Previously I wrote Trump Department of Education Operating Beyond Logic on FFEL Collection Fee Change. This was about how the current Department of Education was rolling back protections that would allow them to charge a 16% collection fee on day one of a federal student loan default. That ability was eliminated in 2015 by the Obama Department of Education.
In my previous post ECMC had come out saying it would not charge the fee, but give debtors 60 days to enter into a rehabilitation arrangement to avoid the budget busting tacked on fees.
Well, the rest of collection companies who deal with these FFEL student loan debts have now come out against charging these fees. Through their trade association, the debt collectors have all agreed and said:
“In light of Tuesday’s filing seeking dismissal of a federal lawsuit against the U.S. Department of Education over student loan collection fee policies, the guarantor community wishes to clarify its collection fee practices. Since the U.S. Department of Education issued a Dear Colleague Letter on July 10, 2015, student loan guarantors have not assessed collection fees on borrowers who entered into rehabilitation agreements within 60 days of default on or after July 10, 2015. Notwithstanding the Department of Education’s March 16, 2017, decision, prompted by a request from a federal judge, to withdraw that Dear Colleague Letter, guaranty agencies are continuing their practice of not assessing collection costs on borrowers who enter into a rehabilitation agreement within 60 days of default and then honor that agreement.” – Source
If you have a credit or debt question you’d like to ask, just click here and ask away.