Student loans are quickly becoming the single largest source of consumer debt, along side mortgages and auto loans. But unlike these other forms of debt, consumers who go through financial hardship have no process to seek remedy.
In Equity Law or ‘Contract Law’ a party is always capable of seeking remedy, which is the right to renegotiate an agreement or contract as a result of unforeseen events, occurrences or happenings. In order for a contract to be binding, each party must act honorably and address harm or inequities when they are discovered. In other words, when a student is unable to pay back a loan because it was either overvalued or they were unable to find work in the industry they trained for, this is a hardship that the lender must provide renegotiation for. If not, the lender is in dishonor and the debt can be rendered non-binding if the borrower has honored the contract to the best of their ability.
Enter the for-profit education system and student loan debt dilemma.
50 years ago, the cost of procuring a college education was proportionally less than it is today. A young high school graduate could pay for their college education by working a part time job, providing a source of money for daily activities while also paying tuition. My own mother in the early 80’s paid for her education by working a part time job while also being a full time parent to her newborn son; that’s me.
But today the cost of a college education has gone up ten fold, even a hundred fold in some cases. Working class people are completely dependent on student loans, government grants and the lending industry in general to procure a higher education. As a result, the cost of college has proportionally gone up by leaps and bounds. For high school graduates today, there is a long road of further education, followed by a lifetime of repayment. For the first time in history, preparing one’s self for the real world so that we can earn a living comes with a non-negotiable debt assigned to it.
Unless one comes from a wealthy family, indentured servitude to the government for some period of time after graduating from college is all but certain.
‘Snake Oil’ Education
At least you have a higher education that gave you the training to work in a lucrative field – or did it?
Today most college graduates spend years receiving an education only to find employment doing something that had nothing to do with their institutional training. Since colleges are now for profit institutions, they have no interest in ensuring we receive an education that is used later in life, but since we ostensibly received said education under an assumption it would help us earn a better living, there is a contractual framework in place that implicitly provides us, the consumer, with a venue to address grievance. But in order for a valid and lawful grievance to be heard and remedy provided, a venue to settle the dispute is required. This is what courts are presumably for, and this is where government sanctioned fraud goes to a whole new level.
The injustice of our age should now be becoming as palpable as curdled milk in coffee. Universities, Colleges, Institutes and Technical Schools are chiefly in the business of training and educating people for the work place. Just like any other for profit business, when a company fails to deliver on it’s consumer contracts, the party that purchased their services has a bonafide and contractual right to seek redress.
College students were essentially sold a load of ‘snake oil’ and the courts are obligated to address this or label themselves as incompetent. Banks provided a service for the educational systems to sell their wears, but since many college graduates never work jobs they went to school for, they were essentially defrauded. This means that banks are agents beholden to the practices of the principle, the college, and as such, fraud by the principle is fraud by the agent. Both lender and educational institution are lawfully bound to make reparations to aggrieved parties; the borrower.
The Injustice of the Justice System
This valid and lawful cause of action should be easily resolved in a true, fair and honest justice system. But instead, the system has enacted policies, which are unlawful, making the University and the Lender immune to claims of redress on the part of borrowers. Even if the so-called education provided the borrower was an elaborate fraud (which it is in most cases) the borrower is still required to pay back the lender. It’s like buying a car thinking it was brand new, only to discover a week later that it was an older model.
This is a glaring indication that we have no justice system acting for the people. This in and of itself is enough to give the people a just and valid cause to end the current reign of for-profit corporate government. In the absence of true justice, the people themselves must embody that justice and have a duty and right to end all forms of tyranny that may have come into existence under their watch.
While this is a sobering reality to contemplate, there does seem to be a ray of hope. The following article details a potentially landmark case that could finally end nearly five decades of lawlessness.
If the borrower successfully has their position upheld, it would give legal precedence to countless scores of student loan debtors who are unable to pay back their worthless education debts.
As much as I would like this to happen, I am not holding my breath. The truth is the justice system is rife with a staggering number of unlawful, deceptive and coercive practices. This is not the work of a few renegade agents but it is actually interwoven to the fabric of the legal system itself. The Justice system is designed to give the appearance of fairness and law, but from behind the scenes it is fraud on top of fraud, literally a for-profit industry designed to suppress the free and enslave the sleeping masses.
Putting all of this into context, I think until enough people are aware of the fraud so as to feel it’s sting, we will toil away as a whole people. For now the work of spreading truth and knowledge as far and as wide as possible is our task, but one day it will bare the fruit of a brighter tomorrow if we can only maintain persistence to the noble task of seeking, understanding and spreading truth.
This Court Case Could Unshackle Americans From Student Debt
A win could be dangerous for the government
by Natalie Kitroeff, published on Bloomberg Business, on October 8, 2015
When Robert Murphy said he wanted to try to get his student loan debt erased, the person overseeing his bankruptcy case told him he had a better shot of getting hit by a bus. Now he’s closer than ever to victory.
The unemployed 65-year-old, acting as his own attorney, spent three years appealing his way to the Boston federal court that is now considering his case. A win for Murphy would relieve him of hundreds of thousands of dollars in student debt—and could fundamentally change the way U.S. bankruptcy courts handle borrowers who can’t repay college loans.
At the center of Murphy’s battle are federal rules that make it nearly impossible for borrowers to get rid of student loans. Most consumer debt goes away in bankruptcy, which was designed to give Americans and companies a fresh start. But in the 1970s, Congress added new rules to the law that excluded most student debt from that relief. Anyone aiming to discharge student debt in bankruptcy must prove that repaying it would constitute an “undue hardship.” Lawmakers never defined an undue hardship, though, so it has been left to the courts to decide just how destitute someone needs to be in order to qualify for relief.
“The opportunity here is significant,” said John Rao, a lawyer with the National Consumer Law Center who submitted an outside brief (PDF) supporting Murphy in the case. A judgment in favor of debtors, he said, “could have a really significant impact on other courts, which have not looked at this issue in a long time.”
Murphy’s appeal seems to have pushed the First Circuit Court of Appeals to reconsider its definition of hardship. Judges have been tinkering with the criteria used to determine whether a borrower deserves relief in recent years, but their efforts have not broadly affected the law. Murphy’s case could mark the first time a federal court weighs in on changing the standards in a decade.
A more lenient standard would make it easier for desperate borrowers to earn a reprieve on student debt, said Rafael Pardo, a law professor at Emory University who filed a brief in Murphy’s case.
“Creditors have been able to stack the deck in their favor as they have litigated what undue hardship means,” said Pardo. Regardless of the outcome, Pardo said, the case may well be appealed to the Supreme Court, which has never looked at the issue.
While the case is crucial for students, they aren’t the only ones with a stake in its outcome. Through a loan servicer called ECMC, the Department of Education has spent several years battling student borrowers who want bankruptcy relief. ECMC, which has an exclusive agreement with the government, has aggressively advocated that judges use the harsh standards to decide when it’s appropriate to forgive student debt. Lawyers for ECMC declined to comment.
The federal student loan bill stands at $1.2 trillion, making it the largest source of consumer debt outside mortgages, and that figure is expected to double in the next 10 years. Some 7.5 million student debtors are severely behind in paying the government back.
“It could be a really dangerous thing for them if the First Circuit announces a rule for debtors to discharge their loans in bankruptcy,” said Pardo, referring to the Department of Education. “That would call into question how much of this $1.2 trillion [in student debt] is collectable.”
From 2001 through 2007, Murphy took out several Parent PLUS student loans — federal debt parents can use to finance their kids’ education — to send his three children to college. After accruing interest, the bill ballooned to $246,500. In 2002, Murphy lost his job as president of a manufacturing company when it closed shop to move overseas. He hasn’t found work in the last 13 years, he said, because he is viewed as too old for executive posts and overqualified for lower-level jobs. He lives on the salary his wife brings in as a teacher’s aide, less than $15,000 in annual income. Murphy said he dried out his retirement savings, and his home was recently foreclosed.
The lawyers arguing the case on behalf of ECMC said in court documents that Murphy’s appeal “smacks of gamesmanship.”
Siding with Murphy “would suggest that any debtor nearing retirement can borrow as much money in federal student loans as possible, only to turn around a few years later, upon retirement, and have that obligation discharged due to the debtor’s ‘unemployment,’” wrote the lawyers.
The lawyers also said that Murphy had not looked hard enough for a job and criticized him for only seeking positions similar to the one he had held. Murphy said he thought his best chance of employment was in management or accounting, but said he had also applied for a job as a chauffeur and didn’t get called.
Even if he were able to find a job paying $50,000 per year until he turned 77, Murphy calculated, the balance of his loans would still grow to $500,000.
“The idea of bankruptcy is to give people respite and relief,” said Pardo, the law professor. “The question is a really simple one: can you pay back your debts in the future? And if the answer is no, then why aren’t you giving relief to a person?”
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