Learn How to Request a Student Loan Collection Resume
Falling behind on student loan payments is more common than many people think. Whether due to financial hardship, unemployment, or unexpected life changes, borrowers sometimes find themselves in default.
Fortunately, there’s a way to get back on track, through a process known as student loan collection resumption. If your loans have been in collections, this guide will walk you through how to re-enter repayment and regain control over your financial situation.
What Does “Collection Resume” Mean?
When a federal student loan goes unpaid for a significant period, typically 270 days, it enters default status.
Once in default, your loan may be transferred to collections, where it accrues additional fees and can impact your credit score.
Resuming collection means that you’re working with your loan servicer or a collections agency to bring your loan back into good standing, either by rehabilitation, consolidation, or repayment agreement.
Step 1: Confirm the Status of Your Loan
Before taking any action, find out the current status of your student loan. You can do this by:
- Logging into the Federal Student Aid website (studentaid.gov);
- Reviewing your credit report for collection notices;
- Contacting the Default Resolution Group (DRG) or your loan servicer.
If your loan is in collections, it will be labeled as “defaulted,” and you’ll typically see the balance being handled by a collection agency.
Step 2: Understand Your Options to Resume Collection
There are three main ways to resolve a defaulted federal student loan:
a. Loan Rehabilitation
This involves making nine on-time, monthly payments over 10 consecutive months.
These payments are typically based on your income, and once completed, your loan will be taken out of default, and your collections record will be removed from your credit report.
b. Loan Consolidation
You can combine your defaulted loan with other federal loans into a new Direct Consolidation Loan. To qualify, you’ll need to either!
- Agree to repay the new loan under an income-driven repayment plan;
- Make three consecutive, voluntary, on-time payments before consolidating.
c. Full Repayment
While rare, some borrowers opt to pay the full amount owed in one lump sum. This clears the default status but doesn’t always remove the negative impact from your credit report.
Step 3: Gather Your Financial Information
Regardless of which method you choose, you’ll likely need to provide:
- Proof of income (pay stubs, tax returns);
- Family size and monthly expenses;
- Loan details (which can be accessed on studentaid.gov).
This information is especially important if you choose rehabilitation or an income driven repayment plan, as it will be used to calculate your monthly payment.
Step 4: Contact the Appropriate Entity
Reach out to the collection agency assigned to your loan. They’ll guide you through the agreement process and determine your monthly payment.
Start the application directly. You’ll be able to select your repayment plan during the process.
If you’re unsure where to start, call the Default Resolution Group at 1-800-621-3115 or visit your student aid account online.
Step 5: Sign the Agreement and Begin Payments
Once you’ve chosen a path review the terms of your agreement, sign any required documents (many can be completed digitally) and make your first payment on time
For rehabilitation, remember that all nine payments must be made on time to successfully complete the program.
Step 6: Monitor Your Loan Status and Credit
After successfully completing the rehabilitation or consolidation process, your loan will be removed from collections.
Your status will return to “in repayment” e your credit report will be updated (especially in the case of rehabilitation)
Be sure to monitor your credit report and student loan account to ensure the updates are reflected properly.
Conclusion
Defaulting on student loans can feel overwhelming, but there are clear paths to recovery. Whether you choose rehabilitation, consolidation, or full repayment, the key is to act as soon as possible.
Resuming collection and returning to good standing not only protects your credit but also restores access to federal benefits, such as deferment, forbearance, and additional student aid.
You’re not alone in this process, use the available resources, and take the first step toward financial recovery today.