This Just In: Trump Reinstates Gouging on Student Loans. DeVos and GOP are Silent
Several media outlets, including The Hill, announced yesterday that President Trump issued a letter that rolled back Obama-era guidance that forbade student loan debt collectors from charging high fees to defaulted borrowers. This rollback was based on a technical argument that “…the initial guidance handed down by the Obama administration in 2015 should have been subjected to public comment before it was issued.” 7,000,000 people with loans through the Federal Family Education Loan Program that are held by guaranty agencies are affected by this decision. The last sentence of the article is chilling:
The amount owed in student loan debt has surpassed that of credit card debt — about $1.2 trillion.
So it is now conceivable that 7,000,000 voters are subject to fees that are as much as 16 percent of the loan’s principal and accrued interest should they fall behind in their loan payments for any reason. This means that when these borrowers are forced to choose between paying off credit cards or paying off student loans they might opt to defer the credit cards… or might skip a meal every day or so… or let their electricity be turned off. One thing is certain, they will be less able to buy goods and services, which will put a drag on the economy. And another certainty is that fewer students will plunge into debt making it increasingly difficult for our workforce to improve its skills.
And where are the voices of protest from the Department of Education? From the GOP? Or, for that matter, from the Democratic Party?
One hopes the Trump administration might seek public comment on this change… but it is unlikely to do so for they know that many of those who would protest it would be wearing those bright red hats that say “Make America Great Again”.