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posted by on Monday May 22 2017, @06:53PM   Printer-friendly
from the cost-effective dept.

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


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  • (Score: 0) by Anonymous Coward on Monday May 22 2017, @11:49PM (2 children)

    by Anonymous Coward on Monday May 22 2017, @11:49PM (#513845)

    Which is odd because potato pickers arent evenly distributed between the genders and races. We must fight for equality of pickers, more women and white people!

  • (Score: 0) by Anonymous Coward on Tuesday May 23 2017, @12:53AM (1 child)

    by Anonymous Coward on Tuesday May 23 2017, @12:53AM (#513869)

    Heh.

    Think of it this way. If you're serious about doing something about illegal immigration, you have to be serious about making sure that farmers have seasonal labor available to harvest potatoes or whatever. If all you're serious about is just hounding some brown people who were unlucky enough to be caught (wherever here is) illegally, you're sort of dipping into racism territory.

    Yes, yes, I've heard "illegal is not a race" enough times. I mean look. I grew up not far from farm country, with blueberry fields in walking distance. There were migrant kids in the classroom with me. Somebody has to pick those blueberries, and that was one opportunity that was available for me when I was 12 and wanted money to buy whatever was trendy, say fidget spinners because I don't remember. (Magic the Gathering? Pogs? Something like that.) However, it was an under-the-table opportunity. You can pay kids who aren't old enough to work legally, and you can also pay migrants who aren't here legally.

    Point is, somebody needs to do it, and I think even minimum wage is too high. I'm not going to pretend to be able to formulate the Golden Answer to this problem in an AC post to SN, but if you really want to stop illegal immigration, you need to adjust the law so that 12 year old kids can pick those blueberries. (There are special rules for agricultural CDLs in my state, why not agricultural workers?) Then you need to really crack down on blueberry farmers who pay for labor under the table. Once that's done, then I'll agree that "illegal" isn't a race.

    Of course, the blueberry farmers absolutely won't like it. Even if you make this special class of agricultural labor tax-free (and why not, that seems a reasonable way to transition to me), now you're requiring the blueberry farmers to keep track of shit loads of paperwork they never had to before, especially since we're talking about people who don't have state ID.

    That may also increase diversity among seasonal agricultural laborers by essentially allowing these jobs to be fully exposed to the market. Or it may not. I spent too long typing this. I leave this half-baked post for somebody else to tear apart. Holy crap I went off topic.

    • (Score: 3, Informative) by Arik on Tuesday May 23 2017, @02:16AM

      by Arik (4543) on Tuesday May 23 2017, @02:16AM (#513918) Journal
      "Think of it this way. If you're serious about doing something about illegal immigration, you have to be serious about making sure that farmers have seasonal labor available to harvest potatoes or whatever. "

      And here's how you do that. It's called a price mechanism. The price of manual labor rises until people are willing to do it again. The price of potatoes rises until the farmers can afford to pay that much.

      "Yes, yes, I've heard "illegal is not a race" enough times. "

      It's not, and it's odd that you seem to be dissing the notion without engaging it.

      "However, it was an under-the-table opportunity. You can pay kids who aren't old enough to work legally, and you can also pay migrants who aren't here legally."

      This illustrates two solid rules that the legislators all too often forget - good intentions don't guarantee good results, and the little people you are trying to control are always going to resist in the ways they can (because they must.)

      So, politics is the art of compromise. I'd go for repealing the child labor laws AND simplifying the legal immigration process into something that mere humans can navigate without lawyers. I suspect we can both agree on eliminating the H1B program and if so we can throw that in too and call it the grand compromise.

      "Point is, somebody needs to do it, and I think even minimum wage is too high. I'm not going to pretend to be able to formulate the Golden Answer to this problem in an AC post to SN, but if you really want to stop illegal immigration, you need to adjust the law so that 12 year old kids can pick those blueberries. (There are special rules for agricultural CDLs in my state, why not agricultural workers?) Then you need to really crack down on blueberry farmers who pay for labor under the table. Once that's done, then I'll agree that "illegal" isn't a race.

      Of course, the blueberry farmers absolutely won't like it. Even if you make this special class of agricultural labor tax-free (and why not, that seems a reasonable way to transition to me), now you're requiring the blueberry farmers to keep track of shit loads of paperwork they never had to before, especially since we're talking about people who don't have state ID.

      That may also increase diversity among seasonal agricultural laborers by essentially allowing these jobs to be fully exposed to the market. Or it may not. I spent too long typing this. I leave this half-baked post for somebody else to tear apart. "

      Well I don't know if it counts as tearing you apart, but your first mistake is not to quit digging.

      You make this big costly system with all this cost of compliance... why?

      Just legalize freedom and be done with it.
      --
      If laughter is the best medicine, who are the best doctors?