US Marshals are arresting people in Texas who have outstanding student loans
Here's what the U.S. government says about the student loan you may have been tardy about paying back: "If your loan is placed with a collection agency, you will be responsible for costs incurred to get payment. The holder of your loan can take other actions to collect as well." Those "other actions" involve withholding your tax refund or, in some cases, garnishing your wages. And, this week in Texas, they began to involve federal agents in combat gear bursting into debtors' houses and arresting them.
That's what happened to Paul Aker. Seven armed U.S. marshals arrived at his door in Houston last Thursday, arrested him on the spot, and took him to jail. He owed all of $1,500, outstanding since 1987. Aker told Fox 26 that without any warning, his 29-year-old debt was forcibly being collected; the marshals took him to federal court and made him sign a payment plan. "It was totally mind-boggling," Aker told Fox 26.
Texas congressman Gene Green explained to Fox 26 that the federal government has been contracting out student-loan collections to private debt collectors, who are allowed to deploy the U.S. marshals as their enforcement arm. "There's bound to be a better way to collect on a student loan debt," said the congressman. Around Houston, that "better way" involves 1,200 to 1,500 arrest warrants. Student debt is at an all time high in the U.S., where students hold an average of $35,000 in federal debt, according to an analysis of government data on Edvisors.
About 40 million Americans have outstanding student loans, and nobody's saying exactly why someone in or around Houston has decided to crack down on local debtors just now. But Texas, in general, does have a high rate of defaults: A recent report from the state comptroller's office says that in 2012, 20.5 percent of Texas's student debtors were more than 90 days delinquent, surpassing the national rate (17 percent). Its students are also particularly reliant on federal financing: Tuition in Texas has been rising faster than the average in other large states, and access to grant aid is relatively low. In 2014, Texas students owed over $75 billion in college loan debt, up 7 percent from the previous year. (Efforts to relieve the state's student debt crisis are just getting started.)
In 2003, U.S. marshals were arresting people in the Twin Cities who had not paid their student loans as part of the so-called "Operation Anaconda Squeeze." But as with any case in the U.S., where debtors' prisons have been outlawed since 1833, those arrests came from contempt-of-court warrants issued after summonses had been ignored; that does not appear to have happened here. Particularly since the financial crisis of the 2000s, debt imprisonment has grown, and a judge can issue a contempt warrant if he or she feels that a debtor is "willfully" not paying a loan.
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