WORLD SOCIALIST WEB SITE: The fraud of Obama’s “Student Aid Bill of Rights”

Career College Central Summary:

  • Last week President Obama announced a series of executive actions that he dubbed a “Student Aid Bill of Rights.”
  • The initiative is partially an exercise in damage control. It follows a series of lawsuits and scandals involving the Department of Education (DOE). The government agency has become the target of growing anger for protection of predatory student loan collection agencies, its bailout of the for-profit career college chain Corinthian and its overall profit-taking from student loans.
  • Obama’s initiative, in the form of a memorandum directed to the DOE, calls for:

    • a new web site where all federal loans will be visible by July 2016
    • requiring loan servicers to notify debtors when their loans are transferred or payments are late
    • instructing loan servicers to apply prepayments to loans with the highest interest rate
    • a “state-of-the-art” complaint system.
  • In addition, the administration will launch a two-year pilot program in which the federal government will directly collect the defaulted debt of a small number of loan borrowers.
  • It is farcical to call such rudimentary accounting and communications procedures a “Bill of Rights.”
  • The language merely emphasizes that there is not even a pretense of a right to higher education in this country. The 43 million Americans who owe some $1.3 trillion in student loan debt were offered zero forgiveness. In fact, Obama does not propose even one measure to actually lessen the ever-escalating cost of college or encroach on the lucrative business of student loan debt. All the “rights” remain in the hands of the government, the banks and hedge funds.
  • To add insult to injury, the centerpiece of the memorandum is the promise of a web site system—in a distant 15 months—from an administration who has not recovered from the political debacle of the Affordable Care Act web site.

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