To: President Donald Trump, Governor Kim Reynolds, The United States House of Representatives, and The United States Senate
STUDENT LOAN BUBBLE
We, the student loan borrowers, request that Congress reverse the 1998 and the 2005 bankruptcy laws regarding student loans. The bankruptcy laws have been continuously strengthened since the 1970s to prevent fraud and abuse, however, prior to the introduction of these new laws which prevent student loan borrowers from discharging their debt through bankruptcy, less than 1% of all student loans were discharged. So there never was a problem with students abusing the system (ie racking-up student loan debt and then filing bankruptcy after graduating from college). These are the facts. Just like the housing bubble, the student loan bubble has topped $1 Trillion (that's more than all the credit card debt in America) and will soon explode into a nation-wide economic disaster.
The current bankruptcy laws allow schools to charge higher tuition rates as well as allow schools to target low-income students with loans they cannot afford; these predatory practices are crippling an entire generation with student loan debt that they may never be able to repay.
Congress MUST act NOW to relieve the pressure on the student loan bubble before it is too late. We request that Congress reverse the student loan bankruptcy protection law and allow borrowers to discharge their debt through bankruptcy. We also request that Congress return the Truth in Lending rights to student loans to prevent students from becoming victims of predatory and fraudulent practices from for-profit schools as well as universities.
Why is this important?
Many people that went to college over the last decade have outrageous student loan debt. Many of them are so far in debt that they may never be able to repay all of the loans. Still others, like me, have student loans that are in default. We need to fix this problem by getting Congress to change the bankruptcy laws regarding student loans as well as returning the Truth In Lending rights to student loans. Student loans should not be a form of debtor punishment or debtor prison. The Constitution gives all Americans the freedom not to be put into a debtor prison; however, the current federal student loan laws are crippling many people with student loans that they cannot afford to repay (I became permanently disabled in 2006, and my only income is my Social Security Disability; I do not receive a benefit amount that can afford me the ability to make payments on my student loans. The student loan lenders have the ability to torture borrowers with default penalty fees (I was charged $25,000!), outrageous interest rates similar to high rates on credit cards as well as demanding monthly payments that are not inline with the borrower's income.