Days after a report on federal student loans revealed a double-digit rise in defaults, President Trump’s administration revoked federal guidance Thursday that barred student debt collectors from charging high fees on past-due loans.
The Education Department is ordering guarantee agencies that collect on defaulted debt to disregard a memo former President Barack Obama’s administration issued on the old bank-based federal lending program, known as the Federal Family Education Loan (FFEL) Program. That memo forbid the agencies from charging fees for up to 16 percent of the principal and accrued interest owed on the loans, if the borrower entered the government’s loan rehabilitation program within 60 days of default.
The Obama administration issued the memo after a circuit court of appeals asked for guidance in a case against United Student Aid Funds (USA Funds) challenging the assessment of collection costs. Bryana Bible took the company to court after being charged $4,547 in collection costs on a loan she defaulted on in 2012. Though she had signed a “rehabilitation agreement” with USA Funds to set a reduced payment schedule to resolve her debt, the company assessed the fees.
The two-page “Dear colleague” letter from the Trump administration walks back the department’s previous stance on the grounds that there should have been public input on the issue.
“The department will not require compliance with the interpretations set forth” in the previous memo “without providing prior notice and an opportunity for public comment on the issues,” the letter said.
There are many things I could say about this, but I'll just note that student loan debt is a huge part of consumer debt, yet these debtors enjoy none of the protections of bankruptcy that other debtors enjoy. While bankruptcy law was conceived to benefit creditors by providing an orderly collection process among competing creditors, bankruptcy law also provides de facto protection of debtors who have no hope of financial recovery. The wealthiest Americans especially enjoy these protections vis-à-vis the corporate shield and corporate bankruptcy laws, allowing them to walk away from billions in debt every year. Trump himself has walked away from billions in debt*. I wonder how many Trump supporters have a heartless attitude toward student debtors, while dismissing Trump's many bankruptcies as a non-issue?
*A close friend--an attorney turned investment banker--worked for Trump in a major bankruptcy case.
Business Insider interviewed Bill Browder, author of Red Notice. Browder was a heavyweight investor in Russia until he ran into trouble with Putin's government. After he left Russia, his Russian lawyer was jailed and murdered. Excerpt:
Jeff Schechtman: Have we all gone a little crazy with our obsession with Russia of late or are there really things happening that we should genuinely be concerned about?
Bill Browder: Well, there’s been stuff that we should’ve been genuinely concerned about for the last 15 years while Vladimir Putin has been running Russia and it’s been a slow catchup from perception to reality. Putin is a different type of leader than any other head of state in that Putin has been stealing money hand over fist to the tune of 200 billion dollars* for himself in his presidency. Russia is effectively a mafia organization in which he’s the capo and the only difference between this mafia organization and the Colombian mafia or the Italian mafia is that Vladimir Putin controls thousands of nuclear warheads.
Jeff Schechtman: Is this all about the money for Putin? Is there a grander foreign policy vision? Is there a grander plan for greater Russia or is it really just about the money?
Bill Browder: Well, it replays with itself. Putin started out just for the money. So, when he first came into power, he wanted to get as much money as he could as quickly as he could. To do so, he had to put a lot of people in jail, he had a lot of people arrested, he had a lot of people killed. Over the course of time, he created a lot of enemies and one thing he also did was, while he was stealing money for himself and the people around him, the top people in Russia were stealing money as well, the average Russian was basically getting nothing. If you were a regular middle class Russian, they don’t have medicine in the hospitals, the teachers aren’t being paid at the schools, there’s huge holes in the roads because they’re not filling them. The country was basically crumbling while Putin and his cronies and his oligarchs were sailing around on superyachts or flying around on Boeing business jets and so on and so forth. After a while, people started to get upset and Putin said to himself, what am I going to do to make sure these people don’t overthrow me? And so that’s when he started this whole idea of creating foreign enemies, invading foreign countries and creating this false scenario that Russia is being surrounded and potentially invaded so they need to fight all these enemies. This grand plan of fighting in Ukraine and fighting in Syria is all a huge distraction strategy to keep people from turning on Putin and saying why don’t we have medicine and you’re rich?
This reminds me of an investigation of Putin aired by Frontline 2 years ago.
*Estimates of Putin's wealth range from $40bn to $200bn.
The Moreland Commision was established in 2013 by Governor Andrew Cuomo to investigate public corruption in NY. Less than one year later, Cuomo disbanded the commission. The office of the governor had itself been a target of the commission.
Perhaps the patent grants were routine, but how do we know for sure? It isn't just a matter of whether Trump uses his role as president to intentionally extract financial gain from foreign governments. It's also a matter of intent on the part of the government of Mexico. Are they able to exert influence on American policy by granting financial benefit to an American president?