College Student Loans Skyrocket Essay -- essays research papers

If youre counting on government student loans to get you with college or graduate school, count on paying them back. The direction Department has nonplus one of the toughest debt collectors around. Over the aside decade, the agency has steadily expanded its armory for dealing with former students who dont repay. A 1998 change in federal legality made it extremely difficult for people to escape student loans through personal bankruptcy. The Education Department also can now seize parts of borrowers paychecks, tax refunds and Social Security payments without a court order, a power similar to the IRSs. Access to a government database of newly assiduous workers has enabled the department to make much more effective use of toffee-nosed collection agencies. And it can go after even decades-old student loans, because theres no statute of limitations on them, unlike most consumer debt. As a result, the Education Department collected $5.7 billion in defaulted student loans in the pa st fiscal year, more than twice as much as in 1998. For current loans that go into default, the department now projects it will ultimately observe every dollar of principal, plus almost 20% in fees and neglectful interest. The aggressive approach has sparked an outcry from some borrowers, consumer advocates and even some bankruptcy-court judges. They plain that the department runs over some former students who have suffered reversals of fortune. Some who kick upstairs a softer stance argue that student loans are ...