The government has extraordinary student loan collection power. The government can seize tax refunds, deny new student loans and grants, garnish wages without a court order, take a portion of Social Security benefits, and charge very large collection fees.
Most crimes can only be prosecuted for limited periods of time, but there is no time limit for collection on federal student loans.
Collection efforts begin soon after you miss a payment. The collection tactics get worse the longer you fail to pay. The most severe consequences kick in only if you default.
The powerful government collection tools may put you in a terrible trap, especially if you are trying to go back to school. This does not mean you should give up. There are ways to recover if you are in this situation. You should first understand the potential consequences of default to help you evaluate whether you are vulnerable to government collection powers. You should then review the ways to repay as a way to get out of default on federal loans. You should also review the various federal loan cancellation options to see if any apply to you. Even if you choose not to pursue avenues out of default, you have the right to fight back against debt collection agency harassment or abuse. This includes letting the Department of Education and the Consumer Financial Protection Bureau know of you complaints about collection agencies.