CRITICISM OF US STUDENT LOAN PROGRAMS

In 1997, under intense lobbying from student loan companies, The Higher Education Act (HEA) was amended, and defaulted student loans became among the most lucrative and easiest to collect type of debt. These amendments allow for huge penalties and fees to be attached to defaulted student loan debt, take away bankruptcy protection for student borrowers, disallow refinancing of the debt, and also provide for draconian collection and punitive measures to be taken against student borrowers, including wage garnishment, tax garnishment, withholding of professional certifications, termination from employment, Social Security garnishment, and others. According to Harvard professor Elizabeth Warren in a Wall Street Journal[1] piece by John Hechinger, "Student-loan debt collectors have power that would make a mobster envious."