Help Students Avoid Predatory Lending
It's that time of year. For students in America, the beginning of September means new classes, new notebooks, and new dorm rooms. But to the American financial industry, it means a new set of vulnerable consumers to exploit.
College campuses are awash with credit card companies using cheap freebies to distract students from the fine print of credit card contracts, and private lenders seeking to lure students away from safer and more affordable federal student loans.
Want to do something to stop these predatory lenders?
First, write to your members of Congress today and ask them to support HR 3221, the Student Aid and Fiscal Responsibility Act. HR 3221 would move all federal loans into the Direct Loan program. Currently, the federal government spends billions of dollars to subsidize banks making loans in the Federal Family Education Loan Program; that's money that can be used instead to benefit students directly through increased Pell grants and lower interest rates on Direct Loans.
Next, tell your Senators and Representatives to support the creation of a Consumer Financial Protection Agency. The CFPA would have the power to curb the abuses of private student lenders while also responding to other financial predators, including debit card issuers who charge exorbitant fees for overdraft "protection" and other services, and credit card companies who will seek to find loopholes in the new credit card law slated to take effect this February.
Finally, please take a moment to talk to the young people in your life about avoiding predatory lending and staying out of debt. Our website and the website of our Partner, Consumers' Union, can help you with this conversation. If you were a student who fell prey to credit card debt, are still paying off your student loans, or wish that someone had suggested that you join a credit union earlier, share your story today. Your words could change someone's life.
Staff Organizer, AFFIL (Americans For Fairness In Lending)