Target: Senate Majority Leader Harry Reid
Goal: Help borrows struggling with weighty private student loan debts
A tragic recent case demonstrated the need for private student loan reform. Parents who suffered the loss of their 27-year-old daughter are now saddled with her massive student loan debt and the care of their three grandchildren without any foreseeable way to pay back the debt. Urge Congress to pass legislation requiring that private lenders forgive student loan debt in the event of bankruptcy or extreme extenuating circumstances.
Many parents co-sign on private student loans to enable their children to attend college, the costs of which have reportedly increased 1,120% since 1978. Although federal student loans are a better financial deal, many students cannot afford to attend college without the additional help of private student loans. These loans often come from a number of different lenders, and have interest rates as high as 12%. Many lenders only provide relief to accrued massive debts on a case-by-case basis, if they give any at all.
A 2005 law called the Bankruptcy Abuse Prevention and Consumer Protect Act included private student loans on a short list of debts that cannot be forgiven, even in bankruptcy. In essence, this legislation puts the profits and earnings of banks over the financial well being of people, despite the fact that banks have been bailed out by the federal government on several occasions over the past few years. With tuition at both private and public colleges at astronomical highs and the job market only very slowly yielding prospects to new graduates, many of America’s young people, and their parents, are finding it impossible to make ends meet, and don’t know if they ever will.
Sign this petition to urge Congress to repeal bankruptcy legislation that favors the profits of banks over the pain and futures of young Americans and their families.
Dear Senator Reid,
Recent stories about grieving parents who are forced to pay the high student loan debts of their deceased children highlight the need for educational loan reform at the federal level. I urge you to consider the futures of struggling young Americans and those they have too often left behind. Repeal the 2005 Bankruptcy Bill that allows private lenders to profit off of others’ financial hardships by requiring that private student loans be forgiven in the event of bankruptcy.
Since 2005, private lenders have reaped the rewards of skyrocketing tuition rates, low job prospects, and unchecked interest rates from young people just starting their lives. This has put many in an unmanageable situation. They have no hopes of paying their loans back or are sidled with someone else’s debt as the result of a tragic circumstance. Our financial institutions are there to help us, to see us through tough situations, and to be rewarded when we emerge on the other side. But with outrageously high interest rates and little wiggle room in the terms of repayment, private student loans can be almost impossible for many to pay off.
Stop lending a hand to banks and instead help out struggling recent graduates and their families as they try to make ends meet in a hostile financial environment. Allow private student loan borrowers to file for bankruptcy and modify their loans’ repayment plans in extreme and difficult circumstances.
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Photo Credit: Kit via Wikipedia Commons