Don’t cry for your lender over the student loan fiasco – Minnesota reformer

President Trump’s eventual appointee to the Supreme Court, Justice Amy Coney Barrett, recently, without comment, dismissed a petition from a conservative Wisconsin group called the Brown County Taxpayers Association to waive student loans for the Biden administration. asked the court to block the plan.

Shortly thereafter, a federal judge in Missouri dismissed a lawsuit seeking similar relief filed by six Republican states, citing the state as having failed to prove the injury that could result. I was told there was none.

But then the Federal Court of Appeals issued a temporary stay Tohe debt relief.

Based on a series of recent lawsuits, the party that has defamed trial lawyers for the past 30 years appears to be aiming for full trial lawyer employment.

The Cookers, who think “Let’s Go Brandon” is the height of political satire, are lazy British majors with purple hair and body piercings who live in their mother’s basement and work part-time at a coffee shop. seems upset that he will be burdened with student loans. Paid with “my taxes”.

It’s a gross distortion of the student debt situation.

Federal student loans are used by college students regardless of their field of study. It is also used by students of vocational schools. You know, plumbers, electricians, linemen, carpenters, and even computer programmers.

Your hair stylist, dental technician, or medical assistant may have used a student loan to pay for their training. Many rookie truck drivers took advantage of federal student loans to attend vocational schools.

The biggest selling point is the ease of getting federal student loans. Interest rates are generally lower than private loans, with fixed interest rates and more flexible repayment terms.

So who else is benefiting from student loans?

Lenders – banks and various scammers. A so-called tuition counselor. And the education and training institutions themselves are doing very well with federal student loans. It’s hard to imagine a public university being able to pay a physical education coach her seven-figure sum without federal cash from student loans.

Undoubtedly, loan agreement waivers cause serious problems moral hazard Questions about moneylenders and their customers (victims). moral hazard It’s a term economists use to describe situations where people risk too much because they believe they don’t have to bear all the consequences in the end. Like they have insurance or the government bails them out.

In short, lenders were given a good deal in the student loan business and knew they would eventually be paid in full, so they started making bad debts.

But these are the types of questions that should have been posed years agonot when Biden decided to help with lEastern third of Minnesota Zero them out in student loans.

The origin of all moral hazard situations was the 2008 financial crisis and subsequent bank bailouts. Mortgage lenders and their Wall Street partners acted like drunken pirates in casinos with little result — for them anyway.

Where were they a few years ago when the federal government handed out billions of dollars of taxpayers in Paycheck Protection Program (PPP) loans to businesses, nonprofits and churches? Most of the loans have been forgiven, many in the six to seven figure range. In other words, people. Companies are people, right? — borrowed taxpayer money knowing they would never pay it back. Now it’s a moral hazard for someone to gossip.

Financial consultants and banks (many involved in selling student loans) enjoyed the windfall benefits of PPPs, charging hefty fees for loan preparation and processing.

Where were the scammers when they gave a big bank a huge gift by exempting credit card companies from the state’s usury laws? Minnesota’s usurers are up to 8%. The average interest rate on credit cards today is over 16%, which is affordable to a relatively small number of cardholders. Most credit cards charge a fee of 20% or more. They are not subject to state law.

Around the time of Watergate, the phrase “follow the money” became popular. And that seems to be the case here. If you’re worried about getting your $10,000 student loan forgiven than an industry that can’t be beaten in the student loan business, follow your money.

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