You Have Options!

Contact attorney D.J. Rausa and find out the best route to your student loan debt relief.

(619) 295-3322

Student Loans In Default

What to do if your student loan is in default.

Student Loans In Default

What to Do If You Go into Default

Luckily, there are ways to get out of default on a federal student loan. You can work with the debt collector to rehabilitate your loan, which will bring the loan out of default and back into active repayment, and allow you to avoid any nasty government actions.

You may also be able to consolidate your federal student loans through the U.S. Department of Education’s Direct Consolidation Loan Program. The program is absolutely free, very easy to handle on your own, and takes about 60 days to finalize. Once you’ve consolidated your federal student loans, you’ll be out of default and back into repayment. Just go to and log in with your FSA username and password to get the process started.

The decision of which way to go — rehabilitation or consolidation — depends on a number of factors, so it’s important to weigh the benefits and burdens of each before making your choice.

For private student loans, there’s no automatic way out of default. But as I’ve said before, that’s not necessarily a bad thing because private student loans provide you with a wealth of opportunities once you’re in default.

Don't Hide!

You should always be sure to update your address. I know — you don't want to receive any letters from collectors. But consider this: if they can't find you, you won't know if the lender:

  • Files a lawsuit against you
  • Offers you an amazing settlement
  • Begins a wage garnishment
  • Seizes your tax refund

It's important to know what's going on with your student loans, even if you aren't able to make payments. If you don't know what's happening, you may miss out on opportunities to protect yourself and forfeit important rights.

What Can Collectors Do?

In general, debt collectors can do the following as part of trying to get you to pay:

  • Talk about your debt with your spouse and your lawyer (if you told them your lawyer’s name).
  • Send letters asking you to pay.
  • Call you at home between the hours of 8 a.m. and 9 p.m.
  • Call you at work.
  • Call you on your cell phone if you’ve given them permission to do so. (Federal student loan collectors may be able to call your cell phone even in the absence of permission.)
  • Call your relatives, friends and neighbors to ask them to have you contact the collector if they can’t find you.
  • Call your employer to confirm you work there or get your contact information.

What Can Collectors NOT Do?

The list of what collectors can do may make it sound as if they have a lot of power, but that's not true. In fact, collectors can't do any of the following things:

  • Call you over and over until you pick up.
  • Call you before 8 a.m. or after 9 p.m.
  • Call you at work if you have asked them to stop.
  • Call your cell phone unless you’ve given them permission to do so. (Federal student loan collectors may be able to call your cell phone even in the absence of permission to do so.)
  • Speak with anyone else about your debt — though they can call other people to locate you, they can’t tell the other person WHY they’re trying to find you.
  • Threaten you or a loved one with bodily harm, jail time, or arrest.
  • Threaten to tell other people you owe money.
  • Threaten to file a lawsuit against you — unless they actually intend to do so and are legally allowed to do so.
  • Impersonate a lawyer or government representative.
  • Impersonate someone else on Facebook or other social media sites in an effort to get you to pay them.
  • Suggest they can take your Social Security, pension, retirement, child support, alimony or tax refund (unless they’re calling about a federal student loan).
  • Tell you the loan can’t be wiped out in bankruptcy. (It’s difficult to wipe out student loans in bankruptcy, but making a blanket statement that it’s impossible to do so is a lie.)
  • Use abusive, obscene, or profane language.

How to Stop Collectors from Contacting You

Simply telling a collector to stop calling or sending letters is not enough — you need to write a letter stating they are no longer permitted to call you or send you correspondence. That letter must include your account number.

Once you've written the letter, you can either send it by fax (you can find the fax number for most collectors by searching for their website online) or mail. If you're sending the letter by mail, be sure to do so by some trackable means such as Priority Mail, FedEx or UPS so you can prove it was received.

Make a copy of the letter and keep it with proof of delivery.

Once the collector receives your letter, it is no longer allowed to contact you except to let you know it’s received the letter from you.

Collectors Can Still File a Lawsuit Against You

Just because a collector can't call or write doesn't mean it can't file a lawsuit against you in court.

Federal student loans can also continue to take administrative actions to collect the debt.

Always Open the Mail

Read every letter, open every envelope, and be sure you understand what it means.

You may think it's, "just another letter," but it may be information about a pending wage garnishment or legal action.

You have rights, but there are also deadlines at stake. Miss a deadline and your student loan problems just get more complex.

So, settling student loans can be simple - or it can be nearly impossible. It all depends on what kind of loans you've got.

You Have Options!

Contact attorneys Chris Bush and D.J. Rausa and find out the best route to your student loan debt relief.

(619) 295-3322

“The starting point on all student loan debt resolution plans is to obtain the Student Loan Report from the US Department of Education. This report is vital to answering any student loan question. I do not even comment on a client’s situation without having first reviewed this report.”
Here's how to obtain your NSLDS report.
D.J. Rausa, Esq., Student Loan Attorney

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"Attorney D.J. Rausa was great from the first consultation to the end! He explained everything very clearly so we knew exactly what to expect, was always accessible for questions and has a great response time. He helped me consolidate my student loans into a lower payment and helped my spouse get approximately $80k in private and federal student loans discharged! I would highly recommend calling him!"

California Student Loan Attorney

California Student Loan Lawyer D.J. Rausa

California Attorney D.J. Rausa has been an aggressive debt solution advocate for his clients in San Diego since 1993. He now specializes in Student Loan Debt Resolution and defense, and is nationally recognized as an expert in this developing area of Student Loan Law.

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California Bankruptcy and Student Loan Lawyer Chris Bush

San Diego Attorney Chris Bush is an experienced bankruptcy litigator and Student Loan Debt Resolution specialist. He can help you find the best solution to deal with your student loan debt burden.

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When you settle a debt for less than the amount owed, you may have a tax liability in the future. Before you settle any private student loan debt, make sure you seek the advice of a tax professional.

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