It’s bad enough the cost of education keeps skyrocketing but presidential candidate, Mitt Romney, and the vampires of Wall Street, are hoping to drain even more from students with private student loans.
These high-interest, extremely inflexible loans were introduced in the mid-2000’s and put together the same way as subprime mortgage loans. Banks bundled private student loans into securities, sold the loans to investors then released them to private lenders. The loans were dangled like candy to students (mostly at for-profit colleges) and Mitt Romney’s crew think this is GREAT! His domestic policy director declared, "We welcome the private sector participating instead of pushing it away.”
Private student loans pump these schools up into highly profitable businesses. The profit is coming straight from the blood of students and taxpayers. The heart of a for-profit school is not student success but rather the agglomeration of financial aid. The Consumer Financial Protection Bureau states, “in 2008, 42 percent of undergraduates at for-profit colleges took out a private student loan, while only 14 percent of all undergraduates used a private student loan.”
A new report issued today by the U.S. Senate says, “for-profit schools are far more expensive than comparable programs at community colleges or public universities”. And so are the private student loans they sell!
What’s the result? Similar to the subprime mortgage catastrophe, the private student loan market has already collapsed once leaving an entire generation of frustrated, unemployed students buried in massive debt. These loans come due immediately after graduation and cannot be declared in bankruptcy. There are no bail outs for students.
So, the first lesson in Capitalism 101 is the private sector will do whatever it takes to rip students off. Wall Street’s financial institutions have figured out a way to exploit the hopes and dreams of college kids and they want the feeding frenzy to continue.
Mitt Romney wants to INCREASE private sector involvement in the student loan market and DECREASE Pell grants. Haven’t we already learned with the subprime mortgage disaster that trusting the private sector doesn’t work? That deregulation only leads to greed and irresponsibility?
Students, BE CAUTIOUS. Romney may "say" Americans don’t need financial help to succeed, but his cronies on Wall Street and the private sector are banking on it.
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For more read:
http://www.salon.com/2012/07/23/another_subprime_crisis_student_loans/
http://blogs.ajc.com/get-schooled-blog/2012/07/30/scathing-report-on-for-profit-colleges-and-their-32-billion-in-tax-dollars/?cxntfid=blogs_get_schooled_blog
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