm |
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BillyQuinones
New Member
Cash: $ 1.60
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Joined: 02 Feb 2013
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such a thoughtful point gov. must think bout this. Great contribution...
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Sat Feb 02, 2013 1:53 pm |
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Jaydejonh
New Member
Cash: $ 0.80
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Joined: 19 Oct 2012
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How come on a Personal line of credit loan you get charged an apr and a periodic finance charge?
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Mon Feb 04, 2013 12:45 pm |
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hewiesidney
Member
Cash: $ 2.00
Posts: 10
Joined: 04 Mar 2013
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There are relatively few loan and grant options for those with bad credit. The cause of bad credit will ultimately determine which loans are available. If you have bad credit because you are socially disadvantaged and have a short credit history, there will be more options than if your credit suffers because of poor financial planning.
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Mon Mar 04, 2013 11:44 am |
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