Student loans in default to be referred to debt collection, Dept of Ed says

The US department of Education took my tax return one year for a remaining balance on a loan of less than $1,000. I never knew about it, and had thought I paid everything off. Well, turns out they took almost $4,000 with all their fees, interest such that had been just building and building for several years. No one had ever tried to contact me via phone, email, etc. for years.<p>The US Department of Education is known for their aggressive collection tactics, including garnishing of wages, taking tax returns and seizing homes and cars. I even heard of a single mother who had her child support taken away because she owed money to a fraudulent vocational school.<p>The US government is openly hostile to those who do business with them, and to their citizens and should be avoided at all costs.

Why do college students have to continue to pay back their loans when the legislature is bipartisanly comfortable writing off $50k+ PPP day loans per business from Covid Pandemic? [0]<p>[0] <a href="https:&#x2F;&#x2F;pppreport.org&#x2F;" rel="nofollow">https:&#x2F;&#x2F;pppreport.org&#x2F;</a>

“Less than 40% of all borrowers are current on their student loans, department officials said.”<p>Hello, 2008, my old friend I&#x27;ve come to talk with you again…

Just like social media is the cigarettes of our generation, student loans will be the &quot;preexisting conditions&quot; of it.<p>Student loans are an odious conflict of interest. People will hold themselves in disbelief that we offered predatory &quot;no risk&quot; loans to literal children, burdening their entire futures with decisions made before they had the faculties to consider it. The moral hazard of protecting a class of loans from completely irresponsible lending alone is enough before even looking at the consequences for the people who took them.<p>Then you have second and third order effects... Authoritarians don&#x27;t consult experts believing they know better so Nth order effects of short sighted policy are authoritarian kryptonite. Nth order effects have a way of asserting themselves into reality and breaking through authoritarian denial about the state of reality and nobody is happy when reality asserts itself.

unlike other loans sent to collections, collection costs are added to the loan. the amount varies by loan type, but it’s typically 25%. so for example, if you owe 50k: you miss a few payments, and put into default, the loan is sold.. and you immediately owe 62.5k. they can then start garnishing wages and any tax refunds based on this amount.

The easiest and most expedient way to resolve this issue is to a) freeze interest payments on student loans, so long as b) borrowers make timely, reasonable payments. You can&#x27;t squeeze blood from a rock and you&#x27;ll only hurt someone in the process.

&gt;“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Education Secretary Linda McMahon said.<p>I thought she was only hired to shut it down…<p>They wouldn’t just lie to us, guys?

College studentsare seen as cancer to the current administration. They used to be sweetheart pawns for the previous administration. This is why financial literacy should be mandatory education in high school so they can make more informed decision while borrowing for college.

There is an element of sadism in this sort of behavior.

Look, I am definitely NOT making any suggestions here. But you know that debt collectors are using these “lawyer gig worker” platforms to outsource their court appearances, and handing full authority to those outsourced lawyers to do the final negotiations on debt amounts that are entered as court judgements.<p>Just sayin’