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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.
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(Score: 0) by Anonymous Coward on Monday May 22 2017, @11:37PM (3 children)
Free education and healthcare, because an educated and healthy citizenry is a productive citizenry. I know, its un'murkin, flies in the face of all the greed and narcissism thats the base of The 'murkin Dream. How's that working now...
(Score: 2) by jmorris on Tuesday May 23 2017, @04:15AM (2 children)
Except reality refuses to line up with your beliefs. You choose the bad option, discard reality and keep the belief.
Free government schools didn't work in K12 here in the U.S. and you can't point to a success story anywhere on the planet at any time where they have worked anywhere from PreK to graduate level. Read the people who organized the push toward government schools and realize there is a reason, the government schools DID work almost exactly as designed but because they have suppressed the original design goals we foolishly judge them based on whether they actually teach people and noticing they don't do very well at that task.
Then the failure was made complete when the private schools the future leaders were supposed to attend became infected with the rot from the public government schools for everyone else and now we have idiots leading idiots. And in a nutshell this is why Western Civilization is doomed.
(Score: 0) by Anonymous Coward on Tuesday May 23 2017, @07:33AM
Lovely how you ignore the multiple successful countries where this does work. For some reason you just think taxing the rich at a much higher rate is on par with treason.
K12 is actually quite successful, the level of education for the average teen is way higher today. The worst change was No Child Left Behind, and there are many problems, but overall the US population is quite highly educated. The US college system really went downhill when Reagan defunded much of the system and for-profit corporations got their hands in the pie. Its like you look at the world through a distorted mirror that filters reality through the lens of radio talk shows and Fox news bullshit. Occasionally your hateful cynical viewpoint of reality hits the mark, but that is just simple statistics at work. Propaganda has to have some basis in reality or it quickly falls apart.
(Score: 2) by butthurt on Tuesday May 23 2017, @10:09AM
Not by your unstated criteria, perhaps. However by the obvious--if somewhat nebulous--criterion of literacy, Latvia would appear to be a success:
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https://www.britannica.com/place/Latvia [britannica.com]