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PHEAA Default FAQ

What does Default mean?

Default on a Federal Family Education Loan Program (FFELP) loan occurs when you fail to make payments and your loan reaches 270 days of delinquency. When your Federal student loan reaches 270 days delinquent, the lender of your loan(s) submits a claim to the guarantor (PHEAA) to purchase the loan(s).

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What should you do if your student loan defaults?

Contact us immediately at 1-800-233-0751 to find out what repayment options are available and to avoid additional consequences.

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How do I contact PHEAA?

By telephone

1-800-233-0751 Toll-Free (United States, Canada)
(717) 720-3400 (international)
TTY: Dial 711 (for hearing and speech-impaired callers)

Representatives are available Monday to Thursday, 8:00 AM to 9:00 PM (ET), and Friday, 8:00 AM to 5:00 PM (ET).

Our interactive voice response system is available 24 hours a day (except for occasional maintenance).

By fax

(717) 720-3644 Attn: Default Collections

By email

default@pheaa.org

Please note: Email is not a secure method of communication as it can be intercepted by third parties. Do not include any sensitive or private information in your email to PHEAA.

By U.S. Mail

For general correspondence:
PHEAA Default Collections
P.O. Box 8147
Harrisburg, PA 17105-8147

For credit disputes:
PHEAA Default Collections
P.O. Box 61017
Harrisburg, PA 17106-1017

For express or overnight deliveries:
PHEAA Default Collections
1200 N. 7th St.
Harrisburg, PA 17102

For payments (except payoffs):
PHEAA Default Collections
P.O. Box 1463
Harrisburg, PA 17105-1463

For payoffs (payments in full):
PHEAA Default Collections
P.O. Box 8147
Harrisburg, PA 17105-8147

NOTE: Please do not send correspondence to our payment address.

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What are my repayment options?
  • Paying the loan in full - This is your best option. PHEAA allows you up to 75 days from the date of default to pay off the defaulted loan balance without any consequences, such as collection costs and negative credit reporting while your loan is in default.
  • Monthly payments - If you are unable to make the full defaulted balance, PHEAA will offer monthly payments. By making monthly payments in a timely manner, you may qualify to participate in the Loan Rehabilitation Program.

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What is the Loan Rehabilitation Program?

The Loan Rehabilitation Program offers a defaulted borrower the opportunity to return their loan(s) to good standing. Upon completing the Loan Rehabilitation Program, you may be eligible for applicable deferments, forbearances, and repayment options. In order to successfully complete the Loan Rehabilitation Program, you must adhere to the requirements listed below:

  • You are required to make nine qualifying monthly payments within a 10 month period. A qualifying payment is:
    • A payment that is made voluntary. Payments received through garnishment or federal offset do not qualify;
    • A payment that is received on-time. On-time is within 20 days of the due date for the payment; and
    • The full amount required. You cannot pay a lump sum amount or make double payments to qualify sooner in the 10-month period. Remember that you are demonstrating the ability to make your monthly payments after the default status has been removed from your loan.
  • You must make your entire monthly payment on-time each month until you receive your Rehabilitation Approval Notice. Contact us immediately if you have any questions regarding whether or not you should make a payment.
  • You must have a minimum principal and interest balance of $50 at the time of rehabilitation (after you make your nine qualifying payments).

Please note, successful completion of the rehabilitation program requires that PHEAA have a lender available to purchase your loan(s). If PHEAA is unable to secure a lender, payments must continue to be made to maintain eligibility until such time as a lender is available to complete the rehabilitation.

Also, any loan(s) previously rehabilitated on or after 8/14/2008 do not qualify for this program.

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How do I qualify for the Loan Rehabilitation Program?

To obtain information concerning the Loan Rehabilitation Program and to determine if you qualify, please contact us directly at 1-800-233-0751. Our office hours are Monday through Thursday 8:00 AM to 9:00 PM (ET) and Friday 8:00 AM to 5:00 PM (ET). When contacting us, please have your most recent federal tax return available, if possible, as your required payment for this program will be calculated based upon your Adjusted Gross Income (AGI) and family size or the completion of a Financial Disclosure Form.

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What are the benefits of the Loan Rehabilitation Program?

After successfully completing the Loan Rehabilitation Program:

  • We will request that the consumer reporting agencies remove any negative credit reporting for your loan while it was in default. However, negative information reported by your loan servicer prior to default will not be removed as a result of rehabilitation.
  • You may be eligible for applicable deferments, forbearances and repayment options.
  • You will regain eligibility for future federal financial aid.

Please note, you may only complete the Loan Rehabilitation Program one time.

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What if I previously completed the Loan Rehabilitation Program, but I defaulted on my loans again?

Unfortunately, you are not eligible for the Loan Rehabilitation Program a second time. If you are unable to pay your balance in full or maintain a satisfactory monthly payment, you may want to consider consolidating your loans through the Direct Consolidation Loan Program.

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What is the Direct Consolidation Loan Program?

This is a program offered by the U.S. Department of Education that allows you to combine all of your eligible federal student loans into a single Direct Consolidation Loan.

Some of the advantages of consolidation include:

  • The removal of your loans from a defaulted status*
  • Reinstatement of your eligibility for future federal financial aid
  • Eligibility for applicable deferments, forbearances and repayment options

*Consolidation does not result in the removal of any negative credit reporting for your loan while it was in default or for information that may have been reported by your loan servicer prior to default.

If you are interested in this program, please visit StudentLoans.gov to get more information or contact the U.S. Department of Education at 1-800-557-7392.

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How do I make a payment?

We offer several convenient ways for you to make a payment:

  • Direct Debit - PHEAA offers free automatic deduction of your monthly payment from your checking or savings account. This repayment option allows you the freedom to choose how often your monthly payment is withdrawn (weekly, bi-weekly, etc.). To apply for Direct Debit, please complete, sign and return the Default Collections Electronic Funds Transfer Agreement (PDF).
  • Automated Clearing House (ACH) Debits - This option allows you to authorize a one-time debit entry from your checking or savings account.
  • Debit Card - You may authorize a single debit card payment to be applied to your account. Please note we do not accept credit cards as a form of payment.
  • Mail - Mail your check or money order to:

    PHEAA Default Collection
    P.O. Box 1463
    Harrisburg, PA 17105-1463


    Be sure to include your account number on all payments made through the mail. After we receive your first payment, you will receive monthly billing statements if we have a valid mailing address on file.

    To ensure your check is processed as efficiently as possible, please review our helpful hints for check payments.

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How is my payment applied to my defaulted balance?

Your payment is first applied to outstanding collection fees, then to outstanding charges, such as legal costs, returned check fees, then to outstanding interest, and finally to the outstanding principal.

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What consequences can occur as a result of non-payment?

If payments are not made timely on your defaulted student loan, your guarantor (PHEAA) has the right to enact various nonpayment consequences against you.

  • Administrative Wage Garnishment Process - The administrative wage garnishment process allows your guarantor (PHEAA) to garnish up to 15% of your take home pay as a means of recouping the outstanding balance of your loan(s). Your guarantor will notify you, via mail at your last known address, at least 30 days prior to initiating administrative wage garnishment proceedings. Upon receipt of this notice, you have certain rights in accordance with federal laws.

    If you wish to establish a payment plan to avoid the initiation of the wage garnishment process or have questions concerning this nonpayment consequence, please contact us immediately at 1-800-233-0751.

  • Federal Treasury Offset Program - The Federal Treasury Offset program allows your guarantor (PHEAA) to seize federal monies you may have access to, such as tax returns, social security benefit payments, and travel reimbursements, to help in the repayment of your defaulted student loan debt.

    If you wish to establish a payment plan to avoid the Federal Tax Offset Program or have questions concerning this nonpayment consequence, please contact us immediately at 1-800-233-0751.

  • The assignment of your loan to third party Collection Vendors - Your guarantor has the option of assigning collection for your loan to a third party collection vendor for assistance in recouping the defaulted loan balance.

  • The assignment of your loan to the United States Department of Education (USDE) - If it is determined that your loan is considered uncollectible, meaning that payments have not been made, your guarantor (PHEAA) may permanently assign your loan to the USDE for additional collection actions at the federal level. To avoid this nonpayment consequence, please contact us immediately at 1-800-233-0751 to discuss establishing a satisfactory repayment arrangement.

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What if my loan is already assigned to an outside collection vendor?

If you know the name of the collection vendor handling your loan, contact them immediately and they will work with you to establish a satisfactory repayment arrangement. If you do not know the name of the collection vendor that is handling your loan, please contact our office at 1-800-233-0751 to obtain this information.

Collection Vendor Phone Number
Performant Recovery, Inc. 1-800-927-7667
Transworld Systems Inc. (TSI) 1-800-377-4834
Windham Professionals 1-877-752-9142
GC Services 1-866-841-9469
Account Control Technology (ACT) 1-866-744-1169
General Revenue Corporation 1-800-880-8316
Premiere Credit 1-877-636-9788

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Are there any benefits for service members?

The Servicemembers Civil Relief Act (SCRA) is intended to grant servicemembers temporary relief from judicial and administrative proceedings and transactions. The SCRA limits the interest rate on a servicemember's eligible loans to a maximum of 6% while he or she is performing qualifying active duty military service. For the purposes of the SCRA, "interest" includes any other charges or fees applied to the loan. This benefit will not raise a servicemember's rate to 6% if it is already below 6%; instead, it provides a maximum rate. To obtain more information, please contact our office at 1-800-233-0751 or visit www.militaryonesource.mil.

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Loans in default?

If your loans are currently in default and you'd like to sign up for Direct Debit, please complete, sign, and submit the Direct Debit Default Collections Electronic Funds Transfer Agreement (PDF)

Completed Forms

Mail or fax your completed form to:

PHEAA Default Collections
P.O. Box 8147
Harrisburg, PA 17105-8147

Fax: (717) 720-3644