University administrators say they’re in a tough position. The third-party collection agencies that are expanding their client base, they may be the only winners here.” Sánchez, senior associate at the public policy group HCM Strategists. “It’s overwhelmingly low-income students who are disproportionately being caught up in this vicious cycle,”said Juana H. They can’t enroll until they pay the debt, and they can’t get aid until they enroll.” Dawn Medley, associate vice president of enrollment management, Wayne State University We had a lot of students who owed us these past balances … but they’re caught. “Think about when you’re 18 years old and what you don’t know about managing debt. More than 36 million adults in the United States have earned some college credits but haven’t finished their degree, and experts say the barrier is often financial. 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. State officials often bemoan a lack of college-educated workers for their economies, yet very few states track this problem. For many students, the financial burden makes it impossible for them to return to college and earn degrees that could get them good jobs. 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. The extra fees and interest can make it impossible for them to get back on track, ruining their credit and imperiling their financial futures. (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.Īs 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. 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. His wife is working, but with three young children and a mortgage, they have nothing left over to chip away at a debt that is now 74 percent more than what he originally owed. He has been unemployed since his last job in television and film ended and the pandemic began. Fishburn, 34, can’t imagine when he’ll have the money to pay off his debt, and until he does, he can’t go back to college.
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