According to the Department of Education, there's about $1.4 trillion in outstanding U.S. student loan debt, $137 billion of which is in default (with 1.1 million students going into default in 2016 alone). No long-term solutions are on the horizon. Meanwhile, as Danielle Douglas-Gabrielle explains in this article,"thousands of Virginia students [are] caught in a state-sanctioned debt trap. These students lack the money to pay their bills on time, and are penalized in a way that makes it harder to meet the obligation." The article goes on:
A little-known Virginia statute requires public colleges and universities to shuttle student accounts of less than $3,000 that are 60 days past due to private debt collectors. Those companies can charge up to 30 percent of the outstanding balance as a fee. That fee is far more than the interest on most credit cards, or on any car loan or mortgage, and it can add hundreds of dollars to student debt. Past-due accounts of more than $3,000 are referred to the state attorney general’s office to enforce collection. That also results in a 30 percent fee.
