Debt Collectors Hunt Student Loans

Elise Amendola / AP Photo

Debt collectors are zeroing in on the millions of American struggling to make student loan payments. The numbers—one of every six borrowers in default, an average of $76 billion in defaulted loans every year—represent a potential feast for the industry, and collection agencies are lining up at the trough. The Department of Education paid collectors $1.4 billion to collect on government loans last year. “I couldn’t believe the accumulated wealth they represent—for our industry,” wrote one industry consultant after witnessing a debt protest by NYU students last year. “It was lip-smacking.”