Possible Bad News for Michigan Consumers with Student Loan Debt

The Obama administration fired five debt collection agencies for giving out inaccurate information to consumers attempting to get their student loans out of default. Now, the Trump administration is ready to welcome two of these debt collectors back. Enterprise Recovery Systems and Pioneer Credit Recovery have both accepted the Education Department’s offer of new contracts. These contracts won’t take effect until certain issues are ironed out in court. However, at some point in the not-too-distant future, Michigan consumers with student loan debt may encounter some big problems.

What the Student Loan Debt Collector Controversy could Mean for Michigan Consumers in Default

Back when the Education Department cut its ties with five debt collectors, these debt collection agencies fought back. They argued that allegations from the Obama administration were flawed because they were based on “a handful” of calls. In fact, four out of the five debt collectors that were fired took legal action against the Education Department. Wanting to end the litigation, the Trump administration offered new contracts to the four debt collection agency litigants.

Two debt collectors have accepted these new contracts, and two have declined the offer. Because not all four were on board, the litigation continues, and the new contracts with the Education Department are in limbo. Many people are unhappy with the decision to invite any of the disputed debt collection agencies back into the fold, fearing that they will continue their alleged dishonesty toward consumers.

Persis Yu, a staff attorney at the National Consumer Law Center summed up these concerns:

“The decision by the Department of Education to reinstate the contracts of the companies it previously fired is a slap in the face to student loan borrowers. Student loan borrowers deserve accurate information regarding their loans. The government should not be rewarding companies that break the law and lie to student loan borrowers with lucrative government contracts.”

Student Loan debt is a huge concern for a lot of Michiganders. You may have earned an awesome degree from the University of Michigan, Michigan State, or one of the other highly esteemed colleges in the Mitten. However, there’s a good chance that this awesome degree comes with a mountain of student loan debt. Landing an awesome job would help you pay off this debt, but what if that job doesn’t happen right away? It can be all-too easy to get behind on your student loan payments. You might even find yourself in default. What happens then?

Getting out of student loan default isn’t easy, but it’s not impossible. Of course, if you’re dealing with a debt collector that isn’t giving you the right information, getting out of debt default will be more difficult. Even if Enterprise Recovery Systems and Pioneer Credit Recovery are never able to accept new contracts from the Education Department, they’re still in operation. They have been taking and will continue to accept student loan debt collection contracts from other sources.

What to do if You’ve been Treated Unfairly by Student Loan Debt Collectors

If your student loan goes into debt collections, it’s a toss-up as to which company will be in charge of pursuing you for payment. Some debt collection agencies are honest and on the level, and some are not. Also, ALL debt collectors are capable of making mistakes.

If you’ve been treated unfairly by a student loan debt collector, you can get a free lawyer to help you make things right. Whether you’ve been lied to about the amount you owe, have been harassed about a debt you don’t owe, or have been verbally abused by a debt collector that calls at all hours of the night, Credit Repair Lawyers of America can ensure that your rights are protected.

Don’t let debt collectors get away with violations. At Credit Repair Lawyers of America, we’ve been helping consumers with abusive debt collectors since 2008 for free. How do we do it? All of our fees come from the defendants in cases that are settled. This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for you. Set up your free consultation today by calling Attorney Gary Nitzkin at (248) 353-2882 or contact us on our contact page.