Default Resolution Group: What It Can Do for Your Student Loans

If you default on your federal student loans, your original student loan servicer will transfer the debt to the U.S. Department of Education’s Default Resolution Group.

The Default Resolution Group will oversee your loans moving forward and help you get out of default. Once you're out of default, it will send your loans back to a servicer.

If you don't get out of default, the group will also handle collections or send your debt to a private collections agency. Once this happens, you start racking up collection fees, your wages can be garnished, and your tax refunds or Social Security benefits can be seized, among other consequences.

Collections activities and other typical consequences of default are on pause through Sept. 30, 2024, as part of the student loan on-ramp. After that, these activities will resume.

» MORE: How much are collection costs on defaulted student loans?

What Default Resolution Group does for student loan borrowers

If you have defaulted federal student loans, here's how Default Resolution Group can help you get your debt back into good standing:

• Sign up for the Fresh Start program. The government's new Fresh Start program can help you get out of default for free, plus other benefits. If your loans are in default, you should sign up before the program expires on Sept. 30, 2024.

• Consolidate your student loans. Student loan consolidation will help you get out of default fast. To qualify, you can make three full, on-time consecutive payments or agree to make payments on an income-driven repayment plan. However, the default will remain on your credit report for up to seven years.

• Rehabilitate your student loans. Loan rehabilitation will remove the default from your credit report, and you won’t incur additional collection costs on top of your loan balance. You must agree to make nine affordable monthly payments consecutively over 10 months. This process in on hold while the Fresh Start program is active.

» MORE: How to get student loan help

How to contact Default Resolution Group customer service

Default Resolution Group phone number:

• For general questions: 1-800-621-3115.

• For international borrowers and incarcerated borrowers: 1-540-792-9171.

Default Resolution Group regular correspondence address:

U.S. Department of Education

P.O. Box 5609

Greenville, TX 75403-5609

Default Resolution Group payment address:

U.S. Department of Education

National Payment Center

P.O. Box 790336

St. Louis, MO 63179-0336

Default Resolution Group email address: use the online form.

Default Resolution Group website: myeddebt.ed.gov.

Are debt settlement or bankruptcy possible default resolutions?

With a debt settlement, your loan holder could waive some or all of your debt, including a percentage of collection costs, interest owed or principal. However, it’s the toughest route to resolve your default and isn't the go-to option. It would be entirely up to your lender to accept. You’d have to hire an attorney or debt settlement company and pay fees to do it.

You can qualify only if all of the following are true:

• You can’t afford to repay the loan and can prove it with documentation.

• You have rehabilitated the loan once before and have defaulted again.

• Your loan holder can’t find a way to collect the debt, such as if you moved out of the country.

Another option to get rid of your defaulted debt is by filing for bankruptcy, but you must prove your debt causes undue hardship. Because of the safety nets in place (such as income-driven repayment), it’s very difficult to prove federal student loans cause undue hardship.

How to complain about Default Resolution Group

If you’re having difficulty with Default Resolution Group that you have been unable to resolve, start by filing a complaint directly with Default Resolution Group's customer service department.

If your issue goes unresolved, you can also make complaints about Default Resolution Group to:

• The Federal Student Aid Feedback System.

• Your state attorney general's office.

• Your state consumer protection office.

• Your congressional representative.

Make sure to keep records of conversations you have, including the day, time and customer service representative you spoke with. Keep copies of any letters, bills or emails about your account.

» MORE: How to complain about your student loan bill

How to settle a dispute with Default Resolution Group

If a complaint doesn’t help, you can contact the Federal Student Aid Ombudsman Group. This method should be used only as a last resort, says the federal student aid office. When you’re ready to reach out, here’s how to get in touch:

Phone: 1-877-557-2575.

By mail:

U.S. Department of Education

FSA Ombudsman Group

P.O. Box 1854

Monticello, KY 42633