debt collector

Depends on the terms of the original contract. Read the agreement you signed with the college when you enrolled, then post back.

Most definately. Schools generally are non profit and they pass all the costs of the collections onto the student . If it was a tuition account , it is in your school handbook, and if a loan, on the prom note . It is not the CA charging you the collection fee but the school . Schools generally dont sell their debts but place them with CA's . If you pay the school direct , the CA still gets paid....that is the way the contract is written . It's expensive too---usually 33-50% for tuition collections, 25-35% for loan collections.

50% interest on tuition accounts? Wouldn't that violate at least some usury law or something?

It is not 50% in interest...it is 50% in collection fees. Very big difference. Students agree to pay all costs of collection efforts.

For some reason I don't think that holds true on contingent fee arragements between a creditor and CA/attorney.

My company has such an agreement with our own corporate attorney, whereby he keeps 1/3 of everything he collects for us. Yet, even though the contract calls for a debtor to pay all collections costs and fees, it is not legal for us to pass that 1/3rd onto the customer - we have to eat it and give the customer credit for their whole payment, even though the attorney kept part of it. The only thing we can charge onto the account is a one-time $350 attorney fee. (Maybe this is only an IL law ?)

It is different for student loans and school debts. It is actually written into the agreement and prom notes that they will be charged the cost of collections. Non profits just dont take the loss.

I used to collect on Loyola University accounts and they tacked on 50%...and that is Illinois!

At least DV the CA and make darn sure THEY can even get a copy of the contract you signed. There are too many cases of CAs just willy nilly adding interest rates or collection fees they by law can not add. Even if you know you owe, still DV the CA..it is your right to do so to make sure you are not being taken advantage of!

There generally is no contract when enrolling in a school. You do admission forms and it says on those forms that you "agree to abide by all policies contained in the student handbook." Student handbook and/or website will contain all policies of the institution.

Even with web enrollment, where people actally sign no contract or e-sign, the act of attending the course and handing in/doing coursework is deemed a contract.

Educational debts are very different to consumer debts, mostly due to the non profit status. Unfortunately most students do not take the time to read what they are getting in to before they attend.,

But then wouldn't the CA have to produce the signed admission forms plus the handbook that specifically states this? Plus I have heard that e-signed documents are hard to prove in court due to the nature of it (I learned this with my ongoing saga with an internet installer clicking on all the agree buttons without my knowledge).

All they have to provide is a copy of a student account. Handbook was provided to the student, the CA will not have to produce it. The act of enrollment is deemed a contract and if classes are on the account, they are valid. Besides, the OP is disputing the account. The schools dont sell these accounts, they assign them to CA's. A simple phone call to the schools collection department will verify the collection charges and who is collecting it.

Also, if this was a state public school, they can simply submit the bill for tax offset. Public debt.

Well, I work for a private, for-profit college and this sounds a little fishy. Most colleges, including ours, has its own collections department. You pay what you owe and that's it. There are accreditation laws that govern schools and prevent things like this from happening. Was this an "online" school? Some completely online colleges don't have regional accrediting bodies, which can cause problems like this. You need to see where that money went--I would request an itemized student ledger card.

well, what was the outstanding debt for? If it was tuition then thats one thing. But it could be something else. There is no legal way to charge you in this situation unless you agreed that if there was an outstanding amount these charges would be added on. It MUST be in the agreement you have with the college, or in the handbook as someone pointed out. If it isnt then they just stole money from you.

something else that doesnt make sense--

1--the college says you owe them money
2--you send the college the two payments.
3--the college then sends your payments to THE COLLECTION AGENT??

That doesnt make sense at all! If you owe the college and they are using a collection agent to get the money from you, why wouldnt they keep the money? If they sold the debt, I can see, but somehow this whole thing doesnt sound right. Please tell us if this CA owns the debt. If they sent you any letters you can tell sometimes by what the letters say.

Schools hire CA's under contract. That contract is for xxx amount of time and anything paid during that period is credited to the CA account. If the student pays directly to the school while the debt is assigned, the school sends the funds or a pay direct to the CA. This is how it is handled at pretty well all schools. Makes total sense.

Quote: