Boom Times for Student Loan Debt Collection Industry

September 10, 2012

The debt collection industry is benefiting from the large numbers of people in default on their student loans, The New York Times reported. In the last fiscal year, the U.S. Education Department paid collection agencies more than $1.4 billion to try to collect debts. Critics argue that the government should be doing more to help borrowers avoid default, rather than focusing on collecting the debts. The article opens with a column from a collection industry trade publication in which the author describes attending a rally at New York University at which students angry about debt wore T-shirts with their large, personal debt totals on them -- $95,000, $60,000 and so forth. "As I wandered around the crowd of NYU students at their rally protesting student debt at the end of February, I couldn’t believe the accumulated wealth they represented – for our industry," the columnist wrote. "It was lip-smacking."

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