Victory! Dept. of Ed Confirms Student Loan Default Is Not Criminal

by Megan Cottrell · 2011-06-22 09:27:00 UTC
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When you saw the news reports last week of a man being SWAT teamed for not paying his student loans, you may have wondered: are they coming for me next?

Well, worry no more. The team from the film Default: The Student Loan Documentary started a petition on Change.org to end this rampant confusion about whether or not students with outstanding loans could be criminally prosecuted. And they're declaring victory today, as the Department of Education released a statement, saying that defaulting on your school loans is not a criminal offense.

Sara Gast, spokesperson for the Department of Education, made the distinction. Students can be arrested for criminal activity like fraud.  But not being able to pay your loans back isn't something you'll be thrown in jail for.

"Generally, defaulting on student loans is not itself a crime," said Gast. "However, there are a number of circumstances surrounding defaults that are criminal, such as trying to obtain federal student aid while in default, or getting a loan with no intention of going to school and then defaulting with no intention of ever repaying."

Kyle McCarthy, director of community outreach for Default, says the clarification is a victory for students.

"Debt prisons were abolished in the 1800s which is why it was so important that the DoE clarified for everyone that student borrowers will not be arrested for defaulting on their student loans," McCarthy said.

He credits the over 300 petition signers on Change.org who asked the Department of Education to clarify their position.

"Thanks to everyone who took the time to join with us on this very important issue," said McCarthy. "Change.org is a great platform which allows people to make a real difference by drawing attention to true injustices happening
everyday.  Thanks again to everyone who took action."

But the student loan crisis still looms over millions in our nation. What should our next step be to help students overwhelmed by debt? What can you do in your community to make sure that college loans are manageable and lead to productive jobs for your community? Write us here at Change.org or start your own petition today.

Photo credit: rrunaway via Flickr

Megan Cottrell is a reporter and writer living in Chicago.
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