The New York Times Thursday ran a lengthy investigative report on one of the largest student loan guaranty agencies in the country and their practices related to rare bankruptcy petitions to expunge student loans.
The report focuses on how Educational Credit Management Corporation (ECMC) advocates for the Department of Education in cases where consumers attempt to get relief from student debt in bankruptcy proceedings.
Student loans are very well-protected from U.S. bankruptcy code. But at least several hundred borrowers per year attempt to have the debts expunged in the bankruptcy process. ECMC is hired by ED to challenge the filings when they arise.
The piece is the latest to shine a light on student loan ARM practices as the total amount in education financing surpasses all other debt types outside of mortgages. In 2014, the debt collection industry should expect heavy scrutiny on the student loan market and today’s article is definitely worth a read.