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The Student Loan Scam: The Most Oppressive Debt in U.S. History and How We Can Fight Back
The Student Loan Scam is an exposé of the predatory nature of the $85-billion student loan industry. In this in-depth exploration, Collinge argues that student loans have become the most profitable, uncompetitive, and oppressive type of debt in American history.
This has occurred in large part due to federal legislation passed since the mid-1990s that removed standard consumer protections from student loans-and allowed for massive penalties and draconian wealth-extraction mechanisms to collect this inflated debt. High school graduates can no longer put themselves through college for a few thousand dollars in loan debt. Today, the average undergraduate borrower leaves school with more than $20,000 in student loans, and for graduate students the average is a whopping $42,000. For the past twenty years, college tuition has increased at more than double the rate of inflation, with the cost largely shifting to student debt.
Collinge covers the history of student loans, the rise of Sallie Mae, and how universities have profited at the expense of students. The book includes candid and compelling stories from people across the country about how both nonprofit and for-profit student loan companies, aided by poor legislation, have shattered their lives-and livelihoods. With nearly 5 million defaulted loans, this crisis is growing to epic proportions.
The Student Loan Scam takes an unflinching look at this unprecedented and pressing problem, while exposing the powerful organizations and individuals who caused it to happen. Ultimately, Collinge argues for the return of standard consumer protections for student loans, among other pragmatic solutions, in this clarion call for social action.
This has occurred in large part due to federal legislation passed since the mid-1990s that removed standard consumer protections from student loans-and allowed for massive penalties and draconian wealth-extraction mechanisms to collect this inflated debt. High school graduates can no longer put themselves through college for a few thousand dollars in loan debt. Today, the average undergraduate borrower leaves school with more than $20,000 in student loans, and for graduate students the average is a whopping $42,000. For the past twenty years, college tuition has increased at more than double the rate of inflation, with the cost largely shifting to student debt.
Collinge covers the history of student loans, the rise of Sallie Mae, and how universities have profited at the expense of students. The book includes candid and compelling stories from people across the country about how both nonprofit and for-profit student loan companies, aided by poor legislation, have shattered their lives-and livelihoods. With nearly 5 million defaulted loans, this crisis is growing to epic proportions.
The Student Loan Scam takes an unflinching look at this unprecedented and pressing problem, while exposing the powerful organizations and individuals who caused it to happen. Ultimately, Collinge argues for the return of standard consumer protections for student loans, among other pragmatic solutions, in this clarion call for social action.
184 pages, Paperback
First published February 1, 2009
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209 people want to read
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Displaying 1 - 30 of 30 reviews
December 25, 2008
I wrote it, so I like it!
June 22, 2009
I haven't been able to find another book quite like this one, I'm so glad the author wrote this book! He exposes the unethical and shady ways that Salliemae dominates the market for student loans (paying universities to make them the primary lender, acquiring other companies, acquiring guarantors and getting the profit for payments made on defaulted loans, etc.). He also addresses how bad things are in the student loan world. Did you know that once you consolidate your loans, it is against the law to re-consolidate them with another lender for a lower rate? Free market principles have no hold in the student loan market, where universities, the department of education, and guarantors are in SallieMae's pocket.
Most frightening is that if you default on your loan, your life is basically over. You can't declare bankruptcy and discharge that debt, even if with private loans. If you don't pay, your wages can be garnished, your disability check or social security can be dipped into, and even your employment can be in jeopardy. In some cases, people have had their licenses to practice medicine taken away because they defaulted on student loans. Collections agencies have contacted borrower's employments to have their wages garnished or get them fired. Just how are they supposed to pay back on these loans if their employment is taken away? Sallie mae is more profitable when people default on their loans, and the author has brought to light incidents where Sallie Mae has allowed loans to go quietly into default for this reason. They don't want you to pay off your debt, they make FAR more money if you are paying them for life.
The bottom line is that all consumer protections have been taken away. When people are committing suicide or leaving the country to escape the stress of their ballooned debt that they've made good efforts to pay, it's time for a change. EVERYONE with student loans should read this book, if nothing else to realize how bad things can get if you get into a rough patch where you can't pay on your loans.
The author was slightly repetitive about some information, but the information he provided was valuable enough to overlook the weaknesses in his writing.
Most frightening is that if you default on your loan, your life is basically over. You can't declare bankruptcy and discharge that debt, even if with private loans. If you don't pay, your wages can be garnished, your disability check or social security can be dipped into, and even your employment can be in jeopardy. In some cases, people have had their licenses to practice medicine taken away because they defaulted on student loans. Collections agencies have contacted borrower's employments to have their wages garnished or get them fired. Just how are they supposed to pay back on these loans if their employment is taken away? Sallie mae is more profitable when people default on their loans, and the author has brought to light incidents where Sallie Mae has allowed loans to go quietly into default for this reason. They don't want you to pay off your debt, they make FAR more money if you are paying them for life.
The bottom line is that all consumer protections have been taken away. When people are committing suicide or leaving the country to escape the stress of their ballooned debt that they've made good efforts to pay, it's time for a change. EVERYONE with student loans should read this book, if nothing else to realize how bad things can get if you get into a rough patch where you can't pay on your loans.
The author was slightly repetitive about some information, but the information he provided was valuable enough to overlook the weaknesses in his writing.
November 6, 2011
I'd give this book 1.5 stars. Reading this book reminds me of watching a Michael Moore documentary; the information is compelling but I'm still skeptical because it's such a one-sided story.
Collinge's book seems more like a plug for his website, which looks about as unprofessional as his book. Though I sympathize with students who took on debt in the hopes of using education for upward socioeconomic mobility, some people need to be realistic about the debt they accrue. My fiance is heavily in debt, but she's pursuing an M.D. Others are heavily in debt pursuing degrees in communications, psychology, public service, Spanish, etc. In other words, if you're gaining student debts to eventually become a public high school counselor, you'd better re-assess your situation. I think that colleges and universities should advise their students to be realistic about their career opportunities and their current debt situation. None of Collinge's examples included engineers, mathematicians, doctors, etc. And of the one lawyer that was mentioned, did he pass the bar exam? The latter aforementioned professions have consistently high salaries and job availability. An analysis from Forbes magazine this year showed that plumbers have about $75k/yr of spending money compared to doctors with $110k/year. The point is that you don't HAVE to go to school for long periods of time and accrue a bunch of loans in order to have a good-paying job. Again, let's just enlighten our students as to the realities of the job market and salary distribution.
The redeeming quality of Collinge's book is that it gives insight into the world of those who have defaulted on their loans. It sounds like a nightmare and I am taking some of his debt advice into account when advising my fiance on her financial options.
His book could probably be summarized by the first chapter and similarly could be conveyed with a 15-minute documentary.
Collinge's book seems more like a plug for his website, which looks about as unprofessional as his book. Though I sympathize with students who took on debt in the hopes of using education for upward socioeconomic mobility, some people need to be realistic about the debt they accrue. My fiance is heavily in debt, but she's pursuing an M.D. Others are heavily in debt pursuing degrees in communications, psychology, public service, Spanish, etc. In other words, if you're gaining student debts to eventually become a public high school counselor, you'd better re-assess your situation. I think that colleges and universities should advise their students to be realistic about their career opportunities and their current debt situation. None of Collinge's examples included engineers, mathematicians, doctors, etc. And of the one lawyer that was mentioned, did he pass the bar exam? The latter aforementioned professions have consistently high salaries and job availability. An analysis from Forbes magazine this year showed that plumbers have about $75k/yr of spending money compared to doctors with $110k/year. The point is that you don't HAVE to go to school for long periods of time and accrue a bunch of loans in order to have a good-paying job. Again, let's just enlighten our students as to the realities of the job market and salary distribution.
The redeeming quality of Collinge's book is that it gives insight into the world of those who have defaulted on their loans. It sounds like a nightmare and I am taking some of his debt advice into account when advising my fiance on her financial options.
His book could probably be summarized by the first chapter and similarly could be conveyed with a 15-minute documentary.
May 13, 2018
Definitely the most important book on student loans, whether you're taking out one or not.
March 11, 2020
The book is written by an activist and it is informative for people mired in student debt, but it is too much about particular fraud or excessive greed by Sallie Mae and other corporations. It's not about structural issues or broad policy.
February 9, 2011
From StaffPicks.org-
Before you touch those FAFSA forms read this book! Author and activist, Alan Collinge is kicking ass and taking names of those profiting off our never-ending student debt. In one of the most brilliantly written accounts of investigative journalism, it will only take the reader a few pages to realize why Collinge was named one of CNN Money’s “Financial Heroes”. Look out Sallie Mae, Collinge has your number and millions of millennials are ready to back him up.
Alan Collinge is in the new film, Default: The Student Loan Documentary which is due out soon...
Before you touch those FAFSA forms read this book! Author and activist, Alan Collinge is kicking ass and taking names of those profiting off our never-ending student debt. In one of the most brilliantly written accounts of investigative journalism, it will only take the reader a few pages to realize why Collinge was named one of CNN Money’s “Financial Heroes”. Look out Sallie Mae, Collinge has your number and millions of millennials are ready to back him up.
Alan Collinge is in the new film, Default: The Student Loan Documentary which is due out soon...
Default: the Student Loan Documentary
July 25, 2011
Mmm, not the best advocacy piece on the student loan problem in America. It's far too repetitive, and unfortunately, doesn't use illustrative anecdotes as well as it could. Much preferred other books on this topic. That said, I'd recommend it to anyone still snowed by the idea of 'education,' and 'student loans' to that end.
April 14, 2010
While the author has a point about corruption and immoral practices in the industry, I felt he ignored one very obvious point: when you take a loan, you have to expect to pay it back. You are not entitled to that money.
Read
February 8, 2018People often belittle the sufferings of people who have undertaken massive student loans to service their tertiary education. I feel this misses the point entirely. Even if we concede that higher education should be a loan, not a grant as it is in European countries, that young borrowers accept at their own risk, we should take issue with the astronomical interest rates on US (Sallie Mae) loans, that inflate required payments several times over the principal and cripple borrowers to potential defaulting, thereby ballooning their loan responsibilities even more:
"Notably, Sallie Mae had also become the nation’s largest
provider of private student loans. Such private loans, which are
not guaranteed by the federal government, now account for 20
percent of all student loans and are extremely profitable for the
lenders; although there are no federal subsidies for the loans,
they typically carry with them interest rates far exceeding those
of federally guaranteed loans. Interest rates of 18 percent or
higher are not uncommon in the industry, and the national average
interest rate is approximately 12 percent. Sallie Mae has
been found to charge APRs of as high as 28 percent."
18 percent interest rates that multiply initial thirty-thousand dollar loans into six figures during payment for education should strike anybody as an unseemly interpretation of "personal responsibility.
"Notably, Sallie Mae had also become the nation’s largest
provider of private student loans. Such private loans, which are
not guaranteed by the federal government, now account for 20
percent of all student loans and are extremely profitable for the
lenders; although there are no federal subsidies for the loans,
they typically carry with them interest rates far exceeding those
of federally guaranteed loans. Interest rates of 18 percent or
higher are not uncommon in the industry, and the national average
interest rate is approximately 12 percent. Sallie Mae has
been found to charge APRs of as high as 28 percent."
18 percent interest rates that multiply initial thirty-thousand dollar loans into six figures during payment for education should strike anybody as an unseemly interpretation of "personal responsibility.
March 25, 2013
Author kind of has a vendetta with lender Sallie Mae, but also too many valid points to be ignored. I do not have any student loans, so I am not among the victims. (However true the usage is.) Fun line too somewhere in the book about how even Oprah is fooled into believing student loans are "good debt."
Aside from the obvious fact a lot of students lack any understanding of what they are agreeing to (really is why you should avoid entering into such agreements), there also seem to have been quite a lot of abuses by lenders mentioned in the book. (Lying that they can have people thrown in jail if they fail to comply, fraud in that they maneuver to force people to try to keep them on the hook even after they have repaid, and really the list goes on.) Although not mentioned by the author, the comparisons between student loan lenders and the subprime lenders (outright fraud, trying to keep borrowers dependent on them and shuffling around loans to keep from realizing losses on borrowers unable to pay even a tenth of what is owed) are quite striking. (Not to mention traditional first-time freshmen with little or no credit history and similarly little or no income really are the same crowd both subprime and student loan lenders target, even if there might be some age difference in who the subprime lenders targeted.)
The book also prominently mentions that the lenders have gotten the laws crafted such that there are none of the "consumer protections" that every other liability (credit cards, mortgages, etc) has. After consolidating loans, you cannot refinance again. (Speaker on my campus once talked about consolidating, but I was unaware just how dire that situation sounds. I have no student loans, so easily out of sight, out of mind.) There also is no option to negotiate with the lenders to settle the debt the way it apparently can be done with credit card debt, at least according to the radio ads for some company or another. (As I am also not in that situation, I would not know whether there is some scary catch, but I am sure it is worth the firm's while to haggle with credit card companies..) The other memorable line is how wages garnished to pay interest on student loans is almost identical under the law as child support or criminal debt.
The author partly explains the rise of student debt by how governments shift the cost of education from federal/state funding to having more of the cost borne by the students. (Frankly I think "higher education" is overpriced because it is overpriced and plenty of videos on youtube about many schools that thanks to government's involvement in student loans guarantees schools can keep raising tuition costs well beyond inflation and keeps getting rising demand all the same. Along with the black humor on how student loans means you get stuck with a mortgage but do not get the house.) As for the typical observations on debt slavery, in addition to lenders appearing to try to force borrowers into perpetually paying to service the debt without ever repaying it, they use any delinquency on people's repayment to lock them out of the profession they went to school for.. which guarantees the people in the story will be stuck into low-paying jobs with wages being garnished.
Worthy of mention too is how student loan companies have a very cozy relationship with schools, similar to Barnes & Noble running what seems like most university bookstores filled with ridiculously overpriced textbooks. (Not mentioned in the book. Suppose comparison to universities having "preferred lenders" might also be criticism on the bookstores typically not alerting first-time freshmen to how much cheaper online options are. Might even call it a weakness that there are just too many abuses that schools engage in, but the entire focus of the book is on the student loan aspect, which means they might diminish the message by not seeking out people with a common cause.) Such abuses include student loan companies staffing university call centers for financial hotlines and providing "financial counseling" to students that steer them to loans or to consolidate with their firm on disadvantageous terms. (The actions -- some of which is deliberate fraud -- may last a moment, but the consequences apparently can be felt over decade.. so perhaps worse than even the worst of the subprime lenders who at least went bankrupt when housing began to implode.)
As far as advice goes, aside from getting delinquent/defaulted borrowers (especially in obvious cases of abuse) to begin getting organized and speaking out, the advice mainly seems to be to go with federal loans if you have no choice but to borrow, but obviously to go with a relatively inexpensive school (emphasis on if federal loans do not go far enough to cover it, the school is probably way too expensive) compared to how some former Harvard students have loans they are unable to repay. Also recommending recording conversations (in states where you have to, saying "This call may be recorded") with lenders so you have evidence. Would be interesting whether recent legislation has changed anything, even if much of it seems to favor either current or future borrowers. As someone who has questioned courses that seemed either useless or irrelevant to the major, it is a worthwhile point that degrees should probably be had with a lot less courses or at least a lot less credit (read: BILLABLE) hours. (Definitely either never truly learned a lot of lecture topics in classes well external to my major or simply have since forgotten it as I look to take on an engineering bachelors to supersede the business bachelors I already have.)
Other thoughts: Aside from the interest rate being astounding in some cases, it would seem like the fees are really the blind side if you fail to get the terms in writing. Is interesting that Michael Moore and Ralph Nader met the author shortly after his 60 Minutes appearance in 2006, but apparently did not do anything big on it. So while some abuses seem obvious enough, perhaps they did not find it explosive enough. (Moore initially intended to include it in his Sicko movie, but apparently dropped it as he had enough material.. I would not know either way, as never watched that movie and not particularly interested in doing so.)
Aside from the obvious fact a lot of students lack any understanding of what they are agreeing to (really is why you should avoid entering into such agreements), there also seem to have been quite a lot of abuses by lenders mentioned in the book. (Lying that they can have people thrown in jail if they fail to comply, fraud in that they maneuver to force people to try to keep them on the hook even after they have repaid, and really the list goes on.) Although not mentioned by the author, the comparisons between student loan lenders and the subprime lenders (outright fraud, trying to keep borrowers dependent on them and shuffling around loans to keep from realizing losses on borrowers unable to pay even a tenth of what is owed) are quite striking. (Not to mention traditional first-time freshmen with little or no credit history and similarly little or no income really are the same crowd both subprime and student loan lenders target, even if there might be some age difference in who the subprime lenders targeted.)
The book also prominently mentions that the lenders have gotten the laws crafted such that there are none of the "consumer protections" that every other liability (credit cards, mortgages, etc) has. After consolidating loans, you cannot refinance again. (Speaker on my campus once talked about consolidating, but I was unaware just how dire that situation sounds. I have no student loans, so easily out of sight, out of mind.) There also is no option to negotiate with the lenders to settle the debt the way it apparently can be done with credit card debt, at least according to the radio ads for some company or another. (As I am also not in that situation, I would not know whether there is some scary catch, but I am sure it is worth the firm's while to haggle with credit card companies..) The other memorable line is how wages garnished to pay interest on student loans is almost identical under the law as child support or criminal debt.
The author partly explains the rise of student debt by how governments shift the cost of education from federal/state funding to having more of the cost borne by the students. (Frankly I think "higher education" is overpriced because it is overpriced and plenty of videos on youtube about many schools that thanks to government's involvement in student loans guarantees schools can keep raising tuition costs well beyond inflation and keeps getting rising demand all the same. Along with the black humor on how student loans means you get stuck with a mortgage but do not get the house.) As for the typical observations on debt slavery, in addition to lenders appearing to try to force borrowers into perpetually paying to service the debt without ever repaying it, they use any delinquency on people's repayment to lock them out of the profession they went to school for.. which guarantees the people in the story will be stuck into low-paying jobs with wages being garnished.
Worthy of mention too is how student loan companies have a very cozy relationship with schools, similar to Barnes & Noble running what seems like most university bookstores filled with ridiculously overpriced textbooks. (Not mentioned in the book. Suppose comparison to universities having "preferred lenders" might also be criticism on the bookstores typically not alerting first-time freshmen to how much cheaper online options are. Might even call it a weakness that there are just too many abuses that schools engage in, but the entire focus of the book is on the student loan aspect, which means they might diminish the message by not seeking out people with a common cause.) Such abuses include student loan companies staffing university call centers for financial hotlines and providing "financial counseling" to students that steer them to loans or to consolidate with their firm on disadvantageous terms. (The actions -- some of which is deliberate fraud -- may last a moment, but the consequences apparently can be felt over decade.. so perhaps worse than even the worst of the subprime lenders who at least went bankrupt when housing began to implode.)
As far as advice goes, aside from getting delinquent/defaulted borrowers (especially in obvious cases of abuse) to begin getting organized and speaking out, the advice mainly seems to be to go with federal loans if you have no choice but to borrow, but obviously to go with a relatively inexpensive school (emphasis on if federal loans do not go far enough to cover it, the school is probably way too expensive) compared to how some former Harvard students have loans they are unable to repay. Also recommending recording conversations (in states where you have to, saying "This call may be recorded") with lenders so you have evidence. Would be interesting whether recent legislation has changed anything, even if much of it seems to favor either current or future borrowers. As someone who has questioned courses that seemed either useless or irrelevant to the major, it is a worthwhile point that degrees should probably be had with a lot less courses or at least a lot less credit (read: BILLABLE) hours. (Definitely either never truly learned a lot of lecture topics in classes well external to my major or simply have since forgotten it as I look to take on an engineering bachelors to supersede the business bachelors I already have.)
Other thoughts: Aside from the interest rate being astounding in some cases, it would seem like the fees are really the blind side if you fail to get the terms in writing. Is interesting that Michael Moore and Ralph Nader met the author shortly after his 60 Minutes appearance in 2006, but apparently did not do anything big on it. So while some abuses seem obvious enough, perhaps they did not find it explosive enough. (Moore initially intended to include it in his Sicko movie, but apparently dropped it as he had enough material.. I would not know either way, as never watched that movie and not particularly interested in doing so.)
February 12, 2019
The main takeaway from this book is "DO NOT DEFAULT ON YOUR STUDENT LOAN!" Author gives a detailed history of the student loan business and especially Sallie Mae. Lenders make billions of dollars through interest on the loans and billions more on fees, late charges, additional interest when loans go into default status. These loans are not dischargeable through bankruptcy.
The advice he gives to prospective college students is not to take out these loans. Instead, work part time, get scholarships, and do everything to avoid borrowing money. He recommends carefully scrutinizing your options and basing your choice of college on the cost of tuition.
There are many first-hand accounts of borrowers who faced severe hardships dealing with lenders and loan collectors. The author gives examples of many truly honest people who through circumstances beyond their control were unable to make their loan payments and suffered horrific consequences; some even took their own lives.
For parents of future college students read Where You Go Is Not Who You'll Be: An Antidote to the College Admissions Mania by Frank Bruni. This will give you some insight into how to select a college.
The advice he gives to prospective college students is not to take out these loans. Instead, work part time, get scholarships, and do everything to avoid borrowing money. He recommends carefully scrutinizing your options and basing your choice of college on the cost of tuition.
There are many first-hand accounts of borrowers who faced severe hardships dealing with lenders and loan collectors. The author gives examples of many truly honest people who through circumstances beyond their control were unable to make their loan payments and suffered horrific consequences; some even took their own lives.
For parents of future college students read Where You Go Is Not Who You'll Be: An Antidote to the College Admissions Mania by Frank Bruni. This will give you some insight into how to select a college.
January 19, 2023
Quick read on the history of the student loan industry, explaining different types of loans and how the student loan business quickly turned from a student focused industry to one focused on student default, which financially benefits the corporate loan industry. The book outlines how Congress
stripped the student borrower of all leverage tools, by making student loans, the only loan in the country null of any standard consumer protections. The author argues, until the student borrower has leverage (option of bankruptcy, ability to change lenders for lower interest rate, etc) the combination of high interest rates and compounding interest can/does bury the borrower in debt, in some cases for life. It also discusses the amount of corruption and illegal activity in past cases in the student loan corporate industry. Lastly, the author offers a chapter on advice, to help guide students from choosing the right college (not the most expensive) to how to stay out of default. Should be a must read for every high school senior (and co-signers) or anyone thinking of going to grad school.
stripped the student borrower of all leverage tools, by making student loans, the only loan in the country null of any standard consumer protections. The author argues, until the student borrower has leverage (option of bankruptcy, ability to change lenders for lower interest rate, etc) the combination of high interest rates and compounding interest can/does bury the borrower in debt, in some cases for life. It also discusses the amount of corruption and illegal activity in past cases in the student loan corporate industry. Lastly, the author offers a chapter on advice, to help guide students from choosing the right college (not the most expensive) to how to stay out of default. Should be a must read for every high school senior (and co-signers) or anyone thinking of going to grad school.
December 30, 2020
A must read book about the student loan crisis. This book is now a decade old and should be updated. However, it is very well researched and the arguments stand. I wish every student and parent would read this book to better understand the cost of college. At times the abuses revealed are shocking. Many A-ha! moments upon reflection of my own experiences receiving higher ed. The unprecedented widespread forbearance of student loans during the pandemic is proof that more revision is possible.
September 5, 2022
this book was an eye opener. with alot of the history of the student loan program and the missteps along the way. whle this may not be popular-I think that all of the past and future executives of Sallie Mae should have to forfeit all of their wealth that they made on the unsuspecting and naive students and parents. they are criminals who deserve to be locked up.
February 3, 2018
Insights into student loan industry corruption and the founding of Student Loan Justice activist group
March 5, 2020
This does a good job identifying the issues with student loan providers and shares personal stories of those suffering from defaulted loans. It reviews the history of Sallie Mae, corruption and fraudulent acts committed. It's disheartening to read the amount of rights and protection removed from the borrowers who are incapable of even filing bankruptcy.
It goes into advice on how to avoid these terrible situations told but not as much as I would have liked. The one critique I have is there were numerous parts that felt redundant throughout the book.
It goes into advice on how to avoid these terrible situations told but not as much as I would have liked. The one critique I have is there were numerous parts that felt redundant throughout the book.
November 3, 2021
I liked! It presents very concise information on student loan debt and the reasons we are in this mess!
Thank you, Alan!
Thank you, Alan!
Read
December 30, 2021Just reading the summary of this book has made me aware of what I've been put through
January 23, 2013
While the book repeats itself quite often, the author is trying to make a point. In this way, the book is almost like a circular argument.
As other reviewers have stated, the title of the book wreaks of bitterness, but after reading the content it is justified. The book focuses on borrowers of student loans who undergo hardships and have difficulty making payments. These borrowers end up defaulting on their loans or begin deferred payments(which penalize them) which in turn causes them to default on their loans.
I'm very glad a book like this exists. This type of information is necessary to alert to our younger generation who believes that student loan companies are cooperative companies interested in mutually beneficial business. The book exposes them for what they really are- cutthroat loan sharks who are out to ruin many people's lives due to their greed, forcing them to live a life of indentured servitude. (slaves)
The main points of this book :
- Student loan organizations like Sallie Mae earn more money when borrowers default on their loans. This means they will do things to make it difficult for you to pay off your debt, such as defaulting your loan without your consent, penalizing you for late payments whether they are late or not, and raising your interest rates without notice or document representation, just to name a few.
- Many student loan organizations work cooperatively with for-profit colleges in order to encourage taking out student loans, which the students will never be able to pay back due to the practices of these organizations listed above.
- Student loans cannot be erased by filing for bankruptcy. Absolutely every other kind of debt can be. This has led many people to committing suicide or leaving the country because they will never be able to pay off the loans because the interest alone can be devastatingly high.
- The government has given student loan organizations the right to garnish your wages indefinitely until the loan is paid off, even if that amount is ineffectual to the principal of the loan and only pays a percentage of the interest.
- Paying for your college classes while working is in your best interest.
- If you must(emphasis on must), always use federal student loans over private. They have APR rates set by the government and are actually made in the best interest of students.
I'm sure I'm forgetting some things, but the you get the gist of it. Be wary of student loans!
As other reviewers have stated, the title of the book wreaks of bitterness, but after reading the content it is justified. The book focuses on borrowers of student loans who undergo hardships and have difficulty making payments. These borrowers end up defaulting on their loans or begin deferred payments(which penalize them) which in turn causes them to default on their loans.
I'm very glad a book like this exists. This type of information is necessary to alert to our younger generation who believes that student loan companies are cooperative companies interested in mutually beneficial business. The book exposes them for what they really are- cutthroat loan sharks who are out to ruin many people's lives due to their greed, forcing them to live a life of indentured servitude. (slaves)
The main points of this book :
- Student loan organizations like Sallie Mae earn more money when borrowers default on their loans. This means they will do things to make it difficult for you to pay off your debt, such as defaulting your loan without your consent, penalizing you for late payments whether they are late or not, and raising your interest rates without notice or document representation, just to name a few.
- Many student loan organizations work cooperatively with for-profit colleges in order to encourage taking out student loans, which the students will never be able to pay back due to the practices of these organizations listed above.
- Student loans cannot be erased by filing for bankruptcy. Absolutely every other kind of debt can be. This has led many people to committing suicide or leaving the country because they will never be able to pay off the loans because the interest alone can be devastatingly high.
- The government has given student loan organizations the right to garnish your wages indefinitely until the loan is paid off, even if that amount is ineffectual to the principal of the loan and only pays a percentage of the interest.
- Paying for your college classes while working is in your best interest.
- If you must(emphasis on must), always use federal student loans over private. They have APR rates set by the government and are actually made in the best interest of students.
I'm sure I'm forgetting some things, but the you get the gist of it. Be wary of student loans!
June 1, 2009
Though "The Student Loan Scam" smacks of bitterness, it's not hard to see why if even half of the information within is true. Written mostly with an eye on student loan borrowers who have defaulted, it's still pertinent information for anyone who has or is considering loans for education. A key point for me was that not only are these debts undischargeable in bankruptcy but they also lack any other consumer protections that other types of debt would carry. It seems to me that if you're going to make a debt unforgivable, you ought to severely cap the profits that can be made off it. Nothing of the sort is happening, allowing intertwined lenders, guarantors, and debt collection agencies major incentives to keep loans in default and avoid working with borrowers to rehabilitate them. The author also has a tendency to repeat information, though this isn't unusual in books and other media (such as documentaries) that are trying to make a point.
August 16, 2009
If you have - or plan on having - any student loan debt to Sallie Mae, you MUST read this book.
The legislation at current does not allow bankruptcy, collection or consumer credit protections of any kind. If you default once your loan will nearly double immediately.
You have to read this book.
The legislation at current does not allow bankruptcy, collection or consumer credit protections of any kind. If you default once your loan will nearly double immediately.
You have to read this book.
November 25, 2012
Great book! So sad that the government is working against students/consumers and just helping Sallie Mae's executives get rich. This book is a must read for any student contemplating taking government or private loans. The behavior of loan agencies such as Sallie Mae, the financial aid offices at universities, and the Dept. of Education is truly despicable and unethical.
May 10, 2009
Somewhat informative, but lacking on the "How we can fight back" parts. This book did open my eyes to a few unknown practices carried out by loan companies, and how they are fully enabled by U.S. federal laws, that places all the control and ability to abuse debtors rights in their hands.
March 29, 2012
Great look at the student loan machine.
August 2, 2013
Unbalanced reporting, but not inaccurate.
June 11, 2014
A quick indictment of the appalling state of student loans. The answer is publicly funded higher education.
January 9, 2016
An uncomfortable must read.
There's a lot of information condensed in this very readable little tome. I am hoping for a new, updated edition with current numbers and trends.
There's a lot of information condensed in this very readable little tome. I am hoping for a new, updated edition with current numbers and trends.
Want to Read
October 23, 2008studentloanjustice.org
(note to self)
(note to self)
October 6, 2014
This book is horrifying and eye-opening. Everyone needs to read this book!
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