“Student-loan debt collectors have power that would make a mobster envious,” Elizabeth Warren

[midnight]

Dozens of students were arrested this afternoon at the Sallie Mae headquarters demanding forgiveness of student loans. The protest comes after recent reports show $1 trillion in student debt burdening borrowers.

The high amount of debt is good news for debt collectors, however. A Bloomberg report shows that debt collectors made nearly $1 billion in commissions from aggressivley pursued student loan collection efforts.
(photo: DonkeyHotey)

“Student-loan debt collectors have power that would make a mobster envious,” said Harvard Law Professor Elizabeth Warren. http://www.commondreams.org/headline/2012/03/26-5

[ProgressiveProfessor]

1. What is not clear is if the debt collectors have powers greater than they normally would

The nature of the debt is different.

[mbperrin]

2. This debt is no different. Money was extended without collateral, same as credit cards,

revolving accounts and many others.


Difference is these guys can have your teaching license, law license or other professional license lifted, even if the student loan was not for that program. That's very different.

Thing should be moot, since we should have a K-16 education system for all at no charge to the student, anyway.

I know, what would the crook investment bankers, I mean, the investment professionals do without it.

[ProgressiveProfessor]

3. Not sure, but I thought educational debt can not be discharged in bankruptcy, while credit cards can

Do you have site you could point me to that describe the powers you are referring to? They are well beyond what normal debt collectors can do.

[mbperrin]

4. You're right - student loans cannot be discharged by bankruptcy, even though

they are no different from any other unsecured loan - they just get this special treatment.

Here's an excerpt on default of your student loan (more at link):

Texas Professional License
Renewal of your Texas state occupational/professional license (e.g., Cosmetology, Real Estate, Optometry, etc.) may be withheld if you are in default on your TG student loan(s).

You must have established a satisfactory repayment arrangement with TG and be current in your payments before a license release letter will be sent to the licensing agency.

For more information on how to set up repayment and/or request a license release letter, call TG at [phone] or send TG an email message.

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Texas State Bar Attorney License
Your Texas State Bar attorney license may be suspended if you default on your TG student loan(s).

You must have established a satisfactory repayment arrangement with TG and be current in your payments before a license release letter will be sent to you.

It is your responsibility to forward the State Bar license release letter to:

State Bar of Texas
Membership Department
P.O. Box 12487
Austin, TX 78711
For more information on how to set up repayment and/or request a State Bar license release letter, call TG at [phone] or send TG an email message.

from: http://www.tgslc.org/borrowers/default/consequences.cfm


And yes, these are WELL beyond what normal debt collectors can do.