Federal Student Aid’s coronavirus disease 2019 (COVID-19) information page is located at StudentAid.gov/coronavirus. The page includes information about relief to student loan borrowers, including those who have defaulted on their federal student loans. Please visit the page regularly for updates.
President Trump signed the CARES Act on March 27, 2020, which will provide additional flexibilities related to COVID-19. Websites and systems are being updated as quickly as possible to reflect changes in the law. We appreciate your patience.
We Are Here To Help You
Welcome to our Student Loan debt informational web page. Our goal is to help you find a satisfactory solution to repayment of your Federal or Private student loan placed with Central Research. We also have provided web links below to government web pages where you can also obtain information regarding your student loans.
We understand some individuals prefer to receive information online rather than talk to a representative on the telephone. Our representatives are available to help you and explain the policies of our clients. We also wish to inform you – This communication is from a debt collector. This is an attempt to collect a debt and any information obtained will be used for that purpose.
The US Department of Education requires that all email be encrypted to protect your privacy and personal information. CRI has to initiate the encryption process, send you directions to log in and accept encrypted email. We also are required to have your permission to email. This permission can be communicated initially by telephone or by letter along with your personal email address.
NOTE: The content of our presentations includes excerpts from the U.S. Department of Education and or the Consumer Financial Protection Bureau websites. Please see below for the links to these important websites regarding your options.
Student Loan Debt Contacts
For all student debt inquiries:
8am to 5pm CT Monday-Friday.
More Helpful Links
Frequently Used Forms
- Loan Rehabilitation Agreement Letter (CRI Help)
- Transportation Statement (CRI Help)
- Unemployment and Income Support Statement (CRI Help)
- Documentation Required for Loan Rehabilitation Income and Expense Information (CRI Help)
- Federal Direct Consolidation Loan Application (CRI Help)
- Income-Based Repayment Plan Request (CRI Help)
- Request to Add Loans Form (CRI Help)
- Repayment Plan Request (CRI Help)
Standard Repayment Plan
- Loan Discharge Application – School Closed (CRI Help)
- Loan Discharge Application – Unauthorized Signature or Payment (CRI Help)
- Loan Discharge Application – Total and Permanent Disability (CRI Help)
- Teacher Loan Forgiveness Application (CRI Help)
- Loan Discharge Application: False Certification if Ability to Benefit (CRI Help)
- Loan Discharge Application: False Certification (Disqualifying Status) (CRI Help)
- Loan Discharge Application: Unpaid Refund (CRI Help)
Administrative Wage Garnishment
- Administrative Wage Garnishment Request For Hearing (CRI Help)
- Financial Disclosure Statement For Wage Garnishment Hearings (CRI Help)
- Pre-Hearing Repayment Agreement Letter (CRI Help)
Frequently Asked Questions
Welcome to our student loan informational web page. Our goal is to help you find a satisfactory solution to repayment of your Federal student loan placed with Central Research for collection. Additionally, you may click on the most commonly asked questions and I will give you the answer. For qualifying Federal student loans, please see the options listed for rehabilitation and consolidation by clicking on the appropriate question.
Please note, if you decide to rehabilitate your loan you must contact our representatives to complete the paperwork required by the U.S. Department of Education. Your monthly payments must also be facilitated by Central Research and the payments processed by the government. Our friendly representatives are trained to help you complete the rehabilitation process.
One way to get out of default is to repay the defaulted loan in full, but that's not a practical option for most borrowers. The two main ways to get out of default are loan rehabilitation and loan consolidation. While loan rehabilitation takes several months to complete, you can quickly apply for loan consolidation. However, loan rehabilitation provides certain benefits that are not available through loan consolidation.
If you rehabilitate a defaulted loan, the record of the default will be removed from your credit history. However, your credit history will still show late payments that were reported by your loan holder before the loan went into default. If you consolidate a defaulted loan, the record of the default (as well as late payments reported before the loan went into default) will remain in your credit history. Late payments will remain on your credit report for seven years from when they were first reported. It’s important that you fully understand loan rehabilitation and loan consolidation before making your decision.
Another option for getting out of default is to consolidate your defaulted federal student loan into a Direct Consolidation Loan. Loan consolidation allows you to pay off one or more federal student loans with a new consolidation loan.
For more information on these options, please see the questions and answers listed below. Our representatives are available to answer your questions and help you resolve your loan as you select the best option to repay.
When speaking with your student loan servicer or a debt collector, be sure that you have written documentation about what federal student debt you owe. If you are concerned that you never borrowed certain loans, check the National Student Loan Data System or telephone 1-800-433-3243 for information. If the loan does not appear there, contact the collector and inform the collector of the problem. Remember, that system shows only your federal student loans, and not your private student loans.
Rehabilitation is a program to give you a fresh start by removing your student loan(s) from a default status. You may then regain eligibility for benefits that were available before your loan defaulted.
When your loan is rehabilitated, the default status will be removed from your loan, and collection of payments through wage garnishment or Treasury offset will stop. You’ll regain eligibility for benefits that were available on the loan before you defaulted, such as deferment, forbearance, a choice of repayment plans, and loan forgiveness, and you’ll be eligible to receive federal student aid. Also, the record of default on the rehabilitated loan will be removed from your credit history. However, your credit history will still show late payments that were reported by your loan holder before the loan went into default.
If you rehabilitate a defaulted loan and then default on that loan again, you can’t rehabilitate it a second time. Rehabilitation is a one-time opportunity.
To rehabilitate a defaulted Direct Loan or FFEL Program loan, you must
- agree in writing to make nine voluntary, reasonable, and affordable monthly payments (as determined by your loan holder Central Research) within 20 days of the due date, and
- make all nine payments during a period of 10 consecutive months
Under a loan rehabilitation agreement, your loan holder will determine a reasonable monthly payment amount that is equal to 15 percent of your annual discretionary income, divided by 12. Discretionary income is the amount of your adjusted gross income (from your most recent federal income tax return) that exceeds 150 percent of the poverty guideline amount for your state and family size. You must provide documentation of your income to your loan holder.
If you cannot afford the initial monthly payment amount described above, you can ask your loan holder to calculate an alternative monthly payment based on the amount of your monthly income that remains after reasonable amounts for your monthly expenses have been subtracted. You will need to provide documentation of your monthly income and expenses, including a completed Loan Rehabilitation Income and Expense Information form. Depending on your individual circumstances, this alternative payment amount may be lower than the payment amount you were initially offered. To rehabilitate your loan, you must choose one of the two payment amounts.
Depending on your income, your monthly payment under a loan rehabilitation agreement could be as low as $5.
When your loan rehabilitates, it is reinstated as a current loan and is serviced by a designated servicer. When this takes place, they will attempt to contact you and will send a bill for your monthly payments. The payments may be higher than you expected, however you can request a new more affordable repayment schedule or apply for a forbearance or deferment if eligible.
We urge you to contact the servicer as soon as possible. Do not wait, it is your responsibility to make payments or to request a more affordable repayment plan or your loan may default again. Your servicer is committed to working with you to help keep your loan current and explain your options. Should you default again, your credit may be affected as well as the balance may increase due to the addition of collection costs.
The most important part is to communicate with your servicer early and as often as necessary to make sure your loan does not become delinquent.
If you can afford to pay off your defaulted federal loan, this is the fastest way to settle your debt. Under certain circumstances, your debt collector may be authorized to waive some of your outstanding fees and other collection costs. For some borrowers, this can be the cheapest way to bring a federal student loan out of default.
Your defaulted debt will be gone afterward, but it will continue to appear on your credit report as a defaulted loan that was repaid. You will also restore your eligibility for federal student aid, if you chose to go back to school.
Please see the answers to other questions regarding rehabilitation and consolidation in determining the best option for you.
Another option for getting out of default is to consolidate your defaulted federal student loan into a Direct Consolidation Loan. Loan consolidation allows you to pay off one or more federal student loans with a new consolidation loan
To consolidate a defaulted federal student loan into a new Direct Consolidation Loan, you must either
- agree to repay the new Direct Consolidation Loan under an income-driven repayment plan, or
- make three consecutive, voluntary, on-time, full monthly payments on the defaulted loan before you consolidate it
Note: If you choose to make three payments on the defaulted loan before you consolidate it, the required payment amount will be determined by your loan holder, but cannot be more than what is reasonable and affordable based on your total financial circumstances.
In addition, if you want to consolidate a defaulted loan that is being collected through garnishment of your wages, or that is being collected in accordance with a court order after a judgment was obtained against you, you cannot consolidate the loan unless the wage garnishment order has been lifted or the judgment has been vacated.
After your defaulted loan has been consolidated, your Direct Consolidation Loan will be eligible for benefits such as deferment, forbearance, and loan forgiveness. You’ll also be eligible to receive additional federal student aid, but unlike loan rehabilitation, consolidation of a defaulted loan does not remove the record of the default from your credit history.
There are special considerations if you want to reconsolidate an existing Direct Consolidation Loan or Federal (FFEL) Consolidation Loan that is in default:
- To reconsolidate a defaulted Direct Consolidation Loan, you must also include at least one other eligible loan in the consolidation in addition to meeting one of the two requirements described above in the previous question. If you have no other eligible loans that can be included in the consolidation, you cannot get out of default by consolidating a defaulted Direct Consolidation Loan. Your options are repayment in full or loan rehabilitation.
- You may reconsolidate a defaulted FFEL Consolidation Loan without including any additional loans in the consolidation, but only if you agree to repay the new Direct Consolidation Loan under an income driven repayment plan. If you include at least one other eligible loan in the consolidation, you are eligible to reconsolidate a defaulted FFEL Consolidation Loan if you meet either of the two requirements described above.
The decision to consolidate your loan is your choice as long as you meet the requirements. However, if you consolidate before your rehabilitation is complete you will not receive the benefits specific to rehabilitation.
If your wages are being garnished and you are making rehabilitation payments, you are prohibited from consolidating as long as the garnishment is in effect.
For more information, please go to www.studentloans.gov.
You apply for a Direct Consolidation Loan through the website www.studentloans.gov. This process offers both electronic and paper options. You can complete the electronic application as explained below or you can download and print a paper application for submission by U.S. mail.
Please contact us via phone or email to let us know you have elected this option so we may flag your account to provide assistance as necessary.
Yes, we are here to help you making your monthly payments reasonable and affordable. The U.S. Department of Education has guidelines to help in determining the payment amount. We also assist in facilitating payments by credit card, electronically from your bank account or by the mail. All payments are processed or deposited by the Federal government. Please call our office as our representatives are trained to help customers find a reasonable solution to repayment of your student loan.
The U.S Department of Education has specific procedures for responding to disputes. Our representatives are trained to help in obtaining information or documentation in response to your inquiry. We ask that if you email, please put DISPUTE in the subject line, or telephone our representative.
We recommend you provide specific details related to the dispute or question. This will expedite the response. In some cases we may need to communicate with the U.S. Department of Education to obtain information which may take some time.
It is also important to note the most common disputes for student loan debt are related to charging interest and the addition of collection costs. We refer you to your promissory note as adding interest is permitted. Also, the addition of collection costs for federal student loans is authorized by the Higher Education Act of 1965 as amended.
The following brief explanation of Administrative Wage Garnishment often referred to as A.W.G. It is a law that allows the garnishment of wages without going to court for non tax debts owed to the Federal Government. The following information is provided in part by the U. S. Department of Education web site referenced on this page.
This tool that allows the federal government or your guaranty agency to have your employer withhold a portion of your earnings to collect unpaid non tax debts that you owe to the federal government. If you have a federal student loan in default, up to 15% of your disposable pay could be taken by the federal government or your guaranty agency to repay your debt.
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 repayment agreement, or if you enter into a repayment agreement but do not continue making the payments you agreed to make, the collection agency will then begin the process of garnishing your wages. If they are unable to garnish your wages for example, because you are self employed, they may recommend that E. D. refer your case to the U. S. Department of Justice for legal action. The Department of Justice may then sue you to collect on your defaulted loan.
Central Research is committed to helping you enter into a voluntary repayment agreement. We follow the guidelines provided by the U.S. Department of Education as to the policies in determining payment amounts and if you are in A.W.G. what can be done to give you a path out of the garnishment situation.
We encourage you to visit the U.S. Department of Education’s web site for more information.
The administrative garnishment process requires that you be send a letter prior to garnishment so you may appeal or avoid garnishment. We urge you to contact our office as soon as possible to discuss how to avoid garnishment. The following is an excerpt from the U.S. Department of Education website.
One way to avoid garnishment of 15 percent of your disposable pay is to negotiate repayment terms acceptable to ED or the private collection agency and ensure that ED receives the first payment no later than 30 days from the date the garnishment notice was sent.
Your other option to avoid garnishment is to make a request for a hearing. You should
- make a hearing request in writing, postmarked no later than 30 days from the date the garnishment notice was sent;
- make a request for a hearing, even if you are requesting copies of documents, because requesting documents doesn’t delay a garnishment order;
- provide proof to support any objection made to the existence, amount, or enforceability of the debt, or financial hardship; and
- pay any expenses you incur to obtain legal representation and to attend an in-person hearing. All in-person hearings are held at one of the three regional offices: Atlanta, Chicago, or San Francisco. You are responsible for the cost of attending and the cost of any witnesses that attend on your behalf.
For more information please see the U.S. Department of Education website www.studentaid.ED.gov. Our representatives are available to help you by explaining your options. Please contact us at your earliest convenience as some of your options are time limited.
Federal law related to the collection of debts owed to the government requires the Department of Education to request that the U.S. Department of the Treasury withhold money from your federal income tax refunds, Social Security payments including Social Security disability benefits, and other federal payments to be applied toward repayment of your defaulted federal student loan. This withholding is called Treasury offset.
If you have a defaulted FFEL Program loan that is held by a guaranty agency, your state tax refunds may be also withheld and applied toward repayment of your loan, and you may lose your driver's license or other state-issued licenses.
Before the offset begins, a notice of pending offset will be sent to your last known address to inform you that the offset is scheduled to begin in 65 days. The notice may only be sent once and offsets will continue until your debt is paid.
You do have the right to request a review of your account to prevent the offset from occurring. If you are successful, then your tax refund and other federal payments will not be offset or the amount being offset may be reduced. If you are unsuccessful, then your tax refund and other federal payments will be offset.
If your Social Security disability benefits are being withheld, the withholding of those benefits will be suspended if the Social Security Administration S.S.A. makes a determination that you are totally disabled, with medical improvement not expected. However, if the S.S.A. later converts your disability benefits to retirement benefits, the withholding of your Social Security benefits may resume without notice.
It is important to note that making payments on your student debts does not automatically prevent an offset. For more detailed information we suggest you review the U.S. Department of Education website.
If your tax return has been taken by Treasury Offset for a defaulted student loan, your options are limited.
First, you should know the offset was performed by the U.S. Department of the Treasury as required by Federal Law. Since your federal student loan is in default, the U.S. Department of Education, as required, submitted your loan information for participation in the treasury Offset program.
While CRI was not involved requesting the Treasury Offset, we can suggest options for you, so you may not be offset next tax year. For more information on the Treasury offset program we suggest you search on the internet. Both the Department of the Treasury and the Department of Education web sites have information regarding this program.