Free Republic
Browse · Search
General/Chat
Topics · Post Article

Skip to comments.

Debt Collectors Cashing In on Student Loan Roundup
The New York Times ^ | Sept 8, 2012 | Andrew Martin

Posted on 09/09/2012 6:47:49 AM PDT by Uncle Chip

At a protest last year at New York University, students called attention to their mounting debt by wearing T-shirts with the amount they owed scribbled across the front — $90,000, $75,000, $20,000.

“I couldn’t believe the accumulated wealth they represent — for our industry,” the consultant, Jerry Ashton, wrote in a column for a trade publication, InsideARM.com. “It was lip-smacking.”

Though Mr. Ashton says his column was meant to be ironic, it nonetheless highlighted undeniable truths: many borrowers are struggling to pay off their student loans, and the debt collection industry is cashing in.

As the number of people taking out government-backed student loans has exploded, so has the number who have fallen at least 12 months behind in making payments — about 5.9 million people nationwide, up about a third in the last five years.

In all, nearly one in every six borrowers with a loan balance is in default. The amount of defaulted loans — $76 billion — is greater than the yearly tuition bill for all students at public two- and four-year colleges and universities, according to a survey of state education officials.

To get the money back, the Department of Education last fiscal year paid more than $1.4 billion to collection agencies and other groups to hunt down defaulters.

Hiding from the government is not easy.

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy; Education
KEYWORDS: boondoggle; college; debt; education; loans; nondischargeable; studentdebt
Navigation: use the links below to view more comments.
first previous 1-2021-4041-47 next last
To: Racehorse
Debt collection is one industry which deserves close and rigorous regulation. They’re scumbags. One company based in California calls and sends me letters trying to recover debts I do not owe to San Antonio hospitals in which I have never received treatment. NEVER!

Yep - I had one based in Texas trying to collect on a medical bill I had paid when I got the bill. They kept coming back with stronger warnings until I sent both them and the medical folks they represent a registered letter telling them that if this continued, or if my credit rating took a hit because they couldn't get their $hit straight, the next missive would be from my lawyer and the instructions for my lawyer would be to collect as much money as humanly possible.

21 posted on 09/09/2012 7:28:59 AM PDT by trebb ("If a man will not work, he should not eat" From 2 Thes 3)
[ Post Reply | Private Reply | To 6 | View Replies]

To: Racehorse

That is possibly a case of stolen identity. I would recommend checking with one of the several accredited websites that help folks determine if they are victims of identity theft or not. This might only seem like an inconvenience right now, but what if this person jumps bail on some felony charges under your name, or if they get into your 401K account and cash it out.


22 posted on 09/09/2012 7:29:19 AM PDT by Stonewall Jackson ("I must study politics and war that my sons may have liberty to study mathematics and philosophy.")
[ Post Reply | Private Reply | To 6 | View Replies]

To: ontap
And companies stupid enough to lend that kind of money to people who have never held a job and have no record of financial responsibility are smart? Of course the government, who I suppose guaranteed the loan, is even smarter! A pox on all of them, kids, financiers and government!
23 posted on 09/09/2012 7:33:57 AM PDT by pepperdog (Why are Democrats Afraid of a Voter ID Law?)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Cowgirl of Justice

“WTF where these idiot losers thinking?”

You’ve hit upon the crux of the issue.


24 posted on 09/09/2012 7:38:28 AM PDT by pingman ("Human history seems logical in afterthought, but a mystery in forethought." (Strauss & Howe))
[ Post Reply | Private Reply | To 16 | View Replies]

To: Uncle Chip

I’m more worried about Ms. Cordeiro putting junior in the back seat of her (expensive-looking) vehicle than about whether she’s a deadbeat. I guess no one ever told her how easy it is to forget about a kid back there (particularly if a debt collector calls), and thus put him at great risk, particularly in the summer.

Tragic.


25 posted on 09/09/2012 7:38:48 AM PDT by BobL (You can live each day only once. You can waste a few, but don't waste too many.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Uncle Chip
I believe that Bill Clinton's campaign moniker, "The Man from Hope", gave rise to his college funding tax scheme, the "Hope Credit". I have ALWAYS regarded this as a totally cynical sop to the Educational Establishment, a major component of the Democrat Party mechanism.

Being limited to the 1st 2 years of post secondary "Higher Learning" costs, it served the purpose of luring in marginal students to 'try out' for those high-paying college graduate jobs. It could not be used for technical or direct skills training courses. Thus students (or parents) are encouraged into "Higher Learning" but with little regard as to what the end expense may be.

Strange thing about "Higher Learning" costs in the past several decades, no matter what the inflation rate or cost of living indexes may show, the tuition/residence/materials cost goes up. In the 1986-2011 time frame, the CPI went up 115% while Tuition went up 498%. Add to this is the fact that the "Higher Learning" employed financial advisors are there to KEEP THE SEATS FILLED and not for the financial benefit of the student.

Is "Higher Learning" a racket? /sarcasm

Is College a liberal stalking horse to destroy our culture? /sarcasm

26 posted on 09/09/2012 7:42:37 AM PDT by SES1066 (Government is NOT the reason for my existence!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: BobL

What happened to her child?


27 posted on 09/09/2012 7:47:44 AM PDT by fatima (Free Hugs Today :))
[ Post Reply | Private Reply | To 25 | View Replies]

To: BobL
Nevermind I thought you meant the author.It's the law to put them in the back seat at that age.
28 posted on 09/09/2012 7:52:10 AM PDT by fatima (Free Hugs Today :))
[ Post Reply | Private Reply | To 25 | View Replies]

To: Uncle Chip

“By the time the government caught up with him, Mr. Chaskin owed more than $19,000 in accumulated interest and penalties, but the judge reduced the amount to $8,200 after Mr. Chaskin pleaded for a break.”

He should have to pay it all back, especially since he had $20k to play with in a brokerage account. Other than that, people (parents and kids) are learning serious lessons about taking money that is offered to you as a loan.

And remember, as bad as the tactics sound here, try borrowing from a shark (like my neighbor did a long time ago), their ways of dealing with deadbeats are a bit more, how do you say, effective (although in his case, he paid it back per plan).


29 posted on 09/09/2012 7:55:56 AM PDT by BobL (You can live each day only once. You can waste a few, but don't waste too many.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ladyjane

Apparently you missed my /s.


30 posted on 09/09/2012 7:57:21 AM PDT by NoGrayZone (For evil to triumph it is only necessary for good men to do nothing.)
[ Post Reply | Private Reply | To 19 | View Replies]

To: Racehorse

there is regulation. Enforcement is a joke. collectors know they can get away with everything because their targets have no money and are a low priority when violations are reported.

nobody cares.


31 posted on 09/09/2012 8:02:10 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
[ Post Reply | Private Reply | To 6 | View Replies]

To: Uncle Chip

Even setting the “basketweaving” PhDs aside, consider how many people we all know (including sometimes, ourselves) who are or were employed in a field almost completely unrelated to their undergraduate majors. In the days of “liberal arts education”, it was not unusual for the biology major to end up running a bank, under the theory that a four-year degree taught critical thinking and analytical skills that were transferrable beyond one’s area of major study. Even if, in today’s much constricted jobs economy, that is still somewhat true, it’s a very expensive gamble for an uncertain outcome.

And, what happens to the lifetime earnings, not to mention the student loan repayment timetable, when you allow for the years living in mom’s basement and/or the years working below one’s potential (underemployed)?


32 posted on 09/09/2012 8:04:53 AM PDT by bigbob
[ Post Reply | Private Reply | To 1 | View Replies]

To: Uncle Chip

No one needs to accrue $90K in loans. If you can’t afford a big-name school, don’t go there. Go to community college and a state school. For most jobs, once you’re out in the workforce, nobody really cares where you went to college.


33 posted on 09/09/2012 8:07:52 AM PDT by informavoracious (Abortions are unproductive wrongs, not reproductive rights.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: NoGrayZone

No, I saw your /s. ;-)

I was just looking for a somewhat relevant post to respond to. I’m always surprised when I see anyone funding a graduate degree with student loans. (obviously there are exceptions)


34 posted on 09/09/2012 8:18:50 AM PDT by ladyjane
[ Post Reply | Private Reply | To 30 | View Replies]

To: fatima

“Nevermind I thought you meant the author.It’s the law to put them in the back seat at that age.”

Sometimes we simply have to get tinted windows and ignore “the law”, as it’s now obsolete with air bags that don’t deploy when there’s a kid in the front (via weight sensors in the seats). I know others think they’re perfect, but I’m not, so I actually (or read did) worry about leaving my kid(s) in the back seat, especially here in Houston.


35 posted on 09/09/2012 8:20:50 AM PDT by BobL (You can live each day only once. You can waste a few, but don't waste too many.)
[ Post Reply | Private Reply | To 28 | View Replies]

To: rarestia

“This was all calculated and expected, I assure you. The Obama regime WANTS debt slaves.”

Uh it was under Dumbo Dubya’s reign of error (with a GOP controlled Congress) in 2005 that the inability to discharge student loans was put in place.

http://www.gpo.gov/fdsys/pkg/PLAW-109publ8/html/PLAW-109publ8.htm

Plenty of us small government conservatives on FR warned that it was a terrible idea for a very simple reason - for every dollar that had to be paid to some debt collector was a dollar that couldn’t be spent to help the economy. Looks like we were proven right again.


36 posted on 09/09/2012 8:48:21 AM PDT by KantianBurke (Where was the Tea Party when Dubya was spending like a drunken sailor?)
[ Post Reply | Private Reply | To 3 | View Replies]

To: BobL

Oh,that’s a worry.I didn’t know about the weight sensors .


37 posted on 09/09/2012 9:15:21 AM PDT by fatima (Free Hugs Today :))
[ Post Reply | Private Reply | To 35 | View Replies]

To: Uncle Chip

I’m actually one of the guys making good on my old student loan. About time I made that amend.


38 posted on 09/09/2012 9:17:45 AM PDT by Lazamataz (Communist Party = Democrats. Socialist Party = Republicans. WE NEED A CAPITALIST FREEDOM PARTY!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Racehorse
After several months of not hearing from them, thinking my demand they cease contacting me and remove me from their database, they started up again!

I had something similar happen. I thought I put a stop to the phones calls after I managed to talk to a real person at the dept collection agency and telling them I had no idea who they were looking for. About 6 months later I started getting phone calls for the same unknown person. They even called my parents in an another city looking for this person. Unbelievable. The calls eventually went way when I was home during the workday and answered the phone.

I am guessing these dept collection firms buy, sell and trade cases and start from scratch each time..

39 posted on 09/09/2012 9:18:39 AM PDT by EVO X
[ Post Reply | Private Reply | To 6 | View Replies]

To: ladyjane

I am speaking of degrees which get you no where and no job.....except of course, in government.


40 posted on 09/09/2012 9:40:10 AM PDT by NoGrayZone (For evil to triumph it is only necessary for good men to do nothing.)
[ Post Reply | Private Reply | To 34 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-47 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
General/Chat
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson