Hell hath no fury like a debt collector scorned. A kind of twisted remark as compared to the original one composed by the famous English playwright William Congreve. But considering the present day dismal scenario of our otherwise crestfallen student population, the statement says it all. Here's why:
Amanda Cordeiro, 29, from Clermont, Florida has confessed to having her phone number changed four times in just a year. She had a student loan debt of $55,000. Though she couldn't complete her graduation way back in 2010 but that hasn't spared her the horror of fielding at least seven collection calls in a day.
The situation is worsening by the day. Around half a million more people have defaulted on their student loans than in 2013. In other words, some 500,000 more defaulters have slid into a default, according to the latest data released by the Department of Education (DOE). The rate of federal student loan default has steadily risen by 5 percent within a year. At least one in five college debtors that should complete their repayments are a year or so behind in fulfilling their obligations. And almost one in eight people have their overall education loans in default.
Sensing the dismal condition of the helpless and mostly jobless student population, both lawyers Deanne Loonin and Persis Lu associated with the National Consumer Law Center (NCLC) have brought to light the growing plight of these young, undiscerning people through their extensive research on how debt collectors are having a field day in exploiting them after having been lured with handsome remuneration packages by the DOE.
Here are some of the crucial facts that was revealed by their research:
the DOE has been incompetent in monitoring borrower complaints against the atrocities committed by the collection agencies and,
that the DOE didn't take any sort of remedial steps to improve the worsening debt collection practices in the country.
The bottomline is that the Federal Student Aid (FSA) office placed under the DOE has proved incompetent in containing the horror unleashed by the collection agencies and that they should have worked in line with the Federal Debt Collection Practices Act (FDCPA) in accordance to the terms and conditions of their agreements. Hence, what is apparent here is that money and not the law has served as fuel in driving up such a horrible collection agency practices across the length and breadth of the country.
Here are some suggestions as put forth by the NCLC that the DOE may introduce as part of its modus operandi to collect loan payments from the student loan defaulters:
So, whom do we hold responsible for all this mess? According to popular view, it is considered as another major blow to the Obama Administration and that the President himself somehow fell short of delivering on his pre-poll promises. In that case, even the Congress should be held liable for the rainy days that our students are made to undergo for years on end. They shoot every plan that the President Obama even utters. Basically, all his promises are just repetitions of what the Republicans before him suggested.
On a different Massachusetts Senator Elizabeth Warren, who has found a high profile mentor in our President Obama, has been working tirelessly to make colleges more affordable. One of her proposals include that outstanding student loan debts be refinanced at below four percent rate of interest. The Senate has already cleared this bill in June 2014 and another round of discussion is to be held in the Senate floor once again to get fresh votes in favor of the bill this September.