U.S. Dept. of Education Is Not A Debt Collector

by Donald Petersen on March 16, 2011

The U.S. Department of Education is not a debt collector. The Department of Education is an original creditor or loan guarantor. But, the US Department of Education often hires private collection agencies who are debt collectors.

Beginning around January, 2010, the United States Department of Education entered into its current student loan collection contracts with 22 private debt collection agencies.

Although these collection agencies collected $ 3.8 billion or 41 percent more than the recovery during the first 15 months of the prior contract, the $ 3.8 in educational loans recovered is less than the U.S. Department of Education’s internal goals. Regardless of the U.S. Department of Education’s targets,
$ 3.8 billion is a substantial amount.

Educational loans are covered as “debts” for purposes of the Fair Debt Collection Practices Act (“FDCPA”). So, collection agencies that attempt to collect educational loans are usually covered by the Fair Debt Collection Practices Act (“FDCPA”).

Collection agencies who attempt to collect student loans often violate the Fair Debt Collection Practices Act. These private collection agencies are accountable for their violations of the FDCPA.

(C) 2011 Donald E Petersen
All rights reserved

{ 4 comments… read them below or add one }

Pamela Lynn August 22, 2011 at 8:39 PM

The agency that I work for covers 9 counties and they call different ones leaving messages and leaving messages on co-workers voice mail trying to coerce them into having me call them back. Also having different people call me then getting on the phone himself and threatening me with garnishment because this is a FEDERAL government issue. I told them not to call me at work and they stated they would do what they had to do.

Reply

Don Petersen August 23, 2011 at 9:23 AM

Pamela : I recommend that you refer to “Calls At Work” using the link on the left hand column of this page.

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Gilda November 5, 2011 at 1:13 AM

A collection agency contacted my daughter today saying that she had been listed as my “emergency contact for an application she filled out” (I’m sure it’s about my several year old student loan which I can’t pay back atm because I’m one of the long term unemployed).

My daughter decided the call was hinky and hung up on them.

Gotta love the underhanded tactics these agencies try to pull. I’m sure it was worded that way to more easily get in contact with those who are unable to find work during these tough economic times.

Reply

Don Petersen November 5, 2011 at 6:45 AM

Gilda :

Here’s an article summarizing the restrictions about when debt collectors can call relatives (friends, neighbors, the workplace) and how what they can say is strictly limited :

http://www.fdcpa.me/collection-agency-calling-family/

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