Student loan defaults are becoming a major issue for America. Total student loan debt is $1 trillion dollars, 6.5% of the national deficit and 8.8% of students default in their first two years of repayment, a 1.8% increase from the previous year (2011). Default statistics beyond the first two years are unknown. Prior to the 1980s, regulation of student loans and accreditation was much tougher on schools than it is today. Deregulation in the industry weighted it heavily in favor of lenders and schools using the excuse that they needed protection from deadbeat students why would use bankruptcy to avoid repaying their loans. This resulted in the erosion of critical protections for students. Where in the past accreditation was reserved for legitimate academic subjects only, in the 1980s any subject could be accredited (i.e. astrology and alternative medicine quackery). In the past program eligibility was dependent on having a total default rate for all students below a certain percentage, private programs lobbied to hide their defaults by only counting the first two years of repayment. Despite having no way to discharge their debts, students who fall prey to school improprieties often have no recourse other than to seek out legal representation to sue the program. This is a very difficult and time consuming process and if students cannot secure legal representation in time they can be held accountable for the debts. Forcing student to repay illegitimate debts after they have been defrauded is wrong and prevents important feedback that provides an early warning system for questionable programs. The Direct Loans program initiated by president Bill Clinton attempted to correct this problem by allowing borrower’s the right to file Borrowers Defenses against any program which violated state law in a way that damaged a student’s education. However the US Department of Education has taken an adversarial stance against the defenses by ruling that only original Direct loans are eligible for the defenses. Because Direct Loan availability was determined by the Department, students attending programs where the loans were not offered were arbitrarily deprived of their right to defend their loans. Further, students consolidating their loans were not informed that they were forfeiting their right to defend the loans on official documents. These intentional actions unfairly deprive students of important borrower’s rights. This petition seeks to address this issue by restoring a true loan default rate and allowing all student loan borrowers the right to file Borrower’s Defenses irrespective of the relationship of their current loans to the original debt and to mandate that all new loan consolidation agreements directly state if borrower’s forfeit their right to borrowers defenses by transferring their loans.

About Me 

In 1996 I graduated magna cum laude from Life University, the largest private chiropractic program in the USA at that time.  After noting several patient injuries from the diagnosis and treatment taught at the school, I began investigating and learned that the school's founder, Sid E. Williams DC, taught fraudulent diagnosis as a way to boost earnings by getting around a requirement to refer non-musculoskeletal pain patients to medical doctors.  In order to prevent serious patient injuries I voluntarily quit practice, causing me financial hardship.  The school also exaggerated the financial success of its graduates by lobbying to have to student loan default cohort rate changed to only the first two years of repayment so that most of its defaults would be hidden.  Between 25% and 50% of graduates quit practice within 5-10 years of graduation and before the rate change the school was the number one defaulter of student loans in the country.  Once I gathered enough evidence documenting the diagnosis fraud I began filing complaints to the accreditor and US Department of Education which after years of investigation resulted in me being told that DOE does not compensate graduates for past problems.  Lawyers then informed me that DOE's long investigation process had exceeded the time limit to sue the program and I was left with $215,000 in student loans to a program that had defrauded me, had discreetly killed several students and faculty, and continued to operate.   State chiropractic licensing boards refused to take action against Life graduates independently so these individuals were scapegoated for any patient injuries (see Chirotalk.proboards.com's Welcome FAQ 1 and Life University schools section threads for details).  I filed a Borrower's Defense against my consolidated Direct Loans and learned that DOE did not honor the defenses for private and consolidated loans, only original loans which were not offered at the school.  I was left with a huge debt for doing the right thing.  I have spoken with graduates from programs in many fields (private computer schools, acupuncture schools, cooking schools, law schools) and their complaints are the same-regulation is too lax and they don't have enough rights to protect themselves because it is difficult to get lawyers to represent them in time to beat state statutes of limitations.  In the past states had tuition refund programs and oversight but these safeguards no longer work because the funds are inadequte and schools can lobby state legislators for exemption leaving lawsuits the only viable option.  The only way to correct this is to inform as many people as possible to demand corrections and shut these schools down and get the huge student loan debt, now $1 trillion dollars under control before the entire system implodes.  As it stands now students can have no confidence in the accredidation process which merely serves as a cash cow for private banks like Sallie Mae. The US government has sold out its children to profit these lenders who continue to make enormous amounts of money from exhorbitant default fees.  Join me in demanding reforms to this corrupt system so that questionble programs can be cleaned up and the victims can at least be released from their debts.  You can make a difference by signing this petition and telling as many people as possible.  Thank you for your support. 

Photo Credit

The man in the photo above is Nick Keith, a disabled graduate of culinary school who claims that the school gave a false impression of success for its graduates by exaggerating employment rates.  Nick now lives in a van and struggles under a crushing $142,000 student loan debt.  Click here for details.