The federal student loan system has been astonishingly absent of the most basic consumer protections for decades, now, and the federal government has done nothing to bring them back.
Thankfully, the City of Albany has decided to act on this issue. I think this is very significant.
The organization I belong to, StudentLoanJustice.Org, has been calling for the return of consumer protections for almost 5 years to no avail. While we aren't specificaly calling for forgiveness, we strongly support the City's proposal (which also calls for bankruptcy reinstatement)
City of Albany calls for consumer protections for student loans, forgiveness.
August 17, 2009
For Immediate Release
Please contact: justice@studentloanjustice.org
--------------------------------------------------------------UPDATE
City of Albany Passes Student Loan Resolution Unanimously
After significant work on the city of Albany's resolution over the past week, We are very happy to announce that the resolution passed unanimously tonight, with every member of the City Council stepping up to co sponsor the Bill.
The resolution, # 43.42.09R, contains provisions for both loan forgiveness, and also a return of Bankruptcy rights for both federally guaranteed, and private loans.
Thanks go out to Jim Sano, whose leadership on the council made this happen, and will continue to be a key player as this resolution continues its journey to Congress, and beyond.
Remember: it is important that it took a City council, far removed from Washington D.C. , to recognize this problem, and act. It is important that you alert your local city councils, as well as media, about this development, in hopes that they too, will pass similar resolutions. The passage of similar municipal resolutions is expected in at least 8 other municipalities according to Sano.
RESOLUTION NUMBER 43.42.09R (as amended)
RESOLUTION OF THE COMMON COUNCIL CALLING UPON CONGRESS TO OFFER PROGRAMS TO REDUCE STUDENT LOAN DEBT AS AN ECONOMIC STIMULUS TOOL AND REFORM THE STUDENT LOAN PROCESS.
WHEREAS, the cost of higher education has risen faster than the average starting salaries, leaving many new college graduates with student debt which exceeds their ability to pay,:and
WHEREAS, student loan repayment can be difficult for young people starting off their careers and has become even more challenging now with the economic downturn, as recent graduates lose their jobs or struggle to land gainful employment. Graduates confront unaffordable monthly payments, loans that are nearly impossible to discharge, and restrictive loan repayment plans; and
WHEREAS, there were nearly $131 billion in outstanding private loans in 2008. In addition, there is $544 billion in outstanding federal loans for fiscal year 2009, up from $502 billion in 2008, according to the Education Department. The average debts of students graduating with loans rose from $18,796 in 2006 to $20,098 in 2007, according to the Project on Student Debt; and
WHEREAS, forgiving private and federal student loans should be greatly expanded in exchange for service in all public sector jobs, so as to better utilize these degrees and experience, especially in our most disadvantaged areas. The time frame for public service should be proportional to the amount of debt asking to be forgiven, and
WHEREAS, forgiving student loan debt would have a stimulating effect on the economy. Responsible people who did nothing other than pursue a higher education would have hundreds, if not thousands of extra dollars per month to spend, fueling the economy. As a result, tax revenues would go up, the credit markets will unfreeze and jobs will be created; and
WHEREAS, in order to stop this cycle of destructive student debt we also urge Congress to examine the following: repealing the exception to bankruptcy discharge of private, governmentally-guaranteed and government education loans; increasing Pell Grant funding; aligning the definition of total and permanent disability discharge with the Social Security definition of a disability; requiring mandatory financial literacy training for all college students; and mandating improvements in loan counseling; and
NOW, THEREFORE, BE IT RESOLVED, that the Common Council of the City of Albany urges the federal government to consider forgiving student loans as part of a stimulus package for young people and to move forward on reforming the student loan process.
NOW, THEREFORE, BE IT FURTHER RESOLVED, that a copy of this resolution, suitably engrossed, be transmitted to United States Senators Kristen Gillibrand and Charles Schumer and United States Representative Paul Tonko
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Dave
Going to make this semi-short because so much is the "same" as so many others...and I have not checked for spelling. Back in the 80's I wanted to go to college. My parents could not afford to send me and I was not eligbale for grants (Pel?) because my parants earned "too much" - which at the time was something like 100 more than what they allowed people to earn per year. The only way I could go to college was to get a student loan. I did this three times - one for each year I was in college.
So college is done and I start to make payments. On a good day (month) I would pay up to 3 payments at once. never one time did I get a "thank you" letter about doing that. On a bad day (month) i might be a week late. The DOE wasted no time in contacting me with threats about "We will report you and that will ruin your credit". Around 1985 or so it got very bad - multiple letters and phone calls with collecton agencys making threats about ruining my credit and telling everyone they could about how bad I was at making payments. For the next almost 18 years there were no more letters, no more calls...nothing.
Than one day I am on a film set. Suddenly the line producer comes out and stops the shoot. She has the really concerned look on her face. She hands me a cell phone and stands there looking so sad. I say hello? and I hear a mans voice ask "is this Dave?" and I say "yes..." and his tone changes and goes into this whole "We are a colleciton agency and you defaulted on your student loan..." blah blah. I was stunned and shocked and i could barely muster anywords..sitting on a set with the entire production being help up because of this phone call. As calmly as I could I had a semi-noir freak out and sked how they got the number and he would not tell me. I told him he had no right to call me on set and hung up. I asked the line producer how, and why, she would stop shooting for that. Well - after she told me what the guy told her I did some back searching. I called my mother and she had gotten a call from an "old friend" of mine who "has some jobs lined up" and needed to get a hold of me as fast as he could. So she gave him the studios production office. They got a call asking for me and told the person I was on a shoot and could not be reached. So the caller tells them there is a serious family emergency and he needed to get a hold oe asap. So they give him the productions cell number so they can call the set directly. The phone rings and the line producer answers the phone and she is asked fo rme and she sayd I am busy, they are shooting ans so on. Now she gets told that my mother is ill and possibly near death and it was of the utmost improtance that he speak with me. By the time I got this whole story together I was shaking and had I known where this collection agency was and the who the person was, and where they lived, I would have done whatever I could have to bring them to their knees in whatever way I could.
The best I could do is get the guys voicemail and left him a message that he was never ever to contact any member of my family or my emplyers again. That if I ever found out who he was I was going to bring charges agaist him for the methods he used. I never heard from him again. But a few years after that I am married and have a child. The first year my wife and I file and get to use th e"erned income" credit suddenly instead of a return we get a letter sayinf that the enitre maoutn was used for a past debt...you got it - the student loan.
Like someopne else posted the IRS on behald of the DOE has taken more than what was owed to start off with except now, this week actually, my neighbors are getting phone calls from a "Val" at "Van Ru" looking for information about me. She says she is an old friend of mine and needs to speak with me urgantly. I have no idea who "Val" is or who "van ru" is - so i do a search and find out "Van Ru" is a collection agency that seems be hired a lot by various state and federal agencys for deebt collection. They also seem to have long list of lawsuits against them for their methods.
Seems they claim I owe $8,000.00 on the loan plsu another $52,000.00 in intrest and "fees". Keep in mind when the harrasment was going on the first time around I only owed $2,500.00 - seems they upped it a bit...ok, they upped it a HUGE bit.
Now here is a bit of info on "van Ru" - I contacted the DOE about them and they said they could not help me because Van Ru was not one of their contractors. So I did some searching and found out their contract with the DOE expired in March 2005. Not only that but guess how much "Van Ru" was paid? (or I should say "guess how much our beloved DOE "awarded" them for the contract to go out and collect debts?") $47,029,654.57 yes - you did read that amount correctly.
So now I have to wonder what the hell is "van Ru" doing? They have not contacted me at all - yet they are contacting all my neighbors asking about me. I did a credit report search and I come up with nothing - as in nothing owed, no debts, no bankruptcy - a clean and good report. But now here is the "fun" part. In the last 12 months guess who has requested to see my credit report? yup "Van Ru". They did it in August 2005.
So that is where I am at as of today. Waiting for the next shoe to drop. But I now save things, I now keep records. I dod not have any student load records around - I don't have check stubs of copies or even statments. I mean they tell you to keep thing for maybe 5 years....and we are talking over 20 years years now with no word about student loans from anyone for about 18 of those years. So sad...so very sad. If I harrased people like some of the Collection places do I would be tossed in jail. Not only can they get away with it, one look at the stack of lawsuits against "Van ru" over the years shows they not only keep doing it but get HUGE govt contracts to do it.