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Subprime Loans Are Just the Start of the Massive Student Debt Scam

By , Capital Wave Strategist, Money Morning • @WallStreet_II -

If you thought there was only one component to the gargantuan student debt scam, think again. If you're about to become a college student, you're in luck.

Financial services giants Discover Financial Services Inc. (NYSE: DFS), Capital One Financial Corp. (NYSE: COF), and Bank of America Corp. (NYSE: BAC), to name a few players in the student credit game, are bending over backward for you.

They totally get you - so to speak...

Student Loan Debt and the Big Higher Education Scam

By , Capital Wave Strategist, Money Morning • @WallStreet_II -

Has higher education become another great American scam?

I'm not talking about the rich getting scammed. They don't wind up saddled with student loan debt after they graduate.

I'm talking about the kids who want a higher education because they believe it's their ticket to employment and well-compensated careers. They pay for it themselves, or their parents cosign on loans or take out personal loans on behalf of their kids' college dreams.

For them, higher education is increasingly looking like a scam. Here's why...

Student Loan Interest Rates Double While Congress Takes a Vacation

By , Associate Editor, Money Morning • @TaraKateClarke -

Today (Monday) federally subsidized Stafford student loan interest rates doubled from 3.4% to 6.8% after Congress failed to reach that would've maintained lower rates by the July 1st deadline.

Monday also marks the beginning of the Independence Day congressional recess, sparking outrage among student advocates as Congress goes on recess without resolving this important issue.

Congress could retroactively "fix" the damage done by the soaring rate increase, but so far no deal is in sight.

The House has already passed a student loan proposal, but the Senate remains divided.

Particularly, Senate Democrats are divided amongst themselves over two different plans, and cannot yet present a strong front on the issue.

Sens. Kay Hagan (D-NC) and Jack Reed (D-RI) have a plan that would extend the 3.4% rate for another year, while also retroactively reducing the rate.

But a bipartisan group of Senators has a different, more long-term solution. They want to permanently tie student loan interest rates to the 10-year Treasury note borrowing rate.

To continue reading, please click here...

Student Loan Debtors Bamboozled Again

By , Associate Editor, Money Morning • @TaraKateClarke -

I know a lot of you out there don't have sympathy for student loan debtors who complain about their debt.

You see it as a matter of personal responsibility - they chose to sign a contract and so should suck it up and uphold their end of the deal.

Money Morning's Capital Wave Strategist Shah Gilani says it best, though:

"You're not wrong. But there are other forces exerting outside influence on the inner intentions of a lot of 'students' susceptible to being sold a bill of goods. Sometimes we're stupid for being conned, and sometimes the con is just so cleverly concealed."

Think of all the branding, marketing, and pressure swirling around the heads of these young folks.

And many don't have parents or educators taking the time to sit down and weigh the options with them.

If I haven't conjured any sympathy out of you yet, a report recently issued by the National Consumer Law Center identifies a new abuse of student loan debtors:

They are being deceived into paying up to $1,600 in initial fees, and monthly fees as high as $50, to private "debt relief firms" for help that they could otherwise get for free.

To continue reading, please click here...

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