#StudentLoans in default to be referred to #DebtCollection, #EducationDepartment says

By ANNIE MA, April 21, 2025

WASHINGTON (AP) — "The Education Department will begin collection next month on student loans that are in default, including the garnishing of wages for potentially millions of borrowers, officials said Monday.

"Currently, roughly 5.3 million borrowers are in default on their federal student loans.

"The Trump administration ’s announcement marks an end to a period of leniency that began during the COVID-19 pandemic. No federal student loans have been referred for collection since March 2020, including those in default. Under President Joe Biden, the Education Department tried multiple times to give broad forgiveness of student loans, only to be stopped by courts.

" 'American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,' #EducationSecretary #LindaMcMahon said.

"Beginning May 5, the department will begin involuntary collection through the Treasury Department’s offset program, which withholds government payments — including tax refunds, federal salaries and other benefits — from people with past-due debts to the government. After a 30-day notice, the department also will begin garnishing wages for borrowers in default.

"The decision to send debt to collections drew criticism from advocates, who said borrowers had experienced whiplash and confusion with the changing student loan policies between the Biden and Trump administrations."

Source:
https://apnews.com/article/student-loan-debt-default-collection-fa6498bf519e0d50f2cd80166faef32a

#CharacteristicsOfFascism #Education #DumbingUsDown #Debt #LoanForgiveness for #TheRich, but not #Students!

It just works, whether you understand it or not.

You don’t have to understand how the internal combustion engine of a car works in order to get somewhere. You get in, press the accelerator pedal, and just go.

You don’t have to understand physics, chemistry, or engineering.

You don’t have to know the proper fuel-air mixture, the timing of the spark plugs, or the torque output of the engine.

Unpaid oil debt mounts.
Oceans hid that shame awhile.
Physics keeps calling.

Knowledge is the antidote to fear.

When a debt collector comes at you, your fear is their friend.

They use fear against you to extract money they didn't earn and don't deserve.

But if you know how the law protects you from unfair and abusive debt collection, you have the upper hand.

And you don't have to fear them anymore.

We'll give you the knowledge—for free. Check the link below.

Four common ways debt collectors break the law:

1. Calling you on the phone when they know they shouldn't

2. Misrepresenting the amount of a debt

3. Using false statements in court proceedings

4. Trying to collect a debt after the statute of limitations has passed

If a debt collector has broken the law while collecting a debt from you, you can sue them. Turn the tables and make THEM pay YOU instead of the other way around.

The smoking gun is usually right there in the debt collector's files.

They lie about simple things, like due dates, or the amounts owed, or the dates of last payment.

And then we dispute the debt, and find out they knew the truth all along.

How'd we find out?

A properly-worded dispute letter to the debt collector often means they cough up the account statements.

Data breach at US debt collector exposes over a million users

NCB Management Services, a debt collecting company from the United States, has suffered what appears to be a ransomware attack in early February 2023 that left the data of over a million people exposed.

#debt #debtcollection #NCB #databreach #ransomware #malware #security #cybersecurity #infosec #hacking #hacked

https://www.techradar.com/news/data-breach-at-us-debt-collector-exposes-over-a-million-users

What if the debt collector already has a judgment against you and is trying to garnish wages?

You have a few options.

1. See if you qualify for an exemption to garnishment. The most common of these are "Head of Household" (you are the main financial support for one or more other people) or if your income is from retirement or disability benefits.

.> Timnit Gebru, founder of the Distributed AI Research Institute (DAIR), described the use of AI in debt collection as "punishing those who are already struggling."
.> "In a time when income inequality is off the charts, when we should be reducing things like student debt, are we really trying to build tools to put even more pressures on those who are struggling? This would be true even if the software was working as intended," Gebru said.
.> "In addition to this, we know that there are so many biases that these LLM based systems have, encoding hegemonic and stereotypical views,” Gebru added, referring to the findings of the paper on large AI models that she co-authored with several other researchers. “The fact that we don't even know what they're doing and they're not required to tell us is also incredibly concerning."
.> Some of the companies that stand to benefit most from AI integration are those that purely exist to collect debt. These companies, known as debt buyers, purchase “distressed” debt from other creditors at steep discounts—usually pennies on the dollar—then try as hard as they can to get debtors to repay in full. They don’t issue loans, or provide any kind of service that clients might owe them for; it’s a business model built on profiting from people who fell behind on payments to someone else.

#AI #GenerativeAI #DebtCollection: "An industry historically known for harassing and intimidating people down on their luck is replacing human debt collectors with AI-powered ones, in a move that one company says will "change debt collections forever."

AI tools will take the industry into “a new era of debt collections,” according to New York and Bangalore-based Skit.ai. A digital voice agent—the new incarnation of a robocall, using AI chatbots and text-to-speech capabilities for dynamic, responsive conversations—could make millions of outbound calls in just a few days, the company claimed, contacting and requesting payment from a collection agency’s entire portfolio of debtors at a far lower cost than human staff.

Human agents could use AI at every stage of the collection process, the company’s blog claims, delivering “instant scalability” through “end-to-end automation,” which of course would boost productivity and lower costs. On the other hand, for someone on the other end of the call, the chance to speak with an actual human during the process becomes ever more distant."

https://www.vice.com/en/article/bvjmm5/debt-collectors-want-to-use-ai-chatbots-to-hustle-people-for-money

Before you enter battle with a debt collector, make sure to do your pre-battle recon and planning!

Here are the four sources of information you must gather as step one of your debt collection battle.

1. Your own bank accounts. They will show what you paid, and when.

2. Account statements, if you have them, for the collection account. They will also show what was paid, when it was paid, and how much the balance is.

#FDCPA #DebtCollection