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Rights Concerning Student Loans in Default

Failing to make your student loan payments may put you default. Defaulting on your loan is a serious mater, and your school, your lender, your loan guarantor and the U.S. government can all take action against you to recover the money. Understanding what default is, and the consequences of defaulting, are essential to avoiding default. Also, important is knowing what to do if your loan is in default, even if you think the default is an error. And unlike most other debts, federal student loans, or loans that are issued through the government, do not have a statute of limitations. Still, you have rights concerning student loans in default and you might be entitled to damages if a debt collector uses illegal tactics or threats against you.

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Default means you didn’t make your payments on your student loan as scheduled in your promissory note–the legal document you signed at the time you got your loan. Your loan becomes delinquent the first day after you miss a payment and the delinquency continues until all payments are made and your loan becomes current. And if you repay your loan monthly, default occurs when you fail to make a payment for 270 days (if you pay less than once a month, default occurs when you fail to make a payment for 330 days, e.g., FFEL Program loans). But loan servicers report all delinquencies of at least 90 days to the three major credit bureaus which will negatively affect your credit rating and make it more difficult for you to borrow money, sign up for utilities, get home owner’s insurance and even insurance or a job!
Whether your loans are delinquent now or not, you should read our tips to help you avoid default.

Getting into default can have severe consequences. The entire unpaid balance of your loan and any interest can become immediately due, as well as late fees, additional interest, court costs, collection fees, attorney’s fees, and any other costs associated with the collection process. You can lose eligibility for deferment, forbearance, repayment plans and even additional federal student aid. Your loan account can also be assigned to a collection agency and will be reported as delinquent to credit bureaus. Additionally, the Internal Revenue Service can take your federal and state tax refund to collect any of your defaulted student loan debt! Your wages can also be garnished employer (at the request of the federal government).

Department of Education, provider of Federal Student Aid, currently contracts with several collection agencies to collect monies owed for student loans that have gone unpaid or are in default.The list below includes known collection agencies or debt collectors who work with the Department of Education in their efforts to collect overdue student loans.

Debt Help Lawyers can stop the phone calls and letters to you and third parties from Debt Collectors even if you do owe the debt. The Fair Debt Collection Practices Act and State Fair Debt Collection Laws, as well as several other “must know” federal consumer protection laws could help you stop the harassment and recover monetary damages!

Progressive Financial Services
P. O. Box 24098
Tempe, AZ 85285
(800) 253-8167

CollectOne Dba Collection Company of America
P. O. Box 5369
Norwell, MA 02061-5369
(800) 896-0282

Allied Interstate, Inc.
P. O. Box 26190
Minneapolis, MN 55426
(800) 715-0395

Pioneer Credit Recovery, Inc.
P. O. Box 99
Arcade, NY 14009
(888) 287-0571

NCO Financial
P.O. Box 41420
Philadelphia, PA 19101-1420
(888) 475-6741

The CBE Group, Inc.
P.O. Box 930
Waterloo IA 50704-0930
(800) 410-8089

Diversified Collection Services, Inc.
P.O. Box 9049
Pleasanton, CA 94566-9049
(888) 335-6267

Allied International Credit Corp
P.O. Box 813220
Smyrna, GA 30081
(800) 464-2076

Collect Corp.
P. O. Box: 960
Phoenix, Arizona 85001
(877) 719-7015

Premiere Credit of North America, LLC
P.O. Box 19289
Indianapolis, IN 46219
(866) 808-7286

Account Control Technology, Inc.
P. O. Box 11750
Bakersfield, CA 93380-1750
(866) 887-2800

GC Services
P. O. Box 27323
Knoxville, TN 37927
(866) 846-9964

Financial Management Systems
P.O. Box 1423
Elk GroveVillage, IL. 60009-1423
(800) 889-6321

P.O. Box 190
Fairport, NY 14450-0190
(866) 804-1700

Van Ru Credit Corporation
P. O. Box 1027
Skokie, IL 60076-8027
(888) 337-8331

Nationwide Credit, Inc.
P.O. Box 290276
Nashville, TN 37229
(866) 381-5530

P.O. Box 9265
Oak Brook, IL 60522-9265
(800) 863-9025

Aman Collection Service
P.O. Box 1149
Aberdeen, SD 57402-1149
(800) 874-8969

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  1. My wages are being garnished for a defaulted student loan. I live in Wisconsin and receive medical assistance and foodshare for myself and my 2 children (I am a single mother). Can my wage be garnished? How can I stop this? I cannot afford to have this much money withdrawn from my check. I will be unable to meet rent & utilities and keep my children in a safe and healthy environment if I cannot stop this. What are my options? Please help

  2. Received a garnishment letter from a debt collector. I had already quit the job because the supervisor was a bully who made me feel miserable. I had to quit. I am afraid it was a parent loan I.took for my son. What can I do? I called the student loan people they said they can’t see the loan. What can I do?

  3. Ci-signer on a student loan which my son has not paid off since graduation. One letter from collector recently, looking for what can be done to me and I am a retiree.

  4. what type wages can be garnished for a student loan I co signed for my child ?

  5. The people wanting me to make payment arrangements with a third party through a new loan. At a much higher interest rate, I don’t think they should force me into that. They, ECMC, are not listed on the above known names for collection companies on student loans. Also, I asked for a hardship hearing because 15% garnish would cause undo hardship on me. My student loans where in my bankruptcy I filed while going through chemotherapy and radiation, but evidently that doesn’t matter. How do I know this company ECMC is legitimate?

    Also, Can they garnish my retirement (social security)?
    Thank you for your time,

    • The list of collectors is always changing and we have no reason to suggest the collections are not legitimate. Generally speaking, the government can garnish your benefits for repayment of certain types of debts, including federal income taxes, federal student loans, child support, alimony, and limited other situations. We sent you an email, we’d be happy to take a look at the paperwork. Please respond to the email or call.

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