Parent Dies, Lender Comes Knocking
The more you learn about the student loan crisis, the dirtier it gets. The Obama administration’s Consumer Financial Protection Bureau has an ombudsman just for issues related to student loans, and the agency has just issued a report describing, among other things, how private lenders can come after borrowers for the entire remainder of the loan if a co-signer, such as a parent or grandparent, files for bankruptcy or dies. They can do that even if the payments are up to date, which doubles the shock for the borrower.
“For a borrower who has proven to be a responsible paying customer and is facing the death of a parent or grandparent co-signer, debt collection calls demanding the full balance with limited explanation will probably not be welcomed,” says the report. (Are its authors going for the Understatement of the Year award, or what?)
And how do they find out that dad or grandma has just passed? Not just by accident, the report informs us: “Some industry participants rely on third parties who conduct scans of public records of death and bankruptcy filings, which are then electronically matched to customer records and trigger a default, regardless of individual circumstances.”
In other words, the lender pays good money to hire snoops to search court records and death certificates to see whose co-signer is broke or dead. And having done that much, do they neglect to notify the credit companies when they throw your loan into default? Oh, no, says the report; in most cases, your credit is screwed right away.
The report suggests that lenders themselves might be better off in terms of recover rate and reputation if they would give borrowers the option of finding a new co-signer, or of refinancing their loans, perhaps with other lenders who might give them a better deal.
However, say the authors, “Private student loan servicers generally do not publish specific information on these co-signer matters. We welcome additional information from industry participants who wish to clarify their policies and procedures regarding the handling of performing loans upon the death or bankruptcy filing of a co-signer, as well as more specific information on the rate at which borrowers are seeking and successfully obtaining co-signer releases.” (Note to CFPB: Good luck with that.) Read the report at http://www.consumerfinance.gov/reports/mid-year-report-on-private-student-loans-2014.• —SK
E-Cigarettes: Research Raises Cancer Concerns
According to a study by scientists from Boston University, the University of Texas Southwestern Medical Center in Dallas and the University of California-Los Angeles conducted earlier this year, e-cigarettes, which replace burning tobacco with an odorless, smokeless nicotine vapor, seem to stimulate the development of cancer in human cells, much as their traditional counterparts infamously do.
Researchers modified human lung cells to contain genetic traits associated with the growth of cancer, then grew them in a liquid that had been exposed to the vapor found in e-cigarettes. At the end of the experiment, they found that these cells showed changes associated with cancer—as did those that were grown in a liquid exposed to tobacco smoke. The findings are preliminary, and the scientists involved emphasized that further testing is needed before definitive conclusions can be reached.
Little is known about the effects of e-cigarettes, with proponents claiming that they are a safer version of the traditional cigarette, while detractors warn that they could carry similar health risks. The Food and Drug Administration has yet to issue guidelines about their use.
However, consumers aren’t waiting for scientists to approve the product. According to Wells Fargo data reported by V2 Cigarettes, an e-cigarette retailer, consumers spent more than $1 billion on e-cigarettes last year, and Bloomberg Industries projects that total could rise to $1.5 billion this year.•
Springfield College Workers Fight for Summer Insurance
Food Service workers at Springfield College last October voted to unionize under UNITE HERE. It was the first union ever at the college where basketball was invented, and which is known internationally for its training in health- and human service-related fields. It was widely supported by students and faculty, who during the unionization drive sported buttons reading “We love our cafeteria workers.”
On the whole, the new union has been quite successful at getting benefits for its employees, according to organizer Caitlin Dubois. “In the beginning, Dubois told the Advocate, “we made a lot of progress. We won seniority. Job postings: there was no system for posting jobs, so people didn’t know that they were available.”
Scheduling had previously posed a major difficulty for workers with families, because the company only posted schedules a day ahead of time. Now, says Dubois, “they’re putting up the schedules 10 days in advance. We have made significant and important gains.”
But a significant and important hardship for workers remains: no health insurance coverage in the summer, when the college is not in session. “That,” says Dubois, “was one of the essential things that we were organizing around. Aramark has never covered people in the summer. So people have been living without insurance for the summer.”
For workers, that leaves three unsatisfactory alternatives, Dubois explained: to spend the summer uninsured and pay the fine Massachusetts exacts from people without health coverage; to apply for expensive COBRA benefits, the benefits available to people who were insured through their employer but are no longer working; or to apply for MassHealth. But COBRA “costs $400 a month, and that’s their whole summer employment check,” Dubois points out. And workers hardly have time to enroll in MassHealth before it’s time for them to go back to work in the fall.
Erskine Kelly has worked in food service at Springfield College for 10 years, the last three as a soup cook. “I would like to see Aramark offer us healthcare that covers us for a whole 12 months,” he told the Advocate. “Last year I got asthma, so I got an asthma attack, and it was in the summer. With me not having any insurance, I had to put $1,300 on my credit card. I’m still paying on it. I don’t want to see that happen with anybody else.
“We have a lot of older ladies working here, and they’re on medications, and some of them need health care to cover their spouses. So I want them to offer us more affordable health care and something that goes for the whole 12 months.”
Helen Flebotte has put in seven years with the college’s food service and makes less than $11 an hour. Her husband is retired and only has hospitalization coverage, so the couple depends on Flebotte’s insurance. But the deductibles are so high, Flebotte said, that they can’t always afford to see their doctors. “One of the medications my husband needs right now he can’t get because we had to cancel the doctor’s appointment,” she said. “I love my job. The students, the people I work with, they’re awesome. Why can’t we get the respect we deserve?”
When the Advocate sought comment on the insurance issue from Aramark, spokesperson Karen Cutler said, “We are still in active union negotiations and it wouldn’t be appropriate for us to comment right now.”
In 2013, Aramark, with 250,000 workers in the U.S. and abroad, was named one of the most ethical companies in the world—along with Google, Microsoft, Pepsico, Ford Motor Co. and General Electric—by the Ethisphere Institute, and one of the World’s Most Admired Companies by Fortune magazine. Also in 2013, Aramark was on a list of the 20 lowest-paying companies in the U.S. compiled by the National Employment Law Center.• —SK
“The Supreme Court has hijacked the First Amendment for the wealthy few, allowing them to drown out the voices of everyone else. We must now use our amendment power under Article V of the U.S. Constitution to defend our democracy. We have done this before in our nation’s history. We can and we must do it again.”
John Bonifaz, co-founder and president of the Amherst-based Free Speech for People, in response to last week’s news that the U.S. Senate will vote sometime this year on a constitutional amendment, proposed by Sen. Tom Udall (D-N.M.), that would overturn the U.S. Supreme Court’s decisions in Citizens United and McCutcheon by allowing Congress to regulate campaign fundraising and spending. Massachusetts Sens. Ed Markey and Elizabeth Warren are both co-sponsors of Udall’s amendment. To be successful, it would need to pass by two-thirds majorities in the Senate and House and be ratified by three-quarters of the states.