According to a recent report from the Institute for One Wisconsin, the average college graduate will face student loan debt payments of $388 for the next 18 to 22 years. This reflects the trillion-dollar student load debt crisis that now exceeds all credit card debt in U.S. households.

The Institute for College Access & Success reported that debt levels increased from 8.7% to 9.1% from 2009 to 2010. The report also found that “Wisconsin ranked 15th nationwide for average college debt, and ninth for the percentage of students graduating with student loan debt. Sixty-seven percent of Wisconsin’s 2010 college graduates have student loans to repay. Add to the debt load an unemployment rate for young college graduates that rose from 8.7% in 2009 to 9.1% in 2010, the highest on record.”

The Department of Education said that of the students whose loans came due after October 2009, 9.1% defaulted within two years. That is up from 8.8% in the previous two-year reporting period and almost double the rate of five years earlier, as reported by Online Wall Street Journal, last September. With the uptick in loan defaults, the government and guaranty agencies, as well as private lenders, hire private collection agencies to collect defaulted student loans.

The Student Loan Borrower Assistant website (http://www.studentloanborrowerassistance.org) provides information and assistance for graduates facing potential student loan default. According to the Student Loan Borrower’s Assistant, agencies may “engage in abusive or deceptive behavior that violates state or federal fair debt collection laws,” including:

• Misleading information in collection letters.
• Confusion about the collection agency.
• Lack of incentives on the part of collection agencies to offer reasonable or affordable repayment options.
• Limited government oversight of collection agencies.

The federal fair debt collection practices law and other relevant state laws make it illegal for collection agencies to harass students for debt repayment. To uphold that right, the student must make a written request for no contact. However, the right to be free from harassment doesn’t mean that a student cannot be sued for repayment.

In addition students also have other protections. For example, collectors are barred from talking to others (e.g. your parents, your spouse, etc.) about a student’s debt. Contact must be made a reasonable time and cannot be made to the student’s place of employment. Collection agencies cannot use harassing or abusive tactics and cannot make false or misleading statements.

The loan-originating agency, such as the Department of Education or loan holder, should be informed if a collection agency is violating the protections outlined above. Good documentation of any activities made by the collection agency is important to prove any issues if they should arise.