By Miriam Felton-Dansky
By Lilly Lampe
By R. C. Baker
By Tom Sellar
By Alexis Soloski
By Molly Grogan
By R. C. Baker
PREDICTION A hard sell. No word on how these measures would be financed.
5. A Break for the Unluckiest
Besides the bills already introduced, more student aid reform ideas are likely to get consideration soon. One would involve amnesty for people who've seen defaulted loans double, triple, and quadruple with interest and penalties, growing to amounts too great to repay in this lifetime. Winning this broad relief is a top priority for activist Alan Collinge of Student Loan Justice, who spent this spring crisscrossing the country in an RV, meeting with two-thirds of the 60 legislators on the House and Senate education committees. "They have been very responsive and receptive," Collinge says.
A second area for reform: Getting rid of the bankruptcy exemption. People who run up huge credit card bills or lose their shirts on a business have at least a fighting chance of having those debts cleared through bankruptcy. That's not the case for student loans of any type. The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act decreed private student loans can't be forgiven in bankruptcy. The same has been true of FFELP and Direct Loans since 1998. Student advocates would like to get rid of both rules and have the courts treat student loans like other consumer debt.
PREDICTION Small steps now, giant ones later