It is no secret that student loan debt has gotten out of control over the last few years. The cost of tuition rises each year, forcing more college hopefuls into borrowing against their future. Now with the job market in dire straits, graduates are either unemployment or significantly underemployed making repaying their loans nearly impossible. Even worse, student loan debt has become one of the fastest growing reasons for bankruptcy filings among Americans under the age of 35.
How Bad Is It?
Debt collection agencies have taken notice of the potential gold mine that is student loan debt collection. Having declared their stake on U.S. Department of Education collection contracts, collection agencies are betting these contracts will bring big money. With the potential to be one of the most lucrative collection deals in recent history, debt collection agencies are fighting to get their hands on the collection contracts.
Perhaps the sweetest part of the deal for debt collectors is the difficulty most graduates have faced finding assistance with their student loan debts. Typically, these debts are not dischargeable in bankruptcy and there has been very little focus on the growing epidemic as problematic. However, a new plan outlined by the President is working to change things for college graduates and give them a chance to earn a decent living without having to shell out over half of their paycheck towards student loan payments.