September 11, 2012
Debt Collectors Cashing In on Student Loan Roundup
Andrew Martin::
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.
On the sidelines was a business consultant for the debt collection industry with a different take.
"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.
Posted by Jim Zellmer at September 11, 2012 2:08 AM
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From the article:
In an attempt to recover money on the defaulted loans, the Education Department paid more than $1.4 billion last fiscal year to collection agencies and other groups to hunt down defaulters.Hiding from the government is not easy.
I absolutely love this. Candidate Obama stops at universities to get out the vote, badmouthing banks and private lenders. Vote for me he says. Wide eyed students agree. Yea, get those banks!!!
Once in office, student lending is nationalized enabling the fed to spend billions to go after the very people who sought security in a benevolent government.
New textbook, $120. Tuition 15K. This article, priceless.
