Elizabeth Warren grill banker illustrating the immorality of student loan policies
Senator Elizabeth Warren continued her fight for the middle class as she grilled Mr. Richard Hunt, President and CEO of Consumer Bankers Association about the immoral student loan practices by bankers.She started by expressing concern that most loans, whether they are credit card loans, car loans, or other loans can be discharged in bankruptcy to enable a fresh start.
Corporations take advantage of bankruptcies all the times as they stiff companies large and small for their irresponsible behavior. Ironically a bankruptcy hit on an individual is more permanent than on a corporation. As a made up legal entity, corporations can just die and reincarnate themselves with the same principals under a different charter.
Elizabeth Warren illustrated the draconian nature of bank student loan policies by relating a CNN Money story about a family who was struggling for relief after their daughter died. They co-signed their daughter’s $100,000 in loans. She died and the banks came after the grieving parents who were left taking care of three grandchildren and a huge student loan to repay. The banks did not forgive the loans. Because student loans cannot be discharged in bankruptcy, very few extenuating circumstances can force the forgiveness of a loan.
“So far what that bank has said is no,” Elizabeth Warren said. “The banks have not forgiven those loans. They have not provided adequate relief to this family and I don’t know how many other families are in those circumstances. … There really is no substitute for bankruptcy protection. But banks went out and lobby to make sure that they were going to be exempt from the bankruptcy laws. And now they won’t even provide the modest relief that is provided on federal loans for people who end up in terrible financial circumstances. I think this is wrong.”
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