All Education Matters: Bloomberg: Obama Relies on Debt Collectors Profiting From Student Loan Woe

All Education Matters: Bloomberg: Obama Relies on Debt Collectors Profiting From Student Loan Woe:

Bloomberg: Obama Relies on Debt Collectors Profiting From Student Loan Woe

by Cryn Johannsen

This article was published today, and discusses the cozy relationship that the Department of Education has with private debt-collection companies who are putting more pressure on borrowers to repay their student loans.

Here are some highlights:

• With $67 billion of student loans in default, the Education Department is turning to an army of private debt-collection companies to put the squeeze on borrowers. 
• Education Department contracts -- featuring commissions of as much as 20 percent of recoveries -- encourage collectors to insist on high payments
• Debt-collection companies helped the Education Department recover $11.3 billion in defaulted loans