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Friday, May 11, 2012



Outside collection agency contingency fees were as high as 25% not too long ago. Perhaps the high default penalty was set in anticipation of those collection costs.
Debt collection agency contingency fees on unsecured debts average between 15% and 18% currently.
Given the "to the grave" nature of student loan debt (worse than taxes for most), and the enhanced methods of collection (no SOL, tax refund intercept, non-dischargeability), contingent collection fees should be lower than market rates for collecting unsecured debts.

I have no doubt that changes to national student loan policies are coming. It would be nice if the changes made better sense for students and the nation as a whole, as opposed to lenders and the securitization market this go around.

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