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Preparing for Student Loan Debt Repayments

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Many working and middle-class borrowers applied for and were approved for the Biden-Harris Administration’s one-time debt relief program that would have discharged student loans. The Supreme Court has blocked the initiative and student loan debt payments will resume in October 2023.  Business Consumer Alliance is warning consumers of scammers that may try and reach you, offering debt relief services or other loan services for a fee. Below is some information to help borrowers prepare for repayment.

Where to Get Help

Remember, you do not have to pay someone to assist you with your student loan. Debt relief companies do not have the ability to negotiate with your creditors to obtain any special deal under federal student loan programs. The payment levels under federal income-driven repayment plans are set by federal law.

If you are having trouble with student loan debt, you can explore options such as income-driven repayment plans and loan consolidation by visiting Applications are free and there are no extra fees. On that site, you’ll find information on requirements for loan forgiveness, repayment estimators to help you pick the right repayment plan to fit your income, loan servicer contact information, and other valuable advice to help you manage your loan repayment.

In addition to repayment plans, the Department of Education website also has information on deferment and forbearance, forgiveness, cancellation, discharge, and default.  You may also wish to speak with your loan servicer for options and plans that may be available to you to repay your debt.

If you are looking to hire a debt relief company, get reviews and reports from trusted sources. BCA monitors reviews and provides transparent reports that consumers can use to make an informed buying decision. Anytime you are looking to do business with a company, check BCA.

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Paying the Debt

If you simply cannot pay what you owe, let your loan servicer know. They may be willing to work with you. Try to negotiate the best settlement you can for yourself. Here are some of the things you may be able to bargain for:

  • Forgiveness of interest, finance charges, collection charges, or other charges if you pay in full by a certain date.
  • Waiver of any claim the collection agency may have against your property.
  • Installment payments that would require specific payments on pre-arranged dates to satisfy the amount owed.

If you come to an agreement with the debt collector, get it in writing. Make sure you know who to pay, where payment should be submitted, and the due dates.

If your loan is in default, you may benefit from the department's Fresh Start program to get you back on track. The Fresh Start program offers special benefits for borrowers in default and can restore access to federal student aid. You will also get an opportunity to sign up for an income-driven repayment plan, which likely will qualify you for a lower monthly payment than a standard plan.

It’s free to sign up for Fresh Start at, by calling 1-800-621-3115 (1-877-825-9923 for TTY), or writing to P.O. Box 5609, Greenville, TX 75403. When applying by mail, be sure to include your name, social security number, date of birth, and a written request to use Fresh Start to bring your loans back into good standing.

Prohibited Threats and Actions

A collection agency may not make these threats against you:

  • To use physical force or violence, or any other criminal means to harm you, your property, or your reputation.
  • To accuse you of committing a criminal offense if you don't pay, when the accusation would be false.
  • To garnish your wages, seize your property or arrest you, unless they can legally and intend to do it.
  • To communicate to anyone information (other than nonpayment of the debt) that will defame you.
  • To take possession of your property by non-judicial action unless they actually intend to do it.
  • To communicate credit information about you that they know, or should know, is false.
  • To take any other action that cannot legally be taken or that is prohibited by law, or to threaten any action they do not actually intend to take.

Aside from communicating with the debtor’s attorney, a collector may contact a third party only to locate the debtor's address, home phone number, and place of employment. They are typically prohibited from contacting third parties more than once and they are generally not permitted to discuss the debt with anyone other than the debtor, their spouse, or attorney.

Person Behind Books

How to Report a Debt Collector

If you believe a debt collector has acted illegally or unfairly you can report them to:

File a complaint with Business Consumer Alliance against unlawful or unfair debt collection practices. You can also seek legal advice to file a lawsuit against a debt collector in state or federal court.  For more information on debt collection rules, check out our blog here. Make sure to share this blog and our Facebook page to keep updated on scams, tips, and more.

About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.