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Student Loan Collections

Debt collectors work with universities, colleges and private lenders to collect student loans. For education loans backed by the federal government, the U.S. Department of Education has a clearly-defined collection program that uses private collection agencies. Recent changes in federal law will shift all previously federally backed loans to direct loans from the federal government, cutting private lenders out of the equation.

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Collection Agencies Choose Sides in Busy Week for ED Contract Protest Case

This week saw a flurry of activity in the Court of Federal Claims case against the Department of Education over its decision to end student loan debt collection contracts with five collection agencies. The end result is a consolidated case that pits four collection agencies — with two others supporting as amici — against the United States and five other collection agencies on the contract.

Student Loan Debt

Collector Layoffs Proceed at ED Contractors as Obama Announces Student Loan Changes

At least two private debt collection agencies have filed notices with their states notifying officials that they will be forced to lay off employees in the wake of the U.S. Department of Education’s announced winding down of collection contracts with five of its vendors. Separately, President Obama today is unveiling a Student Aid Bill of Rights that may further impact the student loan collection market.