Calling All College Students; You Owe Us

October 29, 2015

Although the effect of government is not always everyone’s primary concern, there are times when new policies can affect average consumers and their uses of information technology. The latest budget bill on Capitol Hill marks one such policy; passed it its current form, it could include a rider that allows debt collectors to robocall individuals’ mobile phones.

Current rules at the Federal Communications Commission (FCC (NewsAlert)) do not allow companies that process federal student loans, housing mortgages, or tax filings to reach consumers with automatic, computer-generated calls. According to a report on the matter at The Washington Post, such companies have pushed back in recent years, arguing that people such as student loan borrowers will comply more with scheduled payments when loan providers can reach them on mobile.

The Federal Education Department is even quoted as saying that mobile phones may be the only place providers can reach their borrowers.

“Many student loan borrowers, especially those that may just be graduating, move frequently in addition to no longer having landline phone numbers,” the Education Department said. “It can be difficult for servicers to find a borrower except by using a cell phone number.”

The link between government and private entity here is clear. The government pays private debt issuance and collection companies such as Nelnet, Navient, and American Education Services to manage the payments of borrowers. Their concern, as private entities, is to keep borrowers from defaulting on their loans. When borrowers pay on time, each month, they avoid default. However, many people either do not have the funds or personal schedule to keep pace. Even if a borrower just forgets to make payments, regardless of his monetary situation, he could end up in default. Payment managers argue that robocalls could help fix such problems.

Of course, passing of this legislation could adversely affect students and their mobile payments in the first place. Automatic texts or calls could hit hard the number of minutes or allowed texts an individual has in his phone plan. For that reason, among others, the FCC has taken the position of protecting consumers.

At this point, there is a clear standoff between the FCC and what Congress, the Senate, and President Obama will let slide. The FCC appears to continue to hold firm in protection of mobile users. There is apparent support for the bill with Republicans and Democrats, so it will not be a surprise to watch it pass. If it does make it to law, the real turmoil will be in how the FCC responds and how consumers pick up their own phones to make it known that the robocalls are helping or hurting their lives.

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