This blog used to be about debt. Now it's about a few more things. But really, it all comes back to debt. Trust me.

Wednesday, December 6, 2006

Whodunit?

Student Loan Justice has this excellent post about "Why the department of education should be investigated."

The conclusion may be a little extreme. The tired lingo about corporate welfare and its beneficiaries does sound a bit biased. But there are some compelling arguments and data here.

Some highlights:

Since 1994, the cost of attending college has skyrocketed...
Sallie Mae, the largest provider of student loans, and former Government Sponsored Entity has seen its stock price rise by nearly 2000% during the same period.


In the past 10 years, the Student Loan industry has secured legislation that:


  • ...took away bankruptcy protection for all student loans- federally guaranteed or not.

  • ...made it illegal for most borrowers to refinance their consolidated debt, even with lenders willing to charge less interest, accept less profit.

  • ...gave the lenders collection powers that would “make a mobster envious”, to quote Harvard professor Elizabeth Warren....termination of public employment, income tax seizure, wage garnishment, suspension of professional licenses and certificates, and seizure of social security, and disability payments.


Do what you will with this tidbit: a conflict of interest we've seen before at EPA, Energy, and now the DOE...

The head of the Federal Student Aid program, Theresa Shaw, was brought into the Department of Education from Sallie Mae, and brought many of her Sallie Mae cronies with her.


Finally, kudos to Student Loan Justice for articulating the real problem with all of this:

This legislation has created the perfect mousetrap for a most vulnerable segment of our population: lower and middle class citizens aspiring to achieve the American Dream...


Indeed. Witness scenes from the class struggle in higher education.

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