The “freebies” are officially being taken away from college students.
In 2015, the Obama administration effectively said that if students couldn’t pay their student loan — and it defaulted — they are entitled to a second chance, with no fees for failing to pay on time.
The student loan debt collectors didn’t like that rule being forced down their throat, and rightfully so. It puts their money in a jam and sets a bad precedence for college students, in which they can seemingly disregard their student loan debt entirely.
However, under the Trump administration, that’s all gone away.
Washington Post reports:
“The Education Department is ordering guarantee agencies that collect on defaulted debt to disregard a memo former President Barack Obama’s administration issued on the old bank-based federal lending program, known as the Federal Family Education Loan (FFEL) Program. That memo forbid the agencies from charging fees for up to 16 percent of the principal and accrued interest owed on the loans, if the borrower entered the government’s loan rehabilitation program within 60 days of default.
“The Obama administration issued the memo after a circuit court of appeals asked for guidance in a case against United Student Aid Funds (USA Funds) challenging the assessment of collection costs. Bryana Bible took the company to court after being charged $4,547 in collection costs on a loan she defaulted on in 2012. Though she had signed a ‘rehabilitation agreement’ with USA Funds to set a reduced payment schedule to resolve her debt, the company assessed the fees.
“Education officials sided with Bible, prompting USA Funds to sue the department in 2015. Earlier this year, the company agreed to pay $23 million to settle a class-action lawsuit born out of the Bible case, though it did not admit any wrongdoing.”
The monetarily reckless Bernie Sanders voters aren’t going to appreciate this new action, which fights for fiscal responsibility and honesty.
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