College attendance is on the rise, but unfortunately, so is student loan debt. While employment rates for college graduates are gradually going up as the recession becomes distant, students are still having trouble paying off their student loans. If you or your young adult child took out student loans to help pay college tuition, you may know what it’s like to fall behind on payments. Stress, credit problems, not to mention the barrage of calls from collection agencies.
But if you’re facing these financial problems, there’s some good news. New regulations are helping student borrowers take greater control of their debt and making it easier to report collection agencies that violate the borrower’s consumer rights. It’s a step in the right direction for young people who may be struggling with student debt.
The Graduate Dilemma with Loans and Collection Agencies
In the past, government-contracted collection agencies had no difficulty contacting borrowers. Borrowers, on the other hand, had plenty of difficulty contacting these agencies. If a graduate needed to contact a collection agency to file a complaint, it meant hours of digging through the Education Department’s website.
And, like working with most government agencies, there always seemed to be too many hoops to jump through. The process was simply more difficult than it ought to be.
Even after borrowers finally complained, many collection agencies continued to harass them over the phone.
Progress In Addressing Loan Collection Agencies
But that’s changing. A new article from the New York Times Business Bucks blog details how student federal loan borrowers can deal with collection agency harassment and other issues in the digital age.
“Previously, information about how to file a complaint was buried on the site. Now, all relevant complaint information is in one place,” Jillian McLaughlin, a research assistant at the National Consumer Law Center, told the Times.
Information about how borrowers can address their loans and deal with collection agencies, such as challenging the garnishment of wages, is now available at the easy-to-navigate site Myeddebt.com.
Aggressive Collection of Student Loans
While graduates may see this as a welcome change, collection agencies won’t be adopting less aggressive practices just yet.
Another article published by the Times details the aggressive collection practices and offered partial solution to students who defaulted on their loans:
A better complaint system can help restore a needed balance between borrower rights and “draconian” collection powers, the report said. “The current system of collections for student borrowers in default is unforgiving,” the report noted. “The department has nearly unlimited power to recover defaulted student loans.”
It may not be an ideal solution just yet, but it marks a move in the right direction for graduates dealing with federal loans. Dealing with student loans is stressful enough. A centralized website where users can properly address issues is always welcome, especially when it comes to student loans.
What Do You Think?
Do you have an outstanding college loan? What are your experiences with loan payments and collection agencies? Let us know in the comments section!
If you’d like to file a complaint about a debt collection agency or any other company, click here to get started on Scambook.