Dear Rep. Gosar,
Since 1980, average tuition for a 4-year college education has increased an astounding 827%. Since 1999, average student loan debt has increased by a shameful 511% and student loan debt has now surpassed 1 trillion dollars.
These numbers have meaning--Americans are drowning in debt that is not going away. This debt not only stifles the individual lives of borrowers but also our nations economic growth.
Even when making the best of all possible choices, normal financial setbacks such as illness, divorce, etc...(top reasons for filing bankruptcy) can create the impossible situation during the best of times. But during this recession those setbacks have had an exponential effect and threaten millions of borrowers with a lifetime of poverty.
There are countless problems with the costs and funding of an education in America.
Colleges spend obscene amounts of money on facilities unrelated to education and pass those costs on to students as tuition increases. (While tuition has increased 827% since 1980, the actual costs of instruction have risen only 5.6%!)
Lenders enjoy the benefits of capitalizing interest (superseding state usury laws) and a brutal lack of consumer protections. Capitalizing interest generates inflated balances that become impossible to pay off. Lack of consumer protections means no statute of limitations and they cannot be discharged in bankruptcy, unlike other consumer loans.
This all comes courtesy of lenders who have spent millions of dollars lobbying to purchase laws that serve them exclusively and harm American citizens.
Lenders, such as Sallie Mae, are making obscene profits from this system at the expense of borrowers and taxpayers. In the current design they profit MORE when the borrower defaults.
It is not enough to prevent the impact of this debt on future student loan borrowers; we also need solutions that bring balance and fairness to those currently in repayment.
Americans over the age of 60 currently owe $36 billion in student loans. These loans may be from "round-one" education, the result of later returning to college for better opportunities in a highly competitive market, or loans for their children's and grandchildren's education.
For student loan borrowers of all ages, this debt is like a ball and chain that many of us will carry to our graves. It is NOT the "good debt" we have been sold on by Society, Government and Universities--it is instead the worst of all possible debt.
Younger borrowers may never have the opportunity to buy homes, start businesses, etc...
Older borrowers will not have a meaningful retirement, if any. Instead they will have their monthly Social Security checks garnished--for many, their only source of income.
The solution is to reform this corrupt lending system and bring fairness to all borrowers, not punish borrowers to their graves.
On March 8, 2012 Rep Hansen Clarke introduced H.R.4170. It is a balanced and responsible REPAYMENT plan that removes the ball & chain. This in turn will quickly and certainly contribute to our nations economy--freeing borrowers to make the purchases that drive our economy (such as homes) and invest in new businesses, creating jobs and securing our future.
We strongly urge you support H.R.4170—to bring fairness to borrowers and hope for our economy!