IamA bill collector for college debt and low-income based student loans. AMA

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That's the sort of thing that makes me crazy....so both! There are ways to turn things around even at that stage in default though. Depending on who his lender is, he can probably go for a rehabilitation program. Some lenders are real assholes about this, but with persistence, it can be done. In the short term, this can actually be more expensive...at least for a time, but if he can manage it, it resolves the defaulted status and opens up a lot of helpful programs.

If he can't or won't.....they pretty much have him by the balls! Sorry, but true

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don't blame you there....only advise then is don't marry the guy....then it would be your problem, in most states anyway.

It's only her problem if they try to borrow money for something together. Otherwise, if her credit and income are good and she needs to borrow money for something, she shouldn't need anyone else's sig on the deal.

Valid point. I was thinking more in terms of the annoying calls. In most states, the spouse can be dunned in the same way as the defaulted borrower. If she wants to kick him in the head for defaulting, I'm not sure she'd appreciate not being able to answer the phone in their home.

I defaulted on my loans about ten years ago and no one has ever contacted me about it. Should I be worried? Is my debt still out there?

It's definitely still out there. No statute of limitations at all. In theory, your social security can be garnished. The biggest concern is the cost of default, which continues to accrue. If you have not been contacted, I'd be willing to bet family members have been. If you are really concerned you can track them and "fix" them. Often, the repayment options are income contingent and affordable, but it's up to you.

Whoa whoa whoa. "your social security can be garnished." I'd like to see some proof on that. Social security is 100% exempt when it comes to garnishment.

I'm looking for it now....it's something I have in my training materials, but questions coming in quickly. Now that you've asked, I'll continue to look and get back to you.

So what's the craziest story you've got? Also, do people flip out on you a lot?

People flip out on me more times than not! The craziest was an international student (Haitian) that had given me permission to speak to his father. He indicated that his father was going to help him get the bill cleared so he could return to school....so I called dad. Dad was absolutely freaking out yelling about all the "dead people on the ground." He was hysterical about his family and the people on the ground in Haiti. I googled it and saw that I just happened to contact him minutes after the horrible earthquake in Haiti. He was hysterical because his wife had just told him.....not one of the days I felt good about my job!

Dude, that is pretty traumatic. I can imagine just being told the vast majority of my home country just got flattened, killing tens of thousands in the space of a few minutes. Then immediately get a call from some debt collector saying me and my son owe them a shit load of money.

Im fairly sure at that point my brain would just shutdown and reboot while it tries to work out what the fuckidy crap just happened and how to deal with it.

He was expecting my call. As soon as I figured out what was going on, I contacted the school and got the kid an appeal due to the circumstances...evil bill collector that I am.

no question here, but really good IAMA, man; a pretty tough job to do one from!

It can be a tough job, and it certainly hasn't made me any friends here....but I am glad you found it interesting.

• Do you feel good about what you do?
  
• What has someone told you that you were like "bs".
• What has someone told you that made you want to go home and curl up in a ball and cry?

• item 1 For the most part, I do feel good about it. Now and then it makes me feel like an ass, but for the most part people are grateful for the help.
  
• item 2 I hear all kinds of "bs" I had a woman who neglected her student loans for 15 or more years. I felt bad when she told me she was so disabled she had difficulty getting to the phone, but when I later found out she was a yoga instructor and personal trainer....yea not so bad...that's our tax dollars she squandered.
• item 3 I had a woman tell me she was dying and couldn't pay....after all the "bs" I didn't believe her and pushed for payments anyway. I felt like a complete ass when her death certificate was received in the mail a few months later....

Followup - What is the MOST loans you've seen someone have for a non-professional degree (MFA, MA, etc.)

I have seen staggering student loan debts for these "on-line" schools. It is one of the things I like the least about my job. These "on-line" schools are for profit organizations with very aggressive sales tactics. It saddens me to see some young kid strapped with 10's of thousands of debt and a degree - if they graduate - worth a bit less than the toilet paper in my bathroom! Aside from that, I see huge loans for legitimate degrees that, thanks to our economy, can't get a job and are strapped with a bunch of student loans that, sadly, do NOT get them a job that would allow them to pay them.

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They overlooked one out of 6 loans and need more financial aid? I can help them consolidate through a lender that will accept a defaulted loan. Then they are in good standing and can get back into school again. Not to mention the hold on financial aid is lifted.

They are applying for a job that requires a credit check? I can try to settle the account and advise them on what steps to take to repair their credit....same applies if they need a loan to buy a house, car, etc.

They know they owe some money, but are afraid to talk to me or deal with it because they don't have the balance in full? I discuss and evaluate their situation and try for a payment plan that satisfies the school and doesn't break the students back....keep in mind most of my borrowers are under 25. They have no experience dealing with default.

In most cases, a little guidance is appreciated.

I like you

glad someone does!

Most of the younger people that end up in my office have had to leave school for one reason or another, leaving them with financial aid charge backs. Most are intimidated by the letters or calls, but truly want to "fix" the problem. I feel very good about offering solutions (many with little to no out of pocket expenses) that get the students back in school. I feel very good about that part of the job.

I've heard that student debt collectors are actually nicer than other debt collectors because you guys know that you're going to get your money one way or another (Considering you can't expunge it with bankruptcy). Is this true or false?

Assuming you're from the States, where do you collect? Does each collector go with a certain region, or do you just get cases from all over to tackle? How long does a certain case take? Is it over when you've gotten all the money, or are there certain things you can do and if nothing has worked you pass it to your superior?

EDIT: Sorry, you'll probably be downvoted to hell. I don't see why, it's just a job that someone has to do.

• It cannot be discharged with bankruptcy, but that's not why I'm nicer. My demographic is usually pretty young. I try to approach it with an attitude that being in debt doesn't make you a bad person...just in over your head. It's usually effective.

• I collect from a tiny town in SC - yes the States, but we represent over 1200 schools across the country. I get accounts from all over the country. If a borrower can't or won't pay, there are several things that can happen. If it's federal, it can be sent back to the school and subject to wage garnishment or tax seizure. If the school wishes, it can be sent to a legal department to attempt to obtain a judgement.

• I didn't do it for upvotes....there are so many ways to make things easier on yourself if you find yourself on the receiving end of collection activity. People could get some good advise on how to resolve their problems....or of course, downvote me all to hell for, as you said, doing my job....

Oh and I do NOT get my money either way....but the school or government can and usually does. I only get paid if I can resolve the problem without resorting to the nasty tactics.

That sucks. How many cases would you say, percentage wise, get done in a manner that you get paid?

It depends on the type of debt. I am able to resolve more of the student loans thanks to government programs that give the student a second chance....say 50% In the case of money owed directly to the school, the percentage is closer to 30%....Unless the student wants transcripts, re-enrollment to school, or credit improvements, they just don't care.

What can be done about false claims made by loaners?

A friend of mine was paying all of her loans after college, but because the bank she got her private loan from was bought, bought, bought, and bought again, whichever entity ended up servicing the loan had no record of the payments. When she presented them with bank statements showing the checks had been written and cashed, they simply ignored the evidence. She ended up having to write a check for all the back amount "owed", and all of the payments she had made prior were lost.

Good question. My standard answer, which is true, is that the burden of proof is on the borrower. In this case, it sounds like she had proof. Unfortunately, there are way too many unscrupulous collection agencies out there that "buy" paper - old debt. I don't know how long ago that was, but she may have a case of FDCPA violations. A borrower is entitled to validation of the debt including information about the original lender. Depending on how well kept her records were and how long ago this was, she may be able to retrospectively take action.

What's your collecting process like?

The first step is locating the person I need to collect from. I spend way more time on this than actually speaking to people. Once located, I attempt to make contact. If I do speak to a borrower, I identify that I am speaking to the correct person. I find out how best/most convenient to reach them again. Then I just talk to them. If I can find out why you are in the situation, then I can usually come up with a mutually beneficial solution....that's the idea anyway.

What did you end 2011 with as far as total pay (gross)?

Around $50k.

I know some fellow Americans with outstanding student loans who live and work in Asia. How would you go after them if they are and have been for the past few or several years, out of the country?

I would look for them internationally. If they never plan to return to the States, they may not care, but I'll still attempt to reach them. I have successfully collected American debt from many countries. Unfortunately, due to the amount of time it takes to reach them, the default charges have become ridiculous....

Also, there is no statute of limitations on federal loans. If I am unable to locate them out of the country, and they do come back to the States to live.....it's a big and expensive mess to deal with.

What is the best way to avoid defaulting for a poor student approaching the end of his diploma with an entry-level job to look forward to?

Stay on top of it! You should have a 6 month grace period after graduation. After that, if you apply for it you can get up to 36 months of deferment or forbearance benefits. You may not even need those things though. If you stay up to date, the loans are set up to have low payments as you build your career.

So how can I make it easier on myself when dealing with you people?

It depends on the circumstances and the reasons you are dealing with us. If you want to try to pay regardless of ability, speak to us like people. If you are trying to avoid us completely....another story....Feel free to inbox me if you have specific questions. I'd be happy to try to help with your personal issues, if I can.

I'm paying a ton of money every month to both salliemae and nelnet. I tried he governments consolidation process but it seems like salliemae resists it every time and I can't get it to go through. How can I cut down my payments?

Sallie Mae HATES when people consolidate. They lose money on your interst....Unfortunately, Nelnet is one of the other lenders that behave more like bullies than lenders. If you are eligible....lose them! As long as you are not in some form of involuntary repayment, you don't have to deal with them. They will try to talk you out of it, but they have to follow the same government regulations as everyone else! They just tend to "forget" if you don't remind them.

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My pleasure. The pre-default programs are deferments and forbearance options. After grace (6 months) you have 36 months of eligibility, but you must apply for them in 6 month intervals. You may not need even those programs. The best advise I can give you is to stay informed. The repayment options you get after graduation may surprise you. If they surprise you in that "OH SHIT" kind of surprise, request information on and an application for forbearance. That, at least buys you some time.

Are people with some degrees overrepresented in not being able to pay their bills?

I'm not sure what you mean here, but I see way too many VERY educated people having a hard time because they are "over-qualified." In other words, employers bypass them for an uneducated person they can pay less money to for the same job. Did that come close?

Can you explain what oversight there is when students take out the loans? Does the government guarantee whatever amount the student asks for? Is there any review in terms of the ability the student will have to be able to pay back the loan? ( borrowing $50K to be a doctor is different that borrowing the same amount to be a stage actor. )

• For some reason people think that student loans just disappear if they decide to drop out. It takes way too many students by surprise that the government will not back the loan if it's not actually used for school. It's important to note the same is true for scholarships, grants...any financial aid. Or they get confused as to how many different lenders contributed since they requested and received funds from the same college. If they do not realize they owe anything, they don't keep a current address at the school. They move, they are unaware, they default....

• The government backs what the student qualifies for. In cases of true need, the loans will cover more than tuition giving a student who could not otherwise afford it extra money for books, housing, misc. expenses.

• There are programs available if you find your student loan debt exceeds your earning ability, but you have to request them. And a lot of those potential benefits are lost as soon as the account defaults. To my knowledge, there is no connection between funds requested and chosen field of study. I have seen comparable funding for art students and medical students.

** Typically I see WAY more than $50k in loans for someone attempting the medical field in any capacity....nursing loans for example.

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OUCH! I hate to say you are not alone in the situation. It's bound to be sounding like a mantra by now, but if an income-contingent repayment plan is not available to you....consolidate and get one. If your financial situation never improves - obviously we hope not the case - after 25 years of repayment under income-contingent the rest of your loans are written off - or something to that effect.

do you have FCRA and FDCPA cheatsheets that you use to help you to perform your work in a lawful and ethical manner, or do you just wing it?

I don't have cheatsheets myself, although they are available in company resources, but I do not wing it! I know FDCPA like the back of my hand. I get more fuzzy on the state laws, but they are stricter. My company is extremely strict on ethics and following the law to a tee. They even have a policy that if you violate FDCPA you can be held financially responsible for any litigation or settlement that it causes. Needless to say, I perform ethically and lawfully!

I took out student loans to go to college, then got expelled because of their beaurocratic bullshit. After seeing that I'm $70k+ in debt and homeless, there's never going to be any possibility of me paying this back.

The collectors went away because there's no way to contact or find me. When will they stop looking? Do I have to file for a death certificate and get a new identity to get a real life, or is there a way to make them stop caring?

Not stop trying, no. You can consolidate your loans with an income contingent repayment plan. That means your loans are no longer in default, and being homeless, your payment is 0 per month. If you are not in default, the collectors stop caring.

After 25 years of no default and no payment, it goes away. You "paid" your loans.

If you care, it also replenishes the system so that another student has funding availability.

I'm so going to be in trouble. I will owe so much (close to $100k, maybe?) in student loans. All my loans were based on a $0 EFC...my loans are government loans, I believe. However, I do see stuff from Sallie May and Great Lakes occasionally. I really don't know what that means.

Are my loans different since I didn't have "private" loans...or are my loans "private"? I am scared shitless of all this so I'm kind of...nonchalant? Because I'm going to have a breakdown, I swear. I'll never make much money.

Seriously, I'm afraid. I make, like, $30k, and that's probably all I'll ever make. Are the loan people going to make me homeless?

I defaulted once before, but when I started making "decent" money, I called to say, hey! Lemme do right by this.

I got hit with RIDICULOUS down payment and monthly payments. I did some research and somewhere I found that they couldn't kill me with an "unreasonable" monthly payment. He got his supervisor on the line and she backed it down. After a year, it was rehabbed, and I started school again.

I'm babbling, but I'm really fucking scared I will be eating Ramen noodles once I graduate with some worthless degree that makes me "overqualified" for everything.

:( I'm scared. And it's my fault I've dug myself into this position. I'll never be able to pay 6 figures back. I'll never own a home, I'll never get married, I'll never be able to save for a decent retirement, never not be poor. And it's my fault. Boy, I done made myself cry over that. Sorry.

Don't be scared! It's intimidating, no doubt, but it's fixable. You have rehabbed before, and you've proven by getting a supervisor involved that you can handle the problem without giving into the bullying tactics. Call Direct loans and tell them you have lost track of your loans...that you are concerned they are a mess and ask them if consolidating can help you.

Being overqualified can be a problem, but if you calm down and try to think rationally, you can find a solution. If things never get better and you get stuck in ICR forever...You at least won't be haunted with calls.

Start with step one. Then go to step two. Before you know it you will see that a future is in fact possible for you.

Sorry bill collector person, it seems like Reddit decided to use your AMA as an excuse to bitch about loans instead of an opportunity to learn more about the system and how to save their loans from default if they have problems. Thanks for being open and trying to help us, sorry most people are being dicks.

I've been ignoring the whiners and focusing on the real questions, so no problem. I hope I have helped those who really did want some insight. If so, it made the time and effort more than worth it.

Thanks though.