Edwards calls for fundamental reform of student loan programs

[JohnLocke]

John Edwards Statement On Recent Student Lender Scandals
John Edwards for President
April 5, 2007
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Chapel Hill, North Carolina – In response to recent scandals over colleges' ties to student lenders, Senator John Edwards today called for fundamental reform of the student loan programs:

"The point of guaranteed student loans is to guarantee that students can afford college, not guarantee that banks get immense profits. But it's not working the way it should. Bankers are racking up huge profits, students are facing increasingly large debts, and colleges are stuck in a conflict of interest.

"We need to fix the student loan program to take banks - which are just an expensive middleman - out of the process, and focus on making sure young people aren't crushed by debt by the time they leave college. We should make all loans directly from the Education Department, like a quarter of college loans are already. This one step would free up more than $6 billion a year that could be reinvested in making college more affordable. It would also let students know that college officials have their best interests at heart."

The largest student lender, Sallie Mae, saw its stock go up 1,900 percent between 1995 and 2005, while tuition and fees climbed 63 percent. It paid its CEO $225 million in the five years before he retired in 2005; meanwhile, it charged students rates as high as 28 percent.

Earlier this week, New York State Attorney General Andrew Cuomo announced that Citibank and five universities agreed to pay $5 million to students to resolve an investigation into their student loan practices. Yesterday, the New America Foundation discovered that three college financial aid directors had personal investments in a lender they recommended to their students. The financial aid director at Columbia University has been placed on leave.

Edwards has long supported the Direct Student Loan program, which makes loans from the federal government and serves about a quarter of students today. In 2003, Edwards asked the U.S. Department of Education to enforce federal laws against lenders paying colleges to increase their loan volume. At the time, the department postponed action in deference to an industry attempt at self-regulation."

http://johnedwards.com/news/press-releases/200700405-student-lender/

[NormanYorkstein]

1. good for Edwards

I remember Clinton making the point during his first term, why should banks make a profit from student loans, since they don't take any risk? It's insured by the federal government? Why involve the banks at all?

Go Edwards, plus he's the only one who said anything against these fake voting machines.

[1932]

3. not only is it insured profit, it's guaranteed by laws that make those loans bankruptcy-proof

You can't get rid of those loans in bankruptcy.

What could be less risky profit for private investors?

No wonder there was enough money to pass around for bribes for university and federal loan officials.

[1932]

2. His stance on this ties so tightly with a nexus of issues that he is so powerfully correct about

that it's really is going to be the reason I vote for him in the primary and for president.

He couldn't be more clear on these issues which are all about wealth shifting from the bottom and middle to the top and about how that is so dangerous for our society.

[AtomicKitten]

4. Sallie Mae is really screwing my son.

Refused him school loans at the regular rate, so he took them out with another institution which Sallie Mae bought and now they are charging him a higher rate.

Charlatans.

[Greyhound]

5. Good for him, this scam has gone on far too long. I'm glad somebody is talking finally about

it. After he cleans this up, he can take on the corporate diploma mills.
:kick: & R

[The Backlash Cometh]

6. Love that man. Democratic platform all the way.

[quiet.american]

7. Excellent -- and check out studentloanjustice.org, too.

The founder of studentloanjustice.org has long been lobbying for our Dem candidates to pay attention to this issue, and has undertaken a nationwide bus tour visiting the state offices of elected officials to meet with them on taking exactly the steps Edwards is proposing.

Kudos to Edwards for taking this up; people are committing suicide because they are so distraught over the never-ending pound-of-flesh interest rates, harassment and hounding Sallie Mae and their collection agency minions have been allowed to get away with.

[nashville_brook]

8. would love to see the era of public-private-partnership END

or at least be regulated.

no where in The Constitution does it say the corporations have a right to SKIN the people. 1900% profit! that's just fucking wrong.

i LOVE the idea of a lawyer for the people being president. we need someone ON OUR SIDE. i'm so tired of being robbed by "the free market."