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Paul Aker says he was arrested at his home last week for a $1500 federal student loan he received in 1987.
He says seven deputy US Marshals showed up at his home with guns and took him to federal court where he had to sign a payment plan for the 29-year-old school loan.
Most financial aid professionals recommend federal student loans because these loans are cheaper, more available and have better repayment terms. But, federal student loans also share many characteristics in common with predatory loans. So, let’s consider the question: Is the federal government a predatory lender?
A predatory lender makes loans with unfair or abusive terms and conditions, where the lender coerces, induces or deceives the borrower into accepting the loan. A predatory lender may also take advantage of a borrower’s lack of understanding and lack of sophistication with regard to complicated financial transactions.
The U.S. Department of Education makes loans without regard to the borrower’s future ability to repay the debt. Federal Perkins and Stafford loans, for example, do not consider the student’s credit history. Aggregate loan limits are not based on the student’s likely income after graduation.
America earns $3 billion a year charging strapped college parents above-market interest. "It's like 'The Sopranos,' except it's the government."
originally posted by: Rabb420
this is exactly why furthering my education terifies me
originally posted by: Krazysh0t
a reply to: SkepticOverlord
I thought debtor's prisons were illegal in the US? I guess we are returning to the olden days after all...
PS: You CAN discharge student loan debt in bankruptcy. It's just really hard and tedious.
How to Discharge Student Loans via Bankruptcy