Collectors Get Special Powers for Collecting Government Loans
As per the new provision of the federal government's deficit reduction plan, the collectors can call the student loan debtors at their cell phones. As such, the debtors may have to pay more on their cell phone bills in future.
You are likely to get special attention of the debt collectors if you have defaulted on the government loans. You'll be in the hit list of the collectors if you have not been able to make payments on the federal student loans for several months. As per the new deficit reduction plan of the American president, the debt collectors are entitled to call the people who are lagging behind their payments on the federal student loans. So, if you have defaulted on such loans, then be prepared to get a call at your cell phone from the collectors.
Collectors Can Call at Your Cell Phone
The government feels that collectors should be allowed to call the debtors at their cell phones since majority of them surrender landlines. Apart from the student loan debtors, the collectors can also call the people who have defaulted on FHA insured mortgages. The people who have not paid their taxes will also get calls from the collectors.
The financial experts are of the opinion that the collectors will primarily call the student loan lenders. Statistics reveal that the country is carrying a student loan debt burden of $50 billion on its shoulder. The unemployment rate is still high. Several people have not yet secured jobs. As such, it has become quite difficult for them to keep on making payments on the student loans.
According to the Department of Education, almost 320,000 debtors, who enrolled into a repayment plan in the year 2009, have defaulted in the year 2010. A great percentage of the students studying in the for-profit colleges have defaulted on the educational loans. Nearly, 15% of the students have not been able to make the required payments on the loans. Alternatively, only 4.6% of the students of the nonprofit colleges have become delinquent on the educational loans.
In the last few years, it has been seen that the students at the for-profit schools tend to borrow more than the nonprofit ones. Around 92% of the students (for-profit college)s have borrowed money in the year 2007 and 2008. On the contrary, only 60% students (non-profit colleges) have taken out student loans in the same year. This may explain why the default rate of the students of the for-profit colleges is higher than the non-profit ones.
Debtors fear that the collectors will misuse this special power given by the government. They are thinking that the collectors will specially target the students and harass them. Collectors have a bad reputation of harassing consumers. If one checks the track record of the collection agencies, then he will find that around 144,000 complaints were registered against them by the consumers in the year 2010.
A large section of the unemployed citizens of the country are extremely depended upon the cell phones. People who have opted for pay-as-you-go phone plans may have to pay more due to the provision of the federal government's new plan to reduce debt. Usually, people have to pay around 25 cents a minute for pay-as-you-go phone plans. If the collectors call the people several times in a day, then it implies that they have to pay more on their phone bills.
Finally, even if the new rule is implemented in the near future, then also the consumers can shield themselves from being bullied by the debt collectors. The collectors still have to follow the FDCPA rules and regulations. The collectors don't have the right to call the consumers between 9pm and 8 am. They can call the consumers during this time period with their prior permission only.
If you, the consumer, happen to carry your cell phone to your office, then the debt collectors can't make a call if you have told them to not disturb you at the workplace.
Collectors Can Call at Your Cell Phone
The government feels that collectors should be allowed to call the debtors at their cell phones since majority of them surrender landlines. Apart from the student loan debtors, the collectors can also call the people who have defaulted on FHA insured mortgages. The people who have not paid their taxes will also get calls from the collectors.
The financial experts are of the opinion that the collectors will primarily call the student loan lenders. Statistics reveal that the country is carrying a student loan debt burden of $50 billion on its shoulder. The unemployment rate is still high. Several people have not yet secured jobs. As such, it has become quite difficult for them to keep on making payments on the student loans.
According to the Department of Education, almost 320,000 debtors, who enrolled into a repayment plan in the year 2009, have defaulted in the year 2010. A great percentage of the students studying in the for-profit colleges have defaulted on the educational loans. Nearly, 15% of the students have not been able to make the required payments on the loans. Alternatively, only 4.6% of the students of the nonprofit colleges have become delinquent on the educational loans.
In the last few years, it has been seen that the students at the for-profit schools tend to borrow more than the nonprofit ones. Around 92% of the students (for-profit college)s have borrowed money in the year 2007 and 2008. On the contrary, only 60% students (non-profit colleges) have taken out student loans in the same year. This may explain why the default rate of the students of the for-profit colleges is higher than the non-profit ones.
Debtors fear that the collectors will misuse this special power given by the government. They are thinking that the collectors will specially target the students and harass them. Collectors have a bad reputation of harassing consumers. If one checks the track record of the collection agencies, then he will find that around 144,000 complaints were registered against them by the consumers in the year 2010.
A large section of the unemployed citizens of the country are extremely depended upon the cell phones. People who have opted for pay-as-you-go phone plans may have to pay more due to the provision of the federal government's new plan to reduce debt. Usually, people have to pay around 25 cents a minute for pay-as-you-go phone plans. If the collectors call the people several times in a day, then it implies that they have to pay more on their phone bills.
Finally, even if the new rule is implemented in the near future, then also the consumers can shield themselves from being bullied by the debt collectors. The collectors still have to follow the FDCPA rules and regulations. The collectors don't have the right to call the consumers between 9pm and 8 am. They can call the consumers during this time period with their prior permission only.
If you, the consumer, happen to carry your cell phone to your office, then the debt collectors can't make a call if you have told them to not disturb you at the workplace.
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