It’s a vicious cycle: because some people in the low- and moderate-income community either lack traditional credit histories or rely on financing from non-mainstream credit providers that aggressively market to those lower-income communities, these consumers often have no other choice but to turn to payday and other predatory lenders where interest rates are extremely high, leading them to fall behind on their payments.  This, in turn, negatively impacts their credit scores…and the cycle continues.

Surrounded by parents, grandparents, aunts, uncles, cousins, and friends, my son Joel graduated from college on May 16. He completed his bachelor’s degree in four years without taking on any student loans. There are many reasons why he was able to do that, including the fact that Joel grew up in a middle class household with parents who expected him to go to college and started saving for his college education at birth. Joel was also eligible for some merit-based scholarships and grants and worked each summer to earn some spending money. Joel understands that not every kid has such opportunities and he thanked everyone who helped him along the way.

The Department of Education recently proposed rules that would protect students from excessive fees and other predatory practices on prepaid and debit cards used to receive federal aid funds. The Department estimates that this proposal could protect as many as 9 million college students receiving $25 billion in federal aid. 

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