As of this past June, Americans owed roughly $1.3 trillion in student loans, according to Pew Research Center. College graduates struggle to manage paying off their debt, in part due to low earnings: some seven million student loan borrowers are in default on their loans for not making payments, according to U.S. Department of Education statistics. While the idea is that student loans enable students from all economic backgrounds to earn a higher-quality education, student debt ensnares college graduates in endless and complicated payments, and sometimes even deeper trouble following their college careers. One person took to Reddit to discuss his girlfriend’s student loan debt, and brought to light an alarming development: the state of South Dakota can buy your student debt — for the state's profit.

The writer verified the identity of the subject of this piece, and will be referring to her anonymously throughout because of personal circumstances.

The poster’s girlfriend, after completing college at a public college in her state of South Dakota, consolidated all of her student loans, tying them into one payment plan, except one private loan was accidentally left out. (For context, the average debt for someone attending a public college in South Dakota was roughly $31,000 for the class of 2016, according to the Institute for College Access & Success). She didn’t learn this until the private loan company, based in Minnesota, contacted her to tell her that she had failed to make four months’ worth of payments on her loan (that she didn’t know she was supposed to be paying).

“No problem,” her boyfriend wrote, “she [put] it on a payment plan” with the loan company in order to make sure the payments were brought up to speed. No problem until she received a letter from the state of South Dakota, where she currently lives, informing her that her driver's license would be getting suspended at the end of the month. After calling to figure out what could possibly be going on, the poster’s girlfriend learned that the state of South Dakota — or, more specifically, the state’s Obligation Recovery Center — had purchased that single loan debt from the company that owned it.

South Dakota’s Obligation Recovery Center, which began operating in 2016 after being started by Republican governor Dennis Daugaard and members of the South Dakota Legislature in 2015, was started with the intention of recovering funds owed to six state agencies: the courts system, the Department of Social Services, the Department of Revenue, the Department of Labor and Regulation, the Department of Corrections, and the Board of Regents (which controls six public universities in the state). State Court Administrator Greg Sattizahn told the Casper Star-Tribune last year that recovered money would go to crime victims, schools, and counties; according to the Star-Tribune, the SD Bureau of Administration estimated that state agencies are owed $50 million.

In November 2015, the state government announced that they had contracted with CGI Technologies and Solutions Inc. to support them in, as the Rapid City Journal put it, “sweep[ing] every corner for cash.” The announcement clarified that the center’s scale would include “unpaid taxes, university tuition or fees, and court costs owed by criminal defendants.” This contract enables the state to add a 20 percent charge on top of the charges being brought by the Center, which is paid to CGI.

The college graduate received this 20 percent charge, on top of a new repayment plan and schedule. Whereas in her old plan she would have had five years to pay off her loan at roughly $100 a month, the Obligation Recovery Center plan was for roughly $330 a month over a non-negotiable period of 20 months.