I accidentally defaulted on a small loan. How to proceed?

Advice

I have a bunch of student loans ($70k federal + similar private), but there is a $2k loan with the university I graduated from, which just defaulted.

The loan is federal, and it went to a department of education collection agency. What do I do? I setup an account on myeddebt.ed.gov, but they only have a number listed for the agency. (It says U.S. Department of Education for the collection agency).

Do I call them to sort this out? There is no webpage interface for resolving online. I cannot pay the full amount, but I’d like to avoid garnishment, and this hasn’t went on my credit score, so I’d like to avoid that too.

I’m afraid if I call they will just demand the full amount, but it doesn’t seem worth getting a lawyer for a $2k defaulted loan.

Posted May 4, 2025, 4:46 PM UTC

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