Education Department Terminates Contracts With Debt Collectors Accused Of Wrongdoing
The U.S. Department of Education, under fire for its lackluster oversight of student loan contractors, said Friday it will terminate its relationship with five debt collectors after accusing them of misleading distressed borrowers at "unacceptably high rates."
The surprise announcement follows years of complaints about allegedly illegal debt-collection practices by Education Department contractors, the department's seeming lack of interest in ensuring that borrowers are treated fairly, and the relative opacity of the entire operation.
The most prominent of the debt collectors, Pioneer Credit Recovery, is owned by Navient Corp., the student loan giant formerly known as Sallie Mae. Pioneer, under investigation by the Consumer Financial Protection Bureau, generated $127 million from the contract over the past two years, according to its annual report to investors on Friday. It has worked for the Education Department since 1997.
With the number of borrowers in default now more than 7 million as federal student debt surpasses $1.1 trillion, the contracts have become among the most lucrative Education Department offerings, generating hundreds of millions of dollars a year for debt collectors tasked with recouping cash from borrowers who have defaulted on their federal student loans. In November 2013, Dwight Vigna, the Education Department official who oversees the program, told the financial industry that debt collectors stood to reap nearly $5.8 billion in commissions over the four-year period ending in 2016.
But the department's debt collection program has also become a headache for Education Secretary Arne Duncan, as plaintiffs' lawyers, state and federal regulators and borrower advocates have demanded changes after discovering evidence that borrowers in distress were given false information or otherwise mistreated when they tried to make good on their debts.
http://www.huffingtonpost.com/2015/02/27/education-department-debt-collection_n_6773286.html
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In almost every "developed" country that has been industrialized, the country gives the public FREE education, when you finish your lower education (i.e. grade school/high school) you are then given a option to help the country you live in: (i.e. trade or technical APPRENTICESHIP, ----carpentry, boilermaker, ironworker, electrician, trade school, ect...and if you want to get a two year degree what this country calls an ASSOCIATE DEGREE and for that matter a FOUR YEAR DEGREE the country pays the bill in full) because the country realizes that to be competitive the citizens must be able to compete against another country doing the same thing, to have the required people trained to make the product for competition.
They do not place a burgeon on the student / citizen that you have to have a degree, but you must have a trade education, on saw this in Belgium.
If you want a Doctoral or a PHD then the individual must pay for it out of there own pocket.
They may have higher taxes to cover this expense but the citizens of the country realize it is for them the citizens of the country.
Not in this country its about greed and political greed to attack education as an failure or some other form to have the greed.
This country should take Germany, Japan, Korea, Sweden, Netherlands and use one of there entire system as a model, this country is more worried about the for-profit charter school or private school than PUBLIC EDUCATION and looking for the BLAME GAME, to shift money from one into the other to divide this country----this just shows stupidity and we are ranked 14th, Korea has figured it out they are number 1
