Quote Originally Posted by onlinemoniker View Post
The Student Loan Scam:
Congress passed legislation in the mid-1990’s that skewed student lending to benefit lenders/educational institutions at the expense of students.
•student debt can’t be discharged in bankruptcy
•loan companies/guarantors own collection agencies and can write their own ticket for fees/penalty rates on defaulters—giving them an incentive to allow borrowers to default—lenders will not work with struggling borrowers
•lenders can garnish wages, tax returns, social security, disability
•defaulted loans do NOT qualify for the rare student loan forgiveness programs
•upon consolidation, student loan interest rates may not be renegotiated by borrowers—EVER!
•average national interest rate on outstanding student loans—currently 12%
•student loans are exempt from statutes of limitations for collection, usury laws, Truth in Lending, and Fair Debt and Collections
•lenders are also allowed to take up to 25% as collection fees on defaulted loans
•universities often have "preferred-lender" arrangements with the universities and receive kickbacks
•borrowers wanting to consolidate their loans must use the original lender
I don't understand where the "scam" comes into play. A person borrows money, for whatever purpose, and there is an expectation that what is borrowed will be repaid, with interest. I could see where it might be considered a scam if the borrower were led to believe that the borrowed money did not require repayment, but that's not the case, is it?