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On February 11, seven US federal marshals with automatic weapons arrested Paul Aker at his home in Houston, Texas over an unpaid $1,500 student loan dating back to 1987. Aker, 48, told the New York Daily News, “They grabbed me, they threw me down.”
Aker, who says he had received no advance warning, told the News: “I say, ‘What is this all about?” They say, “Shut up, you know what this is all about.’”
The marshals handcuffed Aker, put him in the back of a truck and placed him in a cell in the federal building in downtown Houston. Later, he was brought to federal court. The prosecuting attorney, he claims, was a collection agency lawyer.
Aker was forced to pay $5,700 for the loan, including interest, as well as nearly $1,300 to cover the cost of his arrest. He was told that if he did not pay the total amount by March 1, he would be arrested again. He says he was never read his rights during the entire ordeal.
Texas Congressman Gene Green told the press that the federal government is now using private debt collectors to pursue people who owe student loans. The debt collectors and their lawyers are obtaining judgments in federal court and requesting that judges use the US Marshals Service to arrest those in arrears.
Press reports, citing a source within the US Marshals office in Houston, say marshals are planning to serve between 1,200 and 1,500 warrants to people who had failed to repay their federal student loans.
Student debt is a massive industry in the US. By the end of 2014, some 43.3 million Americans had student loans totaling $1.3 trillion, making student loans the biggest non-mortgage household debt in the country—ranking above auto-related and credit card debt. The government plays an active role in lending this money and pockets roughly $10 billion a year in profit from the business.
According to the US Federal Reserve, 4.8 million Americans are in default, meaning that they are more than nine months behind in their payments.
Unlike most loans, student loans cannot be discharged under bankruptcy and the government can garnish salaries, social security benefits and tax refunds in order to collect. Failure to make payments is not a criminal offense and Congress officially abolished debtors prisons in the US in 1833. But the reality of 21st century America is that low-income people who are unable to pay their debts, including traffic tickets and other fines, increasingly end up in jail.
This is one expression of class justice in the United States, where the “justice system” treats the working class and poor with remorseless brutality while it allows bankers and hedge fund billionaires to swindle and rob with impunity.
The US Marshals Service issued a statement on Tuesday defending its treatment of Aker. The marshals claimed they were asked to serve Aker a court summons in November of 2012 and spoke to him by phone, but that he failed to appear for a hearing in December of that year. They said a federal judge issued a warrant for his arrest and they were assigned to carry it out.
These techniques are not limited to the collection of student debt owed to the government. They are used as well by private lenders.
Especially since the 2008 economic crisis and ensuing budget cuts, cash-strapped courts have used coercion to extract fines and fees from defendants, charging for the use of public defenders, probation or parole, and then jailing those who cannot pay.
Workers can expect an increase in state efforts to collect debts as the default rate rises. Over a third of students from poor zip codes who graduated in 2009 had defaulted on their loans by 2014. Student debt continues to grow alongside tuition hikes, while the job market and wages remain stagnant.
Recent years have seen increasingly predatory and illegal lending by for-profit colleges. In March 2015, one of the largest for-profit college systems, Corinthian College Inc. (CCI), was bought by the ECMC Group, a student loan guarantor and debt collector, in a deal engineered by the Obama administration’s Department of Education.
Corinthian had been sustained since July 2014 by a $16 million federal bailout and $35 million in accelerated federal loan disbursements after it was unable to prove its advertising claims. It was under investigation by 20 different states, the federal Securities and Exchange Commission, the Consumer Financial Protection Bureau and the Justice Department for its fraudulent activities.
CCI was known to prey on the poor with inflated claims of job placements and high wages for graduates. Tuition at CCI could reach four times the cost of comparable programs at local community colleges.
If the Obama administration had allowed CCI to collapse, up to $1 billion in federal student loans could have been canceled under a “closed school” provision. With the sale of CCI to ECMC, the government sought to secure the repayment of those loans.
Some former students of CCI have called for a “student loan strike” and are refusing to repay their loans.
David Brown is a political commentator for wsws.org.
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[23 March 2015]
APPENDIX
FOR THE RECORD: This is what Yahoo Finance says about the story. A clear effort to minimize the law inequalities observed in the above article. The Yahoo report takes a “consumerist” angle to explain away the incident, an approach widely used by the corporate edia, implying that no matter what horror or imbecility of the system they are reporting, there’s always a “how to” allowing the good citizen compliance with the system’s wishes without too much pain. Thus, while reporting on unemployment, instead of critiquing the capitalist system that creates unemployment, they dish out all sorts of “advice” on how to dress for a job interview, write resumes, look for jobs, etc., which totally eschews the core issues at hand, that under a rational system based on egalitarianism unemployment as we know it would not exist. Incidentally, as the image of Aker shows (snapshot of Fox News report), even Murdoch’s tentacle in Texas reported the case critically. —PG
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U.S. Marshals didn’t really arrest a man for missed student loan payments
Paul Aker told a Houston news station he was arrested by U.S. Marshals for unpaid student loan debt.
We’re scratching our heads over a story out of Houston, where a man named Paul Aker claims half a dozen U.S. Marshals showed up at his home last week and hauled him off in handcuffs — all because of a 29-year-old student loan debt. The amount he owed: just $1,500.
Aker, who was joined by local Rep. Gene Green, told his story to a local Fox news affiliate, claiming he never knew he owed student loan debt in the first place.
Several news outlets picked up the story, painting a dramatic scene in which “U.S. Marshals armed with automatic weapons” arrested Aker “for not paying a $1,500 student loan from three decades ago.” Another outlet even tried to tie Aker’s case to ongoing student loan protests led by disgruntled students who attended shady for-profit institutions.
This all makes for a compelling headline, but Yahoo Finance has learned the true story is much different.
Back in November 2006, Aker was sued by the federal government for nonpayment of more than $2,600 in unpaid federal student loan debt, according to documents from the U.S. District Court for the Southern District of Texas (embedded below). The court record shows that Aker, listed as Winford P. Aker in the complaint, did not appear in court to answer the lawsuit and, as is common when student loan borrowers fail to appear, the presiding judge ruled against him and ordered Aker to pay the full balance on April 17, 2007.
According to a statement from the U.S. Marshals Service, Aker repeatedly refused to show up in court after being contacted several times. The agency said Aker told them by phone he would not appear in court to answer the summons. Disobeying a court order is a criminal offense. Within a few months, the judge issued a warrant for his arrest, which the U.S. Marshals carried out. So, yes, Aker was arrested, but not just because he owed a little student loan debt. He was arrested for disobeying a court order.
The Marshals statement goes on to describe the arrest, saying Aker “resisted arrest and retreated back into his home” when agents arrived:
“The situation escalated when Aker verbally said to the deputies that he had a gun. After Aker made the statement that he was armed, in order to protect everyone involved, the deputies requested additional law enforcement assistance. Additional deputy marshals and local law enforcement officers responded to the scene. After approximately two hours, the law enforcement officers convinced Aker to peacefully exit his home, and he was arrested.”
In the end, Aker went to court and was released. As far as we know, he did not spend any time in jail. Aker claims he was never notified about the order and that could very well be true. His address listed on the complaint is different than the only listing for a “Winford P. Aker” Yahoo Finance found in the Houston area. His court summons may have been sent to an old address (efforts to reach Aker were unsuccessful). However, the U.S. Marshals Service maintains they made every effort to track him down, “including searching at numerous known addresses.”
It’s not clear why it took the Marshals more than three years to track him down, but the fact is he was arrested for failure to appear in court — not for his unpaid debt alone.
Jan Kruse, spokeswoman for the National Consumer Law Center, says cases like Aker’s are not uncommon. If you ignore your student loan bills long enough, your loan servicer can sue you in civil court, which is what happened to Aker.
“If you receive a court summons, you should take it seriously,” Kruse says.
U.S. Marshals commonly serve civil processes to include summonses to appear in court over outstanding federal debt. In Houston, there are approximately 1,500 people who have been identified for not appearing in court to address their outstanding federal student loans, which has resulted in a judge issuing warrants for their arrest, according to the Marshals Service.
Unforunately, it looks like it was a lapse in communication that landed Aker in handcuffs (to be clear, he did not spend time in jail — he was escorted by Marshals to court). And, to add insult to injury, he was ordered to pay more than $1,200 in fees back to the U.S. Marshals service for the cost of arresting him.
We were unable reach Aker for comment. We also reached out to Rep. Green’s office, but haven’t heard back.
Know your options
Aker’s case is an extreme one but it might have been avoidable.
“I can’t say it more emphatically enough — there’s no need to allow it to get to that point with all the [repayment] options available,” says Betsy Mayotte, a consumer outreach director for advocacy group American Student Assistance. Federal student loan borrowers struggling to repay their debt may qualify for special repayment programs based on their income or have their loans consolidated. Despite these flexible options, the government has struggled to get the word out to borrowers.
There’s another reason Aker’s story probably struck a chord — some shady debt collectors have illegally posed as federal agents to scare borrowers into paying back their debts.
Just a couple of years ago, the FBI and U.S. Attorney General took down a company that made $4.1 million off such a scheme, duping 6,000 victims into believing they were associated with the U.S. Marshals Service as well as other bogus federal agencies like the “Federal Government Task Force” and the “DOJ Task Force.”
This tactic is used in all areas of debt collection, not just student loans, says Mayotte.
“If you’re contacted by someone threatening legal action over federal student loans, you should know there are consumer-friendly ways to resolve federal student loan debt,” she says. But if you do receive notification that you’re being sued and there’s a court date, show up.
“If you don’t show up,” she says, “you don’t have the opportunity to defend yourself.”
See the original complaint against Aker below:
*Due to a reporting error, we stated Aker was sued in November 2007. It was November 2006.
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1 comment
“Back in November 2006, Aker was sued by the federal government for nonpayment of more than $2,600 in unpaid federal student loan debt, according to documents from the U.S. District Court for the Southern District of Texas (embedded below). The court record shows that Aker, listed as Winford P. Aker in the complaint, did not appear in court to answer the lawsuit and, as is common when student loan borrowers fail to appear, the presiding judge ruled against him and ordered Aker to pay the full balance on April 17, 2007.”
This happen ALL THE FUCKING TIME…Whatever the creditor claims, he may not have been aware of the suit, he many not have been able to appear fow whatever reason, or he may have not wished to contest it, for whatever reason. That is is his legal right.A judgement was entered against him for the full amount. Again, nothing new here -WHY THE FUCK WAS HE THEN ARRESTED BY THE MARSHALL SERVICE? Non payment of debt is not a criminal offense. The Yahoo story make no sense at all. IT IS NOT CREDIBLE AND I BELIEVE ITS FALSE.