Dear distressed student loan debtors: You should vote for Bernie Sanders because Hillary won't do anything for you unless Goldman Sachs approves

Dear distressed student-loan debtor:

You are not alone. There are about 20 million of you all across America--people in default, in delinquency, in forbearance and deferment plans, or making income-based payments that stretch out over 20 or 25 years.  You need help, and you deserve help.

You will not find help from Congress. The for-profit college industry owns Congress.

You will not find help from the U.S. Department of Education, which makes soothing noises, but has done very little to help overburdened student-loan debtors.

And you will not find help from most of the presidential candidates. Hillary Clinton's so-called student-loan reform plan is basically a scheme to funnel more money to the higher education industry with only token efforts to keep tuition costs down.

But Bernie Sanders' proposal for a free college education at a public institution offers real change. If his plan is enacted and people could get a college education for free, the for-profit industry would shut down and the private nonprofits would be forced to cut their tuition.

I know Bernie's run for the presidency is a long shot. And even if he is elected, his very sensible plan to offer free postsecondary education would never be approved by Congress, which is beholden to the for-profits and the elite private schools that benefit from the status quo.

But if--by some miracle--Bernie is elected President--he could do a lot for distressed student-loan borrowers even without help from Congress.  Here are some things Bernie could do, and I think would do:

1) Direct the Department of Education to adopt regulations prohibiting the for-profit colleges from forcing students to sign "covenants not to sue" as a condition of enrollment.
2) Order the Department of Justice to cooperate with state attorney generals who are suing the for-profit colleges under state consumer-protection laws.
3) Issue an executive order stopping the Internal Revenue Service from garnishing elderly student-loan defaulters' Social Security checks.
4) Direct government attorneys and the DOE's collection agencies to stop opposing bankruptcy relief for deserving student-loan debtors.

Certainly, I don't think Bernie would allow the Department of Education to oppose bankruptcy relief for a quadriplegic debtor whose expenses exceeded his salary, as the Department did recently in Myhre v. U.S. Department of Education.

I don't think President Sanders would permit the government to oppose a bankruptcy discharge for a 40-year old man who is living on $1200 a month and is so broke he has to ride a bicycle to work, as DOE did in the Abney case.

And surely, Bernie's DOE would order debtor collectors like Educational Credit Management Corporation to stop harassing elderly women living on less than $800 a month as ECMC did in the Roth case.

Nor would a Bernie presidency force millions of overwhelmed debtors into long-term repayment plans, as the Obama administration--cheered on by the New York Times and such elite college presidents as Vassar's Catherine Hill--is doing now.

So if you are swamped by your student-loan debt, you better register to vote, and you better vote for Bernie in your state's primary. And you need to find out whether your state has an open primary or whether you have to be a registered Democrat to vote for Bernie.  If you have to be a Democrat to vote in the Democratic primary, change your registeration. That's what I did.

In short, do what you have to do to vote for Bernie Sanders, because Bernie is your only hope of student-debt relief in the political arena.

And remember this: Hillary Clinton has her hands in Goldman Sachs' pocket, and Goldman Sachs has an ownership interest in a company that operates several for-profit institutions--Argosy University, Brown Mackie College and South University.

References

Stephanie Saul. For-Profit College Operator EDMC Will Forgive Student Loans. New York Times, November 16, 2015. http://www.nytimes.com/2015/11/17/us/for-profit-college-operator-edmc-will-forgive-student-loans.html?_r=0

Hillary Clinton's plan to help student-loan debtors is baloney. Bernie's plan shows promise.

Bernie Sanders is breathing down Hillary Clinton's neck in the New Hampshire primary election, and suddenly she's become the college student's best friend.  But her plan to help college students pay for college falls far short.

Essentially, she has cobbled together a host of  small-ball ideas and plans to spend $350 billion over the next ten years, using most of the money to encourage state governments to offer more affordable college options. And she also wants to lower student-loan interest rates and expand long-term repayment programs.  Don't worry, Harvard and University of Phoenix. You'll still get your cut.

All the leading presidential candidates know that young people are worried about college costs and student loans, and they've all proposed plans that will supposedly help relieve the financial burden on  college students.

But no plan is worth anything unless it addresses the suffering that students and former students are experiencing right now.  A good reform plan must contain these elements:

• Kick the for-profit colleges out of the federal student loan program.
• Amend the Bankruptcy Code to allow distressed student-loan debtors who acted in good faith to discharge their loans in bankruptcy.
• Abolish unconscionable fees and penalties on student-loan debt.
• Stop garnishing Social Security checks of elderly people who defaulted on their student loans.
• Stop pushing borrowers into 20- and 25-year repayment plans.
• Stop lending money to allow people to enroll in overpriced postsecondary programs that will never pay off---law programs at third-rate schools, overpriced MBA programs, overpriced liberal arts degrees, overpriced online programs, etc.

Has Hillary talked about any of those things? No she has not. Her proposal takes care of her key constituents--the pompous, lazy, and overpriced college industry. It doesn't do anything for the  millions of  people who can't pay back their loans.

Bernie Sanders, on the other hand, has proposed a simple plan that will address at least some of the issues I identified. He basically proposes to offer everyone a free four-year college education at a public college. Vassar College president Catherine Hill said in a New York Times essay that  she opposes this idea, which she says will cost about $30 billion a year.

But that's cheaper than Hillary's plan.

And here's the beauty of Bernie's scheme. If everyone could go to college free, no one would enroll at a for-profit college; and these sleazy institutions would have to close their doors.  That's a big plus.

Moreover, private colleges like Vassar would probably have to lower their tuition. Few people would borrow a quarter of a million dollars to go to a fancy private school if they could enroll in a good state university and pay nothing. No wonder Vassar's president opposes the idea.

And if college is free, people won't be borrowing money to go to college. They won't run the risk of default, of paying huge default penalties, or of being driven into 25-year repayment plans.

So what's not to like?  Especially when you consider that the government is spending $165 billion a year right now on the federal student loan program, which is nothing but a train wreck.  Bernie's idea may seem hare-brained, but it is actually the only proposal put forward by any of the presidential candidates that makes sense.

Bernie's plan won't solve the student-loan crisis completely. About 40 percent of student-loan money is going for graduate education. We've got to get tuition costs down at the law schools, the business schools, and all the professional schools. We've got to quit turning out too many lawyers, veterinarians, and MBAs.  And we've got to forgive the student-loan debt that has buried millions of people.

But Bernie's plan is a start. It will at least deal with the student-loan crisis at the undergraduate level.

References

Mitchell D. Weiss. What's Missing From Clinton Student Loan Plan. USA Today, August 15, 2015. http://www.usatoday.com/story/money/personalfinance/2015/08/15/credit-dotcom-hillary-clinton-student-loan-plan/31456547/