It would be "a cold day in Hades" before collectors would tell borrowers about options with lower payments, according to Kehoe, who said "rehab cash was king." The company pushed collectors to sign borrowers up for the rehabilitation plans, which often required payments equal to 1.25 percent of their loan amount monthly, he said.
Heavy Heart
"It was hard on my mind -- it was hard on my heart," said Kehoe, 25, who now works as a welder in Akron, New York. "There was the guy with one leg or the single mom with five children."
Under pressure to meet collection goals, Kehoe falsified documents for verifying the employment of borrowers who were subject to wage garnishment, he said. Pioneer discovered the violation and dismissed him, Kehoe said.
Sallie Mae declined to discuss the former employees' comments. The company uses a mix of hourly pay "substantially above minimum wage" and performance-based incentives, said Sallie Mae's Christel.
Like other debt collectors, "we design a compensation system that pays for good performance," Christel said. "We take compliance seriously and design our policies and practices to meet all applicable fair debt collections laws and federal government service contract requirements."
The Internal Revenue Service in 2009 stopped using private debt collectors, saying its own employees were more cost effective and flexible for taxpayers facing economic hardship.
'IRS Was Better'
The IRS let Campos, the Boston student-loan debtor, set up a payment plan he could afford when he fell behind on his taxes, he said.
"The IRS was better," Campos said. "They bent over backwards to help you."
The Education Department will "definitely want to take a look" at IRS collections to see "what their experience has been," Hamilton, the Education Department spokesman, said.