Saturday, November 1, 2014

"Stuck on Stupid" $1.2 Trillion Student loan Debt

I have been writing about what has now become a "$1.2 Trillion Student Loan Debt" for the last several years.I have taken the position that there are solutions,but first it's going to take all sides coming together an finally realizing that our children are the only future of our great nation.

We have allowed the hunger for power and greed to trump everything that is good about living in greatest free society ever know to man.A country like no other where everyone is given the opportunity to live the American Dream. Well this statement.."The American Dream" has become a cliche,and is now more about the huge profits that are being made off the backs our children.

We supposedly have all these experts in education that have made us the greatest educated nation in the world. I ask you are we really sure this has happened and is still happening today? I believe that first with all my heart and soul we better take our heads out of the sand. We as a nation better wake up an realize that if changes are not made soon the rest of the world is going to pass us by.

Our student loan system is outdated!We have allowed a very few well placed lenders with the help of our very own Congress and the President who's job were never mean to be a career; I was taught from an early age it should be both an honor and a privilege to serve the American Citizens.These 535+1 have made a mockery of our democratic government and all the good it should stand for.

From the Urban Dictionary:     Stuck on Stupid

 A term used to define someone who is stuck in a cycle of endless stupidity when it comes to making decisions. The inability to make good or logical choices.

Congress and the President have offered refinance and interest rates these will help,while once more making even more profits for the loan servicers of our government student loans or the private lenders, but neither are real solutions.


The 2014  Mid-Terms have now officially had a name change to The Mud-Terms after a reported $4 Billion is estimated to being spent on re-elections up from $3.6 Billion in 2012! Our politicians have loss all reality with the average American; another really scary statistic reported now is 76% of our working class now live from pay check to pay check? How is this possible in the greatest country in the world?

I knew when I started this blog I excepted that I would be called crazy and I would be told time after time by the so called experts I didn't know what I was talking about, and at first I didn't know much except that the student loan system has become corrupted.The student loan system on the surface looks and works to some extend,but the motives of the lenders and to our Congress who have become corrupted because of campaign contributions that are associated with the student loans, and now student loan defaults have become all about huge ungodly profits that are being made off the backs of our children. Remember these are the same children that just the year before college were depending on us as parents to teach them the difference between right and wrong.

I need you to answer this honestly how many of our children knew about loans and financing before they were went off to college? Now we as a nation have programmed our children to believe without a college education they could not succeed.Are our college and universities helping to find jobs so our children would be able to pay off their student loans that are growing faster than any other type loans? Has our government created ways to bring small business and graduates together to help kick start the middle class that we are losing more and more every day? And now add  this with the growing student loan default rate that if changes are not made quickly will become more profitable than the actual student loan.

Now place on top of this that our children student loan consumer protection rights have been removed first from Federal and then Private student loans.These are the same consumer protection rights that each of us ...that's You and Me are entitled to as American Citizens.

I think it is important that you know that student loans are treated as the only other exception in bankruptcy which include fraud,felony, and alimony-dodging. Please ask yourself does your child belong in this group?

Just so your aware my children are 27 and 25 and yes they are both young adults, I am extremely  proud of each one of them,but they will always be my children first. I will do anything and  everything to make sure that they are given a hand up not a hand out, and that they are given the opportunity to live the..............
American Dream.......... The question is will you do the same for your children?

I believe with all my heart that we should offer a hand up,but not a hand out to every child.This is an opportunity our own political system and our own government is consciously allowing to be destroyed, because of the thirst of Greed and Power.All for the sake of being re-elected and taking care of a select few ?

Do you remember the smell taste?.... if something smells bad chances are it's bad...well how does this smell to you?

Once again I will leave you with this today

"A baby comes into this world with only hope.....the only gold we will leave this earth with is our Word"

Anthony Eller

Sunday, October 26, 2014

It's called spinning the Truth....$1.2 Trillion Student Loan debt

I will start this by telling you I have done things in my life that I wish I could take back, and have the chance to do all over again. The truth is that can't happen,but I can admit my mistakes,show remorse and work daily to become a better person.This is what I have chosen and committed to do with the rest of my life.

When an individual has a life changing experience and makes this type of commitment it seems that most become very narrow in their views in the way life should unfold.I see this time after time, I have tried not to make this mistake.I promise you  I am far from perfect and I will continue to make mistakes,but what I have tried to do is admit my mistake and move on.

This blog was created to find solutions to the $1.2 Trillion student loan debt. The $1.2 Trillion student loan debt is now become about right and wrong, and what a few are doing to our present and  future generations.I know that this can't be corrected over night,but those responsible can start taking responsibility for what they have done, and continue doing to destroy our children future. .

Greed breeds greed and now it's not only the lenders, but the college and universities,Congress and our own President have the American public believing the idea that there has to be profits made off the student loans it  now seems everyone  wants to make a profit off our children no matter what the cost.There are some things in this life that are not about the profits,and our children education should be first on that list.

After watching the staggering cost of my daughters education, and the way the educational system seems to pick and chose admissions that keeps some very gifted students from the opportunity to enroll at our state universities..... I knew someone had to speak up.

I have also chosen to find solutions and I promise you there are solutions.....but first we have to realize that our children are America's only hope for the future.We has a nation have to invest in the future now.This is now a world economy like it or not and without our children receiving the best education possible.....

this has to happen before rebuilding Iraq and Afghanistan that we have destroyed.Story after story talks about $Billions that have just been wasted.(USA Today) spending nearly $5 Billion a month on the rebuilding of Iraq and Afghanistan? This just one example of the waste and no real checks and balances on government spending

We had this warning from President Dwight D Eisenhower in his 1961 farewell address to the nation about the increasing power of the military -industrial complex.but now it also includes the too big to fail....these are the powers that control Our President and Congress.

I feel I have talked about the reinstatement of student loan consumer protection rights...until I'm blue in the face....
...Our children will become are what they learn from us..... so maybe it's time to look in our own back yard before we speak out on the $1.2 Trillion student loan debt we as a nation know very little about; this is because of the spin that our media and congress have you believing, and find out the facts before we speak about the $1.2 Trillion student loan debt that the scary part is growing faster today than ever before.This now seems just to be the tip of the iceberg..the lenders with our congress help have slowly change the lending laws that now the lender is now the debt collector as well.Why is this important because our children student loan protection rights have been taken away and student loan defaults continue to increase it won't long before more money is made on student loan defaults than the actual student loan

This is a story that has been spun by our Congress and the media that we will be wasting tax payer dollars if we reinstate student loan consumer protection rights, because all of our children are crooks and thieves and they are so lazy that they all just want something for nothing! These are the very same consumer protection rights that you and I are entitled to and protected by as American citizens..................................... Just so you know even a gambler can declare bankruptcy!

Well...... I'm asking you who would our children learn this from...

.......was you the attorney that job is now no longer about right and wrong and true justice, but about who can you sue to get that large settlement ....  so you can collect your huge fee

....was it you the college president that is making $Million salaries.......

.....was it the college administrators that are hired by the colleges and universities  with 6 figures salaries that are scheming ways to take more money from government student loan system and then raising the tuition even higher

.....was it you congressman that had to make sure that lender laws are not changed so you get that huge donation to your re-election fund

......was it the lobbyist and special interest that continue to create advantage laced amendments
added to bills to help the lenders make even more money off our children's backs ....leaving more and more students in debt for the rest of their lives

....was it the student loan lender that schemed with congress, and became the student loan debt collector knowing that if changes are not made there will now be more profits made on student loan defaults than the actual student loan

......was it the corporately owned for profit college that are destroying the lives of our youth and returning military that all they wanted was to live the American Dream

........Mr,President remember that promise you made....is this what you want you own children to remember

......was it the media that spins all the half truths,leaving just enough truth so you can tell yourself your credible

      definition half-truth: A statement that conveys only part of the truth,especially one used
deliberately in order to deceive someone

...........the spin is in and you have been called out!

I will leave you with this today:

"A baby comes into this world with only hope...
.............the only gold we will leave this earth with is our.......word"

Anthony Eller

Wednesday, October 1, 2014

Who Is Responsible for the $1.2 Trillion Student Loan Debt?

I have been waiting to write this post,because deep down inside I thought for sure there would be at least some improvement by now. Nope......just more and more lip service that everyone keeps on saying something has got to done,but the sad fact nothing is being done and our children keep going deeper and deeper into student loan debt.

Bloomberg  August 26,2013 (what do think another year has done to this to this %?)

College Cost Surge 500% in U.S. Since 1985!

While reports show that 76% of Americans now live from pay check to pay check!
http://www.cbsnews.com/videos/paycheck-to-paycheck-how-76-percent-of-americans-live/
Please tell me am I the only one that sees something terribly wrong with this picture?

I started researching the student loan debt about 5 years ago at the time the student loan debt was $850 Billion, I'm 59, but I don't feel that old, and I do believe  my mind is still working. I ask you am I the only one that it seems just like yesterday when you said millionaire you had it made? I make this reference, because
when we talk about these mass amounts of money owed. I know I can't ...can you  comprehend  $Billion...or...... let a lone a $Trillion?

I am going to add this to help all of us comprehend the difference...Our leaders throw these numbers like no big deal! My daughter helps to proof read my post and this is a suggestion by  Ashley:
When you are a million seconds old you are just....11.5 days old.... then to a billion seconds you would now be 31.5 years old....now.... the  next time Our President or Congress talks about it's only a $TRILLION  which adds up to wait...may I have drum roll please........trillion seconds we would be 31,688 years old.So now just imagine at $1.2 Trillion and how far in debt our Children are right this second, and remember the student loan debt is growing faster than ever before!

Now we talk in $Billions and the National debt is some where around$17 Trillion...and again as I just stated above ... while our children the very future of our great country have  $1.2 Trillion in student loan debt and the scary fact is this student debt is growing faster today than ever before.Please tell me when are we as Americans going to understand this is just plain wrong and correct this injustice.

The first step to a solution to the $1.2 Trillion Student Loan debt is the reinstatement of full consumer protection rights of student loans.The same consumer protection rights that each of us are entitled to as American Citizens.When student loan bankruptcy is reinstated all sides will be held accountable  the student...the colleges and universities,..the lenders..the student loan debt collectors... (the lenders who in case your not aware are now for the most part the student loan debt collectors as well.) The lenders lobbyist special interest and our very own Congress slowly changed the lending laws to allow this to happen. Why is this so important because the student loan default rate is now growing so quickly if changes are not made now it won't be long before more money(even larger profits!) are made on student loan defaults than the actual student loans.

I will remind you again that I have been writing about the student loan debt for 5 years now, and I am now more convinced than ever that until full student loan bankruptcy is reinstated there will be no real solutions to the $1.2 Trillion student loan crisis.There will only be short term fixes used to appease the few that truly seem to care ....while other ways are thought up by the lenders and their lobbyist to make even more deceitful underhanded huge ungodly profits off the backs of our children. You may say I'm nothing more than an alarmist...if that's what you think..Please just look a the numbers they don't lie.

I promise when we as a nation understand that education is not about making huge profits! That the educating of our children is about building a strong nation that will be able to defend ourselves in very sophisticated future, because we will continue to have  the world smartest  that will be allowed achieve their dreams.I will also promise you there will be 100's of other ways once this happens to get student loans to an affordable price for the low income, the middle class (if we're able to sustain a middle class) and the rest of America.

But this time.... there will have got to be real checks and balances put into place at all levels.Our colleges and universities  according to political scientist Benjamin Ginsberg " administrators and staffers out number full-time faculty members" more and more  the emphasis is placed on the student loan more so than the students!
College is ripping you off:Students are cash cows and the Schools are the Predators by Thomas Frank

http://www.salon.com/2014/10/01/college_is_ripping_you_off_students_are_cash_cows_and_schools_the_predators/

The emphasis has got be reversed.....Our children future depends on it... and the very future of our great country.

The answer to the question in the title.....who is responsible ?  each and everyone of us, because we have the ability with the power of our vote to get rid of every politician that is responsible for this corrupted mess.

While our children go deeper and deeper into student loan debt and this amount is growing larger every day.

We need real solutions to the $1.2 Trillion Student loan debt crisis now!

I promise you the $1.2 Trillion student loan debt will never be fixed until serious changes are made to the way our election presently work.....   when it took... $7 Billion to elect the President and Congress the last election!... and with the new Supreme Court rulings this amount could easily double in 2016.Can anyone imagine spending in the neighborhood of $14 Billion! to elect a President  with an approval ratings in the 30% range and Congress that on a good day has an approval rating of 15%-20% range! This is already happening in Kentucky ... the Senate race is estimated to cost $100 Million  with some 80%  of this money coming from outside Kentucky?....when this happens the $100 Million will become the new benchmark... the standard amount ($100 Million) to be spent on any race that is high profile...It's also reported that the candidate that spends to most money wins 94% of the time ...Our President and Congress have been bought and paid for. The sad part for those select few that do run on true integrity their votes are useless until we do a thorough swipe  and take our government back!

I know there is a cost to education I have never said differently.I just had my daughter Ashley do a guest post talking about what college has done for her, and the opportunities that her education created for her. I believe we have got to have a well educated society...A society that questions our leaders and holds them accountable.

I am dyslexic and I wear it as a badge of honor....because my gift of dyslexia has allowed me to recognize my weakness and turn them into strengths.....So....I ask you today... when are we going to recognize our weakness as voters that we  keep electing the same old Congressmen/women that are total failures? When are we going to turn this information  about the corrupted system into a strength as American voters........ What is it going to take to give our children their futures back?

I am going to leave you with two quotes today

"A baby comes into this world with only hope...the only gold we will leave this earth with is our       ....word"                   Anthony Eller

and a second quote

 I believe  this quote should make all us to truly stop, think,and then to understand just how important our children are.

"You only have to know one thing......you can learn anything"


 Salman Khan
 Khan Academy          https://khanacademy.org

 I believe this could be the future of education in America and the world and............. it's Free

Wednesday, September 17, 2014

Guest Post from my Daughter and the $1.2 Trillion Student Loan Debt


Tuesday, September 9, 2014

John Oliver Student Loan Debt 16 Minutes and 17 seconds of Truth!


John Oliver Student Debt HBO

                                                         
                                 Please be aware there is language and topic not suitable for children in this video

This is a sad state of affairs in the United States when we  have to rely on parody television to give us more than a couple of minutes of truth about the $1.2 Trillion Student Loan Debt.The scary fact is this $1.2 Trillion Student Loan Debt is growing faster today than ever before; along with the quickly growing student loan default rate. The President and Congress keeps telling the American people that low interest rates is the the solution? Low interest rates will help, but it is not the solution to an outdated student loan system that has no real checks and balances.

This whole mess is because  "The Politician's" now owe so many favors after being elected they no longer work for the American people;The politician's now work for the select few that bought their elected office for them .I may sound like a broken record,but when it takes $7 Billion to elect the President and Congress the last election.If the last election wasn't bad enough now with the Supreme Court new rulings this amount could easily double.
I know this amount of money is hard to believe,but our first proof is the the Kentucky Senate race that is already estimated to cost $100 Million and from looking at reports today this estimate may be too low. This along with as much as 75% to 85% of this money is coming from outside of Kentucky? I know history will back me up on this when the $100 Million bench mark is hit $100 Million will become the norm on at least the remaining high profile senate races and then imagine what this is going to do to the enormous amounts of money that will be spent on the  Presidential race.

I will promise you that there will be no real solutions to the $1.2 Trillion Student Loan Debt Crisis
until full student loan consumer protection laws have been reinstated. This will hold all parties accountable
The student.. the schools and their out of control rising tuition..our own government that refuses to put real checks and balances in place. and their inability to holding the schools accountable as well.. the lenders...., the collection agency..Oh  just in case you didn't know the politicians with help of lobbyist and special interest groups have slowly changed the lending laws that now the lender can also be the debt collector. Why is this important you ask.The lack of of jobs...low salaries..more companies moving out of the United States because of the new tax laws just to new a few reasons.I can tell you with confidence  it will not be long before more money(Huge Profits!) will be made on student loan defaults than the actual student loan.

This is now a story about right and wrong...I can tell you what the politicians are doing to our children the very future of our great country is WRONG!  


This post is far from being complete, but I want you to tell your friends, your family, your
Congressman or Congresswomen to watch this video.

I will leave you with this

"A baby comes into this world with only hope..the only gold we will leave this earth with is our word"

Anthony Eller

Sunday, July 13, 2014

Yes! Both Federal and Private Student Loan Bankruptcy Have Got to Be Reinstated,But There's More!

I have been following the student loan debt  now for the last several years,and in my opinion this crisis is now at the crossroads. The more I look at the $1.2 Trillion Student loan debt, and  for those of you that have not been following this debt crisis; I believe you should know the scary fact is the $1.2 Trillion student loan debt it's growing faster today than ever before! I promise you the President or Congress are not going to tell you this,because they have too much riding on the huge profits this debt is generating for the lenders,collection agencies (student loans), lobbyist,special interest ,and our very own government. I will yell.... this from the rooftops when it took $7 Billion to elect the President and Congress the last election and now with the new Supreme Court rulings this amount could easily double! Can you just image $14 Billion spent to elect career politicians that have an approval rating at an all time low of 16% Gallup...12.8% Real Clear Politics ? How in the world is this possible???

I believe it's important that you know the senate race in Kentucky which is now estimated to cost
$100 Million...  the most expensive race in history ...with an estimated 75% of the funding coming from out of state?....

.......Just remember once that magic $100 Million has been broken it tends to become the norm

In today's world where Jon Stewart.....
and Stephen Colbert who viewers are saying they are learning more from than the actual news

We now have............

       The (fake) Campaign touts Gil Fulbright as the nation's first honest Politician.

             ...... http://www.honestgil.com/

The above is to show you it's all about the huge profits and the huge amounts of money being spend
to keep the same old ..same old in place!

I use children...our young adults going off to college through out this post I mean it in the most respective way.I have no hidden agenda I am very clear in what I believe. I want you to know I believe in the best possible education for every child.
Yes... I believe every child should be afforded the opportunity to live the American Dream!

I will start this by saying there are still a great number of individuals that truly care about our children's education.There are others that have bought into the lie; that these corporations only have our children best interest when in fact it's the bottom line, and about the huge profits they are generating with the unsuspected help of these individuals. The problem I see is the whole education system is broken and out-dated, and worse yet has been corrupted to very the core. The education system is now more about the huge profits being made off our children than the education we should be providing our children.

I will tell you our children will provide the only future our great country has left! We as a Nation better come together an correct the mess that the 535+1  along with the lenders, collection agencies(student loans), lobbyist,special interest groups......and..... the select few have created.

Just food for thought some examples.....  Why don't we start with something as simple as the cost of Text Books..not sure about this one ask your son or daughter..that's in college. What about tuition and this is very conservative answer from 1982 to 2007 tuition has risen 439%  3x the rate of the 147% cost of living increase?  More and more... $Million contract for college presidents?
the list just goes on and on and on..............

I have said since I started this blog it's the simple common sense solutions that will get us out of this mess.The reason we're in this mess is because of the huge thirst for power by the Politicians, and by the huge profits the corporations now think their entitled to?

The paragraph below is a summary by Alan Collinge

The federal student loan system has become predatory. The root cause of this is the unprecedented removal of all meaningful consumer protections, and the establishment of draconian collection powers, which caused the lenders, guarantors, collectors, and even the Department of Education to make more income when students default on their loans. The wrongly directed financial motivations caused, over time, the system to be inclined towards acting in ways that would promote, rather than discourage defaults. In this environment, damaging consequences resulted including an incredibly high default rate, heinously bad or nonexistent oversight, uncontrolled inflation, indefensible corrupt activities (systemwide) and other systemic failures too numerous to list. These results are in addition to the personal damage and destruction that has been visited upon citizens who were trapped in this predatory system, and their families.

Please read the argument...........     http://www.studentloanjustice.org/

I will add that a student just doesn't say I'm going to declare bankruptcy, and walk away from the debt. Bankruptcy is determined by our court system that has been put into  place to protect all American citizens!

First things first  there has got to be Real checks and balances put into place......
Second..... Real Accountability ...go to a Real jail..accountability...why again do we have white collar crime jails.... oh they're non-violent that don't hurt anyone.... really?? Then what did Corporate America do and most say no one of importance when to jail....and all the other ponzi crooks.....Huge Fines.....
Oh that right!.... the Corporations would just declare bankruptcy......
This is something our own children are not allowed to do because their student loan consumer protection rights have been taken away ...............................Real Accountability!

I want to make sure your aware that even a gambler can declare bankruptcy? How is this possible while every day more and more children are defaulting on their student loans.

We talk about educating our children and how important it is, but we don't have classes in school teaching our children about student loan contracts and the consequences in signing their lives away; that today is more and more possible with lack luster economy,and lack of jobs

This along with corporations sending our jobs overseas, and and their huge profits offshore never to be seen again.........Oh did I forget many of these corporations are paying little or no taxes at all!

I started Project Tuition Reimbursement because of the huge profits that are being made off the backs of our children and the lack of concern for our children future.I know that there are simple common sense solutions to solving the $1.2 Trillion student loan debt.First the huge profits have got to be taken out of education in general and this problem now starts from a very early age...... not just college.

I will be called the "crazy old man"...because I know in my heart there are real solutions. I am dyslexic and have always had to think outside the box to find answers that seem to come easy to most, and if this is what it takes to find solutions to our extremely corrupted high cost of education in America so be it.I know if we take out the huge profits that are being made off our children there can and will be solutions.

I want you to know this fight for the reinstatement of  both Federal and Private student loan bankruptcy... the same consumer protection that you and I enjoy.This is not about left against right, or Republican verses Democrats......
This fight.... this injustice is about right and wrong......and this law is just plain Wrong!
.
When America is not even listed in the top 10 counties in education in the world we have a very serious problem!

I ask you to go back and read some of my solutions some I think are very good.... some not so much, but at least I'm trying. I ask each of you for 1 solution.... together we will find the solutions our great country youth deserve!

This post is not finished  there will be more to come...but today I will leave you with this

"A baby comes into this world with only hope...the only gold we will leave this earth with is our word"

Anthony Eller





Tuesday, February 4, 2014

A Must Read! Re-Posted Article By Alan Collinge



Government Profiting on Defaults

12/30/10

Alan Collinge, Studentloanjustice.org (253) 617-3407

Summary

Suppose it was discovered that B of A,  JP Morgan Chase, and other banks had actually been making, not losing money on defaulted subprime home mortgages, and in fact made more money when the loans defaulted than if they remained in good stead.  Now, suppose further that it turned out that Fannie Mae had a similar perverted financial motivation that gave it a clear preference for loans to default. Finally, suppose that even the Federal Housing Administration actually realized a net profit on defaulted subprime home loans.  This is, in fact, precisely analogous to what is happening, and has been happening for years for defaulted, FFELP, student loans- which comprise the large majority of all student loans, nationally.




Supplemental materials in the president's 2009, 2010, 2011 budgets (and prior) show  that for every dollar paid out by the federal government for defaulted Federal Family Education Loan Program (FFELP) student loans (which comprise a large majority of all outstanding student loans), the Department of Education recovers $1.22 (we assume this is before collection costs, and the government's "cost of money") .  Compare this recovery rate to that for defaulted credit cards, which is usually about 10 cents on the dollar, and one can see that defaulted loans are clearly not costing the Department of Education money.  In fact, it appears strongly that the reverse is true.  Comparison of the defaulted student loan recovery rate with those for other federal loans shows a  hugely exaggerated rate for student loans, and only for student loans.   Furthermore, analysis shows conclusively that indeed, the federal government is making more money on defaulted FFELP loans than for non defaulted loans,  signifying a clear preference for the former over the latter.  This is a defining characteristic of a predatory lending system.


Comparing defaulted student loan collections to typical, industry standards

Consider the case of generalized defaulted bank loans.  Dermine and Neto de Carvalho (2006)  found that these loans incurred, on average, a recovery cost of about 2.6% of the amount recovered.  So for example:  to recover $122,000 in defaulted bank loan debt would cost about $3,500.

It is important to note that for general bank loans (ie home loans, car loans, property loans, etc), recovery typically involves the seizure of physical property pledged against the loan- property that  must be handled, stored, and ultimately liquidated by the bank.  This, combined with the various legal and administrative costs that accompany such recovery action is a significant cost that does not exist for unsecured debts, such as student loans or credit cards.

Consider that student loans are not dischargeable in bankruptcy.  Nor are they subject to statutes of limitations, state usury laws, or even Fair Debt Collection Practices when the collection entity is a non-profit,  government-sponsored (or government) entity.  Consider further that the student lending system can take a borrowers wages, income tax returns, Social Security and Disability income, and can also put pressures on a borrower that no credit card company could bring to bear, such as termination/exclusion from public employment, denial of security clearances, exclusion from practicing in a state licensed profession through administrative suspension, and others. Credit card recovery is probably far more expensive than recovery of defaulted student loans, yet apologists for the student lending system would have us believe that the reverse its true.

These powers, and lack of consumer protections combine to show clearly that the collection costs associated with defaulted student loan recovery should be far, far less, even, than the costs associated with the recovery of defaulted credit card debt., particularly given that for decades, the federal student aid office has been managed by executives who were brought in from private industry lending companies like Sallie Mae,  in order to streamline processes,  control costs,  and otherwise make it run "like a business".

Given that the Department recovers 22% more than it pays out on default claims, the only way the federal government could not  be making money on these loans is if the collection costs incurred amounted to approximately 20% (we assume a nominal "cost of funds" allowance here)..  Given that defaulted credit cards will typically see a 6-10% recovery rate, the associated  collection costs for these cards has got to be significantly less than this- probably no more than 3%.  Given this, and the relative difficulty and expense associated with collecting on credit cards compared to student loans, it would be virtually impossible to credibly claim  that collection costs on student loans could be anywhere near  20%.

This, however, appears to be what the Department of Education would like to claim.   
For example, a recent article in the WSJ intimates that  the government is indeed "losing money"on defaulted loans.  It appears to claim that the department ultimately loses 15%, rather than gains 22%, due to collection costs.  So, according to this logic (and assuming the governments cost of funds is nominal), This means that to collect  $122,000 in defaulted student loan debt costs the Department of Education about $37,000, or, about 37% of the value  of the loan at the time of default.
Comparing defaulted FFELP loans to non-defaulted loans.

To be thorough, let us consider this question from a slightly different basis, and consider narrowly whether a rational dec
isionmaker in the role of FSA would prefer a loan to default, or not.  In other words,  let's compare a defaulted loan to a non-defaulted loan, and see if there is a clear financial incentive to prefer one over the other  from the standpoint of the Department of Education.

From the Department's perspective, an FFEL loan can either default, or remain in good stead.  Given no specific details about the loan,  the borrower characteristics, etc., the Department has a very simple choice to make:

1.  The loan remains in good stead.  

This is the simplest case,  The Department pays subsidies if required during the life of the loan, and  also either pays or receives "spread income"  to or from the lender (this is a complicated mechanism, but generally these payments are made by the Department to the lenders). So the Department pays no default claim, and may incur interest subsidy, and generally pays a small "spread cost".  To be overly generous, we will simply ignore these costs for the purpose of this analysis. So the Department, essentially, just "watches the loans go by", and there  are no costs involved, nor income gained.

2.  The loan defaults,

The Department must pay out principal and interest of the loan at the time of default.  Assuming the government's "cost of money" is small we know that ultimately the Department recovers 122% of this original payout amount.  Even if collection costs were  twice that of general bank loans, this would still leave a hefty profit for the Department of Education.

So essentially, the Department is given a choice:  Either do nothing and get nothing, or outlay cash with the knowledge that this outlay will realize a 22 percent return, ultimately (minus the governments cost of money and collection costs).  From this perspective, it is clear that based solely on financial motivations, and without specific detailed knowledge of the loan (i.e. borrower characteristics, etc.), the chooser would clearly favor the default scenario,  for not only the  return, but perhaps the potential savings in subsidy payment as well,



Conclusion

It should be clear from this analysis that for many years, the Department of Education MUST have looked upon defaulted FFELP loans as a source of revenue, rather than a cost to the agency.   Given a current defaulted loan portfolio of approximately $60 billion, the amount of revenue this represents to the Department of education is in the tens of billions of dollars.  Claims by supporters of the Department of Education ,and by the Department of Education itself to the contrary are simply not credible.




Comment.
This is critically important because  fiscal concerns tend to guide and shape policy and procedures within the Federal Student Aid Office, or any government agency, for that matter.   Seeing defaulted loans as a fiscally desirable outcome creates an obvious and egregious oversight conflict that, if left uncorrected, leads to behaviors that tend to hurt, rather than help the students in all areas, including providing critical, accurate information to Congress, who has ultimate authority on lending limits, and thus controls the cost of tuition by controlling these limits.  Ultimately, this causes 
Great harm to citizens and their families.   

And indeed, there is clear and obvious evidence that the Office of Federal Student Aid has, over time, adopted policies that hurt, rather than help students, There is also clear evidence that the Office of Federal Student Aid acted in such a manner (by both actions, andinactions) that ultimately led to increased borrowing, higher college prices, and a higher default rate.

At  the core of this problem lies the fact that nearly all standard consumer protections have been stripped from federal student loans. Despite the rhetoric offered up by apologists for the student loan system (this includes so-called "student advocates"), federal loans have in fact, far fewer consumer protections than even private, non-federally guaranteed student loans.  This has set up a predatory lending situation that simply must be corrected by returning, at a minimum, standard bankruptcy protections to all student loans.  Conservatives and liberals alike must agree with this statement, and Congress must act accordingly, and immediately.  



 
 A word from Anthony   


                                Mr. President and Congress we need your help!

I will tell you believe  we should be responsible for the debts we sign,but there is something .....terribly wrong
 with our corrupted student loan system.
We allow even a gambler to declare bankruptcy ? How is this possible? The real corruption of bankruptcy laws in America is how corporations are......allowed under our laws to buy up and and tear apart businesses.....  pensions and retirement benefits that are being taken away more and more everyday from hard working Americans because of legal bankruptcy laws... and then these same corporations are allowed to discharge their debt through these same bankruptcy laws?Any body remember General Motors this corporation was allowed to declare bankruptcy with our government help? This is while we allow our children the very future of our Great Country lives to be destroyed....from fewer and fewer jobs available to pay back their student loans...This now is about Right and Wrong!....  We as a Country need a wake up call! 

I want you to know I love writing "our blog" with a passion,but this blog has always been about our children......and their chance to live the American Dream.

This report by Alan...... I hope will open your eyes to the corruption!

I promise you I will start writing again very soon,

This is Great Article by Ike Brannon  June 30, 2014 from the the Weekly Standard

http://www.weeklystandard.com/articles/student-loan-relief-now_795407.html


Read more facts @ ............ http://Studentloanjustice.org


Tuesday, January 28, 2014

Greed,Huge Profits,Just Plain Lies, Equal $1.2 Trillion Student Loan Debt!

I just don't understand how the American Citizen can standby while Our President, Congress, our Colleges and Universities allow our children the very future of our Great Country to take on so much student loan debt?

Do we not realize the people we have elected have done this to our children and parents? This $1.2 Trillion h student debt that is growing faster today than before.I think it's important you understand that 76 % working age Americans now live paycheck to paycheck? Please tell me I'm not the only one that sees something terribly wrong with this picture?

I would not be so upset if I even saw the smallest effort to correct the problem.I ask you to give me one solution that our President or Congress has recommended or has enacted that some special interest group is not going to make a huge profit off the backs of our children.  $7 Billion to elect the President and Congress the last election. The saddest part the few that started out to make change to correct the $1.2 Trillion student loan debt.They are convinced they have to raise $millions to get elected, and so when they do get elected owe so many favors their integrity has already been bought and paid for.

This post is far from being finished!

But, I like 76 percent of working America has to stop writing now and go to work !
I ask you for your thoughts  I promise you there are  real common sense solutions.

This time around we have to stand as one..... the majority! We will no longer allow the huge profits for the select few that are destroying our great country, because of their huge appetite for money and power!

It's time to give the same $Billions in tax credits that our corporation receive who then turn around, and as they laugh in our faces while sending their huge profits offshore, and  then on top of this the jobs our great country needs so desperately these same corporation continue to send overseas. It's now time to use these same $Billions to help match small business with our graduates to start to grow our economy again.  Just think a true stimulus that actually will help to  kick start our middle class.... once again bringing good paying jobs back to our American Citizens.

It's time the whole educational system is reinvented....... it's outdated.....it's not working....$$ and more $$$ are being wasted everyday.The educational system for the most part.... is no longer about educating our children..it's about who is going to get the biggest contract $$$$$!..just look where our educational system ranks in the world... 17th in 2012 according to global rankings Finland and South Korea are 1 and 2 and even the UK ranked 6th?.We are moving in the direction to having as many administrators as we have teachers? Our so called experts don't have a answer how to educate our poor... and today more and more children are moving into the poor category.


June 24, 2013: 2:53 PM ET
NEW YORK (CNNMoney)

Roughly three-quarters of Americans are living paycheck-to-paycheck, with little to no emergency savings, according to a survey released by Bankrate.com Monday.


I want you to remember that 76% of our country now lives paycheck to paycheck...How is this possible in the riches country in the world?

I will leave you with this today

"A baby comes into this world with only hope...the only gold we will leave this earth with is our word"

Anthony Eller