The more I learn about the fraud, waste and abuse coming out of the student loan industry, the angrier I become.
A recent headline from Bloomberg reads “Americans are Paying $38 to Collect $1 of Student Debt”. The controversy surrounds about $1 trillion in student loans in default. Student loans are the second largest category of consumer debt (behind home mortgages) and unlike credit card and medical debt, they can’t be discharged in bankruptcy.
It is a cash cow for the student loan industry including student loan predators, colleges and universities who get kickbacks on promoting them and student loan collection companies aka predators. To the students who use them to pay for tuition at colleges, universities, tech schools and the like, they are the gifts that keep on giving – a ticking time bomb posing as a life preserver.
Imagine paying $38 for that crunchy, stale, high in fructose corn syrup small bag of cereal at the Love’s Travel Stop on US Highway 40. Never, right? Well that is what we do every day as Americans to collect $1 from an unfortunate, unknowing kid who wanted to get a college education but couldn’t afford it. His teachers told him it was okay. His parents didn’t seem to think it was a bad thing. Why not? Fortunately, I wasn’t one of those kids. But I am one of those Americans who is paying $38 to collect each $1 and this isn’t how I want to spend my money.
When my electric bill comes for $200 this month, I’m not going to reach in to my bank account and right a check for $7600 to the utility company. But then, it’s not about me.