Congressmen Caught Helping Student Loan Borrowers
What are they feeding these congressmen lately?
Private Student Lenders Should Play by the Same Rules as Other Private Lenders
Restricting bankruptcy protection for borrowers of private student loans doesn’t protect taxpayer investment; instead it gives special treatment to private student loan companies that other private lenders don’t enjoy.
The argument goes like this--in order to safeguard taxpayer investments in higher education, federal student loans ought to be difficult to discharge in bankruptcy. But private student loans aren’t the same. Private student loans create private profit for private businesses. They are less like federal student loans and more like regular consumer debt such as credit cards and private loans.
Now 4 Senators and 4 Representatives Who Get It
Today, my new favorite congressmen announced legislation to restore fairness in student lending by allowing financially distressed borrowers of private student loans to discharge those loans in bankruptcy the same as other types of private debt.
Senators Dick Durbin, Sheldon Whitehouse and Al Franken are joining Representatives Steve Cohen, Danny Davis, George Miller and John Conyers in a vital initiative totreat privately issued student loans in bankruptcy the same as other kinds of unsecured debt like credit cards and personal loans.
For the past decade, private student loans have been the fastest growing and most profitable part of the student loan industry. Senator Durbin said, “Unlike federal student loans, there are few consumer protections available for these private student loans leaving some students stuck with this debt for the rest of their lives.”
And Congressman Cohen has long advocated for making higher education more affordable. In discussing the new legislation he said, “People who seek higher education to better their futures should not be dissuaded from doing so by the threat of financial ruin.”
That’s what I’m talking about!
I’m liking Congress the last couple of days. Yesterday, it was Senator Sherrod Brown being all cool with his principal reducing student loan legislation. Today it’s Durbin, Whitehouse, Franken, Cohen, Davis, Miller and Conyers getting my love for their bill to make private student loans dischargeable in bankruptcy.
