That’s the message that watchdog Mike Calhoun is shouting around the country. In a recent NPR article Chris Arnold reports how Calhoun is trying to get lawmakers to listen just like he did back when he recognized the recklessness of the subprime mortgage market. Back then he projected over 2 million subprime mortgage foreclosures but was ridiculed by the industry. The cost of ignoring his warning was waves of defaults and foreclosures that propelled the country into the worst recession in generations. Now Calhoun is focused on the Student Loan Crisis.
Mike Calhoun is president of the Center for Responsible Lending and has been a long-time defender of people from reckless lending practices. As student loan debt rises, he sees similarities to how risky mortgage grew before the Subprime Mortgage bubble burst. "You've had an absolutely explosive growth in the amount of student debt. In 15 years, it's gone from about $300 billion to now $1.6 trillion." He adds that, like before, there’s a mismatch between the debt and the borrower’s income and ability to repay. And, like before, there is a failing to connect borrowers with repayment options and forgiveness programs that could help many avoid default.
Calhoun recognizes that some borrowers will need some of their debt forgiven because they simply don’t have the capacity to repay based upon their earning capacity. Millions of others could benefit from simply fixing government programs that are already in place but badly mismanaged. Police officers and teachers, for instance, should receive forgiveness of large amounts of student loan debt through the Public Service Loan Forgiveness Program. While many others should be enrolled in Balance Based or Income Driven Repayment Plans. Addressing the issues that are suppressing these options is essential to solving the Student Loan Crisis many Americans now face.
If you are in financial crisis with student loan debt and need advice, a bankruptcy attorney may be able to help. Call attorney Chris Bush at (619) 678-1134. He is an experienced bankruptcy attorney and consumer debt advocate. He’ll help you find the best solution to your debt burden and get back you on a track to financial freedom.