Skip to comments.debt collectors reap huge salaries chasing student loans
Posted on 05/15/2012 8:08:54 PM PDT by TurboZamboni
Minnesota nonprofit that's on the front lines of a growing debate over student-loan debt.
Bloomberg Businessweek profiles Educational Credit Management Corp., one of the 32 guaranty agencies" that oversee student loans for the U.S. Department of Education and try to recover money.
Its bill collectors can be highly rewarded. ECMC's top collector took home $454,000 in just one year, twice as much as the U.S. secretary of education. The CEO of the group made $1.1 million in 2010. The company moved from downtown St. Paul to Oakdale a few years ago.
(Excerpt) Read more at bizjournals.com ...
“But I thought that was, like, free money, man! “/s;)
“When the lending institution decides the debt is noncollectable, then issues you a 1099C for the forgiven debt
Pardon my iggernunce, but why would they do that? I thought they reported such things to the evil credit rating agencies to ruin your credit.
When the debt collectors are unable to collect the debt, the lending institution writes it off as a business expense then issues you the 1099C, copy to IRS. That’s when your troubles REALLY begin.
Between 1993 and 2007, the number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent. Inflation-adjusted spending on administration per student increased by 61 percent during the same period, while instructional spending per student rose 39 percent. Arizona State University, for example, increased the number of administrators per 100 students by 94 percent during this period while actually reducing the number of employees engaged in instruction, research and service by 2 percent. Nearly half of all full-time employees at Arizona State University are administrators
A significant reason for the administrative bloat is that students pay only a small portion of administrative costs. The lion’s share of university resources comes from the federal and state governments, as well as private gifts and fees for non-educational services. The large and increasing rate of government subsidy for higher education facilitates administrative bloat by insulating students from the costs. Reducing government subsidies would do much to make universities more efficient.
For public universities the administrative bloat is much worse than at private colleges - administrative positions grew by 39% between 1993 and 2007, almost four times the 9.8% increase for instructional positions. At private universities, without access to the public largess, administrative and instructional positions increased at about the same rate.
And we wonder why college costs too much...
“F U, Pay Me!” - Goodfellas
Agreed, administrators are the scourge of government and business alike. Does top management even keep an eye on the ratio of indirect to direct labor any more?
p.s. I like your handle there TZ, you must be a hockey fan
(IMHO, this is why it's not)
Free tax advice (caveat emptor)...
Kent Conrad thought so,too:
They’re already calling it the “Bismarck Bribe”:
The legislation contains provisions apparently designed to ensure votes from wavering Democrats. As outlined in the House version, the compromise plan would give nonprofit loan providers in several states the right to participate, along with for-profit loan companies selected through a competitive process, in helping the Education Department distribute loan money to students.
A new element, included in the plan issued on Thursday, would give a specific right to the Bank of North Dakota to issue federally subsidized student loans, meaning that it would be the only lender remaining outside of the Education Department’s direct-lending system.
The Bank of North Dakota is a state-owned lender that Democratic aides described as representing the type of nonprofit entity they want to encourage. Critics of the loan bill suggested the provision was designed to win the support of a key Democrat, Sen. Kent Conrad of North Dakota, chairman of the Senate Budget Committee.
I did not know that. I thought they sold those debts to zombie debt collectors.