Notices by Cory Doctorow (pluralistic@mamot.fr)

Linda McMahon, a scammer, has thrown 5.3 million student borrowers into collections, calling them "irresponsible." Another 5.59 million will enter default in the next six months. She's opened the door to for these ex-students to have money taken out of their Social Security and other government payments, leaving them only $750/month to live on (this figure hasn't been inflation-adjusted since 1996).

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Each time they get dinged, another $20 in fees (for having their money taken away) will be added to their debts.

As David Dayen writes for *The American Prospect*, McMahon is also unleashing America's scammiest loan servicers on student borrowers:

https://prospect.org/education/2025-05-27-borrowers-besieged-student-debt/

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Take Maximus (owners of the Default Resolution Group), which has been repeatedly sued for misleading debtors, illegally taking money out of their accounts, and failing to note which borrowers were legally protected from having their funds taken. DoE loan servicers have a long and dishonorable tradition of ripping off debtors, like the giant Navient, which was eventually barred from servicing student loans altogether:

https://www.consumerfinance.gov/about-us/newsroom/cfpb-bans-navient-from-federal-student-loan-servicing-and-orders-the-company-to-pay-120-million-for-wide-ranging-student-lending-failures/

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Servicers like Maximus routinely fail in their legal obligation to inform debtors of their rights, and when debtors know their rights - for example, the right to contest wage garnishment - Maximus just ignores their paperwork:

https://escholarship.org/content/qt6rc8r76c/qt6rc8r76c_noSplash_41d21b1b129a7224ae49ae65621f8dda.pdf

Dayen cites a long list of Maximus's documented sins - for example, systematically failing to inform debtors that if they enter loan rehabilitation and make nine payments over ten months, they can avoid default.

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Every time a borrower completes this process, they come off of Maximus's books, so it's not hard to see why Maximus would fail to tell them about it.

The rules are *incredibly* complex. If you *do* enter loan rehabilitation, you can still have payments garnished from your paycheck until you've completed five separate payments.

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You can consolidate your loans - and possibly even get them canceled after 20-25 years - but that also erases any credit you've managed toward debt forgiveness, and starts piling interest on the new loan. If you get any of this wrong, you have to pay more every month, not less.

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The CARES Act ordered Maximus to stop taking money away from debtors - but some workers had their paychecks docked for *17 months* after the order went into effect, including borrowers who had already paid their debts in full:

https://protectborrowers.org/wp-content/uploads/2022/12/SBPC_AWG_Final.pdf

Buried in all the complexity around student debt are several obscure, difficult to navigate paths that can reduce or eliminate your payments.

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These scam agencies charge thousands of dollars - up to 40% of your outstanding debt - for either doing nothing or doing something you can do yourself, but can't readily find out about. This can net them tens of millions of dollars, extracted from desperate debtors:

https://www.ftc.gov/system/files/ftc_gov/pdf/panda_prosperity_complaint.pdf

There's about to be a hell of lot more of those desperate debtors kicking around.

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But these are almost impossible to find (the Office of Federal Student Aid's website devotes 39 words to them, several screens down the page). This has created an opportunity for a giant scam industry that takes desperate debtors' last dollars to fill in paperwork they could easily complete for themselves, or to *pretend* to fill in that paperwork and just walk away from them:

https://www.consumerfinance.gov/enforcement/actions/monster-loans-lend-tech-loans-and-associated-student-loan-debt-relief-companies/

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Pell grants are being taken away from anyone who isn't a full-time student with a 30-hour courseload (so the poorest students, who have to work part-time while they go to shcool, will be shut out of them).

Where will students get the rest of the money? From predatory lenders. Private student loans currently pay for 7% of borrowers' education expenses - soon, it could be 90%.

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The DOE is cutting $330 billion out of the student loan pool in order to fund Trump's tax-break for the ultra-rich. This will make government loans much more expensive for borrowers - but it'll also vastly reduce the amount that students can borrow through the government. The lifetime cap on undergrad loans is now $50k, and $100k for grad students.

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This is great news for scam colleges, like Trump University, which encouraged students to take out predatory loans to pay sky-high tuition for a useless "education":

https://en.wikipedia.org/wiki/Trump_University

The Big Beautiful Bill contains numerous attacks on the safeguards against scam colleges. That means that even more public money will go to propping up fraudulent institutions, and naive students who are just looking to get an education will be on the hook to pay it back - with interest.

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Dayen calls this "The Golden Age of Scams":

https://prospect.org/power/2025-05-27-golden-age-of-scams/

He likens the current griftogenic environment to the situation in Elizabethan England, where counterfeit money was in wide circulation. This prompted Sir Thomas Gresham to coin "Gresham's Law": "Bad money drives out good."

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Gresham observed that anyone who was passed a bad coin would try to spend it as soon as possible, and if they managed to do so, the sucker who received the bad coin would then hasten to get rid of it. Eventually, everyone is preferentially spending counterfeit money and hoarding their legitimate coins.

In Trump's scam-friendly America, honest businesses operate at a disadvantage.

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The car dealer that cheats you on the inspection report for your car, cheats you again on your loan, and cheats you a third time on warranty service will have more money to advertise and market than the honest seller across the street. The supplement-pushing grifter has more money to spend on marketing than the company that makes real medicine.

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Trump is out there pardoning shady crypto exchanges, gutting the white collar crime cops, and accepting tens of millions of dollars in payments from companies and executives who are under investigation for stealing from the American people. The Consumer Finance Protection Bureau just shut down its kleptocracy unit (seriously!):

https://news.bloomberglaw.com/us-law-week/bondis-day-one-corporate-crime-memos-rattle-white-collar-bar

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Trump handed control over the Department of Education to the scammer Linda McMahon, widow of the scammer Vince McMahon, who bought up every wrestling league so that his performers had nowhere else to go, then falsely reclassified them as independent contractors, taking away their health insurance and leaving them to beg for Gofundme pennies so they could die with dignity in their mid-fifties from their work-related injuries:

https://www.youtube.com/watch?v=m8UQ4O7UiDs

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Trump - who has repeatedly lied to investors and customers about his business plans - has elevated the 21st century's most notorious defrauder of investors and customers and put him in charge of restructuring the US government:

https://www.wired.com/story/theres-a-very-simple-pattern-to-elon-musks-broken-promises/

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Under the previous administration, agencies like the FTC and (eventually) the DOT revived their powers to block "unfair and deceptive" commercial practices, from fast food restaurants forcing cashiers to sign noncompete "agreements" to Southwest Airlines selling tickets for planes that didn't exist and cancelling the least-booked flights every morning, stranding passengers:

https://pluralistic.net/2023/01/16/for-petes-sake/#unfair-and-deceptive

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But this administration has reversed course, demonstrating time and again that there is no rugpull too petty or cruel to pass up. Take this one: RFK Jr blames processed food for health problems on indigenous reservations, so the USDA is...killing the food banks that provide local, fresh produce to indigenous reservations:

https://www.propublica.org/article/tribal-food-grant-cuts-trump-rfk-jr

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