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What does Default mean?

Default occurs when monthly payments are not remitted for a period of time. When your Federal student loan account reaches 270 days of delinquency, the lender of your loan(s) submits a claim to the guarantor (PHEAA) to purchase the loan(s). Once purchased, PHEAA Default Collections begins pursuing the account for immediate payment in full. Failure to pay off your loan will result in collection fees and negative reporting to all nationwide consumer reporting agencies. Additional action including wage garnishment and seizure of income tax returns may ensue.

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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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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 any defaulted balance without any consequences, such as collection costs and credit reporting.
  • Monthly payments - If you are unable to remit the full defaulted balance, PHEAA will offer monthly payments. By remitting 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. You may also qualify for deferments and forbearances. To qualify, you must adhere to the requirements listed below:

  • Payments must be voluntary. Payments received through garnishment or federal offset do not qualify.
  • Payments must be on-time.
  • You are required to make nine monthly payments during a period of 10 consecutive months.
  • 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.
  • I understand that upon rehabilitation, PHEAA will request that nationwide consumer reporting agencies remove the record of default tradeline submitted by PHEAA. I understand that the tradeline reported on by my student loan servicer (prior to my default) will not be removed.
  • You must have a minimum principal and interest balance of $500 at the time of rehabilitation (after you make your nine payments).

You must continue making scheduled monthly payments until you are notified that your loan(s) have been purchased by a lender.

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

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How do I remit 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 is our most popular payment method because of its flexibility. You may request to have your payments deducted monthly, bi-weekly or even weekly to make budgeting easier! To apply for Direct Debit, please complete, sign and submit the Default Collections Electronic Funds Transfer Agreement (PDF).
  • Automated Clearing House (ACH) Debits - You may authorize a single ACH debit from your checking or savings account on a monthly basis.
  • Debit Card - You may authorize a single debit card payment to be applied to your account. Please note we do not accept credit card 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 remitted by mail. After we receive your first payment, you will receive monthly billing statements if we have a valid address on file.

    To ensure we can process your check efficiently as possible, please review our helpful hints for check payments.

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What if I previously completed the Loan Rehabilitation Program and I am not eligible for this program, but defaulted on my loans again?

If you can't pay your debt in full or remit satisfactory monthly payments due to financial hardship, you should consider the Federal Direct Consolidation Program.

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What is the Federal Direct Consolidation Program?

This is a program offered by the United States Department of Education (USDE) that allows you to combine your existing Federal Family Education Loan (FFEL) program loans into a new Direct Consolidation Loan. If you are interested in this program, please contact our customer service department at 1-800-233-0751, or visit the Federal Direct Consolidation Loans Information Center for additional information.

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What consequences can occur as a result of non-payment?
  • Wage Garnishment - PHEAA may garnish up to 15% of your disposable income. Payments recovered through wage garnishment are not considered voluntary and would not stop additional collection activity or qualify a loan for Rehabilitation.
  • Federal Treasury Offset - In addition to wage garnishment, PHEAA will advise the Federal Treasury of your unpaid debt which will be deducted from your eligible federal tax refunds or your income, commonly referred to as an "offset."
  • Assignment of the debt to a Collection Agency - If you choose not to work with us, we may assign your account to a collection agency for additional collection action.
  • Assignment of the debt to the United States Department of Education (USDE) - If we determine your debt is uncollectable, we may permanently assign the debt to the USDE for additional federal collection action.

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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 per day (except for occasional maintenance).

By fax

(717) 720-3644 Attn: Default Collections

By email

Please note: Email is not a secure method of communication because 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

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What if my account is already assigned to a collection agency?

If you know the name of the collection agency handling your account, contact them immediately. They will work with you to establish a repayment plan. If you do not know the name of the collection agency that is handling your account, please contact our office at 1-800-233-0751 for this information.

Collection Agency Phone Number
Performant Recovery, Inc. 1-800-927-7667
NCO Financial Systems (NCO) 1-800-377-4834
Windham Professionals 1-866-430-1549 or 1-800-394-4300
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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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