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The federal government has, in recent years, paid debt collectors close to $1 billion annually to help distressed borrowers climb out of default and scrounge up regular monthly payments. New government figures suggest much of that money may have been wasted.
Nearly half of defaulted student-loan borrowers who worked with debt collectors to return to good standing on their loans defaulted again within three years, according to an analysis by the Consumer Financial Protection Bureau. For their work, debt collectors receive up to $1,710 in payment from the U.S. Department of Education each time a borrower makes good on soured debt through a process known as rehabilitation. They keep those funds even if borrowers subsequently default again, contracts show. The department has earmarked more than $4.2 billion for payments to its debt collectors since the start of the 2013 fiscal year, federal spending data show.
[...] Officials at the CFPB say the government should reexamine whether the loan program, and the lucrative contracts it bestows on private firms, is working for the millions of Americans struggling to repay their taxpayer-backed student debt.
"When student loan companies know that nearly half of their highest-risk customers will quickly fail, it's time to fix the broken system that makes this possible," said Seth Frotman, the consumer bureau's top student-loan official.
-- submitted from IRC
(Score: 2) by The Mighty Buzzard on Tuesday May 23 2017, @02:41AM (6 children)
Read as: Someone I've never met should pay for my schooling even though I've done nothing to earn it.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Tuesday May 23 2017, @03:33AM (1 child)
Yes, since that other person will be paying much more in taxes and providing your roads and police etc (healthcare in civilised countries).
If you were half smart, then you would go to university yourself and be the high earner.
(Score: 2) by The Mighty Buzzard on Tuesday May 23 2017, @07:51AM
You think college is a guarantee of success? In this day and age? +1 Funny
My rights don't end where your fear begins.
(Score: 3, Insightful) by bzipitidoo on Tuesday May 23 2017, @05:41AM (1 child)
Like when you were a child, going through grade school? Lot of people you never met paid for your education.
Or did your parents send you to a private school?
(Score: 2) by The Mighty Buzzard on Tuesday May 23 2017, @07:52AM
My parents paid taxes, thus was everything asked of them to school their children paid for by them.
My rights don't end where your fear begins.
(Score: 1, Insightful) by Anonymous Coward on Tuesday May 23 2017, @06:20AM (1 child)
Read as: Someone who doesn't understand the concept of community whines about their fiscal responsibilities while ignoring all factual evidence.
(Score: 1, Troll) by The Mighty Buzzard on Tuesday May 23 2017, @07:53AM
Community: You have more than me and I want some of it.
My rights don't end where your fear begins.