Subject: Re: Op/Ed on Student Loans
From: "Beau Biden" <[email-masked]>
To: "Bill Bartmann" <[email-masked]>
Cc: <[email-masked]>, <[email-masked]>
Date: Tue, 24 Jun 2014 12:02:38 -0400

Good stuff.
Thanks again for the help with Hassan.
Best,
B.

On Fri, Jun 20, 2014 at 5:28 PM, Bill Bartmann <[email-masked]>
wrote:

>  Josh, Beau, Hunter,
>
>
>
> Thought you might be interested in my Op/Ed in today’s issue of The Hill.
>
>
>
> Enjoy the week-end.
>
>
>
> Bill
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> *Many student loan borrowers left behind*
>
> June 20, 2014
>
> By Bill Bartmann
>
> President Obama’s executive action to make more students eligible for
> income-based payment plans is a tremendous relief for those 5 million
> students newly eligible.  The Pay As You Earn Plan allows students lower
> payments in the early years of their careers and catching up on payments as
> their career advances.  It makes great sense.
>
> Unfortunately 6.5 million students, the equivalent of the combined
> population of Los Angeles and Chicago, whose loans are already in default
> are tragically being left behind.  Under current rules, those students are
> not eligible for the plan just authorized by the president or for any of
> the other plans where payments are based on income.
>
> Default on a student loan is a serious matter and the student must have
> missed at least nine regular payments to achieve that status.  Default can
> cause students to be subjected to all sorts of penalties.  Their income tax
> refund can be seized; their wages can be withheld if they work for the
> federal government; they can be sued and wages garnished.  They could even
> be denied renewal of certain professional licenses or lose out on job
> opportunities because their credit score is so badly damaged.  Think of the
> irony, students spending four years of their lives to become more
> employable – and now that their credit score is damaged, they become
> unemployable.
>
> Even if you don’t feel sorry for these 6.5 million students, you might
> want to start feeling sorry for yourself.  This problem has now boiled out
> of the pot and affects every one of us.
>
> Student loan defaults cause tremendous harm to the national economy.  The
> growing burden of student loans threatens to undermine the housing recovery
> by discouraging or preventing an entire generation of potential buyers from
> purchasing their first homes.  Sales of new autos are impacted negatively.
> If students drop out of the housing and auto market, the economic recovery
> as weak as it is, sputters to a stall and slips into a tailspin.  Some are
> already predicting this could cause a downturn equal to or worse than the
> housing crash of 2008.
>
> The Department of Education hires outside parties to receive and keep
> track of payments.  Those private companies, called loan servicers, do a
> pretty good job of tracking the roughly 50 million student loans while
> processing tens of millions of payments every month.  What they are not
> good at is devoting the time and attention necessary to counsel students in
> financial difficulty about the various alternative deferment or payment
> plans.  Largely, students simply don’t get the right advice or that extra
> help and their loan falls into default.  Sadly, once the loan has
> defaulted, the student is no longer eligible for the income based payment
> plans.
>
> Some critics claim that the loan servicers are simply terrible at
> communicating with students who need assistance and just don’t mention the
> income based alternatives to prevent default. Others point out how
> complicated the rehabilitation process can be.  Regardless of the cause,
> the fact is that the nation cannot turn its back on 6.5 million students
> and their loans representing $90 billion of the government’s money.
>
>  President Obama made a bold decision when he decided to open the door and
> allow millions more access to the Pay as You Earn Plan.  He should make
> another bold decision and use his pen to direct the Department of Education
> to take special and extraordinary action to focus on those students who
> have loans in default.  The students who need it most have not received the
> help they need and are not going to get it under the current system.
>
> The Department of Education should borrow a tactic from the FDIC.  When
> dealing with a failed bank, the FDIC will quickly separate the troubled
> loans from the performing loans and assign the troubled loans to a
> different servicer.  This process allows each servicer to focus on only one
> type of situation.  Since the existing servicers clearly are not getting
> the job done, the defaulted student loans should be yanked away from the
> current servicer and assigned to a new Special Servicer who does nothing
> but deal with those defaulted loans -- the far greater challenge.
>
> The Special Servicer will be more focused and more capable of working
> closely with students with defaulted loans.  Rehabilitating those loans is
> the only way to keep the student out of a continued downward spiral.  The
> rehabilitation is not hard but requires a lot of time and personal
> attention to each student to understand their situation and custom fit a
> solution.  It will help that the student now has only one point of contact
> for everything.
>
> More than just the extra attention, the Special Servicer would be required
> to help these students find jobs, provide financial literacy education,
> arrange for needed social services and help the student deal with any other
> credit problems in their life.
>
> A Special Student Loan Servicer assigned to tackle only those defaulted
> loans will make a world of difference in the lives of those students.
> Imagine the possible outcomes of helping 6.5 million students out of a
> tough problem and helping the government recover the money it has loaned to
> give a young person an education.
>
> The potential for greatness is incredible.
>
> *Bartmann is CEO of consumer financial recovery firm, CFS2.  He is author
> of the recently published book Out of Control: Cases of Debt-Collection
> Abuse in America and What We Can Do About It. All proceeds from the book
> are donated to the National Consumer Law Center.*
>
>
>
>
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>
>
> -----
>
> Consumer advocate Bill Bartmann is the CEO of consumer financial recovery
> firm, CFS2.  His first financial recovery firm CFS, which helped 4.5
> million consumers get out of debt, was a published case study by The
> Harvard Business School.  Bartmann has been called the ‘No. 1 Collection
> Industry Consumer Advocate’ in the world and was named national
> “Entrepreneur of the Year” by NASDAQ and the Kauffman Foundation.  He is a
> best-selling author and recently published the book *Out of Control:
> Cases of Debt-Collection Abuse in America and What We Can Do About It*. *Out
> of Control* documents clear patterns of abusive tactics used by unethical
> collectors.  All proceeds from the book are donated to the National
> Consumer Law Center.
>
>
>
> Millions of people have seen Bill on ABC, NBC, CBS, FOX News, CNN and
> CNBC. Bill's expertise has been featured on Sheppard Smith, Neil Cavuto and
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