Wednesday, February 17, 2016

Just plain old totalitarianism...

Man arrested by U.S. Marshals over student loan default

by Sam Rolley

When you think of the kind of fugitives U.S. Marshals routinely pursue at behest of the federal court system, you may picture dangerous international criminals, prolific bank robbers or ruthless murderers. But you’d probably be surprised to learn that the federal law enforcement agency is sending heavily armed officers to drag people into court over delinquent student loans.

So too was Paul Aker, according to Fox 26 in Houston, when seven agents dressed in full combat gear arrived at his home near Houston to collect a debt on a student loan he took out way back in 1987.

Aker said he first thought something was up when he noticed a strange vehicle parked outside his home. When a suspicious person approached him, he retreated into his house as most people would. But later that day, the federal government’s heavily armed henchmen showed up in full force.

“They grabbed me, they threw me down,” the 48-year-old told local reporters. “Local PD is just standing there.”

Aker was unsurprisingly very confused by the government attack and wouldn’t learn until later that it was related to a $1,500 student loan debt from nearly three decades ago.

“I say, ‘What is this all about?'” Aker said. “They say, ‘Shut up, you know what this is all about.’ I don’t have a clue.”

Aker was then placed into the back of a truck and hauled to court where a “prosecutor”— actually a collection lawyer— informed him that he would be forced to pay $5,700 for the loan and its interest in addition to $1,300 to cover the cost of the government operation to apprehend him.

When the question of why the Marshals were so heavily armed came up, the agency claimed it was because Aker is a registered gun owner.

Aker rightly pointed out that the government’s overzealous debt-collection mission could have ended tragically.

“It’s out of control. Out of control,” he said. “What if they had seen a gun on me? They would have shot me for 1,500 bucks.”

Aker’s story is shocking, but it isn’t unique.

According to a source familiar with the U.S. Marshals’ debt collection practices, the agency is planning to initiate between 1,200 and 1,500 identical operations in the months ahead.

And as student loans become increasingly prevalent while economic realities make it harder and harder for borrowers to meet their payment obligations, the problem could get much worse.

Currently, some 70 percent of all bachelor’s degree recipient graduate with student loan debts. The average burden for borrowers is about $35,000.

As of 2009, student loan borrowers who graduated had a default rate of around 3.7 percent and those who dropped out of school had a default rate of 16.8 percent. As a whole, just under half of student loan borrowers are either still in school and not making student loan payments or they’ve had payments deferred due to economic hardships.

The Obama administration has done its best to exacerbate the problem.

According to the Treasury Department, the amount of student loan debt owed to the federal government has increased by 463 percent to $674,580,000,000 in the years since President Barack Obama took office. The major increase is due in part to the Health Care Education Reconciliation Act — one of the laws making up Obamacare — which essentially made it easier for students to borrow money directly from the Treasury.

Arrests like Aker’s are the result of how student loan debt differs from other forms of debt. Student loans cannot be discharged through bankruptcy court like other forms of consumer debt and government-backed collectors have more leeway in using extreme tactics to collect the debts than do other types of lenders. So when a student loan issuer is able to get a ruling in federal court, which is becoming more common, a borrower’s failure to pay puts them in the Marshal’s crosshairs.


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