Politico reports on the federal government’s very costly student loan program. Is it predatory lending? How does it increase access to make the cost so high? How can the Obama talk about expanding access and increasing college graduation rates while charging usurious rates? What you say matters less than what you do.
DO PARENT PLUS LOANS COME WITH A BIG MINUS? The fast-growing federal program known as Parent PLUS [http://1.usa.gov/1K1lwvE ] now has 3.2 million borrowers who have racked up $65 billion in debt helping their kids go to school. The loans have much in common with the regular student loans that have created a national debt crisis and a 2016 campaign issue, but PLUS has much higher interest rates and fees, and far fewer opportunities for loan forgiveness or reductions, writes Michael Grunwald for POLITICO’s The Agenda. The PLUS program, which includes similar loans to graduate students, is the most profitable of the 120 or so federal lending programs.
– According to the White House budget office, the expected recovery rate for defaulted Parent PLUS loans is a remarkable 106 percent, a testament to Uncle Sam’s unique power as a collection agency. Overall, the program is expected to return $1.23 on every dollar it lends this year, thanks to its relatively high interest rates and minimal opportunities for debt relief. When I spoke to White House education adviser Roberto Rodriguez about this conundrum, he emphasized that President Barack Obama has crusaded to make America the world’s leader in access to higher education. But he also said he’s concerned that too many struggling parents are getting in too deep. When I asked him if the Education Department was running a predatory lending program, he didn’t say no. “That’s the heart of the matter,” Rodriguez said. “You want to expand access and choice, but you also want to make sure families can afford these loans.”
– Parent PLUS was created in 1980 to provide small loans to help reasonably well-off families finance an undergraduate education. But it has evolved to providing almost any borrower with almost unlimited cash to attend any school with almost no regard to their ability to repay. “You feel so guilty that you haven’t done enough for your kid, and they make it so easy to get the loans,” said Elizabeth Hill, a 57-year-old property appraiser from the Boston suburbs with more than $30,000 in PLUS debt. “Then they’ve got you by the cojones. It’s like the Sopranos, except it’s the government.” http://politi.co/1fm3d8Z
Diane Ravitch's blog 
My daughter graduated int 2010. I still owe $60,000 on my 2nd mortgage for her education. There is no relief for me but to sell my house. I tried to sell it; no one wants it. They would rather buy foreclosures and shortsales.
At least she got a useful degree—-hahahahaha she is a teacher, and they are coming for her. Soon she’ll be unemployable when the reformers reach their goal.
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This John Oliver piece is the gold standard for attacks on the predatory student loans—& on sleazy for-profit and/or on-line colleges.
It’s also hysterically funny:
BONUS: the video includes a wildly hilarious digression — an actual audio recording of a phone call with U.S. President Lyndon Johnson. While president, LBJ gives some unbelievable-but-true directions to his tailor on how to make pants that will fit the president properly.
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Yes, I got one for my son. I have been paying this loan since 2005. It will be paid off soon. It was costly. The only benefit I got from it was an interest tax deduction.
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“Talk is Cheap (but school loans are not)”
Watch what I do
And not what I say
Talk is true blue
But actions are gray
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Most of you already know this but our military using the GI bill have gone to these corporate colleges which demand outrageous tuition. Their degrees are useless IF they graduate. AND we the taxpayers have subsidized the GI bill which sent them there to get this “training”. Totally incompetent. THAT is what coporate schools, college and charters, do.
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While the student loan program is predatory. so are the practices of big business. Companies are fighting to not label foods that we eat, and not tell us what is in our water, and the air that we breathe. Businesses are attempting to take over most of the human services while doing an abysmal job at it. Banks, and Wall St. can lie, cheat and steal, and rarely suffer the consequences of their actions. It is disturbing that the “land of opportunity” has turned into the land of the predator and the prey.
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