Debt Collectors Profiting From Student Loan Woe

(Tim Schreier)

The following is a real life account by Stephanie Hood as told to LearnVest. It’s funny how you can do all of the right things–go to college, get a job–and then one day wake up with crushing debt.

Debt collector horror stories abound: There are threats to dig up the dead relatives of those who couldn't pay their funeral bills, promises to imprison debtors or take their children into custody -- even warnings that pets will be killed.

So you have student loans and can't wait to get them paid off? Join the club! There are millions of people across the U.S. who are in that very position right now.

When Deacon Hayes and his wife Kim sat down to discuss their finances, the newlyweds discovered they had $52,000 in debt, including $18,000 in car loans, $27,000 in students loans, and $7,000 in outstanding credit card balances.

“So, my student loan payments are more than my monthly rent?” exclaimed my sister-in-law, Kari. “More than a mortgage payment, to be honest,” I replied. Kari is finishing up her junior year of college in May and was curious about what life after college would like like.

The U.S. Supreme Court handed down a ruling Tuesday that could stop indebted grads from taking their student lenders to court, the Wall Street Journal reports. The high court ruled that Olivea Marx had to pay Sallie Mae subsidiary GRC $4,543 on top of all the student loan money she already owes the company.

We have not been shy about exposing the massive (and unsustainable) bubble of credit being blown into the economy via Student Loans from the government. We have not been afraid to note the dramatic rise in delinquencies among these loans - and the implications for the government.