However high that default number really is, what’s clear is that the state is still able to turn billions in profit on its lending, and expects to continue to do so for the next 10 years. The reason for that, again, lies in something everyone who has a student loan understands implicitly – the state and its collectors are not squeamish collecting the money they’re owed. The government is in the pain business, and business is good.“They called me at work, sometimes two to three times a day, doing all the stuff they aren’t supposed to do: threats, et cetera,” says 41-year-old Shawn FitzGerald, who owes $300 a month and says he expects to be paying off education loans into his sixties. “They told the receptionist at my job that I was in legal trouble. . . .”“Sallie Mae has started sending letters to my deceased mother,” says Thomas Daggett of Chesterfield, Massachusetts, who left school in the Nineties and owes $35,000.“I have been told I made the wrong decision going to college, as well as being told I was a failure, an idiot and a mooch,” says Larissa, a young woman from a blue-collar town outside Chicago. “I’ve had ex-boyfriends that I never even lived with contacted by collection agents, my childhood friend’s distant relatives contacted by them, as well as distant relatives of my own. . . .”
As the loan crisis grows, it has become abundantly clear that the cozy relationship between federal lenders and universities is causing serious problems for millions of Americans, and the issues described above only scratch the surface. Read the whole thing.