Critics want changes to student loan system and bankruptcy

Critics want changes to student loan system and bankruptcy

One of the growing issues coming out of the Occupy Wall Street movement and other groups is the increasing burden student loan debt has placed on young professionals and even individuals with families. But some of the more pressing criticism seems to be toward a broken system that rewards lenders for defaulted loans more than the ones that are paid off.

San Diego bankruptcy lawyers note that some observers of the student loan industry consider the lenders’ actions to be predatory in nature. Because student loans are exempt from traditional consumer protections like bankruptcy, refinancing and statutes of limitations, lenders benefit from having a power over those in debt to them to a degree unmatched by lenders in other markets.
For example, the guarantors of the student loans, which are intended to police the lenders, make an average of 60 percent of their total revenues from the excess charges applied to defaulted loans. Outside organizations like the Department of Education also earn profits off of defaults of the loans issued through the Federal Family Education Loan Program.

Because of this environment, people who have student loan debt that they are unable to pay can see their suffering compound as fees and late charges pile up on student loan debt they can’t get out from underneath. The result is a deepening hole with little to no options but to pay off the debt — and all its accumulated charges — regardless of how long the process takes.

Some critics of the current student loan system would like protections put in place that reform current practices to make debt more manageable while providing greater protections to those who take on the debt. Criminal defense lawyers in Shreveport understand these issues and are here to help you solve them.