Unfair Student Loan Collection Practices: How to Fight Back

When you default on a student loan, you may be subject to a wide range of collection tactics -- from phone calls and letters to the loss of your tax refund or some of your wages. Know what's legal and what's not.
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Last Reviewed: Thu, Sep 2, 2021

When you default on a student loan, you may be subject to a wide range of collection tactics -- from phone calls and letters to the loss of your tax refund or a portion of your wages. Student loan lenders, including the federal government, may hire private collection agencies to try to get you to pay back what you owe. You may even be sued.

As with any type of debt, you have legal rights when it comes to student loan collection activities. This article discusses some of the ways private collection agencies violate fair debt collection laws and what you can do if it happens to you.

Student Loan Collection Methods: Federal vs. Private Lenders

If your student loans are in default, it's important to understand that federal lenders have many collection options that ordinary lenders do not. For example, a federal lender can garnish your wages as soon as your loan is in default, but a private lender must win a lawsuit against you before attempting to take a portion of your pay. A federal lender can take a portion of your Social Security or other federal benefits, but a private lender can't.

Knowing what the law allows your loan holder to do can help you if an aggressive collection agency is threatening you. For instance, if you default on a private student loan and the debt collector says you’ll lose your tax refund next year, the collector has just broken the law. You can file a complaint or take other action against debt collectors who threaten you with actions that they can’t legally carry out (see below).

To see the full list of collection options available to federal lenders, see "What Happens If I Default on My Student Loans?"

If you’re not sure whether your student loans are federal or private, see "What If I Don’t Know What Kind of Loan I Have?"

How Student Loan Debt Collectors Break the Law

Both federal and private lenders must abide by the rules of the federal Fair Debt Collection Practices Act (FDCPA) and any Florida laws that offer additional protections. These laws forbid lenders from using debt collection strategies that are deceptive, abusive, or harassing. The Federal Trade Commision offers a good Debt Collection FAQ to help you understand exactly what this means. You should also read up on fair debt collection laws in Florida.

Here are just some of the ways private student loan debt collectors may violate fair debt collection laws:

  • calling you before 8 in the morning or 9 at night
  • calling you at work after you’ve told them not to
  • calling you if they know you’ve hired a lawyer to help you handle your debt
  • discussing your student loan debt with your family, friends, or others
  • swearing at you, calling you names, using repeated phone calls to annoy you, or otherwise abusing or harassing you
  • leading you to believe they’re calling from the government
  • misrepresenting your rights as a student loan borrower, or
  • threatening to have you arrested.

If you think a debt collector is violating federal or state fair debt collection laws, be sure to keep detailed records of all communications with them -- and consider taking action, as described next.

How You Can Fight Back

To take action against a collection agency that’s breaking the law, see What Can You Do If a Debt Collector Violates the FDCPA? on Nolo.com. If the overstepping agency is attempting to collect federal student loans, you should also consider filing a complaint with the Department of Education

For information about hiring a lawyer to help you, see "How to Find a Student Loan Lawyer in Florida."