Government Mulls Making Debt Collection Rules Secret
Should student loan borrowers have a chance to know the rules and strategies used by debt collectors?
The U.S. Department of Education appears to be saying no, at least for now, to the dismay of consumer rights and government transparency advocates.
The department says it is just temporarily removing from public view its procedures for the companies it hires to collect from defaulted student borrowers. Education says it is "reviewing" what should be public. Once the review is "complete, we will re-post all appropriate information," the department says. Meanwhile, the department directs borrowers having trouble making payments to its Guide to Defaulted Student Loans.
But many outside the government are worried. The guide designed for borrowers is incomplete, says Deanne Loonin, a student debt expert for the National Consumer Law Center. The site designed for collectors gives borrowers updates on changes to rules and practices "you can't get anywhere else," Loonin says. Loonin would regularly compare what collection agencies told her clients with the laws and specific procedures posted on the collectors' site to make sure her clients were treated fairly and legally. She says this is the first time she started using the site in 2004 that she has noticed the department hiding the collections procedures from the public.
Many transparency advocates also worry that the department's move contradicts the Obama administration's lofty rhetoric. "A democracy requires accountability, and accountability requires transparency," President Obama declared in a memo on his first day in office. "Agencies should take affirmative steps to make information public. They should not wait for specific requests from the public. All agencies should use modern technology to inform citizens about what is known and done by their
