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Student Loans: Malpractices. Frivolous Lending, Helpless Lendees
Journalism & Communication
Pages 10 (2510 words)
Student Loans: Malpractices, Frivolous Lending, Helpless Lendees 1.Introduction As of 2012, a research (H.C. Whisett, 1) discovered that there are 37,000,000 Americans with outstanding student loans. Over 7,000,000 USA students borrowed from the biggest student loan provider, Sallie Mae.
Growth of student loans has been very noticeable yearly. Chart A shows the uptrend since the year 2000. Chart A In 2008, the number of borrowers in default of their monthly amortizations had accumulated $ 60 billion worth of default, according to Jen Haley (money.cnn.com), “about 2% - 4% of delinquent student loan debt is owed by students abroad”. That means they left the country to avoid debt payment they felt they could not afford. But Alan Collinge had written a book in 2009 describing student loans as the most oppressive debts. From actual experience of regularly paying his own student loans, he discovered that his account had been charged penalties for late payments each month even while he paid on schedule. He asked for the removal of those unwanted penalties by Sallie Mae. But that lender refused to do so. In his research, he discovered what appeared to be a scam in the Student Loan Industry. There was “lack of consumer protections…beneficial for student loan companies” (A. Collinge, 5) resulting in Sallie Mae’s $920 million profits in 2005 or a 228% increase in profits compared to the year 2000. The bulk of profits came from penalties charged to students. A review of this book by A. Collinge was made by Frederick S. Goethel, author of Legalized Loan Sharking Courtesy of Congress. ...
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