Delivering Distress to Borrowers in Default
This paper starts by grounding readers in the consequences of student loan default, who is in default and why, and why so many borrowers remain in default for years. It then identifies legal authority, under existing regulations, that empowers the Secretary of Education to compromise student loan debts and so end collection from defaulted borrowers where such efforts would be futile or unreasonable. Now—before the suspension of federally-held student loan collection ends next year—is the time to act on that authority.