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U.S. Department of Education Loans Designed to Keep You in Debt

Dec
3,
2009
11

Student Loan ScamWith all the recent eye-opening discussions concerning CDL schools and student loan scams, it made me take a hard look at one of my own college student loans that I have been paying on now for about 15 years.   A $21,000 loan that to this day, is still at $21,000.   Hard to believe, isn’t it?   The reality of these student loans is simple:  they are designed to keep you in debt forever.

This particular loan which is through the U. S. Department of Education, is so well designed, that even after nearly 10 years of payment, the balance is still the same as it was in the beginning.   These types of student loans are the kind of loans a person can never pay off, based on the monthly payment agreement.  The U. S. Department of Education will give a student a grace period before they have to start paying back the loan.  During this grace period, the debt is collecting interest.  Any unpaid interest is added to the capital . . . this is why a person can pay for 15 years and the capital never goes down.  If a person falls behind in payments, the interest is compounded.  Furthermore, if the student defaults on the loan, such as due to the poor economy, job loss, etc., the U. S. Department of Education will add thousands of dollars in interest, collection fees and compound interest.   It is a student loan program designed to keep one in debt through out their lifetime, much like many CDL training loan scams.

The best course of action is to pay off the interest immediately, and better yet, take out a bank loan and pay off the student loan in the very beginning.  After researching this U. S. Department of Education extensively, that will be my next step.   My biggest mistake was spending 10 years making the monthly payment over and over, yet never stopping to look at what the loan balance was doing!   I started with about $21,000 and it is still at $21,000 . . . RED FLAG!    I also discovered that student loans are exempted from coverage under the Truth in Lending Act, basically making institutions nothing more than loan sharks.

I just happened to stumble upon a book called The Student Loan Scam, by Alan Michael Collinge, available at Amazon.   So, I guess one of my New Year Resolutions for 2010 will be to secure a bank loan and bring this U. S. Department of Education scam loan to an end, once and for all . . . or, I could keep making the payments and it might be paid in full by my 162nd birthday . . . what do you think?

© 2009 – 2010, Allen Smith. All rights reserved.

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By: Allen Smith

Allen Smith is a 37 year veteran who started at an early age in a household goods family moving business. He began driving straight trucks in 1977 and moved to the big rigs in 1982. His experience within the industry includes; owner operator, company driver, operations manager, and owner of a long distance HHG moving business, taking many of the long haul moves himself when needed. Allen Smith, a truck driver advocate who is driven by the desire to help others succeed within an industry where injustice, unrewarded sacrifice, and lack of respect and recognition exists. Allen and his wife Donna are hosts of Truth About Trucking ”Live” on Blog Talk Radio. Other websites include AskTheTrucker, TruckingSocialMedia, NorthAmericanTruckingALerts, TruthAboutTrucking, and many Social Media websites. In 2011 Allen and Donna hosted the first Truck Driver Social Media Convention, designed to create unity and solutions for the trucking industry. This is now being extended through the North American Trucking Alerts network as those within the industry join forces for the betterment of the industry. Allen strongly supports other industry advocates who are also stepping up to the plate to help those who share honesty, guidance and direction. He believes that all those involved in trucking need to be accountable for their part within the industry, including drivers, carriers, brokers, shippers, receivers, etc… The list of supporters and likeminded people grow daily, networking together and sharing thoughts and ideas for the betterment of trucking. He has coined the popular phrase "Raising the standards of the trucking industry"

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11 Responses to U.S. Department of Education Loans Designed to Keep You in Debt. - Post a Comment

  1. […] rest is here: U. S. Department of Education Student Loan Scam | AskTheTrucker Posted in […]

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  6. […] U. S. Department of Education Student Loan Scam | AskTheTrucker […]

  7. […] a previous post I wrote about my experience with the U.S. Department of Education.   Having taken out a loan for $20,400 ten years ago, today, the current payoff amount is still […]

  8. […] Also, beware of going to college fairs or job fairs – people are getting scam into going back for training or schools by the school itself.  Get into more loans and get higher education, even if you don’t need it.  Hmmmm U.S. Department of Education Loans Designed to Keep You in Debt […]

  9. Jill

    I just woke up to this scam myself! This is the only loan on the planet that penalizes you for paying early! If you do, more interest will apply the next month because with the daily compounding, more days will have passed. So when you make the regular payment that second month, most of it will apply to interest. Once I sent two payments marked “interest only.” Please don’t ask me how, but when I did that, my balance the following month was higher than ever! When you ask them how the heck to read the bill, they act like they don’t know what you’re talking about, and say “I don’t have on my computer what you’re reading.” So WHERE DID THE BILL COME FROM, A SPACESHIP?? I am going to request a hardship settlement for less than the balance “due” (hmmph) and not feel bad about it. After all, I have PAID this loan many times over, and the balance is higher than it was on day one. FRAUD!!!

  10. Allen Smith

    I hear you Jill! Same with me. Been paying and paying and paying to the U.S. Department of Education and the loan NEVER goes down and always remains the same debt. BIG STUDENT LOAN SCAM operation!

  11. Arthur Rutter

    I have had a loan since 1986 and I believe the GOVt. was behind this AMERICAN TRUCK DRIVING SCHOOL telling them to tell the students that is was free, I was seventeen and very nieave,and to this day I still am being hasseled.

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