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Student Loan Collections and Debt Collection Agencies

The U.S. Department of Education outsources student loan debt collection to private debt collection agencies. Currently, the debt collection agencies listed below are involved in student loan collections. Click on the name of the debt collection agency to learn more about the company.

Periodically, the Department of Education invites private debt collection agencies to bid on contracts to collect delinquent student loans. Five slots are reserved for debt collection agencies categorized as small businesses (less than $8.5 million in annual revenue). In the list above, Collection Technology, Coast Professional, Delta Management Associates, National Recoveries, and Immediate Credit Recovery are categorized as small businesses. The remainder are categorized as unrestricted (large) firms.

The current contract period for debt collection agencies began in 2009. As of December 2010, the private debt collection agencies had collected over $738 million during the current contract period. Given that the agencies receive 25 cents for every dollar they collect, there’s powerful incentive to get and keep Department of Education accounts.

Each quarter, the Department of Education ranks the debt collection agencies, and awards new accounts based on each agency’s score. According to debt collection industry association ARM, “The department awards 70 points for dollars collected to the top performance, 20 points for total accounts serviced, and 10 points in the administrative resolution category.”

The scoring is heavily weighted in favor of the best performers. In other words, the more a debt collection agency rakes in, the more accounts it receives from the Department of Education. Debt collection agencies sweat bullets in anticipation of the announcement of contract awards, as their livelihoods literally depend upon it.

For that reason, it’s no surprise that many Department of Education debt collection agencies will go to almost any length to collect on overdue student loans. While there are significant differences between student loan debt and other types of unsecured consumer debt, one thing remains constant: debt collection agencies that collect student loans must abide by the federal Fair Debt Collection Practices Act. This means, for example, that they can’t harass you, embarrass you, threaten you, or mislead you. Learn more about illegal debt collection practices.

Fighting Illegal Debt Collection Practices

If you have a student loan and have been the victim of illegal debt collection practices, you should know that the Fair Debt Collection Practices Act outlines penalties for debt collection agencies that break the law. You can recover up to $1,000, plus actual damages and attorney fees. The legal team at will provide you with a free case evaluation, and will represent you free of charge if you’ve been the victim of abusive debt collection practices. Complete the form to the right or call to get help.

Lemberg & Associates’ team
of consumer attorneys is highly
skilled and ready to help you
with debt collector abuse.

If you have been the victim of harassment or illegal or unfair debt collection practices, Lemberg & Associates will discuss your options with you and protect your rights. For more information, contact Lemberg & Associates today at .

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"The FDCPA is a consumer protection statute and was intended to permit, even encourage, attorneys like Lemberg to act as private attorney generals to pursue FDCPA claims."

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