For people interested in getting government student loans to get the necessary degree, it’s necessary to pay them back on time. Nowadays, the department responsible for issuing these loans is one of the toughest debt collectors in this industry, and it expanded its arsenal for managing those borrowers who refuse to repay. In 1998, changes in federal laws made it really hard for people to avoid paying back their student loans via filing for personal bankruptcy. Besides, this department has its right to seize the parts of their tax refunds, paychecks, and even social security payments without any order from the court.
The access to the government database of newly employed people enables this department to benefit from private collection agencies. It has the right to collect the student loans that very old as there is no statute of limitations, unlike consumer debts. That’s why there was a lot of money collected as defaulted student loans in the last year. For current student loans that may go into default, the department plans to get each dollar in principal, including 20% of interesting rates and other extra fees.
This aggressive approach resulted in the outcry of many borrowers, bankruptcy-court officials, and consumer advocates. They keep complaining that tis department runs over former students who lost their fortune. Some supporters of the softer stance claim that student loans are the type of financial help, so they are not similar to other consumer debts. They also state that borrowers are encouraged by available federal programs to go into their debts to be able to attend colleges or universities.
It’s true that students are more sophisticated borrowers financially, so they lack the necessary understanding of how debts keep piling. The department answers that it respects legislators, taxpayers, and many students who manage to repay their loans, but it will pursue others who don’t. This agency also offers a number of effective tools, including debt counseling, to help former students pay off their loans while refining interest rates. According to the latest studies, the group of people who are most unlikely to pay off their loans is students who failed to complete their studies for any reason. That’s why college student loans keep skyrocketing in their number, interest rates, requirements, terms and conditions, etc.
For people interested in getting government student loans to get the necessary degree, it’s necessary to pay them back on time. Nowadays, the department responsible for issuing these loans is one of the toughest debt collectors in this industry, and it expanded its arsenal for managing those borrowers who refuse to repay.