The U.S. Department of Education contracts with several collection agencies to collect on defaulted loans. … If you still have questions regarding the collection agency your loan was sent to, call the Default Resolution Group at 800-621-3115. Was this page helpful?
Thereof, are federal student loans sold to collection agency?
Federal student loan debt is never sold to a collection agency. Instead, the federal government assigns defaulted student loans to a debt collector to handle the debt collection process.
Also question is, can student loans in collections be forgiven?
The federal government will send student loans to collections after nine months of non-payment. … Depending on the type of loan you have, the remaining balance will be forgiven after either 20 or 25 years’ worth of payments. Borrowers will have to pay taxes on the amount forgiven.
Do student loans disappear after 7 years?
Student loans don’t go away after 7 years. There is no program for loan forgiveness or loan cancellation after 7 years. However, if it’s been more than 7.5 years since you made a payment on your student loan debt and you default, the debt and the missed payments can be removed from your credit report.
If you have a federal student loan, you must contact the collection agency that has been assigned to collect on the loan. If you don’t know which collection agency your loan might have been assigned to, you can contact our Default Resolution Group at 1-800-621-3115 for the agency’s address and phone number.
Check Your Credit Reports
The first stop in determining what debts you owe should be to get your credit reports from the three major credit bureaus: Experian, TransUnion and Equifax. Creditors generally report debt accounts to one or more credit bureau, which then add it to the credit report they maintain.
So if your student loans have been sent to a debt collection agency, here are five steps you can take to get back on track.
- Dispute the debt. First, ensure that the information the debt collection agency has is accurate. …
- Settle your debt. …
- Pay the amount owed. …
- Consolidate or rehabilitate your loans. …
- Declare bankruptcy.
Who is Nelnet? Nelnet, Inc. is a student loan servicer that deals with the administration and repayment of student loans and education financial services. They are headquartered in Lincoln, Nebraska. You may see them listed on your credit report as a collections account or late payment.
After a set period of time, lenders may send unpaid debts to a collection agency. … This is known as a “charge-off” debt. Once received, the collection agency reports that your account has gone to collections to the three major credit bureaus, leading to a negative mark on your account and a drop in your credit score.
If your account goes to collections, you’ll be assessed collection fees in addition to the student loans you owe. … As long as your loans remain in default, the following can also happen: Wages can be garnished and income tax refunds can be taken to repay debt. You can become ineligible for federal financial aid.
You may face a lawsuit if you default on your private student loans. If the lender has trouble collecting payment on a private student loan default, it may sue you (and your cosigner) for repayment.
If you have good credit or a credit-worthy cosigner, you could potentially refinance your loans to a lower rate to save on interest costs over time. Once you refinance, though, keep in mind that you’ll lose access to federal programs like income-driven repayment and loan forgiveness.