ABC: Private Lenders Stealing Food from Borrowers?
Here’s the latest slant in student loan coverage for you: private lenders essentially steal food off borrowers’ tables.
"I’ve got to sacrifice food on my table and I don’t think that’s a fair option,” said Nicole Gibson, a graphic designer who makes $1,400 a month, but pays $1,200 a month toward her student loans.
“World News Sunday” on June 17 used Gibson’s very extreme situation to heap more blame on lenders without asking questions about her payment plan, loan consolidation or any other options that could lower her payments. The report also left out key facts such as where Gibson lives, how much debt she has, and what type of loan or loans she has.
ABC Correspondent Gigi Stone said Gibson earned her degree from Rochester Institute of Technology, but left out the price tag of nearly $25,000 a year. The average annual cost of undergraduate tuition is much less - $5,836, according to an October 2006 U.S. News and World Report.
Using Gibson as an example and relying heavily on liberal New York Attorney General Andrew Cuomo, Stone’s report emphasized Cuomo’s slanted perspective that the student loan industry is “victimizing” poor students.
Stone mentioned “new revelations,” referring to Cuomo's decision to expand his investigation to private loans.
“What we’re finding is that many lenders actually use the school that you are attending as one of the factors in the equation and this is startling to me frankly,” added Cuomo.
Stone used Cuomo’s comparison with mortgage “redlining” – charging different interest rates for different populations – implying that poor and minority students would be the ones to suffer from student loans.
“World News” was cut short before an opposing perspective was included. The video cut out just as Stone was going to Harrison Wadsworth of the Consumer Bankers Association. However, an ABCNews.com story included Wadsworth’s comment about practices Cuomo called “unfair.”