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Carrying Student Debt? You May Be In for a Lot of Robo-Calls

Constant contact with debtors may not generate any new revenue for the government.

The calls to Michelle Vasquez's cell phone from student-debt collectors seemed ceaseless: She said she was getting four per day from a computerized dialer. Odette Verrier was on the end of four calls per day from an automatic dialer in January. Ashlee Rogers she said she got three or four calls a day from the same collector as the other two women, Navient Solutions, on her work cell phone, even though she told them someone stole her identity to take out the student loans they referred to.

The three women all sued Navient, which collects student loans on behalf of the government, accusing it of violating federal law by haranguing them with incessant calls. 

QuickTake Student Debt

Now Congress is threatening to take away one of the only legal avenues student borrowers like them have to protect themselves from harassment. Buried in Congress's 56-page budget bill is a new rule allowing debt collectors to “robo-call” people on their cell phones if they owe student debt to the government. The provision may make federal debt collectors exempt from a federal law that protects consumers from robo-calls if they haven’t consented to them. 

“This is the worst of Congress, and it’s the worst type of abuse of people who owe debt,” said Indiana Attorney General Greg Zoeller, who is urging lawmakers to oppose the exemption. “Singling out primarily young people who have graduated with college loans for this type of collection action really seems like salt in the wound of people who are struggling at the start of their careers.”

In the past, debt collectors could autodial borrowers only on the phone number they provide in their loan agreements. The new rules could allow the companies to repeatedly call any phone number associated with a student loan borrower—including family members’ cell phones or any number once held by the debtor.

Debt collectors and their advocates have spent years lobbying Washington for the ability to bombard student debtors with automatic calls, filing several notices with the Federal Communication Commission. The loan companies have said that the calls will help “minimize the costs of loan servicing, and ensure cash flow for federal student loan programs.”

"Most student loan borrowers we service have given us permission to contact them on their cell phones, which helps us keep delinquencies and defaults lower," said Navient spokeswoman Patricia Christel in an email. 

In their fight for more constant contact with student borrowers, the debt collectors have had two powerful allies: the White House and the Education Department. Since 2013, President Obama has recommended allowing debt collectors to call student borrowers on their cell phones in every annual budget proposal. The Education Department began pressing the FCC for the privilege to autodial cell phones in 2010. 

Taxpayers may not have all that much to gain from letting government collectors robo-call student debtors. The White House estimated that the calls could bring in $120 million over 10 years. But the Congressional Budget Office said last month that the move would not necessarily generate any revenue by 2025.

The FCC now has nine months to decide whether there will be limits on the timing and the number of calls and whether collectors will still have to respect people's requests not to be autodialed. If people can revoke their consent, they will have at least one weapon against the barrage of calls, consumer advocates say.

Rogers said she repeatedly told Navient to stop contacting her on her work cell phone, and that the calls interfered with her day-to-day tasks at a landscaping business. When she finally reached a person at the other end of one of the calls, she was told she had no recourse to stop them from autodialing her at work. 

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