This week, social media has been exploding over a story out of Houston, TX that a man was arrested by U.S. Marshals over a 30-year old defaulted federal student loan. People are, quite understandably, angry and terrified about the prospect that the federal government may now be arresting people who default on their student loans.
It’s a bit more complicated than that, however.
First of all, as a threshold matter, let me make one thing absolutely clear: It is not a crime to default on student loans. Don’t get me wrong – defaulting on student loans (particularly federal student loans) is very serious. The federal government has draconian collections powers that can cause significant hardships for student loan borrowers, and the secondary consequences of default can be even more crippling. Default can literally ruin someone’s life, and it’s no laughing matter. But, I’ll say it again: It is not a crime to default on student loans.
So what happened to this guy in Texas?Read More