U.S. Marshals are Arresting People for Unpaid Student Loans

February 16th 2016

Kyle Jaeger

Last week, armed U.S. Marshals arrested a man in Houston, Texas, over an unpaid, $1,500 federal student loan that he took out nearly three decades ago, Fox 26 reports.

student loan arrest

The man, Paul Aker said he was shocked when seven Marshals with semi-automatic weapons arrived at his home last week. They arrested Aker and brought him to federal court where he was required to sign a payment plan agreement for the federal student loan he received in 1987. More arrests like this are coming soon, an unnamed source from the Houston U.S. Marshals told Fox 26.

Up to 1,500 people in the Houston area could be served with warrants for outstanding federal student loan debt, raising concerns among debt-saddled college graduates across the U.S.

Because the federal government has started using private debt collectors to pursue those who have failed to pay off their student loans, attorneys for those debt collectors have asked judges to deploy U.S. Marshals to serve between 1,200 and 1,500 arrest warrants to student debtors. Aker's ordeal prompted social media outrage, with many questioning whether arresting people over student loan debt is a proper use of federal resources.

"There’s bound to be a better way to collect on a student loan debt that’s so old,” U.S. Rep. Gene Green (D-TX) told Fox 26.

"Our federal resources — our U.S. Marshals and the federal court system — are being used by the private sector," Green continued. "A few years ago, Congress allowed the private sector to contract for student loan collections and so you have these private companies who are doing this."

Back when Aker was in college, the average student loan debt was under $10,000. Times have changed, and so have student debt rates. The average student loan debt for today's graduates is around $35,000, the Wall Street Journal reported. In an AMA (Ask Me Anything) thread on Reddit, bankruptcy lawyer Neil Sader said that policy reform for federal student loans is "politically inevitable."

"Given the impact of compound interest, I will soon be seeing clients with $1 million student loan balances, which are not payable in any scenario," Sader said. "The question is whether the existing bankruptcy laws will be used to help allow these debts to be discharged or will there be other programs initiated. I do not think drastic action will be anytime soon... but give it another 3 to 4 years and I think the overwhelming debt many will fact will force the issue."

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