Student Debt Crisis Your One Stop Hub For Student Debt Issues Mon, 05 Oct 2015 21:34:20 +0000 en-US hourly 1 What $100,000 in Student Debt Feels Like Mon, 05 Oct 2015 21:21:29 +0000

Loads. Of. Debt.

That’s the story of graduates today.

But $100,000? Or more. Any debt counselor will tell you that’s insane.

It’s a choke-hold on young people starting their lives — It means putting off getting married, having children, and buying that first home.

The number is so staggering that it’s hard to come to terms with it. Maybe that’s why one graduate was a little cavalier about it when talking about it with CNNMoney. Here’s how he views his debt and the story of two other young graduates, also with a lot of student loans…

Continue Reading at CNN Money…

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A Multi-generational Hit: Student Debt Traps Parents and Kids Mon, 05 Oct 2015 21:14:29 +0000 WASHINGTON (AP) — A college degree practically stamped Andres Aguirre’s ticket to the middle class. Yet at age 40, he’s still paying the price of admission.

After a decade of repayments, Aguirre still diverts $512 a month to loans and owes $20,000.

The expense requires his family to rent an apartment in Campbell, California, because buying a home in a decent school district would cost too much. His daughter has excelled in high school, but Aguirre has urged her to attend community college to avoid the debt that ensnared him.

“I didn’t get the warmest reception on that,” said Aguirre, a health care manager. “But she understands the choice.”

America’s crushing surge of student debt, now at $1.2 trillion, has bred a disturbing new phenomenon: School loans that span multiple generations within families. Weighed down by their own loans, many parents lack the means to fund their children’s educations without sinking even deeper into debt…

Continue Reading at Associated Press…


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SDC Members Help CFPB Find Flaws in Student Loan Servicing Thu, 01 Oct 2015 15:10:31 +0000 Congratulations Student Debt Crisis members! Because you and many other organizations have remained diligently focused on out-of-control student debt, the Consumer Financial Protection Bureau will be discussing new rules for the loan servicing industry. In July, the CFPB asked Americans to share their experiences with student loan servicers. Our members were a huge portion of the responses received, and the stories shared by our members proved that the current system is dysfunctional, works against borrowers, and serves to increase the profits of servicing companies. But, because of your help we can expect the CFPB to create fairer rules in the future. From the entire Student Debt Crisis team, THANK YOU.

Read what The Los Angeles Times says about this:

The Consumer Financial Protection Bureau says borrowers are reporting widespread problems with the companies servicing their student loans.


In a report released Tuesday, the bureau found servicing practices that “may be contributing to student debt stress” after analyzing more than 30,000 comments from the public as part of an inquiry launched in May.


Some of the problems included lost paperwork and processing delays that could lead to missed payments and late fees. Some borrowers said they had trouble getting errors fixed; others couldn’t easily access complete information on alternative repayment options to help them avoid default.


The federal agency, which oversees the student loan industry, said it will consider industry-wide rules for the companies that manage student loans…

Read the Entire Article at The Los Angeles Times…

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SDC Statement on The Students Before Profit Act Thu, 01 Oct 2015 14:54:39 +0000 FOR IMMEDIATE RELEASE
September 30th, 2015
CONTACT: Natalia Abrams
646-820-8037 or 310-365-1069

SDC Statement on The Students Before Profit Act

Today, September 29, U.S. Senator Dick Durbin, Sen. Chris Murphy, Sen. Elizabeth Warren, and Sen. Sherrod Brown introduced a promising bill that aims to protect students from bad actors in the for-profit college industry. The Students Before Profit Act would create harsher civil punishments and wider oversight of for-profit colleges that defraud students by: publishing fraudulent job placement data, graduation rates, and loan default rates. One reason we support this bill is because it includes a “student debt relief fund” that will assist current borrowers, and is completely funded by fines collected by increased industry oversight.

In addition, we are especially impressed that this bill finally holds for-profit college executives personally liable for misuse of financial aid, and even goes as far as to ban careless executives from leading for-profit institutions after they have committed financially harmful acts against students. By holding individuals accountable, as well as the schools they work for, this bill could improve the predatory business culture that defines today’s for-profit college industry

If our government is to truly hold for-profit colleges accountable, it must start at the source- executives who willingly choose profits over students. It’s important to keep in mind, college isn’t a faceless institution, policies are created by real people who must be held accountable if they commit financial crimes against students. Student Debt Crisis is encouraged by The Students Before Profit Act precisely because it places responsibility in the hands of these schools’ leaders. ” – Natalia Abrams, Executive Director

With over 700,000 members nationwide, Student Debt Crisis is committed to protecting the 43+ million Americans struggling with existing student loan debt.



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Progress Report Shows Dept. of Ed Failing to Assist Victims of Fraud Mon, 28 Sep 2015 18:37:43 +0000 The federal government’s decades-long failure to curb predatory behavior by the for-profit college industry has left untold numbers of Americans with crushing debt while providing useless degrees — or no degrees at all — in return.

The Obama administration took an important step in the right direction when it created new oversight rules for the industry and stepped up its investigations into companies like Corinthian Colleges — one of the largest operators of for-profit colleges and trade schools in the country until it collapsed last year amid state and federal lawsuits and fraud investigations.

Education Secretary Arne Duncan took the logical next step in June when he promised to forgive federal student loans incurred by two groups of people: those who were enrolled in Corinthian when it shut down — or shortly before — and those who could prove that the company had defrauded them. The department is already making good on its promise to the first group — but not on its promise to the second…

Continue Reading at New York Times…

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Small Loans, Big Problem Mon, 28 Sep 2015 18:18:14 +0000 Community colleges are relatively affordable, and their students tend to borrow less than those who attend other types of institutions. Yet the debt students rack up at community colleges is troubling.

The reason is that students who attend two-year colleges struggle to repay even small loans, and often default on them, a concern that is reinforced by a new study from one of the sector’s primary trade groups — the Association of Community College Trustees.

Just 17 percent of community college students take out federal loans, the report said, which is much less than at four-year public institutions (48 percent), private colleges (60 percent) and for-profits (71 percent). But students who attend community colleges are more likely to default.

Continue Reading at Inside Higher Ed…

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How Bad is the Student Debt Crush? Thu, 17 Sep 2015 22:13:39 +0000 It’s a trillion dollar problem that’s causing many potential students to opt out of college altogether. Illustrated by Rob Donnelly.

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Student Debt Crisis Wins ‘Democracy For All’ Prize With Video to #GetMoneyOut of Politics Wed, 16 Sep 2015 17:55:18 +0000

#GetMoneyOut of Politics and Help Student Loan Borrowers from Student Debt Crisis on Vimeo.

Congratulations Student Debt Crisis, September 16th  $1,000 winner!

We asked Natalia Abrams, Executive Director, a few questions:

How did you find out about the contest?

We found out about the contest at Netroots Nation, 2015 from Rio Tazewell.

Why did you enter this contest?

We entered the contest because we feel strongly that we need to get money out of politics in order to fix the $1.3 trillion student debt crisis. Removing the powerful grip of billionaires and corporations on our political system is the only way we can move on to helping 43 million struggling borrowers.

Before this, have you ever participated in any type of activism?
Yes! At Student Debt Crisis we constantly engage in online and offline activism. It is incredibly important for people to stand up and voice their opinion. Today, America’s student loan borrowers are bringing incredible pressure to politicians to solve this crisis, and we are proud to fight on their behalf. If you would like to learn more about Student Debt Crisis you can visit our website

Read the Entire Interview at Democracy For All…

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SDC STATEMENT: President Obama’s Heads Up America Program Wed, 09 Sep 2015 16:13:59 +0000 UPDATED 9/11/15

SDC STATEMENT: President Obama’s Heads Up America Program

Today, September 9th, President Barack Obama announced Heads Up America, a new program to promote two years of free community college nationwide. We firmly believe that community college should be free, and is a valuable resource for students interested in advancing their educations, however, this proposal does not go far enough. 

“I am grateful for the years I spent at Los Angeles Valley Community College. If it wasn’t for the low cost and available state grants I wouldn’t have been able to afford the cost of college. However, once I started at UCLA, I was stuck with tens of thousands of dollars of student loan debt. It is my hope that if we achieve the desired goal of the Heads Up America program, that we will also increase focus on millions of students with college debt.” – Natalia Abrams, Executive Director

With all of the recent talk about debt-free college, tuition-free college and free community college, one group is being largely forgotten – the 43 million student loan borrowers already shouldering $1.3 trillion in student loan debt. We need to take action to help the first injured party while simultaneously addressing the issue of college affordability.

With over 1.2 million members calling to forgive student loan debt, Student Debt Crisis is deeply committed to defending all 43 million student loan borrowers.



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The Many Pitfalls of Private Student Loans – The New York Times Sun, 06 Sep 2015 16:33:36 +0000 By: TARA SIEGEL BERNARD
Mallory Rego, the first member of her family to attend college, says she now sees that she put too much blind faith in the power of education.

After graduating in 2008 from Emmanuel College, a liberal arts school in Boston, she enrolled in a graduate program nearby that would have certified her to help children cope when undergoing stressful medical treatments.

But she had to drop out midway to earning her graduate degree: Although her federal loans were deferred, her private student debts came due while she was still in school and, she said, she couldn’t afford those payments, plus her rent and books. She now owes $220,000 — largely in private loans — works in a yogurt shop and is paid to drive an autistic child to and from school.

“College seemed like my ticket to success, so the large sums I was borrowing seemed like a problem for future, educated, richer Mallory to deal with,” said Ms. Rego, now 29, who graduated with a bachelor’s degree in psychology and is now living with her mother and siblings in Hamden, Conn. “I don’t pretend,” she added, “that I didn’t get myself into this mess.”

Many student borrowers often accept the financial aid packages set before them, which may include piles of private loans that cover what federal loans do not. But students often do not realize that private loans can cost more and come with few escape valves if they can’t afford their payments. Their parents and relatives aren’t always aware of the consequences, either. Yet when they co-sign the loans — and roughly 90 percent of private loans have co-signers — they are fully liable.

That is why when a borrower runs into financial trouble, the problems can quickly escalate into a family affair, and, in extreme cases, a legal one. Some borrowers I spoke with said their co-signers panicked when they realized that the graduate’s earnings prospects were bleak, so the co-signers (typically relatives who were not parents) sued the student, claiming fraud.

“I can’t tell you how many borrowers told me about the real tension that was created when their lender refused to negotiate with them,” said Rohit Chopra, the student loan ombudsman at the Consumer Financial Protection Bureau until June, and now a senior fellow at the Center for American Progress. “Now, all of a sudden, their parents and grandparents were being called, and it became a discussion at Thanksgiving.”

Unlike federal loans, which typically have built-in protections for distressed borrowers, including income-based repayment and forgiveness programs, private loan borrowers are at the mercy of their lenders, whose terms for relief may be opaque or change every time you call customer service. (Like federal loans, private student debt is not automatically discharged in bankruptcy. Borrowers must file a separate suit proving (undue hardship.)

Private loans represent only an estimated 7 to 10 percent of the $1.27 trillion student debt outstanding, but new loans are on the rise. Lenders made $6.7 billion in new private loans in the 2014-15 academic year, according to MeasureOne, which analyzes data from six lenders and holders of private loans, which collectively represent about 71 percent of all outstanding loans. That is up about 14 percent from $5.87 billion in 2009-10.

“The cost of college has gotten so outrageous that people are relying on these loans more, sometimes just to afford a state college,” said Natalia Abrams, executive director at Student Debt Crisis, an advocacy group.

Continue reading at The New York Times

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