Good riddance to several debt collectors that seemed hellbent on sending all Oregon student loan debtors into bankruptcy. Pioneer Credit Recovery, Enterprise Recovery Systems, National Recoveries, and Coast Professional had all sued earlier this year once the Education Department said it would no longer send them any more accounts under their current contracts. A federal judge on Tuesday has now dismissed all their claims.
The Department of Education had previously stated that these collectors had mislead distressed borrowers “at unacceptably high rates.” With roughly 7 million Americans in default on more than a $100 billion on their student loans, having the Department of Education actively paying unscrupulous debt collectors to collect on them was a recipe for disaster.
It is probably fair for Oregon and Washington consumers with defaulted student loans to question why the Department of Education did not take this action years ago before thousands of them were sent reeling into bankruptcy.