News and Opinion

FFELP is Dead! What Should We Do Now?

by Walter Steele June 5, 2012 1 Response

Could the next evolutionary replacement of the Federal Family Education Loan Program (FFELP) be the catalyst that helps jumpstart the recovery of the U.S. economy?

Is it Socially Acceptable to Not Pay Your Student Loans?

by Tom Gillespie June 4, 2012 11 Responses

Occupy Wall Street is one good recent example of how people, especially young people, are starting to revolt. The reason they are revolting is because they were offered credit at a young age and thought that if it was offered to them, they could obviously afford it.

Enhancing the Student Experience Should be a Top Priority in Controlling Loan Default Rates

by Tim Smith June 1, 2012 (Be the first to respond)

Given the challenges and immense pressure the student loan industry is under to reverse cohort default rate trends, student lenders and collectors should take a close look at their approach and evaluate their strategy.

Colleges Continually on the Line for Defaulted Loans and Grants

by Mike Bevel May 31, 2012 (Be the first to respond)

Student loan debt isn’t just the responsibility of the recently graduated high-school senior hoping to earn that degree in comparative woodworking — as more colleges are discovering.

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

by Mark Russell May 30, 2012 4 Responses

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

by Don Taylor May 29, 2012 9 Responses

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.

Mortgages, Student Loans Temper Plunging Consumer Credit Delinquencies

by Patrick Lunsford May 23, 2012 20 Responses

Consumer debt delinquencies in the U.S. have been steadily falling since 2010. Late payment rates on auto loans and credit cards are now near record lows. But the two loan types with the largest outstanding balances – mortgages and student loans – have seen delinquencies stuck at maddeningly high rates, with the possibility of further increases.

Student Loans for K-12 Education on the Rise

by Patrick Lunsford May 21, 2012 (Be the first to respond)

Education expenses are rising at colleges and universities across the country. But parents are also finding that the education bubble is engulfing private grade schools. Demand for loans to cover private K-12 education was up 10 percent in March when compared to the same month a year ago

To Collect from Students, You Need to Connect with Students

by Tom Gillespie May 18, 2012 2 Responses

Students should be held accountable for their loans. But we should sell them on all the positive aspects of paying their loans and tuition bills — having a solid credit report is as valuable as any degree at the end of the day –as a part of the collection process. Let’s treat them like customers and not like debtors.

Bloomberg Still Hates Student Loan Collectors

by Mike Bevel May 16, 2012 (Be the first to respond)

If Bloomberg’s argument is “collection agencies are getting too rich working these accounts,” much of the accompanying examples in their piece would seem to, if not contradict, at least mitigate a lot of that vitriolic emotion.

94% of Students Take on Debt for Bachelor’s Degree

by Michael Klozotsky May 15, 2012 (Be the first to respond)

Among the social media platforms ripe for business application in the ARM industry, the one most frequently met with misgivings (if not outright scorn) is Twitter. I’m a believer in Twitter’s use value as a business tool. For example, without ever Tweeting, one can consume the day’s important news and up-to-the-minute events much more efficiently [...]

Sticker Shock: $900 Monthly Student Loan Payment?

by Mike Bevel May 14, 2012 5 Responses

The wide-open job market has become a rare breed of unicorn in many aspects, and students are rarely presented with a “Here’s what you’re going to pay when you graduate” statement along with a “Here’s what you’ll likely earn as a graduate” statement.

How the World Conspires Against Students

by Mike Bevel May 11, 2012 (Be the first to respond)

While college tuition has steadily risen, wages haven’t — at least not with the same first-to-the-moon speed. So degree-requiring entry-level jobs aren’t providing wages that allow for students to pay back those loans, even though nearly entry-level jobs require college degrees. Are you starting to sense a vicious cycle here?

Who’s to Blame for Federal Student Loan Defaults?

by Michael Klozotsky May 10, 2012 14 Responses

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

by Patrick Lunsford May 9, 2012 2 Responses

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.

Student Loan Interest Rate Fix Stalled in Senate

by Patrick Lunsford May 9, 2012 1 Response

Senate Republicans succeeded Tuesday in blocking a bill that would have prevented student loan interest rates from doubling on July 1.

National Consumer Law Center Paints Bleak Picture of Student Loan Collections

by Mike Bevel May 8, 2012 2 Responses

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…

Senate Takes Up Partisan Debate on Student Loan Interest Action

by Patrick Lunsford May 8, 2012 (Be the first to respond)

The U.S. Senate this week will be taking up a bill intended to prevent interest rates on student loans from doubling on July 1. Even though both sides agree that keeping that keeping the rates low is in everyone’s best interest, competing ideas on how to pay for the bill are creating a partisan battle. [...]

Welcome to insideARM.com’s Big Issue: Student Loans

by Michael Klozotsky May 7, 2012 4 Responses

insideARM.com, 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 insideARM.com and F.H. Cann will publish on this big topic.

Sizing the Market for Student Loan Collections

by Patrick Lunsford May 7, 2012 5 Responses

There is a lot of student loan debt out there, we’re constantly told. Many graduates can’t keep up with their student loan payments, even if they are lucky enough to have a job. And this, of course, leads to default. But just how much is there, and more importantly, how much would potentially be available for members of the ARM industry?