In a change designed to remove the incentive to pressure student loan borrowers into higher payments, the Obama administration has cut commissions paid to private collection companies that pursue overdue student loans. Some $77.4 billion worth of student loans are currently in default, prompting the U.S. government to use private collectors to go after borrowers. Consumers have complained that these companies often insist on high payments, even when borrowers qualify for leniency and even though federal law requires collectors to offer “reasonable and affordable” payments to debtors. The U.S. Education Department once paid up to 16 percent of the entire loan amount for collectors that got defaulted borrowers to make stiff monthly payments, but now that fee has dropped as low as 11 percent, regardless of the payments’ size. According to Persis Yu of the National Consumer Law Center, collectors were encouraged to press borrowers for a higher minimum payment that would trigger the highest commission and not inform them of their options for lower payment amounts. The new DOE contract allows borrowers to get back in shape financially while allowing collectors to still make a commission. "It's a big deal," says Yu. "t will make life easier for borrowers. We're not setting people up to fail."