If you default on Federal Student Loans, the U.S. Government has many collection tools at it’s disposal. They can take your tax refund, garnish wages and bank accounts – without suing you.
However, private student loan collectors do not have as many collection options with out suing you.
- Private student loan there is a time limit for collection depending on the state.
- Borrowers can fight back against any harassment or abuse by collection agencies by enforcing their rights under the Fair Debt Collection Practices Act. In certain situations, borrowers may be awarded up to $1000 when debt collectors violate the law.
- You can be sued for defaulted private student loans and then if the creditor wins wages and bank accounts, etc. may be garnished.