When he announced his candidacy in 2007, Barack Obama Barack Hussein ObamaObama calls on Senate not to fill Ginsburg's vacancy until after election Senate Republicans face tough decision on replacing Ginsburg Cruz: Trump should nominate a Supreme Court justice next week MORE looked like he could be the one to finally stand up to the student lending system. He was one of only two members on the Senate Health, Education, Labor and Pensions (HELP) committee not to have taken money from the Sallie Mae PAC. In this position he was privy to HELP Committee and other reports detailing a broad swath of illegal and deceptive activities by the lenders, the universities, and even the Department of Education.



His rhetoric about making college "affordable" sounded great. The deletion of most every standard consumer protection (like bankruptcy and statutes of limitations) from student loans had caused a hyper-inflationary market, and a systemically predatory lending system that was lives and livelihoods of millions of people. The nation's student loan debt had skyrocketed to $450 billion, and the Department of Education had actually begun turning a profit on defaults.





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So when Obama was elected, largely due to overwhelming support from young people, it was assumed that he would make things right. But he did nothing to bring back any standard consumer protections. His administration did nothing to curb the predatory collection powers of the student lending system. College prices increased faster than previously, and today the average undergraduate is now leaving school with $35,000 in debt, up from about $17,000 when Obama announced.By the time Obama leaves office next year, the nation will have added $1 Trillion to its student debt tab.What the Obama administration did do was great for the federal government, not the students. Obama federalized the system to where the government now profits immensely from both interest on loans it makes directly to students, and defaults. To say that the federal government now sits atop the most predatory lending system in our nation's history is not an understatement.The various repayment programs that promise forgiveness are cruel jokes, administered in bad faith by a Department of Education that has zero desire or intentions of forgiving any loans. I estimate that fewer than 15% of those signing up for these programs will actually make it through. The rest will be expelled owing far more than when they entered.Obama's Consumer Financial Protection Bureau (CFPB) was designed so as to give it essentially no jurisdiction over federal student loans. The CFPB busies itself only with private student loans, which at least have statutes of limitations, and are covered under Fair Debt Collection Practices, and Truth in Lending laws (federal loans are not). So the CFPB is no help. Meanwhile, Obama's lawyers fight furiously behind the scenes to keep bankruptcy protections gone from student loans in order to protect their cash cow.This all happened on Obama's watch. He cannot avoid accountability for what is shaping up to be among the largest financial catastrophes this country has ever seen. His pleasant disposition does nothing to mitigate the cruel infliction of such massive harms upon the very citizens who put him into office.President Obama still has 6 months left. There are 3 good bills in Congress right now that would at least return uniform bankruptcy rights to student loans- something that that the founding fathers called for-ahead of the power to declare war, form a military, and coin currency when they gave power to Congress in the Constitution. Obama could get any one of these bills moving (I would recommend HR 449, since it has bipartisan support).If Republicans in Congress were serious about reining in the powers of the federal government, they would not only join in these efforts- but lead on this critically important task.

Alan Collinge is Founder of StudentLoanJustice.Org, and Author of The Student Loan Scam (Beacon Press)