According to the New York Daily News, student loan debt in the United States has reached the $100 billion mark. As an education becomes imperative for individuals seeking immunity from a bad economy, collection of student loans and outstanding tuition becomes a major market. However, unlike credit card companies collecting past due accounts, universities and colleges collecting on unpaid loans and tuition have strict guidelines for collector’s practices. Academic institutions have their valuable reputations to uphold and overly aggressive collectors can tarnish those reputations. That’s why so many of these institutions are seeking collection agencies that are participating in the new wave of collection practices. It’s a gentler approach more akin to credit counseling than the harsh (and sometimes scary) collection style of the past. And it’s more important than ever for agencies to take this approach since the FTC is cracking down on agencies, even agencies with government contracts. Where regulatory compliance was once a selling point, now it’s the bare minimum. Agencies must strive to retain customer relationships, uphold client reputations, and still manage to get paid.
Student loan debt is a 1 trillion dollar opportunity for debt collectors
Associated Press – Debt collectors with govt contracts paid penalties