Here it is June and many young men and women will stroll across stages at colleges all across the country to receive their hard-earned diplomas while Mom and Dad wipe back tears of joy, and relief. Their sons and daughters will be moving into the job market, getting married, buying homes and raising families. At least that’s what their parents hope they’ll do – move out of the basement and get a high paying job! Soon…Please!
But their new graduate may be a little pessimistic. With the job market still stuck in neutral, the prospects of paying off student loans in a timely fashion may not be realistic.
Let’s look at the data:
- Nearly 20 million Americans attend college each year.
- Of that 20 million, close to 12 million – or 60% – borrow annually to help cover costs.
- As of the first Quarter of 2012, the under 30 age group has the most borrowers at 14 million.
Of the 37 million borrowers who have outstanding student loan balances, 14%, or about 5.4 million are at least one payment past due. Of the $870 billion to $1 trillion in outstanding student loan debt, approximately $85 billion is past due.
The challenge for those holding this student loan debt is how to collect it. You understand and sympathize with the students who are burdened by student loan debt. You certainly don’t want to damage their credit as they are just getting started. Mom and Dad are in no position to pay the outstanding loan debt either (that helps explain why the grad is still living at home). That said, you have a large stake in recovering the money that your institution loaned on good faith.
There are several strategies to collect debt. The most obvious is the least appealing: you and your colleagues can send letters, send past due notices, and spend hours on the phone. Given the scale of most educational institutions and the complexity of federal and state regulations governing collections activity, one misstep employing the DIY model and you may land in the middle of a lawsuit.
Wouldn’t it be encouraging if there was a cost-effective way to collect student loan debt without alienating your former students and their families, and remaining on the correct side of collections law?
There is. Contingency Collections is very affordable, especially since there is no up-front cost.
The best collection agency’s method sets an industry standard. In a polite, understanding and constructive way, they and your client set up a payment plan. Reputable agencies know how this works and how to use gentle persuasion to get the debtor’s attention. It probably matches your values regarding outreach to former students, while it also has an extremely high success rate.
Of course, you’re not the only one trying to get that loan paid. What about that beleaguered kid who just got his diploma? He’s working hard to get you your money, and he just landed a good job at a Fortune 500 firm. He’s moved out of Mom and Dad’s basement (um…Mom, are those tears of joy or tears of sadness?) and he can make payments on his plan in full and on time. The birds are singing and the sun is shining!
To help you find a solution to your delinquent student loan debt problems, we have a handy guide for you: Choosing a Contingency Collection Agency.