Congress
turned on the money spigot last month and spewed out cash to millions of
people and businesses that were hurt by the coronavirus pandemic.
The airlines are
getting bailout money, the casinos are
eligible for aid, and corporations are accepting loans they don't need. AutoWeb,
for example, got a $1.4 million federal loan and gave its CEO a $1.7 million
bonus one week later.
Meanwhile, millions of Americans are burdened by federal student
loans they can't repay. More than a year before the coronavirus outbreak,
Education Secretary Betsy
DeVos publicly admitted that only one out of four student borrowers
were paying down both principal and interest on their federal loans. One
out of five borrowers, DeVos disclosed, were delinquent on their debts or in
default.
Now, with the unemployment rate hovering near 15 percent, and millions of hourly workers out of a job, college-loan debtors are struggling more than ever.
And what has the Department of Education done to assist harried
student debtors? Not much.
DOE is giving college-loan borrowers a six-month deferment from making their monthly payments, and it won't assess interest on outstanding loans during that time. DOE
has also temporarily stopped seizing wages, Social Security benefits, and
tax refunds of people who defaulted on their federal student loans.
In other words, the Trump administration is shoveling big bucks to
corporations, while it throws a few crumbs to college-loan borrowers.
Here's an illustration that shows just how meaningless the Trump
administration's response to the student-loan crisis has been.
Laurina Bukovics borrowed $20,000 more than 30 years ago to obtain a
bachelor's degree from Wisconsin University. Through the years, she made regular
monthly loan payments except during times when DOE gave her deferments or
forbearances due to her financial difficulties.
Over 25 years, Bukovics repaid $29,000 on her student
loans—140 percent of what she borrowed. Nevertheless, by the time she showed up
in bankruptcy court, her student-loan debt had grown to $80,000—four times what
she had received from the federal loan program.
How much relief does a six-month moratorium on loan payments give
to people like Ms. Bukovics, who have
been burdened by student debt for their entire adult lives and have seen their
loan burdens double, triple, or even quadruple?
Hardly any relief at all.
The federal government has poured out trillions to alleviate the
financial crisis that was triggered by the COVID-19 virus. But much of this money has gone to
corporations and businesses.
When corporations ask the feds for money to help them get through
the coronavirus pandemic, the government responds by saying, "Where do we send the check?"
On the other hand, when beaten-down student-loan debtors try to discharge their student debt in bankruptcy, the federal government almost always opposes relief. Ms. Bukovics, for example, was unemployed while she was in bankruptcy and living temporarily with a friend. She had no car, and she was so impoverished that she qualified for food stamps and Medicaid.
And what was the response by the Department of Education's debt collector to Ms. Bukovics's plight? ECMC opposed bankruptcy relief because it believed Bukokvics was spending too much money on food.
And what was the response by the Department of Education's debt collector to Ms. Bukovics's plight? ECMC opposed bankruptcy relief because it believed Bukokvics was spending too much money on food.
Betsy DeVos's summer home |