The Student DebtCropper System: Even the Destitute Hounded by Debt Collectors

[xchrom]

http://www.alternet.org/education/student-debtcropper-system-even-destitute-hounded-debt-collectors




As most people who have passing familiarity with student debt in the U.S. know, it’s a millstone that is brutally difficult to remove. But it turns out that even the limited ways out are often not available in practice thanks to the hyper-aggressive conduct of a critical government contractor.

Unlike every other type of obligation save child support and criminal penalties, it can’t be discharged in bankruptcy. The lone type of exception is “undue hardship”: when a borrower is so clearly incapable of ever paying that it’s ridiculous to keep pressing them for the money.

The undue hardship standard is very difficult to meet, so one would think given how stringent it is, and therefore the comparatively small number of cases that are involved, that the student debt collectors would accept this minuscule level of losses and focus their resources on people with means.

But it instead seems that the debt police are unable to contain themselves. A New York Times story discusses bankruptcy court abuses by the organization that is the main contractor to the Department of Education on these cases, the Educational Credit Management Corporation:

A review of hundreds of pages of court documents as well as interviews with consumer advocates, experts and bankruptcy lawyers suggest that Educational Credit’s pursuit of student borrowers has veered more than occasionally into dubious terrain. A law professor and critic of Educational Credit, Rafael Pardo of Emory University, estimates that the agency oversteps in dozens of cases per year.

[jtuck004]

1. Millions of families been living with this for years. Now a new crop of victims.

Gotta love it when they tell the kids to get the credit card out of mommy or daddy's purse or wallet and read it to them...

But it will be good practice, and make them appreciate it when they can meet the standard to file bankruptcy on their 8 or 9 thousand $ (or more) medical co-pay and out-of-network billing...

[davidpdx]

2. I'm to the point I don't even worry about them anymore

They will never be paid off in my lifetime.