Student Loan Borrower Assisstance
  • For Borrowers
    • Basics of Student Loans
      • Student Loans 101
      • Understanding Your Student Loan Situation
      • Federal Loans vs. Private Loans
    • Dealing with Student Loan Debt
      • Repaying Your Loans
      • Pausing Student Loan Payments
      • Default & Debt Collection
      • Loan Cancellation, Forgiveness & Bankruptcy
      • Private Student Loans & Other Education Debt
    • Find Help
      • Help with Your Student Loans
      • File Complaints
      • Help Videos
      • Surviving Debt
      • Share Your Story
  • For Advocates
    • Tools & Resources to Use with Borrowers
      • Advocate Tools & Resources
      • Student Loan Law
      • Borrower Rights After the Supreme Court Ruling
      • NCLC Digital Library
    • Help with Cases
      • Case Consultation
      • Student Loan Law Listservs
      • Legal Aid Coalition
    • Trainings & Upcoming Events
  • Updates & News
    • Latest Student Loan News
    • Featured Reports, Issue Briefs, Resources
    • Subscribe
  • Our Work
    • NCLC’s Student Loan Borrower Assistance Project
    • Contact Us
    • NCLC.org
Home » For Borrowers » Dealing with Student Loan Debt » Default & Debt Collection » Collection of Student Loan Debt

Collection of Student Loan Debt

Collections Temporarily Paused

Due to the COVID-19 payment pause, most collections on federal student loan debt have stopped. While the payment pause ended on September 1, 2023, the Department of Education announced a new program, called Fresh Start, to help borrowers get out of default quickly and easily before collections begin again. The Fresh Start program will run until one year after the payment pause ends. The pause on collections will continue for all loans that are eligible for Fresh Start (loans that defaulted before the pandemic) through the end of the Fresh Start period. Don’t miss out. See our page on Fresh Start for more information about signing up for this time-limited program.

What is a default?

You are in default on most federal student loans if you miss payments for nine months. If you start to fall behind on student loan payments, don’t wait to fall into default. Act now to avoid defaulting. Contact your loan servicer to see if you are eligible for a more affordable payment plan, a deferment or forbearance, or another way to get temporary relief.


What are the consequences of defaulting on federal student loans?

If you default on your federal student loans, the government may be able to seize money from your federal tax refunds or Social Security benefits and garnish your wages without a court order. Additionally, you will not be eligible for new federal student loans or grants if you are in default on a federal student loan, making it hard to go back to school. Default also hurts your credit history and score, which can make it harder or more expensive to get housing or loans. Collection fees can also be added to defaulted loans, and interest continues to be charged, making your loans harder to pay off over time. 


How does the government collect defaulted student loan debt?

The three most common ways the government collects student loan debt are:

  • Federal Tax refund offsets,
  • Administrative wage garnishments, and
  • Social Security offsets.

In more limited cases, the government will also file lawsuits against borrowers with defaulted student loan debt to try to get a court order to collect on the debt. The government does not file these cases as often because it can easily collect on the debt without a court order. If you have been sued recently for a student loan debt, it is likely that you were sued for a private student loan debt, but you should talk to an attorney to confirm this.

Collection of Student Loan Debt

  • Tax Refunds Seizure
  • Social Security & Other Government Benefits Seizure
  • Administrative Wage Garnishments
  • Lawsuits to Collect Federal Student Loans

Recent Posts

Student Loan Repayment is Here
Sep 15, 2023
SAVE: A New Payment Plan That Will Reduce Monthly Payments
Jul 26, 2023
Nearly a Million Student Loan Borrowers Getting Long Overdue Cancellation
Jul 18, 2023

National Consumer Law Center
facebook
linkedin
twitter
rss

Student Loan Borrower Assistance is a project of the National Consumer Law Center.

  • About Us
  • Contact Us
  • Donate
  • Privacy Policy

© National Consumer Law Center, Inc., All rights reserved.