Campus News

U.S. Education Departments paid $1.4 billion to track loans defaulters

As the number of student loan defaults have increased of late, the debt collection industry is a clear beneficiary, according to a New York Times story. The U.S. Education Department paid more than $1.4 billion to collection agencies to track down defaulters in the last fiscal year. With their help, the U.S. government has recouped about 80 percent of defaulted loans.

The average amount for a defaulted loan was $17,000, and dropouts were four times as likely to default as those who graduated.

Critics say the education department is not doing enough to help borrowers prevent default.