Posted on 10/28/2025 5:51:21 AM PDT by karpov
The U.S. Department of Education recently announced a reorganization of its Federal Student Aid (FSA) ombudsman’s office into a broader “Office of Consumer Education and Ombudsman.” The aim is twofold: to provide clearer, more proactive information to prospective borrowers and their families before they sign promissory notes and to issue a new “common manual” for loan servicing and collections that standardizes practices across vendors.
At first glance, the reform seems sensible. After all, with federal student-loan debt at $1.8 trillion and millions of borrowers delinquent or in default, something must change. Yet a closer look reveals that, while better information may help at the margins, it does not resolve the underlying problem: The federal loan system itself creates incentives for overborrowing, tuition inflation, and labor-market mismatches. Without deeper structural reforms, even the best consumer-education program will fall short.
There is no doubt that America’s federal student-loan system is complex, confusing, and inconsistent. As the Department’s own Federal Register notice acknowledges, borrowers often receive conflicting information depending on which servicer manages their account, whether their loan has been transferred, or how a particular vendor interprets high-level guidance from FSA. It is not uncommon for one borrower to be steered toward forbearance while another with the same profile is nudged into income-driven repayment. Transfers between servicers can disrupt auto-debit arrangements, misplace records, and sow distrust. Complaints to the ombudsman’s office consistently reveal frustration with poor communication, unhelpful repayment support, and the inconsistent handling of errors.
(Excerpt) Read more at jamesgmartin.center ...
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The colleges need to be underwriting these loans; only then will they act sensibly.
I am opposed to anything but the following:
1. Government ceases student loan operations immediately,
2. All accounts in good standing will be maintained until transfer to qualified financial institution is codified with termination of such services,
3. All delinquent accounts are given 180 days to be brought to good standing or auction to private collections firms will occur as happens with all bad debt.
Period.
Chips will fall as they may.
The government does not belong in the student loan business....period.
Trump’s US Dept of Education announced a reorganization of its Federal Student Aid (FSA) ombudsman’s office into a broader “Office of Consumer Education and Ombudsman.” With federal student-loan debt at $1.8 trillion and millions of borrowers delinquent or in default, something must change. The aim is twofold:
<><>to provide clearer, more proactive information to prospective borrowers and their families
<><>well before they sign promissory notes
<><>and to issue a new “common manual” for loan servicing and collections
<><>one that standardizes vendor practices.
An underlying problem: The federal loan system itself creates incentives for over-borrowing, tuition inflation, and labor-market mismatches. Without deeper structural reforms, even the best consumer-education program will fall short.
My son looked into financial aid for college.
It amazed me when they told me how much I as the parent was responsible for.
My responsibility is zero. He’s an adult making an adult decision. Further education is not my responsibility.
We did loan him most of the money for his education and he paid it back.
He also went into a field that in high demand and pays extremely well.
We did the same with all of oir kids. He’s the only one who went into a four year program.
The others are doing well with lesser degrees or no college at all.
I am not an expert on student loans and I didn’t sleep in a Holiday Inn, BUT
Doing some research over these years since Bath House destroyed the student loan program, I have discovered that
Student Loan Interest is capitalized, like a credit card, so interest accrued is added to the original debt. Is that correct?
There may well be be borrowers who welch on paying back but I think it would be far more humane to treat student loans like a car loan, instead.
A fixed amount of interest paid back. Borrow $25,000? Pay back 30. Or whatever.
The noise over unpaid student loans is not completely fair, as the practice as is is not fair. The government should not be acting as a loan shark against young, naive students and starry eyed parents.
Cheers.
Some things are clear:
democRATS were the ones who directed the fed takeover of student loans,
democRATS were the ones who toxified academia with student programming,
democRATS were the ones who sought to make students dependent upon government,
democRATS were the ones who built an army and funded it via fraud/waste within the bureaucracy pursuant to a far-left agenda in part with all of the gaslighted graduates of said programming.
We can only hope POTUS has this topic - education - on his list (my other hand remains full /s).
Loans only for those pursuing degrees vital to the U.S. no loans for useless degrees.
The guidance should be that 50% of any loan default or forgiveness should be paid for by the college. Or taken out of the endowments of all colleges to make sure the Ivy League feels the pain too.
The federal government should never have been involved in loans.
Rather than the gubmint being a direct lender covering all academic pursuits, even the ridiculous social science ones that guarantee the loan will not be repaid, the gubmint should go back to being a guarantor of student loans that banks make utilizing their own due diligence but with a restrictive list of loans the gubmint will not guarantee which will be anything in social sciences and with most guarantees applying to STEM studies pursuits. This way we will produce a lot more of what the nation needs while saving young people from a life of debt as a theatre arts graduate.
The solution to student loan issues is STRIDENT enforcement of contract law.
Seize paychecks and property.
It’s their assumptive math. Technically yes you are not “responsible” for it. But the government is going to assume you’re providing it unless there’s a lot of paperwork (like officially disowning your kid), and adjust the aid accordingly.
4. All debtors not paying off volunteer for public service — until paid off.
Just close this branch of welfare and let the private sector figure it out. A lot of good companies are hiring smart folks and teaching them useful tricks.
Joe Bidens basement occupation 101 is not one of them classes that be funded.
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