Friday, June 12, 2015

Team Obama Opens Door for More Student-Debt Forgiveness that could COST BILLIONS

The Obama administration said it would forgive federal student loans owed by Americans who can show they were lured to colleges by fraudulent recruiting, a move that potentially could involve billions of dollars and is one of the most aggressive measures yet to ease student debt.
The move, announced Monday, is designed first of all to help former students of Corinthian Colleges Inc., a big for-profit chain that collapsed into bankruptcy reorganization this spring. Federal officials accused the company in 2014 of lying to prospective students about its graduates’ job success.
The forgiveness push, though, would reach far beyond Corinthian and even the for-profit school sector.
Officials said that under the emerging plan, the government will consider forgiving any loans made directly by the government—those held by the majority of the 43 million Americans with student debt—so long as the borrower can document a school persuaded him or her to take out the loan under conditions that would violate state laws.
The Education Department plans to use a provision of a decades-old federal law that allows borrowers to have loans discharged if they can prove their schools broke a state law—such as by using false advertising or other deception—to lure them to apply and borrow funds.
Federal officials acknowledged the potentially high cost of the policy. In the case of Corinthian alone, the Education Department said 350,000 Americans who owe roughly $3.5 billion in loans could be eligible for forgiveness. In all, Americans owe more than $1.2 trillion in outstanding student debt....
Now I'm not a big fan of Sen. Lamar Alexander, but he NAILED IT here:

“If your car is a lemon you don’t sue the bank that made the auto loan; you sue the car company,” he said in a statement. He added that he would seek legislation this year to “address the right way” to help students who were defrauded.
Read the full story HERE and follow a link to a related story below.

Some people actually repay their student loans. One example is a 2016 candidate:

Scandal! Rubio took out student loans, then paid them off

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