Generation Debt

Greetings. I wanted to let you know that your website caused me an almost "sleepless" night over the discovery of this Bill and the possibility it being passed. I am a lawyer who graduated from lawschool with over 120k in debt. I was horrified to discover I could not take advanatage of new consolidation rates this year since I had already reconsolidated once at 9%, with a small reduction for auto pay. I pay about 1000k a month and feel trapped by this payment. I even left being a prosecutor in part because these loans were creeping up on me and interest was capitalizing. After 10 years of being an attorney, I just started paying the full amount. Bottom line is when I first consolidated, there was no warning this rate was permanent. I thought, like a car, house, if rates fall, I will just refinance. WRONG. After taking a while to figure out why I could not, and recently learning that there are about 800,000 others like me - I stumbled on this website. To get the new rates would be a life changing situation for me, so many young lawyers and other professionals stuck in this trap. Since learning of HR 2711, I have already contacted my local, state and american bar association asking them to do articles about this Bill since I now fear it will languish or die because most of those affected will not even know it is out there. I myself just accidently discovered it. It has huge ramifications for so many... improving quality of life, less money worries, perhaps allowing some to stay in public service! This needs to hit the news in some large fashion. Any other plans to contact professional associations? Even if one attorney in each state hit their state and local bar, begging for articles to be published it would help. Any similar promotion in other areas? Is anyone else as worried as me? Also, once I saw over 3000 bills are proposed every year, I also wonder about feasibility of it ever passing since most do not. Does anyone have an info on the potential success on it? I see some support on your website. What else will it take? I also contacted my House member who was not listed as supporting it and explained the bill and wanted to know if he supports it and if not, why. This is huge chance for so many of us. Looking forward to a reply.

Stacy Parks Miller

814-234-1500

Miller, Kistler & Campbell

720 South Atherton Street

State College Pa 16801

Gerry,

I am taking your advise and I will be using this page as my main contact and gathering of information. I hope that you will work with me and help me in ways that I can be of assistance in getting the ideas of the student loans fixed. I am not sure where to post my comment from the other student loan page as you suggested. Do I do it here or do I create a post? I didn't see anywhere on your page to create a new post, only just to add a comment under the title of something else. I will not add my long posting from the other page until you advise me. I am talking about Student Loans Need Complete Overhaul. I do want to get my thoughts on this out to other people as well because just fixing the interest rate problem only touches the tip of the iceberg and I think you know that. I personally feel that no one single person, agency, company, or government should have that much power over people in regards to these loans. Concerning these student loans it is as if, we are in another country or world and not in the Land of the Free! It is just plain un-American to treat the borrowers this way in the matter of payback of these loans. This is why I think the whole system needs to be re-done. We need to un-do what Bill Clinton did and his good ole boy Congressmen. So, please tell me what to do on how to get my message out on your page. I also have my own student loan story that I have not got to post as it too is rather large. It is a story that spans over ten years and is still going. But I would like people to see my story as well. I have it all typed up. I use it when I converse with someone about student loans on e-mails. Will you let me post it here as well? Please let me know soon. I will do all I can to get the other people from the "DEAD" page over to this one. People are hungry for this, but if you read their stories on that page, most of them have given up. I have been composing the list of e-mail addresses on that page, (and there is a lot of them) and I plan to send them all a message to get them to go to the HR 2711 petition and to come to this sight as well. I am working on over 150 names so far and I am only half way through the names. I don't know if all of them are still good addresses or not, but I will be able to find out by the ones that bounce.

Wish me luck, this is a lot of work in doing just this part. Keep me informed and please write me if you wish at auwilliams@intercorp.com

I live in Enid, Oklahoma and I am an Aircraft Maintenance Instructor working at Vance AFB. Thanks for your Help.

Sincerely,

Allen Williams

Allen,

We're on the same page, my friend. And I look forward to now beginning our work together. Thank you for joining us.

Please share your thoughts and efforts in our open thread. I have also e-mailed you privately to that effect. We will have open threads consistently and we will build upon the work one another is doing. We're learning from what's working and what isn't ... and moving forward to the rate relief we all deserve.

Tell your friend Mary over at the other site to join us here, too! :) And I hope you've both signed the petition. Spread the word. You mentioned 150 e-mail addresses? Help take us over 550 on the petition ... every name counts.

Please remove NOSPAM from email addy above if emailing me.

I don't think that this rule affects federal consolidation loans. I previously had a private consolidation and had no problem transferring the loan into the Direct Loan program. Just recently I reapplied to switch from variable interest to fixed interest at a very low rate (3.5%).

I have something new for you. I'm having trouble with a school I graduated from. This school breached its contract and let me graduate without the skills stated necessary by its accreditor. I discovered that federal loans have a Borrowers Defense provision where "a borrow may be relieved of the obligation to repay all or part of a Direct Loan if the borrower successfully asserts, as a defense against repayment, that the school the borrower attended did somethin (or failed to do something) that could result in action being taken against the school under applicable state law. [34 CRF 685.206(C)] (CODE OF FEDERAL REGULATIONS)

This is excellent for me because in my case I did not discover the specific breach of contract until after the 4 year statute of limitations in state court. I am barred from suing this school and accreditor however, there is no statute of limitations on the Borrower's Defense.

Further suing a school is very costly. Every borrower, private or public, should have the same right to file a Borrower's Defense against repayment. Without this they are held directly responsible to repay bad debts arising from the illegal actions of their schools which relate to how the loan was procured or the educational services provided.

I would like for you to start a petition to grant private borrowers the same rights that I have as a federal borrower. Private borrowers are being discriminated against and have inferior rights.

Another problem is the fact that the Federal Trade Commission regulated the advertising of for profit colleges but does not enforce advertising rules for nonprofit institutions.

Margaret J. Barr writes "Students rely, as they should, on the college catalogue, which, in these days of declining admissions pools, can contain some incautious prose on the school's programs or advantages. Most institutions have included disclaimsers in their catalogues, but these disclaimers are usually set in very small type and are not prominently displyed. The presence of these disclaimers may be crucial, as will be discussed later in this chapter. Furthermore, according to Bender (1976), it may just be a matter of time before the Federal Trade Commission seeks to impose the same consumer based regulations on nonprofit institutions that it places on proprietary schools." (Student Services and the Law, pp. 76-77, 1988, Josey Bass Publishers, San Francisco CA)

Now is the time to start regulating these programs before they have the chance to breach their contracts and cost students billions of dollars for substandard or inappropriate education.

Could you please integrate these issues into your work?

Thank you for your consideration.

Gerry, I tried to post my story here. But I am getting error messages. I am waiting for you to tell me what to do. Thanks...Allen

Hello:

Borrower defense as stated in 34 CRF 685.206(C) is something the ED will not want to deal with because it can give you power to defend your decision not to repay. I am having problems finding the state laws that complement this Federal Regulation, and have been rather suspicious of universities and the ED exploiting a legal loophole and other similar black holes in the legal system.

Here is the theory: some programs at big universities lure you into their mesmerizingly well-reputed programs, you collect the debt in hopes of a glamorous future, they give you useless education (respect going out to the exception that does offer you quality education), let you go without admitting their own shortcomings in integrity, and they get the kickbacks from the givernment in form of grants. The larger universities have such a far reaching legal halo that you will not find an attorney that will risk his or her reputation and his/her children's future entry into that university by taking your case. Again, hats off to the exception that may do just that. I smell conspiracy at this level and debtors must take the time to research this matter. Three thing they do not want you to have: information, brains, and the courage.

Good luck,

Arjun

Subject: 34 CRF 685.206(C)

Hello List:

This CFR indicates that "a borrower may be relieved of the obligation to repay all or part of a Direct Loan if the borrower successfully asserts, as a defense against repayment, that the school the borrower attended did something (or failed to do something) that could result in action being taken against the school under applicable state law. [34 CFR 685.206(C)] (CODE OF FEDERAL REGULATIONS)

Now, what publication would help in identifying such an "applicable" corresponding state law? A case digest perhaps? What if there is no such state law? What area of law would deal with "borrower defense" anyway? Thank you in advance for your input.

Arjun

Correction with apology:

I meant 34 CFR 685.206 (c).

A.S.

I have a suggestion for a faster legal solution than waiting for Congress. Lets ask a federal district court for a Declaratory Judgement whether a borrower can refinance/reconsolidate at the new lower rates with the lender of their choice as our bill HR2711 would require (A formal class action suit would take longer) a Declaratory Judgement could be quicker and if we didn't get the desired result in one court someone somewhere could try in another until we get something going.

The legal questions are on what basis to challenge the High Education Act's prohibition against refinancing/reconsolidation and having a choice of lenders for some competition? Lets here some feed back on this because I've been considering this. I would suggest a 13th Amendment Challenge, since the Higher Education Act's prohibition amounts to involuntary servitude. Some lawyers might not like that argument, buts that exactly what it is. This argument should certainly be presented. Possible wins might come from the following:

13th Amendment violation, involutary servitude, can bar choice of new lender or competition.

14th Amendment due process violation, vague, equal protection violation, borrowers are getting rate preferences.

Anti-trust violations can't bar competition.

Age Discrimination violations, borrowers over 40 are being charged higher rate fixed rates with no options for refinance.

FTC violations - These loan consolidators are advertising lower rates in the mail, on the phone, etc. lets hold them to their ads.

These are just a few ideas. Anyone have any others lets hear it. To those who say it can't be won, I say lets try it. Maybe the attention will get the ball rolling. I honestly think some judge out there would help us fight back and give us a favorable ruling.

This question is a matter of federal law so it would be admissible as a question for declaratory judgement by a federal court without monetary limits. Also, a state court could issue a ruling, but I think a federal district would be the best place to start.

Price gouging is not economic growth!