When a federal student loan borrower misses a payment a student loan payment, his or her loan becomes past due, or delinquent. The borrower’s loan account remains delinquent until the missed payment is paid or other arrangements, such as deferment or forbearance, or enrollment in a new repayment plan is made. When a federal student loan borrower remains delinquent for […]

Before a defaulted federal student loan is placed with a private collection agency, the Department of Education will notify the borrower and explain what can be done to avoid both the assignment to a private collection agency and the reporting of default status to the credit reporting agencies. If the borrower fails to enter into a repayment agreement, the loan […]

In the event of a federal student loan borrower’s default on a federal student loan, the Department of Education has the power to garnish the borrower’s wages without first having to go to court as is the case with most other debts. Under the administrative wage garnishment, the government orders the borrower’s employer to withhold up to 15 percent of […]

In the event of a federal student loan borrower’s default on a federal student loan, the Department of Education has the power to offset federal benefits owed to the borrower including from social security. The offset continues until the defaulted loan is paid in full or taken out of default. There are applicable exemptions – the Department of Education cannot […]

In the event of a federal student loan borrower’s default on a federal student loan, federal law related to the collection of debts owed to the government allows the Department of Education to request that the U.S. Department of the Treasury withhold money from the borrower’s federal income tax refunds. This withholding, sometimes called a “Treasury offset” or “tax return […]