Consumer Law & Policy Blog

Student Loan Debt: Massive and Past Due

The N.Y. Federal Reserve just completed this study on student loan debt. Total outstanding student loan debt in the U.S. is $870 billion. 15.4% of the 241 million people in the United States who have a credit report with Equifax, the company that provided data to the Fed, carry student loan debt. And get this: Adjusting to exclude student loan debtors who are in a grace period, about 25% of student loan debt is in default (to be precise, about 21% of all student loans and about 27% of all student loan debtors). These rates are far higher than the delinquency rates for credit card debt, mortgages, and car loans.

So, what will happen? It strikes me as unlikely that most of the debtors will be able to pay their way out of default. Will the taxpayers foot the bill?  Bear in mind that, except in unusual circumstances (what the law calls "undue hardship"), student loan debt cannot be discharged in bankruptcy.

Read more about the issue in today's LA Times.

Does Digitalizing Health Records Cut Health Care Costs?

It's not clear.

Poll Shows Public Dissatisfied with Affordable Care Act. Why?

A recent USA Today/Gallup poll shows that more Americans think that the national healthcare reform legislation will make things worse than think it will make things better. The same poll found that almost three-quarters of Americans think the law's individual mandate is unconstitutional. David Lazarus discusses here what the law does and does not provide and ask whether Americans really know how the law operates.

In 2009, Mitt Romney Touted His Massachusetts Health Care Plan As A Free-Market Model For The Nation

It is all in this 2009 USA Today op-ed. First of all, just in case you had any doubt, Romney just adored his state's individual mandate -- ya know, the same one that's in "Obamacare." The same one that's being challenged in the Supreme Court. The one that Romney now claims he hates. Romney explained, just as President Obama does, that an individual mandate prevents free-riders from harming the system:

Our experience also demonstrates that getting every citizen insured doesn't have to break the bank. First, we established incentives for those who were uninsured to buy insurance. Using tax penalties, as we did, or tax credits, as others have proposed, encourages "free riders" to take responsibility for themselves rather than pass their medical costs on to others.

And he definitely thought that his plan in Massachusetts was a model for a national law:

Health care cannot be handled the same way as the stimulus and cap-and-trade bills. With those, the president stuck to the old style of lawmaking: He threw in every special favor imaginable, ground it up and crammed it through a partisan Democratic Congress. Health care is simply too important to the economy, to employment and to America's families to be larded up and rushed through on an artificial deadline. There's a better way. And the lessons we learned in Massachusetts could help Washington find it.

Ht to BuzzFeed.

Bank Fees Driving Consumers to Credit Unions

The LA Times reports that

Consumers fed up with the rising tide of bank fees helped the nation's credit unions more than double their number of new customers last year, new figures show. More than 1.3 million Americans opened new credit union accounts last year, up from less than 600,000 in 2010, the National Credit Union Administration reported. That brings the number of credit union members to a record 91.8 million.

The paper reports that the Occupy Movement -- which was targetted in part at big banks -- and the Bank of America debit-card-fee fiasco were likely factors in consumers' decisions to switch to credit unions.

The article suggests to me that competiton among financial institutions for consumers' business will provide some degee of consumer protection regarding bank fees. The Consumer Financial Protection Bureau is particularly concerned over hidden or misleading fees.

Court Permanently Enjoins FDA's New Graphic Cigarette Labels, Upholding Tobacco Industry's First Amendment Challenge

Last June, we blogged about the FDA's new graphic cigarette labels, one of which is pictured below. After that, in November, we discussed U.S. District Judge Richard Leon's First-Amendment-based preliminary injunction against the labels. In an opinion issued today, Judge Leon granted the industry's motion for summary judgment and finally enjoined enforcement of the FDA rule that imposes the new labels. The Blog of the Legal Times has this report on the decision.

UPDATE: The Washington Post has this front-page story.