Collector - February 2016 - 39


STUDENTLOANS

are still a major focus, but not the only focus
of financial education."
Cox agreed that financial literacy
opportunities should be extended to
students in a number of different avenues at
a number of different times throughout the
life of the loan, especially before students
get out of school.
"If we want our students to be more
knowledgeable and better consumers, we
have to give them information they need
and present it to them in multiple different
ways," Cox said.
While assistant director at the Illinois
Student Assistance Commission, Cox
volunteered with Mapping Your Future, a
nonprofit organization committed to helping
students, families and schools navigate the
higher education and student loan processes.
"They have great financial literacy
products for consumers," Cox said. "You can
get every form you need for every student
loan program through that one place. I can't
speak more highly of it."

COLLECTOR 02.16

Huffman said that while it's hard
to pinpoint the biggest source of
consumer confusion in the student
loan repayment process, he often sees
consumers misunderstand the full impact
of delinquency and default. The CFPB
estimates that more than 25 percent of
student loan borrowers are delinquent or in
default-and that number is on the rise.
The consequences of default are
significant: the loan becomes due and payable
immediately, collection costs are added to
the balance and the consumer is ineligible
for deferment and repayment plans. Loan
servicers and collection agencies can also
garnish consumers' tax refunds and wages.
"Though there seems to be a vague
recognition of the importance of credit
scores and the like, recent research shows
that student loans often fall lower on the
priority list because of a lack of immediate,
tangible impact," Huffman said.
He noted that given the complexity of the
multitude of federal loan repayment options,

most companies that are effective in the higher
education space are taking a consultative
approach to student financial literacy.
The extent to which agencies can
actually serve in a financial advisory role to
students remains a question, but collectors
undoubtedly have a great wealth of expertise
to offer consumers.
"Collectors are probably the closest thing
to credit advisors many of these students
will get," Cox said. "We help consumers get
financial and loan repayment information,
we walk them through their bills and
income-and we do that with almost every
borrower. We take more of a consultative
approach to helping people resolve their
debts. Nobody wins if people are upset and
you don't get the debt resolved."
Cox said many of his collectors will
spend 30 to 45 minutes on the phone with
consumers, going over their responsibilities
and all the potential remedies.
"It's extensive," Cox said. "In an automated
environment, most collection agencies want

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Table of Contents for the Digital Edition of Collector - February 2016

Collector - February 2016 - Cover1
Collector - February 2016 - Cover2
Collector - February 2016 - 1
Collector - February 2016 - 2
Collector - February 2016 - 3
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