Last week, friends and cohorts from Chicago’s social services community joined LAF and Joseph Sanders, Assistant Attorney General from the Illinois Attorney General’s Consumer Fraud Bureau, to discuss student loan debt—an issue social service providers like LAF are seeing more and more among its client population. “Having student loan debt that is past due harms people’s chances of landing a job, obtaining permanent housing, and pursuing further education down the road,” said Kulsum Ameji, Staff Attorney in LAF’s Community Engagement Unit and moderator of the discussion. “It can actually exacerbate poverty and push vulnerable people deeper into the cycle of poverty.”
The idea of higher education leaving people worse off runs contrary to the narrative that has shaped how we’ve talk about education for generations. As President Johnson famously said as he signed the Higher Education Act of 1965 into law—which greatly expanded financial assistance for higher education—the “nation could never rest while the door to knowledge remained close to any American.” But as enrollment rates skyrocketed, so did tuition—and at a rate that outpaced income growth, forcing more and more students to take on large amounts of debt to finance their education under the universal assumption that investing in education will lead to higher income and more opportunities for a better life.
Today, with $1.4 trillion of student loan debt in the United States—more than either credit card and auto loan debt and now second only to mortgage debt—and a default rate of 11%, the question of the real return on investment in education is starting to surface. “We have such a positive view of education that we don’t think about its costs the way we do when we’re buying a car,” explains Shelmun Dashan, Staff Attorney in LAF’s Consumer Practice Group. “Most people don’t go to school just for the intrinsic value of learning—we have the goal of achieving a higher income or changing careers, but a lot of times we haven’t done the homework to figure out if what we’re doing will actually meet those goals. Private lenders let you take the loans out regardless, and that gets you in trouble—which they know. They depend on people having this positive association with education and not thinking about what it really means.”
Being an empowered consumer takes some time and research. Is the price tag worth what I’m getting? Are there other ways to get what I want? Apply that same mindset as best you can to higher education, advises Kathryn Liss, Senior Attorney in LAF’s Consumer Practice Group. “It is absolutely imperative in this climate that people really compare the costs, the financial options, and the subsequent opportunities.”
And while educating people considering going back to school now or in the future is a sound preventative approach, there are plenty of resources for the millions already grappling with student loan debt. “Even if we’re not able to take every case out there, we want to be sharing resources and playing a role in connecting people who need help with student loan debt to other organizations that focus on those issues,” Katie says.
That’s where folks like Joseph come in, who helps oversee the IL Attorney General’s Student Loan Helpline. “We started the helpline back in 2015, training five of our Citizen Advocates specifically on student loan issues, he explains. “They are there to assist with anything related to student loans. Even if they’re not your loans, for service providers it can be helpful if you’re working with a client and have a question.”
As student loan debt affects more and more people—disproportionately those from low-income and vulnerable communities—it’s important for community partners to continue having these conversations. Thanks to Joseph and everyone who joined us for this fruitful discussion!
College education offers opportunities for personal and professional growth, but with tuition on the rise, students are borrowing more and more to ease the financial burden. In fact, the average 2016 graduate holds $37,172 in student debt—up 6% from last year. And according to the Department of Education, the student loan default rate is 11.3%
“Student loans aren’t a huge part of what we do at LAF, but it’s an area that we’re trying to cover more,” says Katie Liss, Senior Attorney in LAF’s Consumer Practice Group. “Given the nature of our work, we’re often putting out fires—stopping foreclosures and wage garnishments, keeping people in their homes—we’re not always able to deal with student loan issues as much as we’d like to. But it impacts millions of Americans, and even more in the future, so we’re trying to find ways to address it.”
“When it comes to cases involving student loans, many of our clients became disabled or faced mental illnesses that prevented them from getting jobs and being able to sustain themselves,” says Katie. Through what’s called a Total Permanent Disability Discharge, she’s helped a number of clients with disabilities discharge their loans. “I can see the weight being lifted off their shoulders.”
For other clients who come to LAF seeking foreclosure defense or help filing bankruptcy, student loans aren’t their primary issue, but they may be a contributing factor affecting their overall livelihood. “We counsel clients in other types of cases to help them get on track to make affordable payments on their student loans,” Katie says. “There are a number of affordable ways to make payments on your loans, like income-based repayment plans, that people just don’t know about.”
“There’s just so much stacked against our clients—we need to stand up for them. We need to try to level the playing field.” Help dedicated attorneys like Katie continue standing up for vulnerable and under-resourced communities by making your tax-deductible donation for 2016 at www.lafchicago.org.
The largest civil legal aid organizations in the home cities of the Chicago Cubs and the Cleveland Indians have raised a bet on the outcome of the 2016 World Series. Both organizations work to provide free civil legal services to people living in poverty in their regions, and have entered into a friendly wager on behalf of their teams, who are each hoping to break the two longest championship droughts in Major League Baseball.
From Chicago, LAF has promised a deep-dish pizza lunch to Cleveland Legal Aid’s staff if the Cubs can’t win their first World Series since 1908. Cleveland’s Legal Aid answered the challenge, offering Cleveland pierogis to the staff of LAF if the Indians lose the series.
LAF’s Executive Director, Diana C. White, explained “For the last 50 years, LAF has flown the W flag in the courtroom for people living in poverty in our community. We’re so excited to cheer on the Cubs and Chicago in the World Series!”
Cleveland Legal Aid’s Executive Director, Colleen M. Cotter, highlighted “Our attorneys hit home runs each day for our clients, so it is terrific to celebrate some sports success with LAF through this friendly bet.” Cotter adds, “The last time Cleveland won the World Series, our Legal Aid was celebrating its 43rd year of serving the community. I don’t think our attorneys back in 1948 ever imagined our Legal Aid would be celebrating its 111th year when we win our next World Series.”
LAF’s 2016 Brownbag Roundtable Series Continues with the Consumer Practice Group
As times change, so do the methods of people who abuse systems for personal gain. Those who take advantage of mortgage lending are no exception. But as their methods grow and change, so to do the efforts of the team at LAF who stand against them. “The Life and Times of Predatory Mortgage Lending: A Tale Told Through the Lens of LAF Litigation” was the second of LAF’s 2016 Brownbag Roundtable Series. Dan Lindsey, Director of the Consumer Practice Group, along with Supervisory Attorneys James Brady and Michelle Weinberg, and Senior Attorney, Kathryn Liss, shared their work with a crowded room last week, teaching about how predatory mortgage lending has evolved and exacerbated racial and economic inequality in our community.
One of the cases they profiled was against Mark Diamond, a notorious home repair contractor who preyed predominately on elderly African Americans with false promises of home improvements. He overcharged for bare-bones work (if any work at all), arranged the financing so that he could directly obtain the maximum available funds from a clients’ mortgage loan, and did not provide the legally required consumer rights disclosures. LAF attorneys represented more than a dozen of Diamond’s victims and obtained over $250,000 in recovery. In June 2015, Diamond was finally stopped by the Attorney General, due in large part to the information provided by LAF and the Consumer Practice Group’s tireless representation of individual victims.
“Fraud never sleeps. And so there will always be predators of one kind or another,” they declared last week. Let the hard-working Consumer Practice Group serve as an example that there are also those who will stand up for what is right. Way to go, team!
“I feel like education work is about preventing our clients from becoming our future clients, ” explains Ashley Fretthold, Supervisory Attorney in the Children and Families Practice Group. “We have a lot of cases where kids are scheduled to be expelled, and that’s a turning point in someone’s life. If those kids are expelled, their only option is to go to the alternative school that’s nowhere near their house, and they have to get there themselves. So they’re probably not going to go to school. Then they’re probably never graduating, and then they’re probably on the streets. I feel like when we prevented expulsions, that’s been a major win for us.”
Ashley advocates for one of the world’s most vulnerable populations: children. The scales that can tip, the tidal wave that a single traumatic event can instigate, are realities she navigates daily in her work at LAF. The stakes are incredibly high – the full length and potential of a productive and healthy human life in the balance – and, for Ashley, every case won is a step forward for the child and the community.
“We just settled a case where we got a boy almost $20,000 in compensatory services- which is additional tutoring and speech language services. He’s 7 years old. If he’d come to us when he was 12, 13, or 14 he would already be having tons of behavioral problems in school because he had kind of a serious language processing issue that wasn’t identified. So because he’s 7 and we’ve gotten him the support he needs, I like to think that he’ll go on and he’ll be fine in middle school and high school, he’ll be totally on track.”
Laws are put in place to protect children and ensure that they acquire a good education and the opportunity it affords. Unfortunately, these laws, while well-intentioned, often remain inaccessible without the advocacy of an attorney. Like all those that work at LAF, Ashley’s work is governed by a passion for justice and a core understanding that the world extends so much further than her own experience in it.
“You shouldn’t just go through life living your life. There should be a purpose to your life that involves leaving the world a better place some way. Even if that’s not your full time job, you should – and can – do something. LAF is affecting change now in a way that makes our communities stronger in the future. The things we’re doing now are helping people immediately, but it’s really about creating a better future, not just for them, but for the whole Cook County community.”