A tsunami of student loan default is washing across the country, threatening the financial future of millions of Americans. As sure as sharks follow bait fish, debt collectors follow debtors. But in doing so, some debt collectors use illegal tactics, such as harassing phone calls or threats. The tsunami looks like this:
- More than 44 million Americans owe almost $1.4 trillion in student loans
- Americans owe more in student loans than in all other household debts except mortgages
- Americans are delinquent in student loans more frequently than in all other loans combined
- 11% of student loans are severely delinquent or in default
Data From The Federal Reserve Bank Above 2017
If you default on your student loan, debt collectors may harass you for payment, or even sue you. If you have a government loan, the government may seize your tax refund or social security payments and garnish your wages.
What Can I Do If a Student Loan Debt Collector Harasses Me?
The Federal Debt Collection Protection Act (FDCPA) makes it illegal for a student loan debt collector to harass, oppress, or abuse you or anyone else they contact regarding your loan. According to the Consumer Finance Protection Bureau (CFPB), some examples of harassment are:
- Repetitious phone calls that are intended to annoy, abuse, or harass you or any person answering the phone
- Obscene or profane language
- Threats of violence or harm
- Publishing lists of people who refuse to pay their debts (this does not include providing information to a credit reporting company)
- Calling you without explaining who they are
(According to the Consumer Finance Protection Bureau – CFPB)
The Telephone Consumer Protection Act (TCPA) generally protects consumers from receiving robocalls from debt collectors without express consent (which can be withdrawn at any time). However, in 2015 Congress carved out an exception for collectors of federal debts, including government-backed student loans.
If you believe that you have been harassed, you can contact an experienced student loan debt attorney.
Have Consumers Sued Student Loan Debt Collectors for Harassment?
Yes. In 2017:
An arbitrator awarded a Pennsylvania man $309,000 against Navient, the largest student loan servicer, for making more than 200 robocalls to collect a student loan despite the man having revoked his consent. Navient denied liability and appealed.
National Collegiate, which services private student loans, and debt collector Transworld, settled a case brought by the CFPB for $21.6 million. The CFPB accused National Collegiate of filing 95,000 lawsuits nationally against student loan debtors with false or improper documentation, including phony affidavits.
The Pennsylvania attorney general sued Navient, alleging it made predatory loans to students, engaged in misleading subprime lending, and made $4 billion in abusive interest charges. Student loan debtors serviced by Navient should monitor this case, which could result in individual recovery.
What Should I Do if I am Contacted by a Student Loan Debt Collector?
Regardless of your circumstances, you should take the first contact very seriously. Disregard it, and you may be kissing your financial future goodbye.
ONE: If you have a federal loan, apply for a U.S. Department of Education income-driven repayment plan. If your income is low enough, your repayment could be as low as $0 per month. Apply online here.
TWO: Consider refinancing your loan privately. The Consumer Financial Protection Bureau site helps you determine whether this move is right for you here.
THREE: Beware of so-called student loan relief companies which charge large upfront fees. In 2017, the Federal Trade Commission (FTC) sued to close five companies in California and Florida as part of what it called “Operation Game of Loans”, which included enforcement actions by attorneys general in the District of Columbia and 11 states: Colorado, Florida, Illinois, Kansas, Maryland, North Carolina, North Dakota, Oregon, Pennsylvania, Texas, and Washington.
FOUR: If you are sued, immediately take the papers to a lawyer. If you do not respond, the debt collector will get a default judgment against you, giving him a free pass to collect according to state law, by methods such as garnishing your wages and placing a lien on your property. A lawyer may be able to get the lawsuit dismissed if the debt collector is not in possession of the documents which prove the loan is yours.
FIVE: If you have a government-backed loan, know that the government can seize your tax refunds and social security payments and garnish your wages.
SIX: If you need help, consult a lawyer experienced with student loan debt collection. They may see something in your case which can help you.
If a debt collector has been hounding you, call 844-685-9200 now for a free, no-obligation case evaluation with one of our representatives. Our attorneys have experience assisting those with student loans, fighting debt collectors, and standing up for consumers. If a debt collector has violated the Fair Debt Collection Practices Act, you’re entitled to file suit in federal court and could be awarded up to $1,000 and other damages.