class action: student loans (Canada)

[Kelbon]

I'm doing a bit of research for interests sake on the possibility of launching a class action suit against Federal and Provincial Student Loan Programs, on behalf of heavily indebted students across the country. Sounds a bit far fetched, indeed, but I can't let that get in my way or I'd never get anything done

The preamble, in utter laypersons terms, is this: heavily indebted students are at a huge disadvantage in society. Many are celebrating the victory of paying off their loans at age 45, when they should be celebrating having paid off their mortgage. My claim is that its essentially unethical for the government to allow its youth, the up-and-coming generation(s), to wallow in huge debt loads which are next to impossible to manage (not to mention its to the disadvantage of the economy, and hence government interests, to have a huge amount of people unable to buy big-ticket items: furniture, cars, homes), ESPECIALLY when it is more important now than ever before for youth to have solid post-secondary education backgrounds.

Further, many students have loans in collections for simple and ridiculous administrative errors, running their credit ratings (and financial futures!) into the ground.

What I'm hoping someone here might be able to tell me is 1) whether there would be any logical and rational way to launch such a suit and 2) what you would technically call what you are suing for. (and 3 - is there somewhere better for me to post this?)

Thanks so much for taking the time to read this.

kb

 

[Michael Wechsler]

Good idea and I admire your creativity and sympathy for those that really need the assistance in society.

That said, I cannot see in any way how you could launch a class action suit. While there is a class action area here on thelaw.com and you can see the elements, I don't see the basis for a suit against the banks because you have no valid cause of action. Let's think about this clearly:

The bank is lending money and not forcing anyone to borrow. Simply because schooling costs too much or that post-graduation the pay isn't high enough to pay back the loans does not make the bank liable for lending the money at the request of the debtor and in their own volition. If you have a "beef" or cause for complaint against anyone it would be against the bad economy (no person responsible) or the person who might make a positive effect against your bad economy -- your governmental leaders. And you can't just sue them because the investment in school might no longer be worth the money.

To help you think about class action suits clearly you need to identify:

1) What is the injury?
2) How was it caused?
3) Who caused it?
4) Should they be held responsible for the injury?

Originally posted by Kelbon
I'm doing a bit of research for interests sake on the possibility of launching a class action suit against Federal and Provincial Student Loan Programs, on behalf of heavily indebted students across the country. Sounds a bit far fetched, indeed, but I can't let that get in my way or I'd never get anything done

The preamble, in utter laypersons terms, is this: heavily indebted students are at a huge disadvantage in society. Many are celebrating the victory of paying off their loans at age 45, when they should be celebrating having paid off their mortgage. My claim is that its essentially unethical for the government to allow its youth, the up-and-coming generation(s), to wallow in huge debt loads which are next to impossible to manage (not to mention its to the disadvantage of the economy, and hence government interests, to have a huge amount of people unable to buy big-ticket items: furniture, cars, homes), ESPECIALLY when it is more important now than ever before for youth to have solid post-secondary education backgrounds.

Further, many students have loans in collections for simple and ridiculous administrative errors, running their credit ratings (and financial futures!) into the ground.

What I'm hoping someone here might be able to tell me is 1) whether there would be any logical and rational way to launch such a suit and 2) what you would technically call what you are suing for. (and 3 - is there somewhere better for me to post this?)

Thanks so much for taking the time to read this.

kb

 

[blair]

class action suit :reason: student loans

Yes, I agree. I am not only thinking about it, I am going to pursue a class action law suit. I took out a $20,000.00 loan when I was around 20 years old and now it's over $100,000.00. I was never able to pay the monthly balance because I was never able to obtain a decent paying job. I am 45 years old today and have only had a steady paying joby for the last 4 years and now I am in danger of having my wages garnished. I am a teacher who had to go back to school for about a year and paid out of my own pocket. This is my 2nd full time paid teaching year and now they want a ridulous amount of monthly payments. Each time my loan was sold to a collection agency I was charged a whopping $10 - $12,000.00 collection fees, which is how the loan grew as it did. I was never explained how these loans work or I would have never borrowed. I know ignorance is not a defense within the law but I'm sorry something is not right here. My interest rate was at 9% at the time taken out in the 1980's. When I graduated from school it was during the reagonomic years - no jobs for avearge people existed - or the working poor. There is no way I will ever be able to pay this off. I tried to consolidate at one time and even then the monthly payments were out of my reach. There are some laws that need to be changed or modifyed to assist students who plunge into student loans - there should be a parent and an expert attorney by your side so that you understand the interest rates, grace periods, collection fees, consolidating programs and whatever else tricks are out there to lure people into falling into such a dangerous trap. No - nobody took a gun to my head and made me sign a loan docuement - but there still is something called ethics, justice, and morality that should prevail.

 

[AngelicOne]

Is this class action suit being worked on still? I wouldnt mind being a part of it and I have a really interesting story to tell. I will post it in this forum to get some advice on how to go about dealing with Student Loans. Thanks!

 

[Michael Wechsler]

Yes, I agree. I am not only thinking about it, I am going to pursue a class action law suit. I took out a $20,000.00 loan when I was around 20 years old and now it's over $100,000.00. I was never able to pay the monthly balance because I was never able to obtain a decent paying job. I am 45 years old today and have only had a steady paying joby for the last 4 years and now I am in danger of having my wages garnished. I am a teacher who had to go back to school for about a year and paid out of my own pocket. This is my 2nd full time paid teaching year and now they want a ridulous amount of monthly payments. Each time my loan was sold to a collection agency I was charged a whopping $10 - $12,000.00 collection fees, which is how the loan grew as it did. I was never explained how these loans work or I would have never borrowed. I know ignorance is not a defense within the law but I'm sorry something is not right here. My interest rate was at 9% at the time taken out in the 1980's. When I graduated from school it was during the reagonomic years - no jobs for avearge people existed - or the working poor. There is no way I will ever be able to pay this off. I tried to consolidate at one time and even then the monthly payments were out of my reach. There are some laws that need to be changed or modifyed to assist students who plunge into student loans - there should be a parent and an expert attorney by your side so that you understand the interest rates, grace periods, collection fees, consolidating programs and whatever else tricks are out there to lure people into falling into such a dangerous trap. No - nobody took a gun to my head and made me sign a loan docuement - but there still is something called ethics, justice, and morality that should prevail.

Is this class action suit being worked on still? I wouldnt mind being a part of it and I have a really interesting story to tell. I will post it in this forum to get some advice on how to go about dealing with Student Loans. Thanks!

I don't know that a class action is going to happen here. The overdue loan is over 25 years old. My understanding is that money loaned at 9% interest doubles every 8 years. I'm not saying that this was your rate but it is understandable that with interest the amount might be greatly in excess of what it once was. Add onto it reasonable attempts to collect which were probably agreed to in the original agreement, and you've got a tremendous overdue debt that you agreed to pay.

Here's one problem -- who do you sue? I am truly very sorry for you about not being able to find a job out of school as you had hoped and the Regan administration insisted would "trickle down" to the little people. Unfortunately this is not the bank's fault. Nor is it the fault of the collection agency.

Second, what traps are there? Unfortunately I don't think that terms are as clear as they should be and written in short and plain English for people who don't possess a higher education. But you should have known that you would have to pay back a certain amount each month and at a certain interest rate. You must have known that not paying anything back for 20 years would result in a huge debt.

I don't disagree with you that there needs to be a greater investment into people in this country, especially now with so many jobs being outsourced. Our "great" standard of living is based upon this occurring and is causing a huge disparity between the very wealthy and the middle class, dropping rapidly. This seems to be more of a political issue than necessarily a legal one, since I'm not sure that under the law any "wrong" was committed. You might be better served in speaking to someone locally who can help you move this issue in the right direction and placed into the public light that it deserves. After all, shouldn't our Congress be more involved in helping the great numbers of people who are trying to get by in our country instead of worry about steroids in baseball and now whether the NCAA should have a championship football playoff system?

I wish you the best of luck but I am not sure that a class action is available to you. A greater analysis of the specific facts concerning your loan would be necessary -- plus that would not necessarily pull you out from the burden of the principal and reasonable interest for 25 years. I hope you can find a way to make this work out.