Talking to Student Loan Officers and Collection Agents

Many student loan borrowers will end up on the phone with collectors, loan officers, or other interested parties hoping to ensure that loan payments will be made on time. With student loan debt at unprecedented levels, many more borrowers are destined to have these conversations.

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Five tips to bear in mind when talking to a loan officer or collector about your student loan debt:

1. Do talk to them. Ignoring your debts or the people contacting you about them does you no good. Always answer the phone and respond, and see what kind of arrangement can be made. There are plenty of options for student loan debtors, but you lose access to them if you refuse to talk about your situation.
2. Protect yourself. You should be honest with your student lender, but that doesn’t mean you should be careless with what you say. Talk to a neutral third-party counselor about your situation if you’re not sure what to say to your lender. Remember, your loan may have changed hands, so you may not be talking to the original entity that loaned you the money, and it pays to be extra cautious when talking to third-party debt collectors.
3. Know your options. Federal loans that have defaulted have three primary relief options:
   • Rehabilitation: if your loans have gone into default, you can agree to make 9 payments in a 10-month period to rehabilitate the loan. The payment amount is set based on your situation, so it is usually affordable, but the process could generate extra fees for late payments and interest on the unpaid balance. Once rehabilitated, your loan will once again be eligible for benefits (deferment, forbearance, loan forgiveness, etc.) Additionally, national consumer credit reporting bureaus will be instructed to remove the record of the default from your credit history for the rehabilitated loan. Please note, late payments reported before the loan defaulted will not be deleted from your credit history. You can rehabilitate a defaulted loan only once.
   • Repayment is for people who can afford to pay off their defaulted loan in full, and if that’s your situation, you can usually get collection fees waived in exchange for satisfying the outstanding debt.
   • Consolidation combines all student debt into a single loan with a new monthly payment and interest rate. This typically saves the borrower, as the combined payment and interest rate can be lower that what was being paid separately.
4. Get updated documentation. Ask the lender for up to date documentation about what you owe and to whom. Explain to them you’re going to talk to a student loan counselor and you want to gather all of your paperwork first. Don’t get into any detailed discussion of your debt until you have gathered all of your current documentation. Remember, if you engage with them and make it clear you’re looking for ways to satisfy your obligations, they should gladly cooperate.
5. Defend your rights. If you feel harassed by a debt collector, reach out and file a complaint. The Consumer Financial Protection Bureau (CFPB) takes complaints online, or you can talk to a student debt counselor about your rights and what options you have.

Anyone struggling to meet their student loan obligations has options. There are nonprofit counselors standing by ready to help—don’t let those resources go to waste!

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