Colleges like University of Pennsylvania and Yale are going through some big measures to collect on unpaid Perkins loans — they are suing the defaulted borrowers. Federal Perkins loans are unique in that they are “needs-based” and carry a fixed interest rate of 5%, aimed toward lower-income or needy students. According to this Bloomberg article, …”students defaulted on $964 million in Perkins loans in the year ended June 2011, 20 percent more than five years earlier, government data show.” It is suggested that former students are not paying their Perkins loans because they are either simply not making enough money (unemployed/underemployed) or that they pay other loans first due to their higher interest rates and balances.
But after failed attempts to work out payment plans with borrowers, schools are fighting back through the courts. And the fees can be very hefty – up to 30% of the loan principal, interest and fees as noted on Studentloanborrowerassistance.org.
This Huffington Post article explains that, “Members of Congress have tried to help in recent years by passing legislation that would have required greater disclosure from both lenders and schools to students when they take out loans, but the lawmakers didn’t get very far.”
Like businesses, colleges can have debt collection agencies attempt to collect on their behalves. If you are in collections over your student loan debt, understand that regardless, there is no way that any collector can try to harass you by constantly calling you, letting other people know about your debt, use profane language to you, lie to you or anything else prohibited by law as outlined in the Fair Debt Collection and Practices Act (FDCPA). If you feel you are a victim of any collection abuse, you can contact my law office in Orange County. Our debt collection harassment attorneys can help — call us at 949-200-8755 for a free one-on-one consultation.