You're NOT dealing with the federal government. You're dealing with a former pizza restaurant manager in a basement room.

“We’re not playing here...You’re dealing with the federal government. You have no other options.”

Tom Cruise thriller?

Or debt collector talking to a disabled man about his student loan payments?

This being a consumer law blog, you correctly guessed it was the latter. That quote comes from a story on Bloomberg about student loan collectors leaning too hard on debtors. The debtor in question is disabled, and should have (under applicable rules) paid about $50 per month on his loans. Instead, he agreed to pay $220 per month and to do that, the story says the debtor (Campos):

Campos borrowed from friends, cut meat from his diet and stopped buying gas to drive his 82-year-old mother to doctor’s visits for her Parkinson’s Disease.

The story alleges that the debt collectors are "encourage[d]" to insist on high payments to get bonuses (remember how that worked for Countrywide?) and says the FTC got 181,000 complaints about student loan debt collectors last year.

(I wonder how many of those complaints were resolved in the consumers' favor?)

The story also notes that:

Federal-aid law requires collectors to offer “reasonable and affordable” payments, so debtors can “rehabilitate” their loans, repairing their credit and making good on what they owe taxpayers.

The law mandates no minimum payment for a borrower to enter a rehabilitation program, and collection companies may take borrowers’ finances into account.

I took a quick survey of lawyers and found not a single one (but me) knew that. So do you suppose the borrowers did?

Do you suppose the collectors were told about the law? I've deposed many debt collectors in my career -- and I've found that the training many times is pretty slim. And the incentives to pressure people are high:

Under Education Department contracts, collection companies “rehabilitate” a defaulted loan by getting a borrower to make nine payments in 10 months. If they succeed, they reap a jackpot: a commission equal to as much as 16 percent of the entire loan amount, or $3,200 on a $20,000 loan.

These companies receive that fee only if borrowers make a minimum payment of 0.75 percent to 1.25 percent of the loan each month, depending on its size. For example, a $20,000 loan would require payments of about $200 a month. If the payment falls below that figure, the collector receives an administrative fee of $150.

Remember my opinions about class actions and the like? Consider this:

[In recent history] Minneapolis-based Allied Interstate Inc. and Atlanta-based West Asset Management Inc. paid $1.75 million and $2.8 million, respectively, to settle lawsuits alleging abusive debt collection filed by the Federal Trade Commission. The companies admitted no wrongdoing. In February, to resolve an investigation by 19 state attorneys general, NCO Group, majority-owned by JPMorgan Chase, agreed to pay $575,000 and provide up to $50,000 per state for consumers who can show wrongful collections. The companies admitted no wrongdoing.

Let's see if THAT changes things. (It won't.)

If you've got student loan problems, SEE A LAWYER. For what Campos paid that student loan collector for one month, he could have met with me for an hour and I'd have told him to sue them for FDCPA violations -- potentially getting him enough money to retire his student loan debt entirely.