It’s
time to stop blaming borrowers and instead hold predatory lenders accountable.
By LeeAnn Hall
Years after Toni Potter’s husband passed away from pancreatic
cancer, debt collectors in her state of Washington were still relentlessly
hounding her about his hospital bills.
Andrea Anderson, a young student in Oregon, has been saddled
with $150,000 in college loans as she pursues her dream of becoming a social
worker. She knows she’ll be paying the loans back for decades, threatening her
other dreams of buying a home or starting a family.
Linda Mock of Idaho was trapped by a payday loan that quickly
grew from the original $300 to more than $900 in interest alone. Trying to
break free of the debt, she took out a title loan on her car and ended up
losing her only transportation.
Family debt is no personal failing — it’s a national crisis.
Even as unemployment declines, the debt crisis is holding back a full economic
recovery and pushing more people into poverty.
That’s why President Barack Obama announced recently that he’s instructed the Department of Education and other federal agencies to do more to help borrowers afford their monthly loan payments.
It’s a step in the right direction.
But I’d urge him to go further and rein in the lenders, banks,
and collection agencies that are profiting from Americans’ debt. It’s time to
stop blaming borrowers and instead hold the financial interests that created
the crisis accountable.
When hospitals give big price breaks to insurance companies but
refuse to work with a widow struggling to make ends meet, something’s not
right.
When a federal student loan provider charges young students
nearly twice the interest it charges homeowners, something’s not right.
When payday lenders can get away with charging 300 percent
interest on a short-term loan to a poor family just trying to
fix their car so they can get to work, something’s not right.
The explosion of predatory lenders hurts families and siphons
money out of local economies. There are more than two
payday-lending storefronts for every Starbucks coffee shop in
the United States.
Meanwhile, more than 70 percent of students who graduate with a
bachelor’s degree leave school deep in debt. The average student loan debt
totals almost $30,000 today, up from $19,000 a decade
ago.
For many Americans, there’s no way out.
Student loans can’t be discharged in bankruptcy. Some states
will take your
driver’slicenses and professional certifications if you fall behind
in your student loan repayment.
And if you can’t afford your legal fees, you could go to jail —
just for being poor.
It’s time to break the shame around debt and start putting the
responsibility for solutions where it belongs: on those profiting off
struggling families.
That means placing fair caps on interest rates, ending predatory
practices that push people further into debt, and creating a path out of debt
for people who are struggling.
Recently, folks from different communities across the country
came together for a national online conference, “Up from Debt,” hosted by my
organization, the Alliance for a Just Society. People from Seattle to New York
shared powerful and moving stories — not to gain sympathy, but to erase the stigma
that further burdens families trapped in debt.
The Obama administration should investigate all forms of
predatory lending, including student loans, payday loans, medical loans,
mortgages, and credit cards. On the White House website, you can sign a petition
asking the president to create a pathway out of debt so families can reclaim
their futures.
Our children, our neighbors, our parents, the sick, and the
struggling aren’t cash cows for bankers and lenders to milk. It’s time to
demand solutions that help families move up from debt.
LeeAnn
Hall is the executive director of the Alliance for a Just Society, a
national policy and organizing network that works on racial, health and
economic justice issues (allianceforajustsociety.org).