Press Release

8/5/2021

Press Release

Durbin, Cornyn Introduce Critical Bankruptcy Legislation for Student Loans

August 5th, 2021

We strongly applaud Senator's Dick Durbin (IL) and John Cornyn (TX) for introducing The Fresh Start Through Bankruptcy Act of 2021. Returning bankruptcy protections to federal student loans is the first step that must be taken to address this national crisis. Holding educational institutions nominally accountable for outcomes is also needed.

The Founders called for uniform bankruptcy laws ahead of the power to raise an army, declare war, and create a judiciary in Article I, Section 8 of the US Constitution. Today, student loans stand as the only type of loan in the country to be uniquely stripped of this constitutional enshrined protection.

The consequences of this have been disastrous. 45.4 million citizens are burdened under $1.6 Trillion in federal student loan debt. The default rate for the class of 2004 is 40%, but these people borrowed less than a third of what is borrowed today. Even before the covid-19 pandemic , 80% of these borrowers were either unable to pay on their loans, or were paying but their loan balances were increasing. The default rate for sub-prime home mortgages, by contrast, was only 20%.

Student debt in over a third of U.S. States now exceeds the entire state budget. Older borrowers (over 35) now outnumber younger borrowers (under 35), and they owe far more, despite having borrowed far less. This is- to be blunt- a catastrophically failed lending system, and the tax-paying voters being financially harmed by it span the political spectrum.

We believe that these loans should be completely cancelled by executive order such that no money would be needed from the Treasury and nothing would be added to the national debt. The lending system should be ended and replaced with a more rational funding model. Returning bankruptcy rights is the first step to take- and very least that Congress can do.

We request all Senators to support this historic legislation. Specifically, we ask Senators in the states of Georgia, Florida, Texas, Indiana, Missouri, Maryland, Tennessee, Ohio, North Carolina, South Carolina, Illinois, Michigan, New Hampshire, South Dakota, and Virginia to make extra efforts to quickly pass this bill.

We ask our 1.1 million members, and citizens everywhere to demand that their senators pass this long overdue, and much needed legislation.

Contact: Alan Collinge
(202) 594-1120
[email protected]

5 Comments

Laura Louthan

8/7/2021 10:58:20 am

Thank you Alan for all your tremendous efforts and to all your colleagues helping behind the scenes. I am one of the millions of student loan sufferers that is crying out for help. I applaud you for all your efforts and am so grateful for your endless work bringing this issue to the forefront as you have. Please continue to bring it out of the dark. It is loan sharking pure and simple. I have a credit score of over 800 and am struggling with my school loan it is the only loan I will NEVER be able to pay off. I have always been responsible and now am under this albatross that weighs me down. I see no end in sight for me and a career I thought would bring me happiness and advance me has saddled me with unending debt. I am 53 years old trying to figure out how I will ever be able to retire. I gave up any thought of having children bc I knew I would not be able to afford them, now I fear I will have to give up the thought of a retirement where I could travel and see places I've always dreamed of bc of these loan payments that will never end. Please keep up the crusade until someone in power realizes this isn't just a few people this will be a national emergency someday. Why is it the elite, rich, power brokers or big banks//coporations get bailed out for idiotic corrupt practices and the little guy gets fleeced and nobody cares to help. Please continue your fight. You are a God send if none of the politicians have a back bone enough to do the right thing at least you do. God bless you. Carry on the battle. Millions are behind you and the fight. Sincerely, Laura

Gordon Wayne Watts link

9/7/2021 01:54:22 am

Alan, I echo the sentiments of the prior poster, Laura Louthan, in thanking you for your tireless advocacy and efforts, taking time off from higher-paying work. Indeed, you are probably like myself and many others who are taking time off from work (losing money in the process), and even donating our remaining time, talent, and meager financial resources, to advance and advocate to the Executive and Legislative branches (as well as the 4th Estate aka the news media) for justice here. I only wish we could also advocate in the Judicial Branch of government as well. Class action RICO suit, anyone?.. In any event, we at CONTRACT WITH AMERICA: PART II(TM) are giving you positive news coverage at https://ContractWithAmerica2.com/#bankruptcy regarding our collective fight for Student Loan Justice for all.

P.S.: Many (if not most) of us Constitutional Conservatives support you, here: Bankruptcy is NOT a free handout, but rather a requirement under the U.S. CONSTITUTION'S Uniformity clause, Art.I, Sec.8, clause 4, hello? Sadly, most lawmakers in both parties are not strict adherents to moral, fiscal, or constitutional Conservative values as are we, but that is all changing. Slowly, but surely, we will win. In time. Hopefully sooner than later.

Members of Congress and U.S. Senators make around $200 GRAND to screw, rip off, and cheat us; we actually LOSE money to demand fairness. Let us speak loudly and never give up: We are on the right side of history. Demand lawmakers act, now! Speak up or face disaster. It is our choice.

Sincerely,

Gordon Wayne Watts,
Editor-in-Chief, The Register (https://GordonWatts.com and https://GordonWayneWatts.com)

National Director, CONTRACT WITH AMERICA: PART II(tm)
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Chris

11/10/2021 04:05:06 pm

Interested in seeing what uniform bankruptcy laws would do for the infinite student loan lending program the government and banks keep giving out.

Troy

12/27/2021 12:27:19 pm

Great, informative article. Student loans are dragging this country down a rathole of useless debt.

Stephanie Arnoldin-Adams

1/6/2022 08:40:21 am

We MUST do everything in our power to not only help ourselves get out of this hell but also change this screwed up system so no one else falls victim to this scam. If WE don’t you can be sure this will become a generational problem. Our children and grandchildren learn by watching our struggles and how we problem solve to overcome them!

In our Nation’s Capital, Greed is more plentiful than street smarts. We have to fight this fight and call attention to the greed and hold our politicians, who were elected by our votes, accountable to serve the needs of us all!

Please demand that bankruptcy protection for student loans is abolished! Demand that the law be changed! To give us back control over our lives and our long term financial future, these bankruptcy options must be reinstated! Once these loans hit the bankruptcy courts I know the judges will demand changes as well and I am truly hoping that will finally get the attention of the fat cats in WA DC.

I also suggest we require schools to disclose all viable financial aid options and ensure every free option has been exhausted before loans are considered. IF a if a loan is required to complete your education, we need to be assured that all the terms are spelled out completely before any penny is disbursed so the borrower makes a truly informed decision.

Let me be completely transparent: we cannot just fix this for ourselves or just help People pay off these ridiculous loans; it has to be bigger, way bigger. This is a wrong that must be righted. This is truly a national catastrophe.

When I was a student, in college, I spoke at a conference about the Enron and World Com fiasco and I said that if we do not make fast and sweeping changes to the laws related to creating a fiscally responsible government that discourages greed and rewards accountability at all levels we will continue to spiral into an abyss of crippling debt that will destroy Us and put our very freedoms at risk. That was in 2003! Look at us in 2022!

As I was trying to make sense of that mess I learned a lot about how these systems work and why we seem to keep dealing with these issues over and over again. The only thing that seems to change is the type of debt and who owes it.

After that conference, My professor took me aside and hugged Me and said he was so proud of me and that he hopes I am wrong but he knows deep in his soul I am not. I literally saw the writing on the wall. The pattern was clear to me. I could not get anyone to believe me and gave up because trying to fight these blood suckers was just too much for me! I retreated to my corner but the fight inside me continued to smolder. Now it has been relit. This is a fight I will not back down from. I do not care if I have to sit in front of Congress! I did not ask to become an advocate they made me into one against my will. We all have a responsibility to push back with everything we have because our financial future is at risk. No one should be punished for trying to better themselves and add elevate the collective genius around them. No one should be thrown into financial prison for 20 years to pay off a loan that was supposed to help them get out of poverty not spend their entire life in poverty to pay the loans back.

We have to stop allowing people to make record profits off our backs from exorbitant fees and interest rates. We must band together and show that we are not going to be silenced about this. We need to educate the misinformed public about why this problem i much more serious than they realize and that we are not deadbeats who wan some free ride. We are hard working people who simply want a chance to get back control of our lives without worrying if they will be able to pay rent or have their check garnished.

It would also be awesome if we encouraged corporations to take on some of the financial burden of educated tomorrows workforce so they begin to understand the value we bring instead of requiring degrees to be hired for entry level work. Pay people for the value they bring and stop stuffing people into roles that are are demeaning and unchallenging. Corporation hire the people who are struggling to survive this crippling debt while CEOs and shareholders benefit.

Student loan debt has an impact on everyone in some way. It is not something that will ever just disappear unless we remove the bankruptcy restriction and bombard those courts with bankruptcy filings. The courts cannot deny our right to due process. Filing for bankruptcy relief is your constitutional right, specifically guaranteed by the U.S. Constitution. Since the drafting of the Constitution, Congress has enacted federal bankruptcy laws to help protect you. The ability to use this right in reference to student loans was taken away from us long before any of knew the bad moon that was rising! It is time to take it back and use it to regain control so they understand that fleecing the peop

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