Sometimes, the enemy of my enemy is my friend. One can see that dynamic starting to form, with financial entities beginning to face off against the Federal Government over what many Americans have long felt is predatory behavior toward students and families. Radio listeners know one such person that can be counted on to voice that principled opinion is Dave Ramsey.
He and his organization have had a years-long focus on the seductive nature of the government student loan industry.
Last week Ramsey and co-host, Kristina Ellis, discussed the newly filed lawsuit by SoFi, a major private student loan refinancing company against the United States Education Department.
“I keep my fingers on this student loan, epic, colossal disaster enough to be stirring up a ruckus pretty regularly, but Kristina’s our resident expert on it,” Ramsey began.
Ellis quoted from an article, which detailed both the Biden administration’s recent extension of the moratorium on federal student loan payments and the company’s resulting suit. SoFi is arguing that the “moratorium has no legal basis and has cost the bank, known for its refinancing business, millions of dollars in profits.”
“How about hundreds of millions,” Ramsey added.
“That just makes me want to throw up a little bit right there,” Ellis said. “Their motivation, obviously, is so pure.”
The original government pause, issued three years ago, was designed to lessen the financial burden on borrowers during the pandemic-induced economic shutdowns. But now, 36 months later, many experts feel political calculations – rather than the original emergency measures – are what’s driving Democrats to continue fighting to keep borrowers from re-assuming their responsibilities.
“The bank says its federal student loan refinancing business has suffered because borrowers have little incentive to refinance while payments and interest are on hold,” Ellis continued, reading from the article.
“At a minimum, the lawsuit asks a judge to limit the pause only to borrowers who are eligible for the Biden cancellation plan. Biden’s latest extension, which was announced in November and can stretch as far as this summer, is unlawful on multiple grounds, the lawsuit claims.”
“The pause was basically under emergency times in the pandemic and it was emergency powers, if you will, granted to the president to help things,” Ramsey noted. “And it has moved from him, Trump first and then later even Biden, helping people during the pandemic, make it through their student loans. It has moved from that as a motivation to now I just don’t want them to have to pay their student loans, so I’m just going to kick the can. And I’m the guy that can do that. But there’s no emergency anymore. So I think, kinda, even though I think SoFi’s pretty scummy – it probably stands for scummy-Fi, but I think there’s probably a basis for their lawsuit.”
The United States Supreme Court has yet to rule on the legality of the Democrats’ ploy, so the private financing company took matters into its own hands by filing its suit.
“It’s not like you can go, we have to extend the student loans because of the pandemic! Wait a minute, it’s over dude. It’s over,” Ramsey pointed out. “Nobody’s wearing a mask, dude. Fauci’s gone, dude. I mean really, you need to catch up. That’s so 2020. And he doesn’t have that power on that basis anymore.”
Ellis is an expert regarding the issue, making her Ramsey’s perfect counterpart for this discussion. She is the author of Confessions of a Scholarship Winner, where she documents how she earned $500,000 in scholarships to attend Vanderbilt and Belmont, attaining both her undergraduate and Master’s degrees without debt. And even while disagreeing with the pause itself, she pointed out the multi-billion dollar company is trying to reclaim its right to collect interest on loans.
“And also to get more people to refinance,” Ellis said. “Isn’t that horrible marketing? To be like, we’re going to stop the pause and now you should come refinance with us.”
“When they were thinking about filing this lawsuit, did they not consult their P.R. department?” Ramsey asked, adding that the lawsuit “drew swift condemnation from borrower advocates, who called it a money-grab at the expense of those struggling with student loan debt.”
“Well, it could be at the expense of the taxpayers,” Ramsey said. “And I didn’t have a student loan debt when all this started. Did you? No? We’re paying the interest right now.”
Most people would agree that the price of college tuition is beyond the reach of many Americans, were they required to fork up the cash and pay in full. And that is precisely the devious nature of the student loan scheme. Artificial forces, such as unlimited amounts of loans for borrowers, help create an upward, inflationary effect on tuition prices. And those massive amounts of free-flowing loans increase the momentum with which tuition prices continue to skyrocket.
“I think it’s just important to highlight, too, that these companies, they don’t care about you,” Ellis opined.
“Everybody in the article is evil. I mean the government, the Supreme Court, the Education Department,” Ramsey said. “So there’s no angels in here.”
“There’s no angels in a lot of this process, this whole debate on student loan forgiveness. This isn’t good,” Ellis said of the manipulative efforts.
“It’s like all villains, where’s the hero? All villains in the story. It’s a horrible story. It’s a villain story,” Ramsey said, noting the hypocrisy across the student loan business. “We help you get out of debt by borrowing on our stuff. You didn’t really get out of debt. You just borrowed the debt. No love lost for Biden kicking the can. No love lost for the Education Department. No love lost for SoFi for dadgum sure.”
“But also, a good reminder to start paying on these loans,” Ellis summed up. “This is all not looking good. We’ve been waiting for a long time for decisions and as this is playing out, it’s not looking good.”
Ramsey concluded by reiterating the point he has been making for years.
“We told you to get out of debt because it’s not going to be forgiven,” Ramsey predicted. “When all the smoke clears, you’re going to have a head. So quit acting like it’s not there.”
Rick Schultz is a former Sports Director for WFUV Radio at Fordham University. He has coached and mentored hundreds of Sports Broadcasting students at the Connecticut School of Broadcasting, Marist College and privately. His media career experiences include working for the Hudson Valley Renegades, Army Sports at West Point, The Norwich Navigators, 1340/1390 ESPN Radio in Poughkeepsie, NY, Time Warner Cable TV, Scorephone NY, Metro Networks, NBC Sports, ABC Sports, Cumulus Media, Pamal Broadcasting and WATR. He has also authored a number of books including “A Renegade Championship Summer” and “Untold Tales From The Bush Leagues”. To get in touch, find him on Twitter @RickSchultzNY.
