Tuesday February 26, 2013, 9:17 am

February 6
, 2013
The Honorable Steve Cohen
Ranking Member, Subcommittee on
Regulatory Reform
, Commercial and A
ntitrust
Law
Committee on the Judiciary
U.S. House of Representatives
Washington, DC 20515
Dear Ranking Member Cohen:
On behalf of the undersigned organizations, we are writing to express our strong support for the
Private Student Loan Bankruptcy Fairness Act of 2013
.
Private
education
loans are one of the riskiest, most expensive ways to pay for college. Like
credit car
ds, they typically have variable interest rates that are higher for those who can least
afford them. However, private
education
loans are treated much more harshly in bankruptcy than
credit cards and other comparable types of debt.
Private
education
loan
borrowers also lack access to the important deferment, income
-
based
repayment, or loan forgiveness options that
accompany
federal student loans. This leaves most
private loan borrowers at the mercy of the lender if they face financial distress due to
unemp
loyment, disability, illness
,
or military deployment, or when a school shuts down before
they can finish their certificate or degree. The recent sudden closure
s
of for
-
profit colleges in
Connecticut, Maryland, Massachusetts, and Rhode Island underscore the
urgent need for the
Private Student Loan Bankruptcy Fairness Act of 2013
.
The congressionally mandate
d
July 2012
report
from the Consumer Financial Protection Bureau
and
the Department of Education documented the need for bankruptcy relief for struggling
private loan borrowers.
Your
legislation would reverse the unfair and unjustified special
bankruptcy protections for private lenders included in the 2005 bankruptcy law.
Representing
students, consumers, higher education institutions, faculty and staff, as well as civil rights and
public policy organizations, o
ur broad and growing coalition thanks you for your continued
leadership on this important issue.
Sincerely,
Ame
rican Association of Collegiate Registrars and Admissions Officers
American Association of Community Colleges
American Association of State Colleges and Universities
American Association of University Women
American Council on Education
American Federation
of Teachers
Americans for Financial Reform
Association of Public and Land
-
grant Universities
Campus Progress Action
The Center for Responsible Lending
Consumer Action
Consumer Federation of America
Consumers Union
Dēmos: A Network for Ideas & Action
The E
ducation Trust
Empire Justice Center
The Greenlining Institute
The Institute for College Access & Success and its Project on Student Debt
The Leadership Conference on Civil and Human Rights
NAACP
National Association for College Admission Counseling
Nation
al Association for Equal Opportunity in Higher Education
National Association of Consumer Advocates
National Association of Consumer Bankruptcy Attorneys
National Association of Student Financial Aid Administrators
National Consumer Law Center (on behalf o
f its low income clients)
National Consumers League
National Council of La Raza
National Education Association
Neighborhood Economic Development Advocacy Project
Public Citizen
Rock the Vote
UNCF
U.S. PIRG
United States Student Association
Woodstock
Institute
Young Invincibles

Tuesday February 26, 2013, 10:00 am
Related petition at:
http://www.credoaction.com/campaign/student_private_loans/?p=student_private_loans&r=10197119&id=55317-1945174-KxDryOx

Tell your representative: Protect students from the predatory private loan industry

Americans now owe more money in student debt than credit card debt, with recent college graduates on the hook for more than $1 trillion in unpaid loans.1

Many of these loans - about $150 billion worth - are private loans, which have outrageously-high interest rates and are usually extended under harsh terms without basic consumer protections, resulting in a crushing financial burden on college students and graduates. Worse yet, unlike credit cards and other similar types of debt, a law pushed through Congress by former President George W. Bush prevents students from discharging private student loan debt through bankruptcy proceedings, which gives special protections to the private loan industry at the expense of students and recent graduates.2

Fortunately, two members of Congress - Rep. Steve Cohen (D-TN) and Rep. Danny Davis (D-IL) - have introduced legislation entitled the Private Student Loan Bankruptcy Fairness Act of 2013 that would treat privately issued student loans the same as other types of private debt in bankruptcy, providing much needed relief and consumer protections to college students and recent graduates.3

Your representative hasn't yet co-sponsored the bill, so we need constituents like you to help build support for this common sense legislation and give college students and recent graduates who are struggling in the weak economy the consumer protections they deserve.

Tell your representative: Support the Private Student Loan Bankruptcy Fairness Act.

Since 1999, the average student loan debt has increased by 511 percent.4 That's a five-fold increase in just 13 years! Student loans have now become "the 21st century version of indentured servitude."5 With unemployment still unacceptably high and millions of recent college graduates out of work or underemployed, the last thing we should be doing is making matters worse by allowing students to fall prey to the predatory lending practices of private loan lenders.

As noted in a letter from over thirty-five organizations representing students, consumers, and higher education institutions in support of the Private Student Loan Bankruptcy Fairness Act:

Private education loan borrowers also lack access to the important deferment, income-based repayment, or loan forgiveness options that accompany federal student loans. This leaves most private loan borrowers at the mercy of the lender if they face financial distress due to unemployment, disability, illness, or military deployment, or when a school shuts down before they can finish their certificate or degree. The recent sudden closures of for-profit colleges in Connecticut, Maryland, Massachusetts, and Rhode Island underscore the urgent need for the Private Student Loan Bankruptcy Fairness Act of 2013.6

It is worth noting that the favorable treatment afforded to private student loan lenders was a result of a legislation enacted by President George W. Bush in 2005, which included a special interest provision that severely limits the ability of students to discharge debt through bankruptcy.7

This is unfair and unacceptable. Tell your representative to co-sponsor the Private Student Loan Bankruptcy Fairness Act and address this injustice by restoring the dischargeability of debt from private loans made by for-profit lenders.

Tell your representative: Support the Private Student Loan Bankruptcy Fairness Act.

Let's speak up on behalf of our students, graduates and their families today.

Thank you for speaking out.

1. "Annual Report of the CFPC Student Loan Ombudsman," Consumer Financial Protection Bureau, p. 2, October 16, 2012
2. "Rep. Miller Supports Bill to Restore Fairness in Private Student Lending," Committee on Education & the Workforce, Democrats, February 7, 2013.
3. "Cohen/Davis Introduce Legislation to Restore Fairness in Student Lending," Office of Representative Steve Cohen, February 6, 2013.
4. David Indiviglio, "Chart of the Day: Student Loans have grown 511% since 1999," The Atlantic.com, August 18, 2011.
5. Mike Konczal, "Student Loans are the New Indentured Servitude," The Atlantic.com, October 12, 2009.
6. "Coalition Letter to Representative Cohen in Support of the Private Student Loan Bankruptcy Fairness Act of 2013," The Project on Student Debt, February 6, 2013.
7. "Rep. Miller Supports Bill to Restore Fairness in Private Student Lending."

Tuesday February 26, 2013, 10:05 am
Noted

Tuesday February 26, 2013, 11:02 am
Thank you JL. Unfortunately this is what appeared while trying to sign Credo's Action...
Your search for "http://www.credoaction.com/campaign/student_private_loans/?p=student_private_loans&r=10197119&id=55317-1945174-KxDryOx " returned no results
AM I DOING SOMETHING WRONG??? Can you make the link hot please?

Tuesday February 26, 2013, 12:47 pm
http://www.credoaction.com/campaign/student_private_loans/?p=student_private_loans&r=10197119&id=55317-1945174-KxDryOx paste in on the browser URL line should work

Tuesday February 26, 2013, 2:47 pm
As promised I was finally successful. Just a fluke was all! Thank you JL for the private message, as well as posting here. Good night all...too much puter fun for one day:)

Tuesday February 26, 2013, 3:38 pm
Glad it worked for you SuSanne!

Tuesday February 26, 2013, 3:44 pm
signed earlier, noted (another one ^^) thx

Tuesday February 26, 2013, 5:07 pm
You cannot currently send a star to Angelika because you have done so within the last week.

Tuesday February 26, 2013, 6:49 pm
You cannot currently send a star to Terry because you have done so within the last week