Manual Reveals Loan Collection Secrets

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To 'Unclear "hook"' by J of GA, and "You're wrong and you're responsible' by Frank Crow of MD, and especially the one from 'Single Mom of OR' on may 20, 2010, about consumer protection, I say, ditto, ditto, ditto. And Thank You!
I relate in every way to Single Mom of OR. I am so dissappointed in my government for not coming to our aid with better programs to assist. No one intends to 'NOT' pay back their student loans. Frank Crow of MD.made me see it all even more clearly...the guilt we are made to feel. What I already saw clearly enough is how the inability to pay back a loan you took out so you could get a degree, so you could make a living and pay back your student loan has created such havoc in my life. It interferes with relationships by creating tension when the money is not there to pay these huge amounts requested]When your husband's credit is impacted because he co-signed, bringing down a good credit score,but also the thought of going into retirement with this debt still there, due to a chain of events that you could not have anticipated. It destroys relationships for couples, and I'm sure for parents trying to help their children by co-signing. I don't trust anything they say or do. I feel that in fact when you make a payment they simplly target you for more.They feel they have tapped into something 'good for the getting'. I am so confused that i don't even know what i owe exactly. Plus i tried to get the direct loan program that allows you to pay according to your situation. I applied and did all the paperwork, stuffing it all into the brown self-addressed envelope not knowing if this was the same one my husband was paying on each month. I applied hoping that it would help out, helped along by an agent, since it was for 25 years, income based payments with debt forgiven after 25 years, but i was denied by a letter in mail. I paid $50 to get it started and they went back into my account for more, after promising they would not do that, and shut down my bank account. They did not seem contrite. I wonder what that was really all about. Was this an attempt to just gather more personal information or something. What? I am more confused than ever. Or did they find that my husband was paying, and they decided to let him keep paying. Why make it easier on us. I really don't know anything anymore. Not sure what to think. I don't doubt that the lenders are watching these blogs to learn more about those writing in, to use the info to their (the blogger's detriment). I also think that when they make a loan to a mature older person, they already know they can eventually get their money by taking their SS checks, so happy retirement. I sound cynical, but i have lost all trust. Where's our bailout, or better yet, our jobs. I understand less jobs, but not the blatant lack of compassion for those in dire straits. It's un-American. I feel that all applicants should have to take a class on what borrowing for college REALLY means. It's a nightmare!

C of Il of IL 12:47AM February 27, 2011

Regarding your hook, what a strange statement. I am surprised you chose the phrase "moral obligation" to describe repaying a loan, even if it was to only set up your article. It is quite the normal business practice - and not judged as immoral - for corporations & governments to default on loans. Does this label apply to them as well? If so, I believe business and policy graduate schools would need to redesign their curriculum.

J of GA 5:52PM June 11, 2010

I am a taxpayer and I pay huge amounts of tax each year (I'm in the 30% bracket). I never had a student loan. I completely disagree with your statement:
"And taxpayers naturally want all who took out federal student or parent loans to pay back every penny they owe."
Not without standard consumer protections. Not at the expense of someone's life. Trying to justify the spoiling of many peoples' lives, based on morality is quite the contradiction in terms isn't it?
Anyone that goes into any business (except providing student loans) knows that there is a risk of loss. That is how the business world works. It is not even a question of morality. It is a question of legality.
Standard consumer protection is not immoral. To say so, is to say that the people that have put that into law for every other kind of loan were implementing immorality. And who are you to say so?
Whoever handed student loan providers more power than even the IRS... was wrong. That was immoral. To put into law, the ability to literally crush peoples lives, is beyond immoral. It's nothing short of evil based on pure greed.
That is what you stand for. That is what you support.
You should know that you are *personally* responsible for the people that will end up on the street due to cascading problems that got out of control combined with this evil law based on pure greed.
You are personally responsible because you write this heartless crap, that supports people that are literally making billions of dollars at the expense of peoples' very lives.
How can you look at yourself in the mirror and not be disgusted with yourself? Where is your morality?
This is not about people simply electing to blow off repayment because they don't feel like it. Standard bankruptcy court doesn't even allow that in the first place!
This is about people trying to better their lives, believing that an education would do it for them. Things can always go wrong and how can you sit there and pass judgement on people like that? You are defending millionaire executives that stand NOTHING TO LOSE and have been making HUGE PROFITS and living a life of unbelievable luxury at the real expense of people's lives.
And you think that is OK?? You are evil. Pure and simple.

Frank Crow of MD 10:49AM May 25, 2010

Like other writers here, I borrowed to go back to school. I graduated several years ago and have had no luck whatsoever in finding a better job. In fact because of the economy, my income has fallen hundreds of dollars since a couple years ago. (Ex not working and pay cut at my job). I'm in my 50's, divorced and have two teenagers. By the time they have left home, I'll be sixty years old. I paid on my school loans when I was able to afford it, then went on a hardship deferral. Now they tell me that they can't grant any more hardship deferrals because of the years since graduation. I am struggling to buy food and keep the utilities paid. Sometimes my family has to get emergency food boxes to get by. But the school loan lenders want over $250 a month. I live in fear that they will garnish my paycheck. If they do, we could end up homeless. I went back to school hoping to make a better life for myself and my kids. Instead I find myself with a nightmare debt and NO way to get out of it. I regret going back to college, but can't change it now. This is a shadow that hangs over me constantly. Nobody should have to live like this! There is no other debt with, as the article's author says, such draconian laws. If you get in over your head with credit cards, there is bankruptcy. If you buy a house you later can't afford, you can always give it back to the bank. But only student loan debt is a burden that there is NO escape from, no matter how broke or old you are. Unless the laws are changed, I am sentenced to lifelong poverty, just because I tried to improve my family's standard of living by returning to school. It't not that I choose not to repay the debt, I CAN'T repay it. Not and keep a roof over our heads at the same time.

Single Mom of OR 10:20PM May 20, 2010

Kim, it is preposterous to write of the "sanctity" or "moral obligation" of education debt servitude. I say education debt servitude, as opposed to "student loan debt", because the former conveys the unconscionably onerous nature of the debt, as opposed to the latter which conflates non-dischargeable education debt with other forms of debt, which are dischargeable in bankruptcy.
There is nothing holy or sacred about debt, whether incurred as an educational investment or as a business investment. If I borrow to start a business, and that business fails, our legal system will not recognize any "sanctity" or "holiness" attached to this debt. Our legal system never has, from its very inception: it deals strictly with real-world economics. Unfortunately, special interest lobbying has skewed our legal system to apply a nonsensical, egregiously burdensome regime against education loans, so that if one's educational investment turns sour, the victim is denied the opportunity of a clean slate.
This is absurd in economic terms, and unconscionable in moral terms.

Josephus P. Franks of NY 10:25AM May 20, 2010

I am one of those unfortunate enough to have borrowed for my big break in education. The school, top tier, was so reassuring that its graduates all make more than enough to handle the student loans I was taking. I did well, left school with 70000 in student loans, only a bad economy and no jobs waiting. No matter I tried to start a business, make some loan payments, and then the bottom fell out. Disease, death and divorce, leave me penniless, months behind in rent, with part time jobs that barely paid for motorcycle gas and a little food. There was no IBR, there were no "forbearances", and while there had been bankruptcy protections available when I borrowed the money, the protections were stripped away by congress under influence of yes, THE BANKING LOBBY. So now I have a $300,000 debt to Dept of Ed (consolidation to rehabilitate our of bankruptcy) at 9% interest it accumulates a little less than 24,000 in interest per year. Unfortunately I do not have family with any money. And now that I finally have a family again, with a 3 year old and a 1 year old, I am looking at a loan that can never be repaid, that constantly threatens the end of my modest middle class existence, and has been there for 15 years.
Maybe I made a mistake in going to college, or maybe my business decisions were not the best. But give me a break, my mistakes cost 60,000 at most, I and others like me, do not deserve to be put into a state of permanent insolvency for our entire lives. If so, what about those banks execs and others that cost the economy trillions, should not they be forced to pay back what their companies cost us?
Look, bottom line, there are good reasons for allowing business to obtain bankruptcy and to protect business people from permanent insolvency. It makes our economy nimble; it allows us to leave bad, uncollectible debt behind so that the economy can get going again. It is the same for middle class and lower economic students, they need encouragement to strive, and they cannot afford 100% of the risk all the time. Bankruptcy is a horrible thing to have to go through; permanent insolvency for making the mistake of trying to better yourself is as unfair and draconian in this day and age as debtor prisons were in the 17/1800s.
This whole plan for financing higher education has backfired and it is just getting worse and worse. Now I am beginning to fight this injustice as are others, and our numbers are growing. For me I am fighting for my 3 year old, and my second son coming in July. Even if I can discharge or settle my debt with Dept of Ed, it really will not change my life. I already see less disposable income than when I was 18. No, now I fight to get something to put away for their education so that they will not have to suffer the horror I have been through for the past fifteen years.

WI Will of WI 8:23PM May 19, 2010

My loan experience has been one of deep regret. My debt started out with around $20,000. For various reasons, I never finished my degree, and my employment record has a lot of layoffs. The debt has bloomed to over $80,000. There's simply no way I can ever pay that back. Let me say it again: There's no way I can ever pay that back. Ever. I'd have to live to be a hundred. In the meanwhile, my life is a constant financial slog, with no points of rest, constantly having to rob Peter to pay Paul, and the more I make, the more the lender will get. It's a life of stifling futility. Yes, I did take the loan, and I swear, at the time I made it, I was a person too filled with optimism to believe I wouldn't be able to. But things didn't work out. I'm sorry. I truly am. But there is NOTHING to be done about it at this point. NOTHING. I'm 57 years old, and in a few years I'll be facing retirement on Social Security, and I'm doomed to a life a grinding poverty because of this loan. I made a mistake and there currently is no way for me to live it down. If normal bankruptcy laws were applied to college loans, I'd at least be able to eke out a living. What kind of society have we become?

Alric of MS 2:09PM May 19, 2010

Purchasing a television and getting an education to earn a decent wage do not hold the same moral weight. Higher education has been turned into a government-subsidized business in this country. A select few people are profiting madly from the ridiculous amount of penalties, fees, and interest being taken from unwitting people just trying to get an education.
We need to stop allowing the middlemen to control this country! Any financial reform we have needs to include restoring basic consumer protections to student loans. Only then are we going to start getting costs under control.

Christopher Kessler of ME 1:32PM May 19, 2010

Oh, how nice of the big banks and collection agencies to settle for 90%. They act like they are actually doing something. Many of these people saddled with these huge debts are disabled or have low paying jobs or have garnered a worthless education and then the banks have tacked on all kinds of fees etc. Corporations are allowed to discharge billions of dollars worth of debt all the time but the averge Joe is saddled with this burden forever no matter what. And believe me I know ho wunfair these laws are and how they are tilted to to the corporations and big banks. We have a government in this country that is of, by and for the big corporate interests! The people are sick of this and we are rising up! Time for a nice revolution and throw all of the bums in congress that favor big banks and corporations out on their bums! I am mad as heck and I am not going to take it anymore!

Mark Anthony Ford of WV 1:09PM May 19, 2010

Yes, the manual "allows" the collector, or "will allow" but that doesn't mean they have to do these things. Even if it did, why not just restore standard consumer protections to student loans? Why keep people in servitude when they file bankruptcy on their other debts to start over. People get laid off all of the time. I'm about to be laid off in two days. If I can't find another job in the area, I will have to move and I will lose my house and have to file for bankruptcy. These are difficult times, don't enslave people and make their lives more difficult.

David Gresham of TN 10:59AM May 19, 2010