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The Student Loan Issue

Today’s Featured Article

Student Loan Collections: The Big Issue Wrap-Up

Student loans are a big issue for the ARM industry because, as an asset class, they represent the largest consumer credit market outside of mortgages. Over the past month, and content sponsor F.H. Cann & Associates have taken an indepth look at student loans — not just collections, but the impact this asset class has on the workforce and the economy.

So as we close the pages on this Big Issue, we thought it would be illustrative to look at the Top 5 Pieces of Student Loan Content we published.

News and Opinion

Mark Russell: How Do You Solve a Problem Like Student Loans?

The primary reasons for these challenges have also been well documented – uncontrollable increase in the cost of a college education; access to “cheap” public student loan financing, and even private loan options; ignorance of students and their parents as to the long-term financial implications of taking on large student loan debts; and a troubled economy with a stubbornly high unemployment rate particularly for recent college graduates and college drop-outs.

Evolution of Student Loan Collections

Before 1993, student loan debt collection was basically the same as any other asset class: collectors tracked down a student loan debtor and tried to get them to pay in cash. But after a major legislative change that year, student loans became a very special market for debt collection with advanced tools at collectors’ disposal that do not exist for any other type of debt.

Student loans became exempt from statute of limitation laws as a result and debt collectors got Administrative Wage Garnishment (AWG) and consolidation as new tools. While all three had a profound impact on student loan collections, consolidation is currently the most widely-used provision of the 1993 law.

Who’s to Blame for Federal Student Loan Defaults?

For many borrowers faithfully paying down their loan balances each month, the maximum annual interest deduction for these obligations is capped at $2,500. Buying a house or two? Under current rules you can deduct up to $1.1 million of the interest on your loans. Chief Content Officer Michael Klozotsky connects some dots to a compelling conclusion regarding student loan interest and that McMansion up the block.

Report Distorts Student Loan Debt Collection: ACA International

ACA International, the Association of Credit and Collection Professionals, strongly disagrees with a recent report from the National Consumer Law Center (NCLC) on the student loan debt collection contract between the U.S. Department of Education and private collection agencies.

ACA said in a statement Wednesday that the report paints an inaccurate portrait of debt collection created to further NCLC’s agenda.

National Consumer Law Center Paints Bleak Picture of Student Loan Collections

The Department of Education hasn’t had a chance to read it yet, but the National Consumer Law Center has released a 25-page report detailing the issues, as they see it, with the private debt collection contracts the Department is using. “By contracting out its defaulted loan portfolio and failing to provide effective oversight,” the report opens in its Executive Summary, “the Department has abdicated its responsibility to uphold the borrower protections in the Higher Education Act.” The report doesn’t necessarily get any better from there…

Welcome to’s Big Issue: Student Loans, in partnership with F.H. Cann & Associates, is proud to bring you our latest feature content series: The Student Loan Issue. Over the next several weeks, you’ll find content and infographics devoted to this vertical. Think student loans have no effect on your business if you’re not in that market? You might want to think again. As Chief Content Officer Michael Klozotsky explains in this introductory post: “Student loan payments eat up a whole lot of household wallet share. If students can’t or aren’t paying their college loans, they’re likely under water on other financial obligations as well.” Look for The Student Loan Issue stamp on content to keep track of the exclusive articles and F.H. Cann will publish on this big topic.

Dive In

Student loans are a big issue for the ARM industry because, as an asset class, they represent the largest consumer credit market outside of mortgages. And as education costs rise in the U.S., the market will do nothing but grow. Anytime you see the stamp below, click it to return to this page.

The Credit Card Issue