An Introduction, by Alan J. Yeck

The U.S. spends almost double that of anywhere else in the world on higher education and that’s before the interest charges are shackled upon the students. Nine million Americans are either in default, deferment or forbearance on their student loans with a million more each year. These students are Democrats, Republicans, African American, Caucasians, Latinx, Asian, Native American, young, old, married, divorced, LGBTQ, fathers, mothers…every single demographic that exists. It’s not a political party issue – it’s blatant criminal activity by our elected officials, their collection agencies and the Department of Education. They have created a life-long debt sentence for these students for their own profit at the cost of our country’s future.

This paper will discuss politicians and politics but is not pro Democratic Party or Pro Republican Party. The reality of today is that all politicians are arrogant, self-serving  assholes and all have damaged our country in pursuit of their own wealth building agendas.

The student loan debt crisis didn’t just appear. The warning sirens have been blaring for over a decade with the causes of it going further back than that. The subprime mortgage crisis was also seen years before but again, the people that could have changed it, the politicians, chose to do nothing until it was too late and then they bailed out the firms to the tune of $30 trillion.  That same year Goldman Sachs paid out record bonuses to the very people who caused it. Why was this allowed and why is the student loan debt allowed? Because nasty, rotten, bankers, brokers, collection agencies, politicians and billionaires are making a great deal of money off of the dreams and misfortunes of students and the mismanagement of higher education (again allowed). Shame on them all. A pox on them all. There are solutions beyond the news bites and campaign rhetoric but solutions don’t pay as well.

Forced to compete in the higher education war for a job. Now I’m crushed with the weight of student loan payments and no end to the payoff. I’ve been forced to withdraw from contributing to my retirement fund so that I can make the enormous monthly payments. On a 50k loan, I’ll (if I don’t expire first) will have paid over 250k for this loan. By the way, my annual income will never match the debt I’ve accrued in order to compete for a professional hire career! I think it’s important to note that community colleges had not yet molded programs to support a full-time employee who would be taking full-time credit hours. This forced many adult college bound students into the private college sector. These colleges continue to price-gauge adult students with inflated credit hour costs, books, and fees. My best option would be to quit working all together! I’ll never see the light of day, so why bother making a good living? I support student debt forgiveness!   Jennifer   November 25, 2019  Columbus (https://studentdebtcrisis.org/read-student-debt-stories/)

The student loan debt crisis is not new. It wasn’t like a tornado that pops up with the warning sirens giving only minutes of notice before it destroys everything in its path. It has been in the making since the 1970s and touched down on land over a decade ago. It was seen then – sirens blaring and it was projected to get worse. The narrative never changed – do not ignore this or very bad things will happen – and it has. Our elected officials didn’t just ignore it but instead they have actively, albeit quietly, ensured the system remained broken and has supported the loan “servicing” agencies in pushing their boots harder on the necks of borrowers for their own profits.

These numbers, including our $1.7 trillion student loan debt figures are always increasing so this is a snapshot of the first quarter of 2019 –

Federal loan borrowers in repayment: 18.6 million.

Federal loan borrowers with loans in deferment: 3.4 million.

Federal loan borrowers with loans in forbearance: 2.7 million.

Federal loan borrowers with loans in default: 5.2 million.

11.3 million American citizens cannot make their payments. Twenty-five percent of all borrowers will go into default and that’s where the true ugly begins. At this point interest begins to quickly pile on and can double, triple, quadruple…more from the original loan amount.

Once in default, the loan is sent to collections – this is also the point where the power finance players make their money. With the blessing of congress and the courts, wages are garnished, social security payments are garnished, tax refunds are taken in full, you are no longer eligible for deferments or forbearance, and your credit is ruined. This can also cost you your job, or prevent you from future employment. This will last until the loan is paid back or until death (except private student loans where they can come after the estate).

How we reached this point can be very confusing (intentionally designed) so I’m going to attempt to deconstruct the main areas that facilitated the fraud and the areas that keep it going and growing. All of these issues have been previously reported by numerous journalists but have not always tied the relationships together of higher education, politicians, collection/servicing agencies, financial institutions, billionaires, the department of education and other branches of the federal government, and how they worked and continue to work together to commit such a monumental deception on the American public. 

There are many rabbit holes that they want you to get lost in so I’ll address some of those right now. This piece will not explain all the differences between all the various student loans available today – understanding that like a financial aid officer at a college doesn’t change the corruption. It will not explain in-depth how all the financial tools work involved in this industry – understanding that like a broker doesn’t change the corruption. It will not explain the various loan repayment programs and faulty formulas used by the collection/servicing agencies  – understanding these like the Department of Education will not change the corruption. It cannot cover every institution that has operated fraudulently nor al the dirty, immoral, unethical people involved…but I’ll give it the old college try.  

Beware phony advocates for reform that appear to speak on your behalf with partial fixes but do so just to ensure there are no real changes to the system that would result in any financial losses for themselves and the masters they serve. The predatory student loan industry exists because our elected officials are either corrupt themselves,  don’t take the time to truly understand all the complex aspects of the abuse and fraud in the system (they choose to listen to the industry’s own lobbyists instead of their own constituents), or are just plain morons. Regardless, all kill American higher education. The American student loan system – government loansharking enforced with judicial muscle. The mafia never had it so good.