The debt that students find themselves in because of taking out too many student loans has gotten a close look for the last 10-plus years. However, public outcry really went up when the student loan debt surpassed credit card debt last year.
Universities are being tasked to monitor their cost increases and some states have instituted tuition maximums that universities must abide by or risk losing part of their state appropriation. When you and your staff have done everything you can to address costs at your educational institution, you’re still going to have students leaving with debt that goes unpaid.
Let’s take a look at where most of the debt lies. Of the $1 trillion in student loan debt, $850 million is tied to federal student loans, like the Stafford, Perkins and PLUS loans. Around $150 million is tied to private student loans. A surprising amount of students are defaulting on these loans, but most debt collection attempts start with the private loans.
Collecting on federal students loans is a lot more difficult than collecting on private loans. It’s a very time consuming process that takes an expert touch to pull off correctly. The Department of Education doesn’t take on new debt recovery firms very often, but the ones that are working on federally defaulted loans have probably been on the task for quite some time.
Most private loans come with a different interest rate than federal loans. The default periods are also different, most of the time. If your institution is relying on private loans as well as federal loans, you need a debt recovery agency that can deal with those private loans that aren’t being paid.
Most reputable debt recovery agencies will have a system in place that allows them to automate the way they process each loan recovery attempt. The trying part about dealing with student loan debt is that the debt is one person’s name (the student) while the person paying it is many times someone completely different (usually the parent). Some of these parents are working on retiring soon and might have a tougher time paying back the loans they co-signed for years earlier.
The demographics are changing, too. For instance, the Millennials are the first set of students leaving higher education without landlines. They are a transient group that are tough to pin down. It takes the expert touch of a debt recovery agency to get your institution’s debt back to you.
Most Millennials are more likely to respond to electronic forms of communication. Debt recovery agencies with the right hardware, software and motivated staff are able to work around the intricacies offered by the newest generation of college graduates.
Omega-RMS, llc., can handle debts of all kinds in any state. The staff at Omega is qualified to handle debts owed by debtors in all 50 states and they have the ability to negotiate payment that will get your students out of default and back to a good status.