Student Loan Companies Get Rich Off of Your Taxes
This Washington Post opinion column (free registration required) outlines the latest student loan company swindle:
"Thanks to loopholes in the student loan system, financial institutions that lend to students will earn an unprecedented $1 billion over the next year. None of that money will go to students. All of it will go to the lenders, and all of it will come from you, the American taxpayer. It would be a scandal -- if, that is, anybody were upset about it."
The column also notes that "the student loan industry has contributed about $750,000 to the 49 Republican and Democratic members of the House education committee in the past 18 months."
Read more about the loophole issue in this Daily Nebraskan article, which deals specifically with the lender Nelnet. "By dusting off old student loans and repackaging them as new, the loan agency has collected more than $124 million in loose change from the pockets of taxpayers. Old loans become new when Nelnet augments a portfolio of old loans with new student loans ñ utilizing government loopholes that have some industry watchdogs questioning the companyís ethics."
Will any of these journalists notice that the student loan industry is fleecing those of us who consolidated at high interest rates as well?
Comments
I am one of those students...I barroed $7,500 in 1989 went into defaut after loosing 5 family members who did not have death insurance. Bad attorney said file chapter 13. After 2 years I paid off the chapter 13 which included the student loan of $27,000, the collection agent for higher ed (ECMC) attached my pay andf I am still paying $4oo a month and having my income tax taken every year...I have no hope of ever paying this off. After years of paying them I now own $35,000 on a $7,500 loan...where is the justice. I have in the past contacted 2 congressman, and I get the same answer after months of them working with ECMC. You owe, pay up for the rest of your life. I am 56. Talk about the evil empier. Sad. Veronica in CT
Posted by: Veronica Martish | February 8, 2005 2:57 AM