www.facebook.com www.coasttocoastam.com In the first hour, Ian Punnett welcomed the founder of StudentLoanJustice.org, Alan Collinge, who discussed how federal student loans have become predatory, turning a generation into debtor slaves. “It’s a socially horrible epidemic,” he declared, noting that America’s total student loan debt now surpasses the nation’s credit card debt. He explained that student loans are particularly pernicious because they contain no consumer safeguards such as bankruptcy protection, statute of limitations, or the ability to re-finance the debt in an open market. As a result of these factors, Collinge said, when a loan is defaulted, it can double or even triple due to penalties and fees. In looking at the source of the problem, Collinge pointed to student loan advocates and the Department of Education as the key entities that “failed to play their part” in overseeing lending practices. According to him, the DOE has been using a faulty metric to determine the default rate on student loans, thus misleading Congress into increasing the allowable limits on colleges for lending. Additionally, Collinge said, the DOE actually makes “about 22% versus what they pay out” for defaulted student loans. In order to fix the student loan epidemic, Collinge endorsed restoring bankruptcy protections for these loans. Should that happen, he said, “a multitude of problems” will resolve themselves, including an “almost overnight” drop in college tuitions.

www.pbs.org Above link to PBS doc College Inc Below article that came out in the Kansas City Star on Saturday Jan 15th For-profit colleges are fighting a proposed rule that would cut off their pipeline to federal student loans if too many students default on those loans. At the other end of the higher education spectrum, law schools are fending off accusations that they, too, entice students to take on mountainous debt, knowing many graduates won’t be able to find jobs at salaries high enough to pay off their loans. Public and private colleges and universities are facing related problems. Overall, students and schools are tacking into a perfect storm. Students are told their lifelong earning potential hinges on getting a college degree. But state support for public universities has tanked, as have endowments at private colleges. Meanwhile, the average cost of tuition and fees has increased by 466 percent over the last 25 years, more than four times the rate of inflation. For most families, money to finance college isn’t readily available. But student aid is, especially federally backed loans. The average college senior in 2009 graduated 000 in debt — and facing the bleakest job market in more than a decade. Experts warn that higher education is the next bubble about to burst. More than 0 billion in public and private student loan debt is outstanding, but only 40 percent is actively being repaid. Graduates who default on federally backed loans eventually will find …

March 24 (Bloomberg) — Michael Taiano, an analyst with Sandler O’Neill, talks with Bloomberg’s Margaret Brennan about the impact of legislation overhauling student lending on companies like SLM Corp., known as Sallie Mae, banks and nonprofit lenders. Under the plan attached to the health-care bill and passed by the House of Representatives, a billion federal program that subsidizes private student loans would end and the loans would be made directly by the government. The House amendments now go to the Senate. (Source: Bloomberg)