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Loan Monitor Is Accused Of Ruthless Tactics On Student Debt

Publication Date: 
January 01, 2014
Source: 
The New York Times
Author: 
Natalie Kitroeff

Stanford Law Professor G. Marcus Cole comments on the necessity of clearly defined laws on student loans for The New York Times. 

Stacy Jorgensen fought her way through pancreatic cancer. But her struggle was just beginning.

Before she became ill, Ms. Jorgensen took out $43,000 in student loans. As her payments piled up along with medical bills, she took the unusual step of filing for bankruptcy, requiring legal proof of “undue hardship.”

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Supporters of the agency’s tactics say they are necessary to hold borrowers accountable. “For every dollar that the aggressive debt-collection firm fails to recoup, that’s a dollar that someone else is going to have to pay,” said G. Marcus Cole, a law professor at Stanford University.

Professor Cole added that if it were easy to discharge student loans in bankruptcy, lenders would simply not lend money to students without clear assets or prospects. “We need a standard like that to be able to allow students who can’t afford an education to be able to borrow,” he said.