The Education Department will begin collection next month on student loans that are in default, including the garnishing of wages for potentially millions of borrowers, officials said Monday.
Edit: appears they will be going into federal garnishment, not private collections.
Right, but once they are taken by a private collections company, would they still carry that with them? I assume at some point the collections company actually buys out the loan in hopes of collecting more. Once they buy out the loan, they are owed, but at this point it’s arguable the non-defaultable student loan was paid.
Doesn’t this give a 7 year path to full default and erasure or something similar that federal loans wouldn’t have?
Nope. With student loans you’re stuck with them no matter what.
Edit: appears they will be going into federal garnishment, not private collections.
Right, but once they are taken by a private collections company, would they still carry that with them? I assume at some point the collections company actually buys out the loan in hopes of collecting more. Once they buy out the loan, they are owed, but at this point it’s arguable the non-defaultable student loan was paid.