Student Loan Debt Collection has terms of art. When negotiating with your lender or a student loan debt collector, you will want to know these terms in order to sound authoritative and frankly, to better understand your current position and options.

Federal Student Loan or Private Student Loans. The government, through various agencies offer student loans. These known as federal student loans. These are different than those that you get from private lenders in one very material respect; the government student loans are collectible from you without a judgment being obtained against you first. That’s right. The government can garnish your wages, federal tax refund and other federal benefits all without having obtained a judgment against you. A private lender must obtain a judgment against you before attempting to collect money from you.

Default. This means that the status of your loan is that you have missed 1 or more payments on it. You must be in default before any debt collector may take action against you.

Rehabilitation. This means that your loan is taken out of Default status after you have made a series of payments, on time. You can usually rehabilitate a loan one time. This is the only way to remove the default status from your credit report.

Consolidation. If you have more than one student loan, at some point you may choose to consolidate these loans into one single loan which you can service with one single payment. Be careful about doing this because you can turn a private loan for which a creditor has to obtain a judgment against you before collecting, into a government guaranteed loan for which no judgment may be necessary. Consolidating loans is also a way of getting out of default.

In Repayment. This speaks to the status of a loan that is not in deferment and for which you are not in default.

In Deferment. This is when you owe on a student loan but your currently have no obligation to begin repaying it.