Tell Rep. Latham: Protect students from the predatory private loan industry

CREDO action
The petition reads:
"Support the Private Student Loan Bankruptcy Fairness Act, which is common sense legislation that would treat privately issued student loans the same as other types of private debt in bankruptcy, providing much needed relief and consumer protections to college students and recent graduates who are struggling with excessive debt."
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Dear Friend,

Americans now owe more money in student debt than credit card debt, with recent college graduates on the hook for more than $1 trillion in unpaid loans.1

Many of these loans — about $150 billion worth — are private loans, which have outrageously-high interest rates and are usually extended under harsh terms without basic consumer protections, resulting in a crushing financial burden on college students and graduates. Worse yet, unlike credit cards and other similar types of debt, a law pushed through Congress by former President George W. Bush prevents students from discharging private student loan debt through bankruptcy proceedings, which gives special protections to the private loan industry at the expense of students and recent graduates.2

Fortunately, two members of Congress — Rep. Steve Cohen (D-TN) and Rep. Danny Davis (D-IL) — have introduced legislation entitled the Private Student Loan Bankruptcy Fairness Act of 2013 that would treat privately issued student loans the same as other types of private debt in bankruptcy, providing much needed relief and consumer protections to college students and recent graduates.3

Your representative, Rep. Tom Latham, hasn't yet co-sponsored the bill, so we need constituents like you to ask him to support this common sense legislation and give college students and recent graduates who are struggling in the weak economy the consumer protections they deserve.

Tell Rep. Tom Latham: Support the Private Student Loan Bankruptcy Fairness Act. Click here to automatically sign the petition.

Since 1999, the average student loan debt has increased by 511 percent.4 That's a five-fold increase in just 13 years! Student loans have now become "the 21st century version of indentured servitude."5 With unemployment still unacceptably high and millions of recent college graduates out of work or underemployed, the last thing we should be doing is making matters worse by allowing students to fall prey to the predatory lending practices of private loan lenders.

As noted in a letter from over thirty-five organizations representing students, consumers, and higher education institutions in support of the Private Student Loan Bankruptcy Fairness Act:

Private education loan borrowers also lack access to the important deferment, income-based repayment, or loan forgiveness options that accompany federal student loans. This leaves most private loan borrowers at the mercy of the lender if they face financial distress due to unemployment, disability, illness, or military deployment, or when a school shuts down before they can finish their certificate or degree. The recent sudden closures of for-profit colleges in Connecticut, Maryland, Massachusetts, and Rhode Island underscore the urgent need for the Private Student Loan Bankruptcy Fairness Act of 2013.6

It is worth noting that the favorable treatment afforded to private student loan lenders was a result of a legislation enacted by President George W. Bush in 2005, which included a special interest provision that severely limits the ability of students to discharge debt through bankruptcy.7

This is unfair and unacceptable. Tell Representative Latham to co-sponsor the Private Student Loan Bankruptcy Fairness Act and address this injustice by restoring the dischargeability of debt from private loans made by for-profit lenders.

Tell Rep. Tom Latham: Support the Private Student Loan Bankruptcy Fairness Act. Click here to automatically sign the petition.

Let's speak up on behalf of our students, graduates and their families today. Click below to automatically sign the petition to Representative Latham urging him to support the Private Student Loan Bankruptcy Fairness Act.
http://act.credoaction.com/r/?r=10197120&p=student_private_loans&id=55317-3362360-F8FUOQx&t=5

Thank you for speaking out.

Murshed Zaheed, Deputy Political Director
CREDO Action from Working Assets

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Learn more about this campaign

1. "Annual Report of the CFPC Student Loan Ombudsman," Consumer Financial Protection Bureau, p. 2, October 16, 2012
2. "Rep. Miller Supports Bill to Restore Fairness in Private Student Lending," Committee on Education & the Workforce, Democrats, February 7, 2013.
3. "Cohen/Davis Introduce Legislation to Restore Fairness in Student Lending," Office of Representative Steve Cohen, February 6, 2013.
4. David Indiviglio, "Chart of the Day: Student Loans have grown 511% since 1999," The Atlantic.com, August 18, 2011.
5. Mike Konczal, "Student Loans are the New Indentured Servitude," The Atlantic.com, October 12, 2009.
6. "Coalition Letter to Representative Cohen in Support of the Private Student Loan Bankruptcy Fairness Act of 2013," The Project on Student Debt, February 6, 2013.
7. "Rep. Miller Supports Bill to Restore Fairness in Private Student Lending."


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