“Days after a report on federal student loans revealed a double-digit rise in defaults, President Trump’s administration revoked federal guidance Thursday that barred student debt collectors from charging high fees on past-due loans.”
Robert Reich summarizes:
Trump education secretary Betsy DeVos -- who has never taken out a federal student loan for herself or her children, but had a financial stake in a company that financed a student debt collection agency -- just killed an Obama era rule protecting students with late loan payments from high fees.
America’s bankruptcy laws allow billionaire casino moguls like Trump to declare bankruptcy and walk away from their debts, but not people unable to meet their student debt payments.
This opened the door for student debt collection agencies to demand humongous interest payments -- until the Obama administration barred them from charging borrowers who default on their loans as much as 16 percent of the loan’s principal and accrued interest.
Now DeVos is rescinding that directive and allowing collection agencies to charge whatever they want -- a move that could hurt nearly 7 million people with $162 billion in student loans.
For what reason? To add to the profits of wealthy investors and inflict pain on the vulnerable.
President Trump listens as
Education Secretary Betsy DeVos
speaks during a meeting with parents
and teachers on Feb. 14 at the White House.
By Danielle Douglas-Gabriel