Education, HHS unveil program to ID loan defaulters

"Repayment of Student Loans"

The departments of Education and Health and Human Services have unveiled a computerized matching program to assist in collecting money from people who default on loans awarded under Title IV of the Higher Education Act or people who must refund an overpayment.

As the prime agency, Education will gather personal data and employment information on people who have defaulted on student loans or who have outstanding grant overpayments. HHS’ Administration for Children and Families, Office of Child Support Enforcement, will verify the data, perform a computerized match and produce a file for Education containing the name, Social Security number, address, employer, wages and employer’s address for each individual.

Education will use the information to initiate collection of the debts under the provisions of the Debt Collection Improvement Act of 1982. Anyone who earns more than $16,000 a year will be subject to having a portion of pay withheld until the obligation is paid in full.

The department will also be responsible for ensuring that no adverse action is taken against any individual singled out by the matching program until the information has been independently verified. Then Education will notify the person of its findings and of the opportunity to contest them.

The matching program will continue for 18 months after the effective date of May 18 and may be extended for an additional 12 months.