If you default on your federal student loan, the loan may be placed with a collection agency, which will then contact you to obtain payment. 
If you default on your federal student loan , the entire balance of the loan principal and interest becomes immediately due. This is called acceleration. Once your loan is accelerated , you no longer have access to deferment or forbearance options or to a choice of repayment plans. In addition , if you do not make repayment arrangements with the holder of your loan the U.S. Department of Education ED, a guaranty agency, or the school that made the loan and comply with the terms of the repayment arrangement , your loan holder may place your loan with a collection agency. If your loan is placed with a collection agency , you will be responsible for costs incurred by your loan holder to get payment. These costs amount to 17.92% of your loan amount if your loan is held by ED. Other loan holders may charge a different amount. You should check with them to find out what it is. The 17.92% is payable in addition to your outstanding principal balance, interest, and fees. For example , if you owe ED $10,000 , you ll owe an additional $1,792 in collection fees once your loan goes to a collection agency, for a total of $11,792 : 17.92% = 0.1792 $10,000 x 0.1792= $1,792 $10,000 + $1,792 = $11,792 The holder of your loan can take other actions to collect as well. ED currently contracts with several collection agencies to administer many of the collection activities of our accounts. Many guaranty agencies also contract with collection agencies for the same reason. Collection agency employees are trained to comply with the terms of the Fair Debt Collection Practices Act, which govern collection practices by debt collectors. If your defaulted loan is placed with a private collection agency , you can expect the agency to first offer you the option of entering into a voluntary repayment agreement. If you do not agree to enter into a voluntary 

user: I have been contacted by someone who has told me that they can get my federal student loan out of default for a fee. What should I do?

assistant: You first port of call in this instance should always be the Default Resolution Group

assistant: Has any company sought "enrollment", "subscription" or "maintenance" fees from you to help get you out of default?

user: Yes, I have been contacted in this manner

assistant: Your first action here should be to walk away. Your loan can be moved out of default for free with the Default Resolution Group

user: Is there any way that I can avoid having 15% of my wages garnished when dealing with loan collections?

assistant: One way to avoid this is to come to an agreement with the ED and negotiate better repayment terms for you which are acceptable by the ED or the private collection agency. You must ensure that the ED receives the first payment that is due no later than 30 days from the date of garnishment

user: Is there anywhere that I can learn more about companies seeking fees to get my loan out of default?

assistant: You should read our blog post called "Don't Be Fooled; You Never Have to Pay for Student Loan Help"

user: Are there other collection costs applicable apart from the cost of placing my loan with a collections agency?

assistant: You may have other costs, such as Treasury offset processing fees. There may also be costs associated with potential civil litigation from the Department of Justice

user: How do collection agencies work when they take over a loan that is in default?

assistant: There are a number of collection agencies that work with the ED. The employees of these agencies are trained to comply with the Fair Debt Collection Practices Act, which governs all collection practices undertaken by agencies