Monday, March 26, 2012

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

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