Yes, that is correct. Do you feel robbed? I sure do! Turns out, according to a recent Bloomberg article, that US tax payers are putting a pretty penny in the pockets of student debt loan collectors hired by the U.S. government. Yes, these guys are making bank! -even Wall Street is jealous.
In fact, one collector (Joshua Mandelman) received a $454,000 bonus (yes almost half a million) for his chasing down of feral student loan payers! His boss, Richard Boyle (the CEO of Educational Credit Management Corp) received $1.1 MILLION in 2010 alone – including commuting expenses from his 715-acre ranch in New Mexico to the Collector Headquarters in Minnesota and Sacramento. His ranch is also home to 26 head of cattle, all provided by YOU, the TAXPAYER! So go collect your milk. =) Not to mention, that the other guys working at ECMC received pay in the $300k to $400k range.
Anyway, I think the fact that these guys are getting paid in millions to collect loans from feral student loan debtors is pretty ridiculous. The government has the money to throw away at these guys so why don’t they utilize the funds to create a sustainable solution to the student loan debt phenomenon. Why not work with the debtors in a way that is feasible and sustainable given the current economic climate? What would that type of program even begin to look like? Because at this point in time, the government is turning to companies like ECMC when other troubled agencies (agencies that aren’t as tactful at collecting what is due) seemingly can’t get out of work (and broke) graduates to pay!
Suggestions anyone? How about a cap at interest that could build on the loan itself- why is it that if I took out 28k to fund a year of education that I now have to pay over 40k in interest? Why? Why not cap it at a point that actually feels doable? Maybe that is an incentive for debtors to pay it back- rather than feeling like there is no end to being a broke graduate for the remainder of their existence.
Anyway, I just felt dirty at the fact that these collectors are dancing around with bonuses that match the old wall street bonuses. Bonuses that many can’t even imagine obtaining given the slow paced economy we find ourselves in (no matter how many polls and stats say otherwise). It just does not sit right with me and I hope it doesn’t sit right with you. The fact that the US government (oh wait, no…the US taxpayer…otherwise known as you) is paying for the student loan defaults in the millions in the form of bonuses is RIDICULOUS. It’s unacceptable. But please, help me understand otherwise.
Student loan debt is the next mortgage default bubble…..POP!
- Fleeing the country to avoid student loans? (alleducationmatters.blogspot.com)
- For some, student loan debt lingers decades later (shortformblog.com)
- Should Student Loan Debt Be Forgiven? (txwclp.org)
- student loans haunt older folks, too (twentysomethingthebook.wordpress.com)
- Student-loan debt collection criticized in report (sfgate.com)