Tag: student loans

British Universities Push Sharia Loans While Taxpayers Cover The Unpaid Tab

British universities are now openly advertising government-backed “interest-free” student loans designed around Islamic finance rules.

The Alternative Student Finance product, based on the principle of takaful, replaces interest with a mutual “contribution” that is ring-fenced to fund other students on the same scheme rather than flowing back into the Treasury.

Official forecasts already expect nearly half of student debt never to be fully repaid, so British taxpayers will underwrite the shortfall while the ring-fenced pot serves a program primarily aimed at Muslim students, the Telegraph reports.

The scheme is open to anyone eligible for student finance, yet it exists because Islamic law prohibits interest.

Universities including University College London, Bristol, Leeds, City St George’s, Newcastle and De Montfort have begun telling applicants the loans could be available in the 2026-27 academic year, describing them as “compatible with Islamic finance principles,” “non-interest bearing” and “sharia-compliant.”

The Department for Education paid the Islamic Finance Council UK more than £365,000 in public money to design it and has presented the arrangement as one of the first state-backed sharia-compliant student loan systems in the world.

Suella Braverman, Reform’s education spokesman, said: “This outrageous anti-British scheme creates a two-tier education system and divided society. The scheme from Labour proves they are addicted to double standards in all aspects of British life.”

She added that offering sharia-compliant loans risked “creating parallel institutions that are incompatible with the British way of life” and that “the whole idea is made even more farcical by the fact that the Treasury, and therefore British taxpayers, will have to foot the bill if they fail to pay.”

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DOJ Flags Nearly 831,000 Student Aid IDs In Nationwide ‘Ghost Student’ Fraud Probe

Federal investigators say overseas-linked fraud rings used stolen American identities to claim college aid, while new safeguards could affect legitimate applicants.

Federal investigators have identified 830,840 potentially fraudulent student aid IDs associated with nearly $130 million as the Justice Department pursues an alleged international scheme that used stolen Americans’ identities to obtain federal college assistance.

The department announced Operation Ghostbusters on October 29, unveiling charges against five defendants across Virginia, New Jersey, and Nebraska and a seizure of more than $750,000 in cryptocurrency connected to the suspected network. Prosecutors say individuals in Kenya worked with accomplices in the United States to collect aid refunds for people who never attended classes.

The government has not established that every flagged ID was fraudulent or that all $130 million reached criminals. The FBI separately reports more than $32 million in identified losses in similar ghost-student schemes, with additional losses suspected. Those figures describe different categories and should not be added together.

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Trump Treasury Lining Up Private Debt Collectors To Seize Wages From Nearly 10 Million Student Loan Defaulters: Report

Trump administration officials are preparing to penalize millions of Americans in default on their federal student loans next year, The Washington Sun reported, citing five people familiar with the matter. The Treasury Department is moving forward with plans to hire private debt collectors, possibly as soon as November, three of the sources said, and those plans are unlikely to be announced before the midterm elections.

According to the Treasury’s Sept. 30 release – there are more than 5 million borrowers who have been in default for over six years and another 5 million who entered default in less than a year.

The plan would revive collections the administration shelved this year. As we noted in January, the Education Department said it would begin garnishing wages in January, with up to 15% of a borrower’s after-tax income at stake and about 1,000 notices expected the first week. That same month, however, ABC News reported that the department paused both wage garnishment and Treasury Offset Program collections – tax refund seizures included. Under Secretary Nicholas Kent said the tools “will function more efficiently and fairly” after reforms, and the department said it had collected roughly $500 million from defaulted borrowers before the pause.

According to the Sun, last year the White House Office of Management and Budget began helping the Education Department prepare to seize federal benefits and wages from defaulted borrowers, and Treasury officials blocked the effort, citing the economic cost of punitive measures against workers. Staff said they warned senior Treasury officials that scores of Trump supporters would be seriously hurt by going after the wages and benefits of people struggling to keep their jobs. “This is not who you think it is. The demographics are not good for us,” one source said.

Some officials want to garnish benefits and wages for the current tax year, meaning the April 15, 2027 deadline, but the sources cautioned that it could slip again while Treasury makes sure its new Defaulted Loans Support Center is working. That online portal for rehabilitating or consolidating a defaulted loan launched Sept. 30. The administration’s stated preference remains getting borrowers into voluntary payment plans. “It would be politically insane to do this before the midterms,” one source said, “but 2027 probably makes a little more sense.”

The government has two main tools; one seizes payments that follow taxes, such as expected tax refunds, Social Security payments, and the earned income tax credit and child tax credit. The other garnishes wages by requiring employers to send the money to the government. Newsweek noted that wages can be garnished up to 15% without a court order, citing the National Consumer Law Center, and that borrowers generally get at least 30 days’ notice first.

OMB and Treasury declined to comment. The Education Department said: “We don’t respond to fishing expeditions.” IBTimes noted that no agency has responded on the record to the plans themselves, and no restart date has been announced.

Treasury’s push last year to postpone collections has cost taxpayers about $5 billion so far, according to Marc Goldwein of the Committee for a Responsible Federal Budget, and the figure grows the longer the administration waits. “They’ve done the same thing they criticized Biden for,” Goldwein said. Treasury’s September release itself blamed the prior administration for the default pile-up, including its termination of contracts with private collection vendors, the same kind of contractors Treasury is now reportedly preparing to hire.

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The Democrat Plan to Redistribute Wealth to the Wealthier

Two hypothetical college graduates who are married now have a combined annual income of $240,000; they each earn $120,000 per year.

Should an American who graduated from high school but never went to college—and who now works as a delivery truck driver, earning $43,950 per year (the median annual earnings for that job) be forced to help pay off the federal student loans of these two college graduates who make $240,000?

If former President Joe Biden had gotten his way, that truck driver and other hardworking American taxpayers would indeed have seen their tax dollars help pay off those loans.

When Biden was running for president in April 2020, he announced his plan for “forgiving student debt.”

“I propose to forgive all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities for debt-holders earning up to $125,000,” Biden said.

His plan, he said, would also “[i]mmediately cancel a minimum of $10,000 of student debt per person.”

After he was elected president, Biden did not get Congress to enact new legislation to implement this plan. Instead, he took unilateral executive action in an attempt to do so—and his administration claimed this action was justified under a law that had been enacted under former President George W. Bush.

In 2003, Bush signed the Higher Education Relief Opportunities for Students Act, aka the HEROES Act.

This act, said its official summary, “[a]uthorizes the Secretary of Education to waive or modify any requirement or regulation applicable to the student financial assistance programs under title IV of the Higher Education Act of 1965 as deemed necessary with respect to an affected individual who: (1) is serving on active duty during a war or other military operation or national emergency; (2) is performing National Guard duty during a war, operation, or emergency; (3) resides or is employed in an area that is declared a disaster area by any Federal, State, or local official in connection with a national emergency; or (4) suffered direct economic hardship as a direct result of a war or other military operation or national emergency.”

As the nation headed into the 2022 midterm elections, Biden announced his student loan forgiveness plan. “On August 24, 2022,” explained the Congressional Research Service, “the Biden Administration announced it would invoke the Higher Education Relief Opportunities Act of 2003 (HEROES Act) to carry out a ‘one-time student loan debt relief policy’ to ‘address the financial harms of the [COVID-19] pandemic for low- and middle-income borrowers.’ Under the one-time student debt relief policy (HEROES Act policy), ED (Education Department) would have cancelled up to $10,000 in qualifying HEA Title IV federal student loan debt for borrowers with an adjusted gross income (AGI) in 2020 or 2021 of less than $125,000 (for individuals or married borrowers who filed federal income taxes separately) or $250,000 (for married couples filing jointly and certain other individuals).”

So, under Biden’s plan, a law that had been designed to help individuals “serving on active duty during a war or other military operation or national emergency” or had “suffered direct economic hardship as a direct result of a war or other military operation or national emergency” could be used to grant general federal student loan forgiveness in the wake of the COVID-19 pandemic.

On Sept. 26, 2022, the Congressional Budget Office sent a letter to Sen. Richard Burr, R-N.C., and Rep. Virginia Foxx, R-N.C., that estimated the cost of the Biden plan. “As of June 30, 2022, 43 million borrowers held $1.6 trillion in federal student loans,” said this letter. “About $430 billion of that debt will be canceled, CBO estimates.”

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Democrat Socialist Who Wants to ‘Tax the Rich’ Complains About Paying Her Own Back Taxes and Student Loan Debt

Angie Nixon, the Democratic Socialist running for U.S. Senate in Florida, is not interested in paying her fair share.

The ‘tax the rich’ leftist commented during a podcast appearance this summer that she does not want to pay her back taxes or her student loan debts.

How incredibly typical.

The Washington Free Beacon reports:

Nixon’s personal income in 2025 clocked in at well over five times the median income of the average American worker, yet she failed to set aside enough of her substantial earnings to pay her taxes and repay her student loans. The dues-paying Democratic Socialist reported in her latest disclosure submitted in Florida that, as of Aug. 25, she owes nearly $14,000 in unpaid taxes to the IRS on top of $17,600 in unpaid federal student loans.

Nixon’s unpaid taxes and student loan debts are a drop in the bucket compared with the extraordinary and diversified income she earned in 2025. Still, the Democratic Socialist, who wants to institute a 5 percent annual wealth tax on billionaires, recently complained about how “crazy” it is that the federal government is forcing her to pay her own fair share.

“Your girl over here is on a payment plan to pay the IRS $12,000 back,” Nixon said during a podcast interview in July. “And listen, I ain’t made $105 billion, but you making me pay $12,000 to the feds? Like, really? That’s what we’re doing? And they already took some of the taxes away anyway. I paid over $10,000. It’s just, it is crazy.”…

As for Nixon’s unpaid federal student loan debt, she says she won’t repay it. In October 2023, when Congress ended the pandemic-era student loan moratorium, Nixon, a University of Florida graduate, declared on Facebook she was “above” paying back her educational debts.

“Dear Student Loans. It’s above me now,” Nixon wrote. “I don’t wanna pay it back. Education supposed to be free.”

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The Decline Of Higher Education Continues

During my second career teaching high school English, I noticed several darkly funny but disturbing trends in “higher” education.  They were fueled by three primary drivers: abandoning merit, the federal government taking over the student loan industry, and DEI hysteria.

It was Barack Obama who federalized the student loan industry, pushing the idea that everyone should go to college.

To make that idea a reality, it was necessary for the government to guarantee student loans.

That had plenty of unfortunate and foreseeable effects. Because Colleges no longer had any financial skin in the game, they went on a mad administrator-hiring binge, which required enormous amounts of money, which required unprecedented numbers of students. 

Combined with a faux-religious devotion to DEI, colleges admitted all manner of people who in past years would have reasonably been found to be poorly suited to do college-level work. To cover this, it was necessary to do away with any sort of predictive testing like the SAT. All that was required for college admission was a student loan, unless one was a white male applying at an Ivy League school. Those guys, regardless of academic qualification, were often denied.

Enormous DEI departments with all manner of administrators and functionaries were established, and hundreds of millions were wasted on DEI gurus imported to inspire them.

So unprepared were so many, colleges were forced to establish remedial high schools on campus. It was a great scam. Full tuition for no credit, and blame students’ lack of ability on high school teachers like me, who could have told them who wasn’t academically capable if anyone had bothered to ask.

Grade inflation was a direct result of these disasters. It was necessary to hide the scams, so professors were required not only to dumb down the content of their classes and to require far less work, but to award unearned grades. An entire generation of college students was conditioned to expect maximum grades for minimum and poor work. And God help any professor who gave a minority student the grade their lack of work deserved.

As a result, innumerable students took 6-7 years to get a 4-year degree at enormous cost, but many simply dropped out without a degree, bearing enormous debt they had no credentials or ability to pay off.

I’m certainly not arguing college should be denied to anyone. I’ve known many people who struggled greatly but managed to earn a degree and were better and more productive people for it. I am arguing for rational decision-making and fiscally sound, ethical colleges.

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AOC’s student debt unpaid as she embarks on costly egg-freezing journey

Rep. Alexandria Ocasio-Cortez (D-NY) has made at least $174,000 annually for nearly eight years as a member of Congress, but like many of her “Squad” colleagues, she has yet to put a substantial dent in her student loan debt, according to House financial disclosures.

The Bronx and Queens Democrat has owed between $15,001 and $50,000 in federal student loan debt since her election to the House in 2018. That’s the same amount she owes now, according to her August disclosure, where lawmakers report ranges for debt and income.

The “Tax the Rich!” pol reported less than $81,000 in total assets.

Recently, Ocasio-Cortez has suggested that she’d been saving up for some time instead to freeze her eggs, a process that can cost between $10,000 and $20,000 per cycle.

“I got sworn into the House of Representatives when I was 29 years old,” she said in an Instagram video. “There’s this flip side where you have to then grow up in the public eye in a time that most people usually get to grow more privately.”

Ocasio-Cortez amassed the loans while attending Boston University as an international relations and economics major between August 2007 and May 2011 — and went on to tend bar in Manhattan before her successful run for Congress.

The “Squad” Democrat has consistently backed student debt cancellation. During former President Joe Biden’s term, she even pushed the 46th commander-in-chief to cancel as much as $50,000 in debt per student borrower. But she’s not the only US lawmaker who’s still holding student loans.

Rep. Ilhan Omar (D-Minn.) has held up to $50,000 over the past eight years in student debt — despite her net worth ballooning for a time to as much as $30 million due to her husband’s winery and venture capital businesses.

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The Student Loan Crisis Is Exploding

Student loan defaults have surged to 9.2 million borrowers, representing roughly one in every five people with student debt. What is astonishing is the speed of the deterioration. There were approximately 6 million borrowers in default last August. That figure jumped to 7.7 million by December. By April it had reached 9.2 million. Another 3 million borrowers are reportedly at least 90 days delinquent and appear headed in the same direction.

The government suspended reality for years through payment pauses, forbearance programs, and emergency measures that temporarily masked the problem. Now collections have resumed. Wage garnishment is returning and borrowers are once again being confronted with debts that never disappeared. Politicians celebrated the pause as though the crisis had been solved. All they really did was postpone the reckoning.

What nobody wants to admit is that the student loan system became fundamentally broken the moment the federal government guaranteed virtually unlimited lending. Once colleges realized that students could borrow almost any amount with government backing, tuition exploded. Universities had no incentive to control costs. They built lavish facilities, expanded administrations, hired armies of bureaucrats, and continuously raised tuition. Students were told that any debt was acceptable because a degree would guarantee future prosperity. The numbers tell a different story.

Tuition costs have risen by hundreds of percentage points over the past several decades, vastly outpacing inflation and wage growth. Yet many graduates entered labor markets where earnings never remotely matched the debt burden they accumulated. Entire generations were encouraged to believe that college was the only path to success. Many emerged with degrees carrying little market value but very real financial obligations.

Borrowers are returning to repayment obligations while facing some of the highest living costs in decades. Housing costs remain elevated. Insurance premiums continue rising. Food prices have increased substantially. Many young Americans are already delaying homeownership, marriage, and family formation. Now millions face renewed collection efforts and potential wage garnishment on top of those challenges. The economic pressure is becoming overwhelming.

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New Report Appears to Confirm Covenant School Shooter Audrey Hale Bought Guns With Student Loan Money

If you needed another reason to dislike student loan programs, you’re in luck.

The FBI has just released more pages from the manifesto of Covenant School shooter Audrey Hale, which suggest that she bought the guns used in the 2023 shooting with money she had from a Pell Grant.

Hale’s parents suggested this two years ago and this report appears to confirm that.

The Tennessee Star reports:

Latest FBI Release of Covenant School Manifesto Files Appears to Confirm Trans-Identified Killer Bought Guns with Pell Grant Money

The FBI on Monday released another 230 manifesto pages written by Audrey Elizabeth Hale, the biological female who identified as a transgender man on March 27, 2023, when the 28-year-old killed six at the Covenant School in Nashville, the Christian elementary school she once attended.

This latest journal appears to have been written sometime in late 2021, and includes lengthy sections about the weapons the killer planned to use to commit a mass shooting at a school sometime that year.

Following multiple pages full of weapons to purchase, the journal includes a page labeled “Account Savings Record,” which appears to reference the Free Application for Federal Student Aid (FAFSA). It also records multiple payments received from Nossi during the period when Hale attended the Nossi College of Art and Design in Nashville.

“FASFA [sic] grant checks started at $2,050.86,” wrote Hale at the top of the entry.

The page then lists a series of apparent ledger entries, starting with, “$2,656.87 (x3 checks from Nossi).” The next ledger entry states, “+$530.00 (x1 check Nossi) ($3,186.87).”

This reference to Hale’s federal student aid, located in the writings next to her entries about guns she considered buying, appears to corroborate the claims made by her parents to Metro Nashville Police Department (MNPD) detectives in 2023, when they told law enforcement their child purchased the firearms using federal Pell Grant money.

She apparently hated religion too, but that seems pretty obvious, doesn’t it?

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Education Department Ends Biden Student Loan Bailout

The Trump-McMahon Department of Education (DOE) has moved to end the last of the Biden administration’s large-scale, illegal federal student loan bailout programs.

DOE announced its agreement with Missouri to end the Saving on a Valuable Education (SAVE) Plan, which was set to cost taxpayers almost $350 billion in a decade’s time. The Dec. 9 press release celebrated the move as being not only a win for taxpayers, but necessary clarity for borrowers duped by extravagant and unrealistic Democrat promises.

Why should waitresses, construction workers, plumbers, and other hardworking Americans pay off the college degrees of strangers? The federal government already funnels far too much money into higher education as it is. In fact, federal involvement in universities is what has driven up prices and spread wokeness for decades.

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