Troubled Educational Assistance Relief (TEAR)

Troubled Educational Assistance Relief

The present and continuously growing burden of overwhelming college-loan indebtedness has reached crisis proportion for significantly large number U.S. citizens. Immediate relief needs to be passed by Congress that rolls back the nearly impossible task of receiving reorganization or discharge in U.S. bankruptcy court. Currently both private student loans (credit-based student loans issued by private banks without the backing of the federal government) and government-backed federal college loans are categorized as “education loans,” are exempt from discharge in bankruptcy in all but extreme cases.
The current bills, Fairness for Struggling Students Act (S. 3219) and the Private Student Loan Bankruptcy Fairness Act (H.R. 5043) do not offer any relief to government-backed federal college loans and are not an acceptable remedy. In order to have one’s private student loans erased in bankruptcy, a borrower must be able to show that repaying the loans would result in “undue hardship,” a legal standard that can be extremely difficult to meet and that has generally been reserved for government- and court-mandated obligations — unpaid alimony and child support, tax debts, criminal fines. Neither car loans nor credit card debts, not even home mortgages, are subject to the undue-hardship requirement to be dischargeable in bankruptcy.
“The 2005 bankruptcy restrictions penalize borrowers for pursuing higher education [and] provide no incentive to private lenders to lend responsibly,” Rep. Danny Davis criticized Borrowers of private student loans are “at the mercy of the lender if they face financial distress due to unemployment, disability, or illness,”
According to the USSA, student loan borrowers in the Unites States currently hold an estimated $730 billion in outstanding federal and private student loan debt, of which 60 percent, or $440 billion, is in deferment or default. These are our U.S. citizens, real people. Compared to the over $1.0 Trillion dollars given the big banks and Wall Street and over $1.0 Trillion dollars spent on stimulus by the current administration, and for what? Three years later, the economy is still in the tank.
Current laws give the federal government Gestapo like enforcement powers to be used against our own U.S. citizens. This includes garnishment of income, wages, levy bank accounts, and seize property without first obtaining a court judgment against the debtor. This tactic is called administrative wage garnishment.

Let us get over 20 million registered voter signatures to each and every U.S. House and U.S. Senate elected member and to there opposition candidate in the general election asking them to please turn back the repressive laws that no longer afford the handling of student loans like all other unsecured debt.

We deliver to you today the electronic signatures of ______million registered voting U.S. citizens asking for your pledge NAME:___________________________(U.S. House of Representatives or U.S. Senate candidate) to turn back the clock on the repressive and economy killing current U.S. bankruptcy laws treatment of student loans. Promise to immediately support legislation that handles student loans like all other unsecured debt in U.S. bankruptcy.