Here at the Student Loan Ranger, we recently read about Educational Credit Management, a Minnesota nonprofit that is earning commissions of up to 31 percent for collecting on defaulted student loans. Seven of their employees earned more than $400,000 in 2010, according to the San Francisco Chronicle.
Ironically, we just got an E-mail from a woman who defaulted on her federal student loans and is struggling to rehabilitate them. Like so many borrowers we talk to, she genuinely wants to pay back her student loans but is struggling to do so.
Hopefully even periodic readers of this blog also know how important it is to take out federal student loans whenever possible and to utilize their borrower protections, such as income-driven repayment plans and hardship deferments, to avoid default. These are proactive steps that can make sure the Educational Credit Managements of the world will not be profiting off your pain.
Isaac Bowers is a senior program manager in the Communications and Outreach unit, responsible for Equal Justice Works' educational debt relief initiatives. An expert on educational debt relief, Bowers conducts monthly webinars for a wide range of audiences; advises employers, law schools, and professional organizations; and works with Congress and the Department of Education on federal legislation and regulations. Prior to joining Equal Justice Works, he was a fellow at Shute, Mihaly & Weinberger LLP in San Francisco. He received his J.D. from New York University School of Law.