Public colleges shock students by sending them to costly debt collection agencies

By: | June 1, 2021

To the surprise of many students and parents, public colleges in every state in the country except Louisiana use for-profit debt collection agencies to retrieve overdue tuition, library fees and even parking fines. (Louisiana, like several other states, sends students’ debts to the attorney general’s office, which can charge fees as high as 33 percent of the original bill.) Many universities add late fees to students’ bills, and when debt collectors add another 30 or 40 percent, students can end up owing thousands of dollars more than they did originally.

As tuition has risen astronomically, one child care or medical crisis can push students over the edge and force them to choose between household bills and tuition payments. The extra fees and interest can make it impossible for them to get back on track, ruining their credit and imperiling their financial futures.

Public colleges have sent hundreds of thousands of students around the country to private debt collection agencies, and the spiraling debt held there now totals more than half a billion dollars, a Hechinger Report investigation has found through more than 60 inquiries with agencies in every state and more than 120 inquiries with individual institutions. For many students, the financial burden makes it impossible for them to return to college and earn degrees that could get them good jobs. State officials often bemoan a lack of college-educated workers for their economies, yet very few states track this problem. Most states cannot provide figures on how often their colleges use these companies, how many students are affected or how much in additional fees and interest is being charged.

Read more from The Hechinger Report.

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