Private Student Loan Help Needed. Pass the Fairness for Struggling Students Act.

Rachel just sent in a question for me to answer about the hopelessness of private student loan debt.

The tragedy of private student loan bondage is one that will sacrifice a generation of hardworking citizens under the hopelessness of private student loan debt if solutions are not made available.

Unlike government backed student loans, private student loans offer no real meaningful tools to use to overcome unbearable and suffocating private student loan debt.

Students that are unable to complete their degree still have to face the same issues as those that do. They are staring tremendous debt that can’t be discharged in bankruptcy, provides no income based repayment solutions, and leaves the borrower facing administrative wage garnishments, massive collection fees, and penalties that just pile up to turn an original debt into a mountain of insurmountable student loans debt.

This debt without solutions leads people to consider suicide, and some do kill themselves in the face of hopelessness. Other see leaving the country for good as their only way to live.

It wasn’t until Congress passed new laws that prohibited the discharge of private student loan debt in 2005 that the deadened for private student loan borrowers began to manifest itself. Before then, private student loan debt was dischargeable in bankruptcy. Some might say the situation now is grossly unfair to other creditors. If one loan can be discharged and a private student loan can’t how does that create a fair environment.

Bankruptcy is a process to give people a legal fresh start in the face of overwhelming financial problems. And while government backed student loan debt is not dischargeable in bankruptcy, it also real provides options and solutions for dealing with student loan debt through income based repayment programs. Private student loan lenders do not provide any real options.

If private student loans are allowed to continue this unfair and grossly harsh position an entire generation of private student loan borrowers will be lost in financial hell.

See also  How to Locate Who You Owe on Your Private Student Loans

I invite you to please sign this petition to make a meaningful change and urge Congress to pass the Fairness for Struggling Students Act of 2011.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Damon Day - Pro Debt Coach

Steve Rhode

6 thoughts on “Private Student Loan Help Needed. Pass the Fairness for Struggling Students Act.”

  1. I have student loan debt that has grown to $230k since I graduated in 2007.  I have never paid more than interest only (which is $1100/month)  My payments are going up to $1750/month this month and I cannot pay… I only make $2200 per month after taxes.  The interest only payment was taking 50% of my income… I can pay a maximum of $1400 per month and the loan companies will not work with me.

    All I have left is a $500k life insurance policy… Worth more dead than alive.  I don’t know if there is any way out at this point.

  2. There are way to fix the problem with private student loans.  Part of the problem is a lack of Lawyers with integrity, guts, and vision to figure it out.  The major problem is the biased judges shamelessly ruling in favor of student loan creditors.  Just read some of the court opinions and you will see.  The Brunner Test is complete ridiculousness, “certainty of hopelessness,” are you serious?  This judicial law making has got to stop.  There are a couple of holes in the statues.  There are not enough cases where people actually attacked the interpretation of statues of 11 USC § 523.  Everybody who takes on these cases only takes the path of least resistance which is arguing “undue hardship.”  There are plenty of other arguments to make, but it takes research, time and effort.  Many attorneys are not willing to put this kind of effort into a case, because of greed.  They want money, and someone at their wits end who doesn’t have the kind of money to fund a case with this level of work and research.  My suggestion to all the recent law graduates is to flood the courts with adversarial proceedings and civil suits against these lenders.  This in turn will open the eyes of Congress on the issue.  Although difficult, this is a new opportunity to make some money in a niche that has potential.  One Trillion in outstanding student loans and so many people who have them.  Use the dockets find related case, start the battle.  This student loan mess is a racket.  The cost of school has inflated so much its not even worth it to going to school and it all comes back to Lobbyist with interest in taking advantage of the American public.  When you get rid of the bankruptcy protections, tuitions inflate, and creditors have unlimited power.  Having peoples parents co-sign loans and ruining families when their children default.  Having clauses when in death the loan still exist so if their child dies they are still responsible for the loan.  People killing themselves, becoming homeless, and resorting to unscrupulous actives due to these “slave loans.”  Its complete evil and the people responsible for orchestrating this mess will one day face judgment for these actions.

    • Yes it is allowed for back child support, spousal support, taxes,  even loans for homes, cars, businesses, etc…. all can be written off!  It is a Legal Racket!!! And they are coming to break our knee caps!!! I borrowed $8K and I now own $24K and one point they drafted my cecking account for a set amount for over a year then sent in a granishment on my pay check for 3 times the amount which was a whole week’s pay and more than my house note! I am a single mother and I have a house and car note. NO CABLE, CELL, or INTERNET and I live pay check to pay check sometimes with only a dollar until next check. Now I will have to move in with someone else and lose my home or take in a renter in my home. I have a masters and I am earning $22K a year!! That is right! Keep our jobs here and make more and maybe we could pay this crap off!!! So YES the law makers are part of this problem!!! Make Imports pay much higher taxes or give us our DAMN jobs back!!!


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