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-- to bisphenol a catastrophe we are seeing all around -- colleges and universities now suing graduates that are paying back allowance.
The number of students defaulting on their Perkins loans though saying easy to say is staggering.
It adds up to almost a billion dollars for the school year ending in June 2011.
Joining me now to make sense of this is attorney Evangeline Gomez.
Make money off suing the students it and it costs something to have a lawsuit and that the student is -- impending.
If I don't have money so -- and it what's the point.
What the problem is they're required by law on -- -- universities are required by law to see you students who do default on these loan they are.
Yes they are by federal law.
Now the second issue is if they don't pursue them and see them.
What's gonna happen is -- students who are making payments as they have.
This person got away without -- stop paying so that's the fear that they half but if you -- think they'll be successful.
Well the issue is and as you rightly raised with most of these students are what you would.
Probably deemed judgment proof that have no income they have -- -- so what are you gonna get you're gonna get a nice default judgment in some cases for those students who won't show up for what kelp or what have an attorney show up on their behalf.
All -- just gonna get already have judgment that needy you can use kids to line in the birdcage that's it get it doesn't seem like it's.
They do -- much good because already.
You know they could.
I mean they already owed the money it's not like it's a question of whether or not they -- the money would -- -- be if you could garner people's wages mean would that be aware to these students aren't gonna wait wolf many.
Many of these students from because of how the economy as they can't get jobs that allow them to make money where they're actually you know working for someone in getting a paycheck.
So many of them do odd jobs.
You know -- seeing a landscaping.
And you know are they getting -- are they getting paid on the table how -- -- garnish wages in those instances so it's difficult and we hear right universities like -- being behind this and beasts and beings and the ones -- -- thinking about going -- -- -- -- Even so does has a huge endowment to they need the money this badly.
Well yeah -- has actually stopped being discontinued.
Offering Perkins loans to students why.
The problems that in with repayment.
So that was -- Christina Perkins loan and some other kind of lot of that might start offering that's what the -- insulin tends to be for low income students who come from low income families the Stafford loans these these are provided by the federal government rate tends to be forced students were from middle income families.
Now we hear about Obama wanting to augment that Perkins loans program from one billion to eight point five billion.
Now before our.
Obama and congress decide to augment any program what they should do is change the regulations of the Perkins loans programme.
So that students can one defer payment if they're not working for a year to.
Gore they can also do what Stafford loans allow students to do and that's paid back and smaller payments based on whatever small income you had not.
But this -- just a sign of the time in the larger student loan crisis and we student loan default is eighty huge problem in this country and it's just getting bigger at this point.
Solution the other solution is not to offer the loans with some universities what they're going to start doing -- being one of them it appears as if they'll just start providing.
This type of -- in the form of grants or scholarships rate and Angeline thanks so much coming -- -- appreciate your time thank you.
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