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Students who defaulted on a college loan have one less tool to help them negotiate with collections agencies now that the U.S. Education Department pulled a manual for debt collectors off its website.

The department removed the Private Collection Agencies Procedures Manual from its website last month after a U.S. News and World Report blog, College Cash 101, detailed some useful tips from the manual for borrowers who have fallen behind in repaying their federal student loans.

Reporter Kim Clark’s blog said that although the 292-page manual from September 2009 is intended as a guide for collections agencies, it also reveals ways for debtors to get relief. For example, if the borrower makes a good faith agreement to repay the loan, the collector can waive all collection fees and reduce borrowers’ total debt by up to 10 percent.

While writing her blog post, Clark said she called the Education Department to see if there were any updates on the manual, and officials there “freaked out.”

“They told me that if people find out that they can negotiate a debt reduction of 10 percent they will hold out for it, and all sorts of things like that,” she said, adding that the Department of Education tried to convince her not to publish information from the manual. After publishing her story, Clark said the “next thing I knew, the manual was off the site.”

In response to the Center’s questions about the manual, the Education Department wrote in an e-mail that the electronic copy of the document was removed because the host website is currently under review. “Once it’s complete, we will re-post all appropriate information,” the e-mail said.

Although the Education Department’s e-mail recommended that student borrowers with defaulted loans consult the Federal Student Aid’s Collections Guide to Defaulted Student Loans, Clark said that guide is simply not as informative as the manual for collectors.

For example, in order to stop harassing telephone calls from collectors at work or at home, student loan borrowers must request in writing that collectors “cease all collection activity.” The precise language is important, the manual says, because simply asking a collections agency to stop calling does not carry legal weight.

Such semantics are in the manual, but not in the guide that remains on the department’s website. “How are you supposed to know that without this manual?” Clark said. “Lawyers used to go to it all the time to make sure the collectors were doing what they are supposed to.”

Luckily for student loan borrowers, the manual can still be found at the Student Learning Analytics Blog run by Tim Ranzetta. A copy of the manual is also now posted on the Center’s website.

The manual itself notes that 17 private collections agencies (PCA) annually recover billions of dollars in defaulted student loans on behalf of the Education Department. The department “strives to develop the best possible working relationship with the PCAs, while maintaining comprehensive oversight and a dedicated commitment to outstanding customer service,” the introduction to the manual said.

“I understand that the government has a natural tendency toward secrecy but in this case they should be setting the standards for transparency and protecting the people,” Clark said. “They might be delinquent [on their student loans], but they’re still tax payers.”


What: Private Collection Agencies Procedures Manual

Where: U.S. Education Department

Availability: No longer on department’s website

Format: Word document

Usability: n/a

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