Student Loan Debt Collectors have to follow rules, too
Sept. 14, 2012
At a protest against mounting student loan debt, students wore T-shirts with the amount they owed scribbled across the front — $90,000, $75,000, $20,000. A debt collection consultant, Jerry Ashton, who witnessed it remarked in a column he wrote for a trade publication, InsideARM.com, “I couldn’t believe the accumulated wealth they represent — for our industry…. It was lip-smacking.”
It is amazing that he wrote it. While it is comical, it illustrates the worst excesses of the industry. It creates images of Wile E. Coyote drooling over the crowd, envisioning a tasty dinner. Since its once-thriving business of credit card collection has diminished with the rising tide of unemployment, the industry has an outstanding balance of more than $1 trillion. Student loans have become expected silver lining for the debt collection industry.
That means 2 important things for consumers to remember:
1. New collection agencies are going to get into the student loan business.
2. Collection agencies are going to get more aggressive overall.
Watch out! Student loans are consumer debts and the collection agents have to follow the same rules. Just because you may have student loans, doesn’t give them a right to abuse you if you fall behind.