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Household debt is a national crisis. Predatory lenders, not borrowers, are to blame.

(Khalil Bendib, Other words)

By LeeAnn Hall

Years after Toni Potter’s husband died from pancreatic cancer, debt collectors in her Washington state still harassed her relentlessly for her hospital bills.

Andrea Anderson, a young student from Oregon, received $ 150,000 in college loans as she pursues her dream of becoming a social worker. She knows she will pay off loans for decades, threatening her other dreams of buying a house or starting a family.

Linda Mock from Idaho was trapped by a payday loan that quickly went from $ 300 to over $ 900 in interest alone. Trying to get out of debt, she took out a title loan on her car and ended up losing her only form of transportation.

Family debt is not a personal failure – it is a national crisis. Even though unemployment falls, the debt crisis is slowing down a full economic recovery and pushing more people into poverty.

LeeAnn Hall.
LeeAnn Hall.

This is why President Barack Obama recently announced that he called on the Department of Education and other federal agencies to do more to help borrowers pay their monthly loan payments.

It is a step in the right direction.

But I urge him to go further and put the brakes on the lenders, banks and collection agencies that take advantage of Americans’ debt. It’s time to stop blaming borrowers and holding the financial interests that created the crisis to account.

When hospitals give big discounts to insurance companies but refuse to work with a widow who is struggling to make ends meet, something is wrong.

When a federal student loan provider charges young students nearly twice the interest it charges homeowners, something is wrong.

When payday lenders can get away with charging 300% interest on a short term loan to a poor family who are just trying to fix their car so they can get to work, something is wrong.

The explosion of predatory lenders is hurting families and siphoning money from local economies. There are more than two payday loan storefronts for every Starbucks coffee shop in the United States.

other wordsMeanwhile, over 70 percent of students who earn a bachelor’s degree leave school heavily in debt. Average student debt today stands at nearly $ 30,000, compared to $ 19,000 ten years ago.

For many Americans, there is no way out.

Student loans cannot be discharged in bankruptcy. Some states will take your driver’s licenses and professional certifications if you fall behind on your student loan repayment.

And if you can’t afford your legal fees, you could go to jail just because you’re poor.

It’s time to break the shame around debt and start putting responsibility for the solutions where it belongs: on those who take advantage of struggling families.

It means placing fair ceilings on interest rates, ending predatory practices that push people into more debt, and creating a way out of debt for those in difficulty.

Recently, people 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 hangs even more on 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 way out of debt so that families can get their futures back.

Our children, our neighbors, our parents, the sick and those in difficulty are not cash cows for bankers and lenders to milk. It’s time to demand solutions that help families get out of debt.

LeeAnn Hall is the Executive Director of Alliance for a just society, a national policy and a network of organizations that work on issues of race, health and economic justice.

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