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Series | Student Debt Slavery: Time to Level the Playing Field, Part 2

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Historically, debt and austerity have been used as control mechanisms for subduing the people. It is time for the people to unite and take back their power.

http://evergreenedigest.org/sites/default/files/Editor%20Comment%20icon.jpg Evergreene Digest Editor's Note: This is the second in a two-part article on the debt burden America’s students face. Read Part 1 here.

Ellen Brown, Truthdig

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Jan 6, 2018 | The lending business is heavily stacked against student borrowers. Bigger players can borrow for almost nothing, and if their investments don’t work out, they can put their corporate shells through bankruptcy and walk away. Not so with students. Their loan rates are high and if they cannot pay, their debts are not normally dischargeable in bankruptcy. Rather, the debts compound and can dog them for life, compromising not only their own futures but the economy itself.

“Students should not be asked to pay more on their debt than they can afford,” said Donald Trump on the presidential campaign trail in October 2016. “And the debt should not be an albatross around their necks for the rest of their lives.” But as Matt Taibbi points out in a December 15 article, a number of proposed federal changes will make it harder, not easier, for students to escape their debts, including wiping out some existing income-based repayment plans, harsher terms for graduate student loans, ending a program to cancel the debt of students defrauded by ripoff diploma mills, and strengthening “loan rehabilitation” – the recycling of defaulted loans into new, much larger loans on which the borrower usually winds up paying only interest and never touching the principal. The agents arranging these loans can get fat commissions of up to 16 percent, an example of the perverse incentives created in the lucrative student loan market. Servicers often profit more when borrowers default than when they pay smaller amounts over a longer time, so they have an incentive to encourage delinquencies, pushing students into default rather than rescheduling their loans. It has been estimated that the government spends $38 for every $1 it recovers from defaulted debt. The other $37 goes to the debt collectors.

http://evergreenedigest.org/sites/default/files/Ellen%20Brown.jpg Ellen Brown <> is an attorney, chairman of the Public Banking Institute, and author of twelve books including "Web of Debt" and "The Public Bank Solution."

Full story … 

Related:

Series | Student Debt Slavery: Bankrolling Financiers on the Backs of the Young, Part 1, Ellen Brown, Truthdig 

The exponential rise in college costs occurred only after the government got into the student loan business in a big way.

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