Student Accounting

Loan Collections

The regulations that govern the Student Loan Programs UC Davis participates in require the University of California to refer to a commercial collection agency any delinquent borrower who has not responded appropriately to our internal collection efforts. We would prefer to work directly with you.

A collection agency may demand that the entire unpaid balance of your loan(s) be paid immediately, and may refuse to take anything less than immediate payment in full. Once you have been referred to an agency, UC Davis cannot interfere or mediate between you and the agency. You must deal directly with the collection agency.

Collection agencies are in the business of pursuing collections. If the circumstances warrant, they will proceed with litigation against you, and your cosigners if you have any. This could mean a court appearance and additional expenses for you as a borrower. A court judgment against you will affect your credit rating and may present an obstacle should you wish to apply for credit in the future for a car, credit card, home mortgage, or personal loan.

Collection agencies charge the University a percentage of the money collected for their services. Federal loan regulations require these collection costs be assessed and charged directly to you, the borrower. Therefore, the balance referred to a commercial collection agency will include principal, accrued interest and late fees, as well as substantial collection costs.

It is to your advantage to work directly with Student Accounting before a collection agency is involved. Please don’t make it necessary for us to take the costly and drastic step of referring your loan(s) to a commercial collection agency. Take positive action and contact Student Accounting for assistance today.

Should you find yourself working with a collection agency, you still have rights. Collection agencies are regulated by the Federal Trade Commission under the Fair Debt Collection Practices Act. The FTC maintains a Web page with a variety of resources you may find useful here.

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