Federal Student Loan Collections Enforcement Reaches All-Time High

Federal Debt Collections Activity Sets New Records

A recent Bloomberg article reports that Federal Student Loans Collections activity has reached an all-time high in 2019, far eclipsing previous records, collecting nearly $3,000,000,000 BILLION dollars in the Fiscal Year 2018, and recovering even more than that total in the first 6 months of Fiscal Year 2019.

If you’re one of the unlucky Federal borrowers who has fallen into Default or Delinquency, and has faced Wage Garnishment, having your Tax Returns Withheld, or some other form of penalty, fine or fee, then you’re part of this new record statistic. (Luck you!).

And while this story is making huge news, none of us should be surprised about it, especially considering Betsy DeVos’s track record as Secretary of the Department of Education.

What Does Betsy DeVos Have To Do With It?

Put in place by President Trump, and perhaps seeing the writing on the wall about his re-election potential for 2020, Education Secretary Betsy DeVos seems to be making a last ditch effort to collect every possible penny from every single borrower she can attack.

After all, what are the realistic odds that Donald Trump manages to win reelection in 2020, allowing Betsy DeVos, pawn of the for-profit schools, corrupt student loan servicing companies, and student loan debt collections agencies to remain in power at the Department of Education?

And don’t forget that Secretary DeVos’s leadership has lead not only to these new record-setting levels of collections enforcement activity, but that she’s also responsible for bringing the most effective Federal Student Loan Forgiveness Benefits to a complete halt, denying over 90% of applicants, including those who seemingly fulfilled all the eligibility requirements of the programs they were applying to.

If You’re Already Buried in Student Loans…

For those of you already buried in student debt, I’d like to offer a quick word of advice – no matter what happens as a result of the obvious corruption going on at the Department of Education, any relief programs you’ve eventually offered will take YEARS to emerge.

Instead of sitting around waiting for that to happen, I recommend getting on top of your debt now, and dealing with it head on.

If you're truly struggling with student debt, then you should also consider paying a Student Loan Debt Relief Agency for help. Why? Because the people working at these companies deal with student loans all day, every day, and they're your best chance at figuring out how to get your loans back under control.

I've interviewed all sorts of debt relief agencies over the past 10 years, talking to all sorts of so-called "experts", and I can tell you that in all honesty I've only found two companies I trust to offer actual financial relief to people struggling with student loans.

For help with FEDERAL Student Loans: Call the Student Loan Relief Helpline at 1-888-906-3065. They will review your case, evaluate your options for switching repayment plans, consolidating your loans, or pursuing forgiveness benefits, then set you up to get rid of the debt as quickly as possible.

For help with PRIVATE Student Loans: Call McCarthy Law PLC at 1-877-317-0455. They will negotiate with your lender to settle your private loans for much less than you owe, then get you a new loan for the much lower, settled amount. NOTE: McCarthy Law can ONLY help with Private student loans.

If you do decide to call one of these companies and you have a bad experience with either of them, PLEASE make sure to come back and let me know about it in the Comments!

What Has Betsy DeVos Accomplished as Education Secretary?

Betsy DeVos’s big wins as Education Secretary have included a four-pronged assault on the ordinary American Student Loan Debt Borrower, including:

Knowing that our own Education Secretary is literally waging a war against the American people and ordinary borrowers on behalf of the for-profit schools, debt servicing companies and debt collection agencies, is it any wonder that we’re hearing about statistics like the fact that 1 in 15 Student Loan Borrowers has considered suicide because of their student debt?

How Have Schools Contributed to the Problem?

Before we continue, let me make one thing quite clear: Betsy DeVos’s inaction on the issues listed above continues to trap thousands of new students in an ever-growing cycle of student debt, but she’s not alone in facing blame for the student debt crisis.

Because it’s also irresponsible colleges and universities that continue to enable the disastrous debt bubble being inflated here, and the best evidence for this can be found in the list of bad-actor schools who have been accused of defrauding students, saddling them with huge loans and failing to deliver on the marketing promises made to their students when encouraging them to enroll in courses.

Is it any wonder that there’s a long list of schools currently being sued by the Consumer Financial Protection Bureau and an assortment of State Attorneys Generals, or that some of the country’s biggest schools have been wrapped up in these lawsuits?

Even though it’s obvious that something should be done to prevent the system and these sorts of schools from trapping further Americans in a never-ending cycle of debt, Betsy DeVos and her Education Department have set their sights on the wrong target, pursuing the debts of ordinary Americans instead of attempting to prevent further innocent people from falling prey to illegal marketing activities and false promises made by the schools themselves.

Setting Another New Record: Complaints Against Federal Debt Collectors

Perhaps unsurprisingly, another student loan record recently set came from the Consumer Financial Protection Bureau, who reported that they had received 2,475 complaints against the Government’s debt collectors between January 2018 and the Spring of 2019, totaling to more complaints than they’d ever seen before over a similar time period.

Complaints included all sorts of terrible stories about rampant abuse and harassment being conducted on behalf of the Federal Government, from contacting employers, employers, friends, neighbors, family members and all manner of other relations in order to embarrass and humiliate delinquent borrowers, to calling repeatedly, making physical threats and impersonating Government Officials.

If you’re being harassed by debt collectors, whether they’re from the Government itself, or a private corporation attempting to collect on Federal loan debt that you’ve defaulted on, make sure to consult the Fair Debt Collection Practices Act (FDCPA), which is the Federal law governing debt collection practices, and which protects you from facing abusive, unfair or deceptive practices to collect money you owe.

What Happens if I’m Delinquent or if I Default on Federal Student Loans?

The Federal Government has a range of options for attacking borrowers who have slid into delinquency or default status, ranging from not that bad, to absolutely terrible outcomes.

It starts with legal warnings, written letters stating that legal action could be taken against you, and by the way, these will never arrive in the form of a phone call or email, as that is highly illegal, and any contact you receive along those lines should be disregarded as likely originating from a Student Loan Debt Scam Operation.

But once you’ve failed to properly respond to those warning letters, that’s when the Government begins to turn it wheels and start slapping fines, fees, penalties, and all sorts of collections activities against you, from withholding tax refunds to garnishing wages.

Penalties for Defaulting on Federal Student Loans

The wide-ranging list of potential penalties for defaulting on your loans include:

  • Withholding Federal income tax refunds
  • Withholding Social Security payments
  • Witholding Social Security disability benefits
  • Witholding State tax refunds
  • Confiscating Drivers Licenses or other state-issued licenses
  • Garnishing up to 15% of disposable income directly from paychecks
  • Fines and fees for the costs associated with collecting defaulted debt
  • Processing fees and costs from civil litigation being added to your debt balance

In a nutshell, you definitely don’t want to default, because the Federal Government has all sorts of ways to come after you to get back the money you owe them, and none of them are pleasant.

If your loans are delinquent, or even if you’ve already defaulted, then the first thing you’ll want ot do is visit my Guide on How to Deal with a Federal Student Loan Delinquency or Default.

Fortunately, the News Isn’t All Bad…

As I mentioned above, it’s looking more likely each and every day that President Trump and Secretary Betsy DeVos’s terms will be ending in 2020, which almost certainly lead to significant reforms in the way Federal student loan borrowing is handled.

Without getting too political over it, I think we’d see a return to sanity here, with fair lending practices put back in place, enforcement actions levied against the out-of-control, corrupt, and widely immoral schools, lenders, servicing companies and debt collectors currently preying on indebted Americans, and a restoration of Federal forgiveness programs, who haven’t been approving benefits applications ever since Betsy DeVos took office and effectively paused all forms of Federal relief.

For some insights into just what could be changing, make sure to visit my page on the 2020 Presidential Election Candidates Student Loan Plans, where I go through each Candidate’s proposals for dealing with the student loan debt crisis.

For those of you who are truly buried in excessive, inescapable debt, you’ll certainly want to pay close attention to Elizabeth Warren’s Student Debt Proposal, as well as Bernie Sanders’s Student Loan Plan, as they’re currently the two leading candidates offering the best relief packages for both current and future borrowers.

Where Can I Get Help With My Loans Now?

But keep in mind that even if President Trump were to lose and the Democrats retake the Presidency, it’ll be years until the transfer of power occurs and new laws can be put in place to help improve the current sad state of affairs.

Fortunately, there are all sorts of options available right now to help you deal with your student loans, whether they’re Federal or Private.

If you’re having trouble dealing with your debt, you will certainly want to visit some of the other pages of my site where I go through each of the benefits plans, repayment plans, forgiveness and discharge opportunities in detail, explaining exactly how to access the tremendous financial relief programs currently on offer.

Help for Federal Student Loans

To get Help with Federal Student Loans, you’ll want to visit my Guides on:

If you can’t find any way to take advantage of the Federal relief programs listed above, then you clearly aren’t thinking outside the box.

Help for Private Student Loans

If you need Help with Private Student Loans, please make sure to review my Guides on:

There are all sorts of financial relief programs available, and you’re almost certainly going to qualify for something, no matter how much you owe, or how badly you’ve dealt with paying the loans back, so be sure to check out all of your options listed above.

And if you still have questions about how to deal with your debt, then please post them in the Comments section below. I review Comments regularly, and will do my best to get you a response as quickly as possible!

Finally: Please Help Me Out!

Running this website takes a great deal of time, from researching legal changes to student loan debt collections laws to making sure that I’m updating content whenever news stories break – it’s basically a full-time second job.

I can only continue to dedicate the kind of time it takes to make this site useful if more people like you start to visit, so if you found my site to be helpful, please share a link to it with your family, friends and colleagues.

Please do your part to help support a realistic resolution to the student loan crisis, and to support people like me who spend a great deal of time writing about it, by posting a link to this Post or to one of my other Guides to Facebook, Reddit, Twitter, or wherever you participate online!

The more people who visit, the more time I can dedicate to writing up Guides just like this one, and helping out people just like you.

Thank you for your support!

Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.


Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.

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