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
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