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The $1 Trillion Student Loan Rip-Off: How an Entire Generation Was Tricked into Taking on Crushing Debt That Just Enriches Banks

Young people accepted a home mortgage worth of debt before they ever even had a regular income based on phony promises.

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But, of course, she’s only doing it to help those poor creatures who otherwise couldn’t attend schools! If she happens to make a killing doing so, then the market is working its magic, I guess. This is the same argument used by exploitative payday lenders — loan sharks in ghettos — to justify predatory lending habits targeted at impoverished and vulnerable communities. Only it’s coming from one of the most respectable members of Washington’s elite, and not the proprietor of a check-cashing joint.

Of course, you know an industry is generally bad for the world as a whole once Goldman Sachs gets into it. Goldman bought part of predatory for-profit college chain EDMC in 2006,  and it’s already made a killing driving random people into crushing debt. EDMC uses  sales tactics taken directly from subprime mortgage hustlers to find and retain customers.

But employees recounted a distinct culture shift once the company went private under Goldman Sachs and the other private equity investors, as day-to-day operations warped from a commitment to students and their success into an environment laser-focused on hitting mandated enrollment targets. New recruits were viewed simply as a conduit for federal student assistance dollars, the employees said, and pressure mounted from management to enroll anyone at any cost.

So we have incredibly rich and powerful elite institutions joining forces to bleed youths and minorities and poor people dry. And people wonder why there’s marching in the streets.

Alex Pareene writes about politics for Salon. Email him at apareene@salon.com and follow him on Twitter @pareene

 
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