In , the United States Treasury Department proudly announced they would start a pilot program to collect defaulted federal student loans. Treasury thought they could save the government money by collecting debts themselves (instead of contracting with private companies) while not mistreating borrowers.
Two weeks ago Treasury quietly released initial results from the random control trial in a blog post. The government collected at lower rates than the private control group. They are abandoning their gentler approach. And they do not mention whether they save money compared to contracting with private companies. (more…)