Student Loans

Collection Activities

Once a loan is in default, you may be asked to immediately pay the unpaid principal balance and interest. Your debt may be referred to a collection agencyexternal link icon and collection costs will be added to your loan.

Federal Loansexternal link icon

For federal student loans, collection activity can occur without a court judgment. You may be subject to a variety of collection efforts, including:

Private Loansexternal link icon

If your student loan is a non-federal loan, your loan may go into default much sooner than federal loans. Your private loan may also go into default for other incidents as described in the loan contract, such as if you or your cosigner die, file for bankruptcy, or break other promises in the loan.

Dealing With Debt Collectorsexternal link icon

If a debt collector gets involved in collecting your student loans, it will generally add to your loan costs and can be expensive. It is best if you can work with your loan servicer to prevent your loan from being placed in default.

If your debt is referred to a collection agency,external link icon know your rights. Review this Office’s Debt Collection Fact Sheet and The Credit Handbook for more information on your rights when dealing with debt collection agencies.

The U.S. Department of Education has hired over 20 debt collection agencies to assist it in collecting on student loan debt. If a debt collection agency working for the federal government behaves improperly, you should let the U.S. Department of Education know:

United States Department of Education
400 Maryland Avenue SW
Washington, DC 20202 link icon

The Minnesota Department of Commerce is a state agency that licenses and has authority to regulate debt collectors operating in Minnesota. If a debt collection agency behaves improperly, you should file a report with the Department of Commerce as follows:

Minnesota Department of Commerce
85 7th Place East, Suite 280
St. Paul, MN 55101
(651) 539-1600 (local)
(800) 657-3602 (Greater MN only)

Image of a Stop Sign Beware of Student Loan Assistance Scams