LA JOLLA, Calif., March 18, 2015 /PRNewswire/ — Student loans continue to dominate the news wires as our current administration seeks ways to ease the burden of student loan debt. There are hints of taking a crack at allowing bankruptcy for student loans. But until that time, which may or may not come, there still remains a major problem with the continued default rate in repayment of student loans. Once student loans go into default, this is when the debt collectors get involved.
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This past month, the Department of Education cut ties with five of their private collection agencies: Coast Professional, Enterprise Recovery Systems, National Recoveries, Pioneer Credit Recovery and West Asset Management. These agencies were allegedly providing "materially inaccurate" information to borrowers about opportunities to rehabilitate their student loans.
Student loan defaults will continue to be a problem. The lack of confidence in the lenders to provide accurate information regarding student loan borrower options is unfortunate. The hope is that with continued monitoring by the Department of Education and Consumer Financial Protection Bureau, things will change. President Obama recently announced a Bill of Rights that is aimed at helping borrowers to repay their student loans. The Student Aid Bill of Rights states:
- Every student deserves access to a quality, affordable education at a college that's cutting costs and increasing learning.
- Every student should be able to access the resources needed to pay for college.
- Every borrower has the right to an affordable repayment plan.
- Every borrower has the right to quality customer service, reliable information, and fair treatment, even if they struggle to repay their loans.
As a result of this new Bill of Rights, the Secretary of Education is set to create a new website in July 2016 to provide borrowers a way to file complaints and provide feedback regarding their federal student loan lenders, servicers, collection agencies, and institutions of higher education. Further, the Department of Education is now charged with the responsibility of ensuring that student loan collection agencies charge borrowers reasonable fees and actually help return borrowers to good standing. Specifically, these debt collectors will be charged with helping student loan borrowers get into successful loan rehabilitation programs.
It remains to be seen if more rigorous monitoring and accountability of debt collectors will make a dent in the student loan crisis. One can only hope that this is more than a small Band-Aid on a gaping wound.
Daniel R. Gamez, an attorney focusing exclusively in debt settlement, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in La Jolla, CA. For more information, please contact Daniel Gamez at 858-217-5051, Email, or visit gamezlawfirm.com.