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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 tangomargarine on Monday May 22 2017, @10:10PM (4 children)
An educated populace asks way too many questions about the schenanigans you get up to while working in government. Much better to cut education funding to render them more docile.
"Is that really true?" "I just spent the last hour telling you to think for yourself! Didn't you hear anything I said?"
(Score: 2) by kaszz on Monday May 22 2017, @10:16PM
Until some other nation run circles around you and there's no way around that other than having their own educated people to secure national security and wealth. Uneducated people are easy to control but can't help you when the whole system is at stake.
How long has America been the top of the world when it comes to science and technology? I have read some indications that it was with WWII it took of and were quite dismal before that.
(Score: 2) by Runaway1956 on Tuesday May 23 2017, @03:52PM (2 children)
That seems counterintuitive, doesn't it? More educated people always seem rather docile. Hillbillies and rednecks are far more likely to fight for little to no reason.
(Score: 0) by Anonymous Coward on Tuesday May 23 2017, @03:52PM
Hillbillies, rednecks, and MUSLIMS!!!
(Score: 2) by tangomargarine on Tuesday May 23 2017, @06:22PM
It's easier to tell the plebes that everything is fine if they don't know how things are supposed to work.
"Is that really true?" "I just spent the last hour telling you to think for yourself! Didn't you hear anything I said?"