“Scumbagalooza”: The War on Students
Legendary bank-robber Willie Sutton said he robbed banks because that’s where the money was. So where do the bankers go to cover their gambling losses? Student loans? You bettcha!
The student loan business is Big Business, generating billions of dollars for private lenders, and private collectors, lining their balance sheets with federal guarantees and subsidies (aka corporate welfare), money which Secretary of Education Arne Duncan says should go into Pell Grants for students.
The Obama Administration has called for an end to this racket, but the banks are fighting back. The biggest fight is being waged by SLM Corp. or “Sallie Mae,” the nation’s largest student loan company. Heavily dependent on taxpayer subsidies and predatory lending practices, Sallie Mae doesn’t profit nearly as much from making the loan (which the government guarantees in any case) as it does going after loan payments.
Unlike subprime mortgages, there is no walking away from student loans,no bankruptcy provisions, no statute of limitations, just endless penury. Elizabeth Warren, Obama’s surprising Consumer Pit Bull, puts it this way: “Student-loan debt collectors have power that would make a mobster envious.” It’s no wonder they’ve unleashed a “scumbagalooza” of lobbying and lies as Firedoglake’s Jane Hamsher put it, and she’s right. And who’s lobbying for students? You are. Today!
