Dive Brief:

• The National Consumer Law Center filed a lawsuit Monday against the U.S. Department of Education, seeking the release of records about student loan debt collection activities.
• In its lawsuit, the center states that one in seven student loan borrowers had defaulted within three years of starting repayment, for a total of $94 billion. The education department hired private debt collectors to get the defaulted debt repaid to the federal government.
• The law center submitted a Freedom of Information Act request for information about the department’s hiring of debt collectors and the incentives it provides, which are designed to reward the best-performing collectors.

Dive Insight:

The U.S. Education Department effectively declined the request for the debt collector information — what it did provide was heavily redacted — claiming the information was exempt from FOIA requests because it was commercial or financial information that was privileged. A more likely explanation for the denial: The details of the debt collector incentive program were probably embarrassing for the Department of Education. According to the lawsuit, the department pays commissions to collectors based on the amounts they recover, along with bonuses based on how their performance stacks up against competitors.